Judge: Maurice A. Leiter, Case: 20STCV49851, Date: 2022-12-07 Tentative Ruling

Case Number: 20STCV49851    Hearing Date: December 7, 2022    Dept: 54

Hearing Date: December 7, 2022

Department 54, Judge Maurice Leiter

Motion to Dismiss or Stay Based on Forum Non Conveniens

Moving Party: Defendants, Chi Cheng Chang and Shih En Chang

Responding Party: Plaintiff, Pacific Department Stores Co. Ltd.

T/R:     DEFENDANTS’ MOTION TO DISMISS OR STAY BASED ON FORUM NON CONVENIENS IS GRANTED IN PART. 

The case is stayed, to ensure Plaintiff may maintain the action in Taiwan.  Each Defendant shall personally sign and have filed with this Court a declaration under penalty of perjury stating both their consent to jurisdiction in Taiwan and their waiver of any applicable statute of limitations, in a lawsuit concerning these allegations brought in Taiwan. 

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:30 am on the day of the hearing. 

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

This case concerns an alleged breach of fiduciary duty by Defendant Chi Cheng Chang, the former director of Plaintiff Pacific Department Stores, Co. Ltd., and by Defendant Shih En Chang, a former employee of Plaintiff.  Plaintiff is a Taiwanese corporation in the business of operating department stores.  Defendant C. Cheng served as Executive Director from 1991 to 2006.  Defendant S. Chang served as an employee in the Marketing Department from 2011 to 2017.  Plaintiff alleges Defendants engaged in various fraudulent reimbursement schemes while employed by Plaintiff.  For example, Plaintiff claims Defendants initiated reimbursements indicating they were for “Business Social Expense[s]” when they were for Defendants’ personal expenses. Plaintiff alleges Defendants took from Plaintiff approximately $2,000,000.00.

The operative complaint, filed on December 30, 2020, alleges causes of action for: (1) Breach of Fiduciary Duty; (2) Conversion; and (3) Constructive Fraud.

On September 30, 2022, the Court denied Defendants’ Motion to Quash Service of Summons. On October 28, 2022, Defendants filed this Motion to Dismiss or Stay Based Upon Forum Non Conveniens.

ANALYSIS

            Code of Civil Procedure § 410.30(a) gives the court discretion to stay or dismiss an action, in whole or in part, and upon any conditions that may be just, where it is found “that in the interests of substantial justice an action should be heard in a forum outside of this state[.]” This section codifies the common law doctrine of forum non conveniens, “an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction [to stay or dismiss[ it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.”  (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.)

            “In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the [proposed] alternative forum is a ‘suitable’ place for trial.”  (Stangvik, supra, 54 Cal.3d at p. 751.)  With respect to this first inquiry, the court must consider whether the defendant may be properly subjected to jurisdiction in the proposed alternative forum, and whether the statute of limitations of the alternative forum would permit the action to lawfully proceed to trial.  (Id. at p. 752.)  If it is affirmatively concluded that the proposed alternative forum is a “suitable” place for trial, the court will next “consider the private interests of the litigants and the interests of the public in retaining the action for trial in California.”  (Id. at p. 751.)  “The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses.  The public factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternative jurisdiction in the litigation.”  (Id. at p. 751.)

            The party moving to dismiss or stay an action based on the doctrine of forum non conveniens bears the burden of proving a suitable alternative forum exists.  (National Football League v. Fireman’s Fund Ins. Co. (2013) 216 Cal.App.4th 902, 933, fn. 15.)  The moving party must provide the court with sufficient evidence to enable the court to carry out its weighing and balancing analysis.  (Ibid.)

            Defendants contend that Taiwan is the appropriate forum for this action.  Defendants argue the alleged fraudulent acts occurred exclusively in Taiwan, and were committed by Taiwanese residents against a Taiwanese corporation.  Defendants say the relevant witnesses are in Taiwan; the relevant documents are located in Taiwan and written in Mandarin -- they would need to be translated into English for a trial in California; and Taiwanese law likely would apply to this dispute. 

A.        Timeliness

            Plaintiff argues this Motion is untimely because Defendants filed it one year and nine months after the filing of the Complaint, and eleven months after Defendants moved to quash service of summons on similar grounds.    

            Code of Civil Procedure section 430.10 does not establish a deadline to file this motion.  But they should be filed “within a reasonable time.”  (Global Financial Distributors, Inc. v. Superior Court (2019) 35 Cal.App.5th 179, 193.)  A court may deny a motion to dismiss or stay based upon forum non conveniens where a plaintiff has suffered prejudice from a defendant’s delay.  (Compare Martinez v. Ford Motor Co. (2010) 185 Cal.App.4th 9, 19 [plaintiff suffered prejudice as a result of defendant’s 18-month delay where defendant, knowing the relevant facts, delayed the motion until completing discovery that would have been unavailable to it in the alternative forum] with Morris v. AGFA Corp. (2006) 144 Cal.App.4th 1452 [motion filed one year after action commenced did not appear to be untimely, and did not prejudice plaintiffs].)

            Defendants’ Motion is not untimely.  The vast bulk of the work done in this case has involved Defendants’ motion to quash service. And Plaintiff has failed to identify any meaningful prejudice.  The Court is unpersuaded that Plaintiff’s incurring attorneys’ fees is a sufficient showing of prejudice.  (Morris, supra, 144 Cal.App.4th at p. 1461 [plaintiff’s contention “that they and their counsel had invested a large amount of time and resources and plaintiffs were suffering serious financial hardship” was an insufficient showing of prejudice].) 

B.        Suitability of Taiwan for Trial

            Defendants have submitted sufficient evidence that Taiwan is a suitable place for trial.  Defendants have declared they will consent to the jurisdiction of the Taiwanese courts, and counsel states they will stipulate to waive a defense based on any applicable statute of limitations. (Aghaian v. Minassian (2015) 234 Cal.App.4th 427, 431 [“An alternative forum is suitable if the defendant is subject to jurisdiction and the cause of action is not barred by the statute of limitations.”].) Defendants have shown that the claims asserted here could be brought in Taiwan, and a court in Taiwan could enforce any judgment Plaintiffs obtain.

            Plaintiff argues that Taiwan is not suitable because a Taiwanese court of law would not be able to award the relief requested here.  Plaintiff says: “[i]t is Plaintiff’s position that Defendants used some or all of the funds they embezzled from Plaintiff to purchase real property in California” (Opp., at p. 4:18-19), and “[t]his action was filed in California for the simple reason that a Taiwan court will not be able to grant any relief with respect to the real property [located in California]. As an example, a Taiwan court would be unable to impose a constructive trust or equitable lien against the properties.”  (Id. at p. 4:19-21.)  But the Complaint does not seek a constructive trust or equitable lien with respect to any real property located in California; Plaintiff seeks a money judgment.  And Plaintiff has not provided any evidence that Plaintiffs purchased real property in California with the allegedly embezzled funds.  The Court is unpersuaded that courts in Taiwan cannot provide the relief sought in the Complaint.     

C.        Weighing of Public and Private Factors

            Balancing “the private interests of the litigants and the interests of the public in retaining the action for trial in California” (Stangvik, supra, 54 Cal.3d at p. 751) leads to the conclusion that this case should be litigated in Taiwan, not California. 

            Taiwan will be a more convenient forum for litigation.  The accounting documents, board meeting minutes, and other corporate documents relevant to the issues are in Taiwan.  (C. Chang Decl., ¶ 8.)  The relevant documents are in Mandarin and would need to be translated into English were the case to remain here.  (Ibid.)  Relevant witnesses, including former co-workers of Defendants, are in Taiwan.  (Id. ¶ 9.) 

            Nor does California have a particular interest in having the case litigated here.  Plaintiff is a corporation incorporated and with its principal place of business in Taiwan.  (Compl., ¶ 1 [“Plaintiff PACIFIC DEPARTMENT STORES CO. LTD. is, and at all times mentioned herein was, a corporation established under the laws of Taiwan, with its principal place of business in Taipei, Taiwan.”].)  Where “the plaintiff resides in a foreign country, . . . the plaintiff’s choice of forum is much less reasonable and is not entitled to the same preference as a resident of the state where the action is filed.  [Citation.]  At best, therefore, . . . the fact that plaintiff[ ] chose to file [its] complaint in California is not a substantial factor in favor of retaining jurisdiction here.”  (Stangvik, supra, 54 Cal.3d at p. 755.) 

The alleged misconduct was committed in Taiwan by Taiwanese residents. Any public interest of California is “certainly less” than that of Taiwan.  (Quanta Computer Inc. v. Japan Communications Inc. (2018) 21 Cal.App.5th 438, 448.)  California courts need not preside over a trial in which California has far less interest than the courts of Taiwan.  (Ibid., citing Stangvik, supra, 54 Cal.3d at p. 757 [“Piper held that the jurisdiction with the greater interest should bear the burden of entertaining the litigation.”].)