Judge: Michael E. Whitaker, Case: 23SMCV05762, Date: 2024-03-20 Tentative Ruling

Case Number: 23SMCV05762    Hearing Date: March 20, 2024    Dept: 207

TENTATIVE RULING

MOTION

            Specially appearing Defendant Ty Warner Hotels & Resorts, LLC (“TWHR”) moves to quash service of the summons and complaint, and to dismiss the complaint, on the basis of lack of personal jurisdiction. 

Plaintiff Michelle Stornetta (“Plaintiff”) opposes the motion and Defendant replies.

EVIDENTIARY OBJECTIONS

            The Court rules as follows with respect to TWHR’s Objections to Plaintiff’s Opposition Evidence:

1.      Overruled

2.      Overruled

3.      Overruled

4.      Overruled

5.      Overruled

6.      Overruled

LEGAL STANDARDS

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes:  (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her.”  (Code Civ. Proc., § 418.10, subd. (a)(1).) 

“[W]hen jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that ‘minimum contacts’ exist between the defendant and the forum state to justify imposition of personal jurisdiction.” (Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.) It is thus upon the plaintiff to demonstrate by a preponderance of the evidence that all jurisdictional criteria are met. (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232.)   

Moreover, “on a challenge to personal jurisdiction by a motion to quash, the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction.”  (ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 209–210 (hereafter ViaView).)  “The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint.”  (Id. at p. 210.)  If plaintiff meets this burden, “it becomes the defendant’s burden to demonstrate that the existence of jurisdiction would be unreasonable.” (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1362.)

California’s long-arm statute grants its courts the power to assert personal jurisdiction over out-of-state parties to the maximum extent that the state and federal constitutions allow. (Code Civ. Proc., § 410.10.) Under the due process clause of the Fourteenth Amendment to the United States Constitution, state courts may exercise personal jurisdiction over nonresidents who have “minimum contacts” with the forum state. (International Shoe Co. v. Washington (1945) 326 U.S. 310, 316.) Minimum contacts exist when the relationship between the nonresident and the forum state is such that the exercise of jurisdiction does not offend “traditional notions of fair play and substantial justice.” (Id. at p. 316.) The primary focus of the personal jurisdiction inquiry is the relationship of the defendant to the forum state. (Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County (2017) 582 U.S. 255 (hereafter Bristol-Myers).)

“Minimum contacts exist where the defendant’s conduct in the forum state is such that he should reasonably anticipate being subject to suit there, and it is reasonable and fair to force him to do so.” (F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782, 795, citing World–Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297; Kulko v. California Superior Court (1978) 436 U.S. 84, 92; Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269.)

Personal jurisdiction may be either general or specific. General (also called all-purpose) jurisdiction means that a defendant's contacts with a state are sufficiently extensive that the “defendant is ‘essentially at home,’ ” and the court may exercise jurisdiction over the defendant regardless of whether the claims relate to the forum state.  (Ford Motor Company v. Montana Eighth Judicial District Court (2021) 141 S.Ct. 1017, 1024; Goodyear Dunlop Tires Operations, S. A. v. Brown (2011) 564 U.S. 915, 919.)

Specific personal jurisdiction hinges on the “ ‘relationship among the defendant, the forum, and the litigation.’ ” (Daimler AG v. Bauman (2014) 571 U.S.117, 133; accord Walden v. Fiore (2014) 571 U.S. 277, 284.)  Such jurisdiction requires “ ‘an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.’ ” (Bristol-Myers, supra, 582 U.S. at p. 262.) Consistent with the constraints of due process, “the defendant’s suit-related conduct must create a substantial connection with the forum State.” (Walden v. Fiore, supra, 571 U.S. at p. 284.)

Further, “a nonresident defendant may be subject to the court's specific jurisdiction if three requirements are met: (1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the exercise of jurisdiction would be reasonable and comports with fair play and substantial justice.”  (ViaView, supra, 1 Cal.App.5th at p. 216.)

ANALYSIS

TWHR contends that it lacks the “minimum contacts” with California to confer personal jurisdiction over it because (1) its principal place of business is in Illinois; (2) the alleged incident occurred in Mexico; and (3) Plaintiff’s injury did not arise from TWHR’s contacts with California.

Plaintiff counters that (1) California has personal jurisdiction over TWHR because TWHR was personally served in California; and (2) TWHR has sufficient contacts with California to establish both Specific and General jurisdiction.

Personal Service in California

California’s long-arm statute grants its courts the power to assert personal jurisdiction over out-of-state parties to the maximum extent that the state and federal constitutions allow. (Code Civ. Proc., § 410.10.)  Under the due process clause of the Fourteenth Amendment to the United States Constitution, state courts may exercise personal jurisdiction over nonresidents who are personally served in the forum.  (Burnham v. Superior Court of California, County of Marin (1990) 495 U.S. 604 (hereafter Burnham).)

However, Burnham’s “tag” jurisdiction does not apply to corporate entities.  (Martinez v. Aero Caribbean (9th Cir. 2014) 764 F.3d 1062, 1069.)  Instead, personal jurisdiction exists over a corporate entity only if that entity’s contacts with California support either specific or general jurisdiction.  The “mere designation” of an agent for in-state service of process does not create general jurisdiction over a corporation.  (King v. American Family Mut. Ins. Co. (9th Cir. 2011) 632 F.3d 570, 576.)

Therefore, while the proof of service indicates TWHR’s agent for service of process was personally served with a copy of the summons and complaint in Glendale, California, the Court finds that service of the summons and complaint is insufficient to confer personal jurisdiction over TWHR.

Specific Jurisdiction

While TWHR has purposefully availed itself of the benefits of California generally by registering to do business in California, it has not availed itself of California’s benefits with respect to the injury Plaintiff allegedly suffered in Mexico.  Moreover, TWHR’s contacts with California are not related to the injury that occurred at TWHR’s Mexico resort.

Plaintiff argues that TWHR advertises the sale of “memberships” to its California properties.  But the injuries Plaintiff sustained at TWHR’s Mexican resort do not arise out of TWHR’s memberships for its California properties, or its online advertisements thereof.

Therefore, California does not have specific jurisdiction over TWHR with respect to the allegations at issue in this action.

General Jurisdiction

Plaintiff contends California has general jurisdiction over TWHR because TWHR owns and operates five California properties, including three golf courses and two hotels. 

The secretary of state documents demonstrate that TWHR is a Delaware Corporation with principal place of business in Illinois that has been registered to do business in California since 2002.  (Exs. A-D to Pettit Decl.)

The TWHR website lists seven total properties, five of which are in California, one of which is in New York, and one of which (the property where the incident occurred) located in Cabo San Lucas, Mexico.  (Exs. E & G to Pettit Decl.)

TWHR sells memberships for (1) the Montecito Club; (2) regular or “signature” membership to the Coral Casino Beach and Cabana Club in Santa Barbara; (3) Connoisseur membership for full access to the Montecito Club and Coral Casino Beach and Cabana Club and complimentary green fees at Sandpiper Golf Club in Santa Barbara; (4) “signature” membership to Montecito, with complimentary green fees at Sandpiper.  (Ex. G to Pettit Decl.)  Thus, the membership packages TWHR sell pertain primarily to three properties located in Santa Barbara and Montecito, California.

As such, a substantial, if not majority of TWHR’s business appears to stem from its connections to resort properties located in California.  If so, TWHR may be sufficiently “at home” in California for California to exert personal jurisdiction over it.

TWHR contends that although the properties are all marketed as “Ty Warner Hotels & Resorts,” it does not actually own any of the properties; that the properties have separate owners, and TWHR merely provides “advisory or management services […] including accounting, insurance, and property tax services” but does not otherwise control or run the “day to day operations” of the properties.  (Hwang Decl. ¶¶ 5-10.)  Further, TWHR contends it does not own any real estate in California or have any California bank accounts, and the majority of TWHR’s employees work out of its Illinois headquarters; it has only three employees in California.  (Hwang Decl. ¶¶ 13-15.)

However, TWHR’s 2010 Secretary of State filings indicate that the type of business TWHR conducts is “Real Estate Investments,” which suggests TWHR may currently have or previously have had an ownership interest in the California “Ty Warner Hotels & Resorts” branded properties.  (Ex. C to Pettit Decl.)  Moreover, TWHR indicates “the advisory or management services TWHR provides for those California properties are distinct from the services TWHR provides to the ownership of the Las Ventanas Resort,” suggesting that TWHR may have even more robust financial interests and/or managerial control over the California properties than the out-of-state properties, further suggesting that TWHR may be “essentially at home” in California.  (Hwang Decl. ¶ 10.)

Ultimately, the Court cannot determine from the existing record whether TWHR’s contacts with the California properties are sufficiently substantial that TWHR is “essentially at home” in California for the Court to exercise personal jurisdiction over it.  As such, the Court grants Plaintiff’s request for limited jurisdictional discovery to determine the extent of TWHR’s involvement with the California-based properties and what proportion of TWHR’s business derives from its involvement with these “Ty Warner Hotels & Resorts” branded properties in California.

CONCLUSION AND ORDER

            The Court finds the current record insufficient to grant or deny TWHR’s motion to quash and dismiss and grants Plaintiff’s request to conduct limited jurisdictional discovery to determine the extent of TWHR’s involvement with the California properties and the proportion of TWHR’s business derived from the California properties. 

            Further, the Court continues the hearing on the motion to June 27, 2024 at 8:30 A.M. in Department 207.  Following the completion of the limited jurisdictional discovery, Plaintiff may file and serve a supplemental memorandum of points and authorities in opposition to the motion on or before June 5, 2024, and TWHR may file and serve a supplemental memorandum of points and authorities in reply on or before June 17, 2024. 

            Plaintiff shall provide notice of the Court’s orders and file a proof of service regarding the same.       

DATED:  March 20, 2024                                          ___________________________

                                                                                    Michael E. Whitaker

                                                                                    Judge of the Superior Court