Judge: Michelle Williams Court, Case: 22STCV07251, Date: 2022-09-13 Tentative Ruling

Case Number: 22STCV07251    Hearing Date: September 13, 2022    Dept: 74

22STCV07251           VERB TECHNOLOGY COMPANY, INC. vs STUART JOHNSON

(1) Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion for Forum Non Conveniens

(2) Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction

TENTATIVE RULING:     Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion for Forum Non Conveniens is DENIED.  Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction is taken OFF-CALENDAR at the request of the moving parties.

Background

On February 28, 2022, Plaintiff Verb Technology Company, Inc., a Nevada Corporation, filed this action against Stuart Johnson and Success Partners, Inc., a Texas Corporation. The complaint asserts causes of action for: (1) intentional interference with contractual relations; (2) intentional interference with prospective economic relations; (3) negligent interference with prospective economic relations; and (4) violation of Business and Professions Code § 17200. The complaint alleges Defendants disseminated false “documents that purported to be independent analyst reports, when in fact they were prepared by Defendants (or at Defendants’ direction) for the purpose of harming Verb.” (Compl. ¶ 1.)

Motion

On May 6, 2022, Specially Appearing Defendants Stuart Johnson and Success Partners, Inc. filed a motion for forum non conveniens.

On May 6, 2022, the moving defendants also filed a motion to quash service of summons for lack of personal jurisdiction. On September 2, 2022, the moving defendants filed a document entitled “Notice of Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion to Quash Being Taken Off Calendar” indicating their request to withdraw the motion. Accordingly, Specially Appearing Defendants Stuart Johnson and Success Partners, Inc.’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction is taken OFF-CALENDAR at the request of the moving parties.

Opposition

In opposition, Plaintiff contends Defendants failed to support their motion with adequate evidence to meet their burden, Plaintiff’s evidence refutes the claims made by Defendants, and the private and public interest factors do not support trial in Texas.

Reply

In reply, Defendants reiterate their arguments in the initial motion.

Motion

Standard

“Forum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.” (Global Financial Distributors Inc. v. Superior Court (2019) 35 Cal.App.5th 179, 186.) Pursuant to Code of Civil Procedure section 410.30(a), “(a) [w]hen a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” Additionally, “[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: . . . To stay or dismiss the action on the ground of inconvenient forum.” (Code Civ. Proc. § 418.10(a)(2).)

“In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternate forum is a ‘suitable’ place for trial. If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California. 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 interest 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 alternate jurisdiction in the litigation.” (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.)

“On a motion for forum non conveniens defendant, as the moving party, bears the burden of proof.” (Ibid.) “If the private and public interests weigh in favor of a suitable alternative forum, the trial court generally has discretion to either dismiss or stay the action on any conditions that may be just.” (Aghaian v. Minassian (2021) 64 Cal.App.5th 603, 609.)

In opposition, Plaintiff contends its choice of forum is entitled to significant deference and relies upon the “seriously inconvenient” standard. (Opp. at 10:14-12:6 citing Ford Motor Co. v. Insurance Co. of North America (1995) 35 Cal.App.4th 604, 612.) The Court agrees with Defendants that neither a strong presumption nor the seriously inconvenient standard applies. “[A] resident of one of our sister states who files suit in California is entitled to due deference under the circumstances presented, not a strong presumption, in favor of its choice of forum. That deference is to be weighed and balanced by the trial court along with all the other pertinent factors, including the defendant's residence or principal place of business, and has no direct bearing on the moving defendant’s burden of proof. We therefore disagree with the contrary language in cases such as Ford, which assert that all U.S. citizen plaintiffs' choices of forum are entitled to great weight.” (National Football League v. Fireman's Fund Ins. Co. (2013) 216 Cal.App.4th 902, 929–930. See also id. at 932 (“We conclude that the phraseology “seriously inconvenient” as used in the Judicial Council Comment was intended to describe the quantum of evidence needed to justify a dismissal in the face of the strong presumption favoring a resident plaintiff's choice to sue in its home-state court system.”).); Fox Factory, Inc. v. Superior Court (2017) 11 Cal.App.5th 197, 206 (“National Football League offers a more factually analogous and more cogent analysis than that of Ford.”).)

Texas is a Suitable Forum

Defendants seek to dismiss or stay this action and require Plaintiff to litigate in Texas.

“As a general matter, a forum is suitable if there is jurisdiction and no statute of limitations bar to hearing the case on the merits. A forum is suitable where an action can be brought, although not necessarily won.” (American Cemwood Corp. v. American Home Assurance Co. (2001) 87 Cal.App.4th 431, 437 (quotations and citations omitted).) Defendants provide evidence that Stuart Johnson has been a resident of Texas for over 40 years and Defendant Success partners is a Delaware corporation with its principal place of business in Plano, Texas. (Johnson Decl. ¶¶ 2, 4.) Additionally, Defendants stipulate to jurisdiction in Texas. (Id. ¶ 8.) Plaintiff does not oppose Defendants’ arguments that Texas is a suitable forum. (See Opp. at 10:8-17:15.) Defendants note Texas provides a two-year statute of limitations for Plaintiff’s claims, which has not expired. (First Nat’l Bank v. Levine (Tex. 1986) 721 S.W.2d 287, 289.)

The Court finds Texas would be a suitable place for trial. (Stangvik, supra, 54 Cal.3d at 752.)

Defendants’ Evidence

Defendants bear the evidentiary burden and their motion is supported by the declaration of Defendant Stuart Johnson. Johnson states he is a resident of Texas, he does not own property in California, and has “at times rented a vacation home in California where [he] conducted little to no work and visited [his] daughter who attended college there.” (Johnson Decl. ¶ 3.) Johnson further states Defendant Success Partners “is incorporated in Delaware with its principal place of business in Plano, Texas. . . . does not have California offices, California employees, nor is it registered to do business in California. . . . does not own or lease property in California, have an agent for service of process in California, have California bank accounts nor has it filed California tax returns. . . . does not specifically target or market to California residents . . . [and its] California business constitutes only approximately three to five percent of its revenue.” (Id. ¶¶ 4-6.)

In reply, Defendants’ counsel contradicts Johnson and admits Defendant filed a California non-resident tax return, and the revenue generated in California is more significant than represented. (Jacobs Reply Decl. ¶ 4 (“I found Success Partners’ 2020 non-resident California tax return.”); Id. ¶ 5 (“Success Partners California revenue consisted of only 35% of its total profits for 2020.”).)

In reply, Defendants also provide Defendant Success Partners’ response to special interrogatories, which they cannot rely upon to support their motion. (Jacobs Reply Decl. ¶ 3, Ex. B. See Code Civ. Proc. § 2030.410 (“the propounding party or any party other than the responding party may use any answer or part of an answer to an interrogatory only against the responding party.”).) Defendants also provide the entirety of the deposition transcript for Defendant Johnson’s August 17, 2022 deposition without highlighting relevant portions, which is improper. (Cal. R. Ct., rule 3.1116(b) (“the exhibit must contain only the relevant pages of the transcript.”); Cal. R. Ct., rule 3.1116(c) (“The relevant portion of any testimony in the deposition must be marked in a manner that calls attention to the testimony.”).)

Defendants Failed to Meet Their Burden Regarding the Private Interests

“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.” (Stangvik, supra, 54 Cal.3d at 751.)

Defendants failed to meet their burden as to the private interests. Defendants summarily state, without evidence, “[a]ll (or nearly all) of the presumable sources of proof are located in Texas,” “the cost of obtaining the attendance of nearly every single non-expert witness in California for depositions and trial would be grossly disproportionate to the costs of securing the attendance of these witnesses in Texas,” and contends only Texas can compel the attendance and testimony of Texas witnesses. (Mot. at 3:25-5:8.) Defendants do not identify any specific evidence or any specific witnesses that are located in Texas.

Defendants cite Morris v. AGFA Corp. (2006) 144 Cal.App.4th 1452, which notably relied upon the plaintiff’s interrogatory responses and declarations of non-party witnesses, evidence absent here. (Id. at 1457-1458.) Defendants cite Hansen v. Owens-Corning Fiberglas Corp. (1996) 51 Cal.App.4th 753, which involved evidence that most of the plaintiff’s asbestos exposure occurred while living in Montana, not California. Defendants do not provide any evidence in support of their motion regarding where the conduct at issue in this case occurred or where witnesses thereto are located. Finally, Defendants cite Price v. Atchison, T. & S. F. Ry. Co. (1954) 42 Cal.2d 577, which involved railroad accidents that occurred in New Mexico and was supported by affidavits establishing 18 witnesses resided in New Mexico. Defendants provide no such evidence here. In reply, Defendants reiterate their unsupported contention that all relevant witnesses are in Texas.

Defendants failed to demonstrate any significant portion of the private interest factors support the case being tried in Texas. At most, Defendants have demonstrated they reside in Texas at least some portion of the time, which is not sufficient.

In opposition, Plaintiff submits evidence that Defendant Johnson provided the reports in question to individuals while he was present in California. (Opp. at 7:9- 9:6.; Jacobs Decl. Ex. C, Johnson Depo. at 56:6-58:13, 59:22-60:6, 60:25-61:23, 64:2-65:20, 67:2-10, Ex. 26, 27, 28, 32.) Defendant Johnson met one of the individuals to whom he distributed one of the reports at issue in Irvine, California. (Jacobs Decl. Ex. C, Johnson Depo. at 56:6-58:13, Ex. 32.) Defendant Johnson also admitted to spending approximately 40% of his time in California between June 2020 and June 2021. (Id. at 50:3-9.) Defendant Johnson met with individuals employed by SeneGence in California, (id. at 105:11-107:19, Ex. 29), one of Plaintiff’s clients. (Cutaia Decl. ¶ 5.) Plaintiff also provided evidence that it maintains an office in California where a number of its corporate executives work and none of Plaintiff’s employees work in Texas. (Id. ¶¶ 3-4.)

The Court finds Defendant failed to meet their burden to demonstrate the private interests factors favor trial in Texas and Plaintiff has provided evidence, rather than general argument, supporting trial in California.

Defendants Failed to Meet Their Burden Regarding the Public Interests

“The public interest 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 alternate jurisdiction in the litigation.” (Stangvik, supra, 54 Cal.3d at 751.)

Defendants’ public interest argument similarly relies upon their unsupported contention that all relevant witnesses are in Texas and the conduct at issue occurred in Texas. (Mot. at 5:26-8:3.) Based upon Defendants’ unsupported assumptions, they contend a California jury should not be required to adjudicate the claims, Texas has an interest in resolving the dispute, and Plaintiff is merely forum shopping. Defendants also rely upon unsupported rhetoric regarding this Court’s ability to conduct the instant litigation, without any basis for concluding a trial court in Texas has any greater resources. (Mot. at 6:4-7; Reply at 9:21-28.) The Los Angeles Superior Court and the courts of California have sufficient resources to adjudicate the parties dispute.

As noted above, Plaintiff submitted substantial evidence rebutting Defendants’ claims, including evidence indicating Defendants disseminated the reports at issue to individuals in California while Defendant Johnson was in California. California has a strong interest in adjudicating such claims. (Doe v. Damron (2021) 70 Cal.App.5th 684, 692 (“The issue is California's interest in regulating tortious conduct in California. That interest is beyond dispute. . . . the state's interest extends to non-resident victims.”).)

The Court finds Defendants failed to meet their burden to demonstrate the public interests factors favor trial in Texas and Plaintiff has provided evidence, rather than general argument, supporting California’s public interest.