Judge: Monica Bachner, Case: 22STCV25243, Date: 2022-12-16 Tentative Ruling

Case Number: 22STCV25243    Hearing Date: December 16, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Specially Appearing Defendants Sorto Pallet Corp.’s and Kevin Sorto’s motion to quash is granted. This matter is dismissed without prejudice as to Specially Appearing Defendants Sorto Pallet Corp. and Kevin Sorto. Specially Appearing Defendants to submit a proposed judgment of dismissal without prejudice within 10 court days. 

Specially Appearing Defendants Sorto Pallet Corp. (“Sorto Corp.”) and Kevin Sorto (“Sorto”) (collectively, “Defendants”) move for an order quashing the service of summons and complaint (“Complaint”) by Plaintiff Standard Pallets LLC (“Standard LLC”) (“Plaintiff”) for lack of personal jurisdiction.  (Notice of Motion, pg. 2; C.C.P. §418.10.)

Background

On August 4, 2022, Plaintiff filed a complaint against Defendants alleging four causes of action: (1) breach of contract, (2) fraud, (3) account stated, and (4) restitution and unjust enrichment.  Plaintiff is a limited liability company organized and existing under the laws of the State of California, located and doing business in Los Angeles County, California.  (Complaint ¶1.)  Plaintiff alleges Sorto is an individual and resident of Texas.  (Complaint ¶3.)  Plaintiff alleges, on information and belief, Sorto Corp. is a Texas corporation doing business in Texas and California among other venues.  (Complaint ¶2.)  The causes of action are based on allegations that Plaintiff and Defendants entered into a contract under which Plaintiff agreed to purchase from Defendant Sorto Corp. any and all used pallets that were surplus to Defendant Sorto Corp.’s needs, to be delivered from time to time as available to Plaintiff’s factory in Los Angeles County, or as Plaintiff might otherwise direct.  (Complaint ¶7.)  Plaintiff alleges the parties agreed that Defendant Sorto Corp. would tender invoices and related shipping documents from time to time as goods were delivered and that Plaintiff would render expedited payment by wire transfer.  (Complaint ¶7.)  Plaintiff alleges many terms of the contract are oral, but the various invoices tendered by Defendant Sorto Corp. memorialized in writing each shipment to be made pursuant to the contract.  (Complaint ¶7.)  Plaintiff alleges the contract was cancellable on reasonable notice from either party.  (Complaint ¶7.)

On August 26, 2022, Plaintiff filed two Proofs of Service indicating Defendants had each been served by personal service on August 25, 2022.  On September 26, 2022, Defendants filed the instant motion.  On December 5, 2022, Plaintiff filed an opposition, and on December 7, 2022, Defendants filed a reply thereto.

Motion to Quash

C.C.P. §418.10(a)(1) provides: “[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 . . . [t]o quash service of summons on the ground of lack of jurisdiction of the court over him or her.”

“When a defendant moves to quash service of process on jurisdictional grounds, the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction.  Once facts showing minimum contacts with the forum state are established, however, it becomes the defendant’s burden to demonstrate that the exercise of jurisdiction would be unreasonable.”  (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449, citations omitted.)

          “Personal jurisdiction may be either general or specific. A nonresident defendant may be subject to the general jurisdiction of the forum if his or her contacts in the forum state are ‘substantial . . . continuous and systematic.’ In such a case, ‘it is not necessary that the specific cause of action alleged be connected with the defendant’s business relationship to the forum.’ Such a defendant’s contacts with the forum are so wide-ranging that they take the place of physical presence in the forum as a basis for jurisdiction.”  (Id. at 445-446, citations omitted.)

“If the nonresident defendant does not have substantial and systematic contacts in the forum sufficient to establish general jurisdiction, he or she still may be subject to the specific jurisdiction of the forum, if the defendant has purposefully availed himself or herself of forum benefits, and the ‘controversy is related to or “arises out of” a defendant’s contacts with the forum.’”  (Id. at 446, citations omitted.)

“The first element of specific jurisdiction is whether the defendant purposefully availed himself of forum benefits. Courts apply the ‘effects test’ to determine purposeful availment in the defamation context. [Citation.] Under this test, intentional conduct occurring elsewhere may give rise to jurisdiction in California where it is calculated to cause injury in California. The defendant must expressly aim or target his conduct toward California, with the knowledge that his intentional conduct would cause harm in the forum.  (Dongxiao Yue v. Wenbin Yang (2021) 62 Cal.App.5th 539, 547, citations omitted.)  While mere posting of defamatory comments on the internet even with the knowledge the plaintiff is in the forum state is not enough to establish specific jurisdiction, “specific jurisdiction may be established under the effects test where a defendant sends ‘California-focused’ social media messages ‘directly’ to California residents ‘with knowledge the recipients [are] California residents’ for the alleged purpose of causing reputational injury there.”  (Id.)

The Court notes that both of Defendant Sorto’s declarations fail to conform to C.C.P. §2015.5 because they are made under penalty of perjury under the law of Texas.  They are therefore inadmissible in California courts.   (C.C.P. §2015.5) Nonetheless, as discussed below, Plaintiff has failed to meet its initial burden the “demonstrating facts justifying the exercise of jurisdiction.” (Vons Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at 449; see also  Elkman v. National States Insurance Co. (2009) 173 Cal.App.4th 1305, 1312-1313 [On a motion to quash on the ground of jurisdiction, the plaintiff bears the burden of establishing, by a preponderance of the evidence, that minimum contacts exist.].) 

As a preliminary matter, Plaintiff does not dispute Defendants’ assertion that they are not subject to the Court’s general jurisdiction, and as such, that issue is conceded and only the matter of whether specific jurisdiction applies remains.

In opposition, Plaintiff asserts Defendants should be subject to jurisdiction given Plaintiff and Defendant Sorto Corp. were parties to a joint venture agreement aimed at expanding both parties’ business within the state of California.  (Opposition, pg. 1; Decl. of Bravo ¶¶2-4.)  Specifically, Plaintiff argues that Defendants engaged in no less than 54 separate transactions for the delivery of Defendant Sorto Corp.’s goods to customers in California, with eight of those transactions alleged to be fraudulent, for which Plaintiff seeks recovery.  (Opposition, pg. 2; Decl. of Bravo ¶¶4, 5.)  Plaintiff also cites to the complaint’s allegations based on a May 16, 2022 Statement of Account to demonstrate the risk of suit in California was plainly foreseeable because of the volume of sales in California and because of the natural and probable consequence of expanding Defendant Sorto Corp’s presence in California.  (Opposition, pg. 2; Complaint, Exh. A.) 

However, Plaintiff did not meet its burden of establishing specific jurisdiction by a preponderance of the evidence.  Contrary to Plaintiff’s assertions, the allegations and evidence are not sufficient to demonstrate the controversy arises out of Defendants’ contacts with California such that specific jurisdiction applies to Defendants based on their transactions with a California LLC. Plaintiff does not submit competent evidence supporting its assertion that Defendants delivered goods to customers in California.  (Complaint, Exh. A.)  The disputed payments do not indicate a physical presence by Defendants in California, nor the sale of Defendant Sorto Corp.’s products in California. 

          Based on the foregoing, Defendants’ motion to quash is granted.

This matter is dismissed without prejudice as to Specially Appearing Defendants Sorto Pallet Corp. and Kevin Sorto. Specially Appearing Defendants to submit a proposed judgment of dismissal without prejudice within 10 court days. 

Dated:  December _____, 2022

Hon. Monica Bachner

Judge of the Superior Court