Judge: Randy Rhodes, Case: 22CHCV00493, Date: 2022-12-19 Tentative Ruling
Case Number: 22CHCV00493 Hearing Date: December 19, 2022 Dept: F51
Dept. F-51
Date: 12/19/22
Case #22CHCV00493
MOTION TO QUASH SERVICE OF PROCESS
Motion Filed: 8/5/22
MOVING PARTY: Defendants Gary G. Topolewski and
Topolewski America, Inc. (collectively, “Defendants”)
RESPONDING PARTY: Plaintiff Bank of the West
NOTICE: OK
RELIEF REQUESTED: An order quashing Plaintiff’s service of
its complaint and summons on Defendants, and dismissal of the action for
inconvenient forum.
TENTATIVE RULING: Defendants’ motion to quash service
of process is denied. Defendants’ request to dismiss the action for
inconvenient forum is denied. Plaintiff’s request for judicial notice is
granted.
BACKGROUND
This action arises out of
three business loans extended by Plaintiff to defendant Topolewski America,
Inc. (the “Company”). Plaintiff allegedly entered into three separate loan
agreements with the Company on 7/26/19, 5/14/20, and 7/12/21, each secured by
various pieces of the Company’s equipment as collateral. (Compl. ¶¶ 11–19.)
Plaintiff alleges that the Company breached the loan and
security agreements “by, among other things, failing and refusing to allow [Plaintiff]
to inspect the Equipment Collateral.” (Id., ¶ 24.) Plaintiff also
alleges that it has reason to believe the Company “never actually had ownership
or possession of the Collateral and that [the Company] made continuing
misrepresentations to [Plaintiff] concerning [the Company’s] alleged ownership
and possession thereof.” (Ibid.) Plaintiff alleges that defendant Gary
Topolewski (“Mr. Topolewski”) and the Company “are the alter egos of one
another, and each is fully responsible and liable for all obligations and
debts.” (Compl. ¶ 7.)
On 7/6/22, Plaintiff filed
its complaint against Defendants, alleging causes of action for Breach of
Contract and Breach of Security Agreement with respect to each of the three
loans. Plaintiff’s complaint also pleads causes of action for Recovery of
Personal Property, Temporary Restraining Order/Preliminary Injunction,
Conversion, and Fraud and Deceit. On 7/7/22, Plaintiff served the Company with
process via substitute service, and Mr. Topolewski via personal service. (7/20/22
Proofs of Service.)
On 8/5/22, Defendants filed
the instant motion to quash Plaintiff’s service of its complaint and summons.
On 11/23/22, Plaintiff filed its opposition. On 11/28/22, Defendants filed
their reply. [[On
12/13/22, Plaintiff filed its surreply.]]
Sur-reply
Here, P filed a surreply to Ds’ 11/28/22 reply. According
to the CA Civil Courtroom Handbook and Desktop Reference (2022 ed.):
There is no provision in the Code of Civil Procedure for a
reply-to-a-reply, i.e., a “sur-reply.”
Thus, unless leave of court has been sought and granted to file a
sur-reply, the procedurally correct way to deal with a sur-reply brief is to
object and ask the court to disregard it. However, ultimately consideration
of the sur-reply brief is within the discretion of the court. (See Guimei
v. General Electric Co., 172 Cal. App. 4th 689, 703, 91 Cal. Rptr. 3d 178 (2d
Dist. 2009); and see City of Arcadia v. State Water Resources Control Bd., 191
Cal. App. 4th 156, 180, 119 Cal. Rptr. 3d 232 (4th Dist. 2010))
The court's discretion is likely to be exercised against
allowing a sur-reply to be filed. (See, e.g., Wright ex rel. Trust Co. of
Kansas v. Abbott Laboratories, 62 F. Supp. 2d 1186 (D. Kan. 1999) [sur-reply
disfavored; normally allowed only if invited by court]; Chubb & Son v. C
& C Complete Services, LLC, 919 F. Supp. 2d 666, 679 (D. Md. 2013) [court
granted defendant's motion to strike the plaintiff's sur-reply because the
sur-reply was not authorized by the court])
ANALYSIS
A defendant may move, “on or before the last day of
his or her time to plead,” to quash the service of summons by alleging a lack
of personal jurisdiction, or to dismiss the action on the ground of
inconvenient forum. (Code Civ. Proc. § 418.10, subd. (a).) A motion to quash
must be granted if the court finds that either (1) there is no basis for
exercising personal jurisdiction over the defendant or (2) service on the
defendant was improper. (Ziller Elecs. Lab GmbH v. Superior Court (1988)
206 Cal.App.3d 1222, 1229.)
Personal Jurisdiction
Here, Defendants maintain that both
Mr. Topolewski and the Company are residents of the state of Nevada, and thus
the Court lacks personal jurisdiction over them. (Defs.’ Mot., 2:20–22.) A
court’s personal jurisdiction over a defendant may be general or specific to
the defendant’s contacts with the forum state which give rise to the action. (Strasner
v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215,
222–226.)
“A defendant is subject to general
jurisdiction when it has substantial, continuous, and systematic contacts in
the forum state, i.e., its contacts with the forum are so wide-ranging that
they take the place of a physical presence in the state.” (Id., at 222.)
“When a defendant challenges jurisdiction through a motion to quash, the plaintiff
bears the burden to demonstrate facts, as to each nonresident defendant,
justifying the exercise of jurisdiction by a preponderance of evidence.” (Id.,
at 221–222.) Once the plaintiff has met its initial burden, the burden then
shifts to the defendant to prove that the exercise of jurisdiction would be
unreasonable (i.e., does not comport with fair play and substantial justice). (Vons
Cos. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449.)
Mr. Topolewski
“In-state service of process
confers [general] jurisdiction over a physically present nonresident.” (In
re Marriage of Fitzgerald & King (1995) 39 Cal.App.4th 1419, 1426.) “The
return of a [registered] process server … establishes a presumption, affecting
the burden of producing evidence, of the facts stated in the return.” (Evid.
Code § 647.) “The filing of a proof of service creates a rebuttable presumption
that the service was proper.” (Floveyor International, Ltd. v. Superior
Court (1997) 59 Cal.App.4th 789, 795.)
Here, the 7/20/22 proof of personal
service shows that Mr. Topolewski was personally served with process in
Northridge, CA on 7/7/22. (7/20/22 Proof of Personal Service.) Defendants
dispute the purported service on Mr. Topolewski, arguing that he was not
personally served, and further contending that the actual occupant of the
house, Tom Bennie, was the person at the premises when the process server
attempted service. (Defs.’ Reply, 3:19; Decl. of Tom Bennie; Decl. of Gary
Topolewski.) Plaintiff argues in opposition [[and surreply]] that the process server has
confirmed that the person he personally served on 7/7/22 is the same individual
depicted in Mr. Topolewski’s driver’s license, which is attached to the instant
motion. (Pl.’s Opp., 5:2–4; Decl. of Omar Shammout, ¶¶ 3–4; Supp. Decl. of Omar Shammout, ¶¶
3–4.)
Plaintiff asserts that Mr.
Topolewski had ownership interest of the property where he was purportedly
personally served, through 2018, before allegedly fraudulently transferring his
interest to a business entity. (Pl.’s Opp., 5:4–6.) Plaintiff supports its
argument with the title records of the property and a Notice of Pendency of
Action against Mr. Topolewski and the business entity to which he granted the
property interest, of which the Court takes judicial notice. (Exhibit 1 to
Decl. of Joshua Partington; Exhibit 1 to Pl.’s Request for Judicial Notice.) Based
on all of the evidence presented, the Court finds that Defendants have not
sufficiently rebutted the presumption the Mr. Topolewski was personally served
with process in Northridge, CA on 7/7/22. (Floveryor, 59 Cal.App.4th at
795.)
Plaintiff alternatively argues that
the Court has general personal jurisdiction over Mr. Topolewski because he “has
substantial, continuous, and systematic contacts with California, such that
hailing [him] into a California Court would not offend traditional notions of
fair play and substantial justice.” (Pl.’s Opp., 6:1–3.) Specifically, Mr.
Topolewski was seen on multiple occasions at the Northridge residence where he
was purportedly personally served, playing local pickup hockey games, and
shopping at local businesses. (Decl. of Leigh-Anne Salinas, ¶¶ 2–12.) The Court
finds these contacts to be sufficient to satisfy the due process requirements
of personal jurisdiction.
Therefore, Plaintiff has met its
burden to show that the personal service of process on Mr. Topolewski within
California, along with Mr. Topolewski’s contacts with California, grant the
Court general personal jurisdiction over him.
Topolewski America, Inc.
Defendants further argue that the
Court has neither general nor specific personal jurisdiction over the Company.
The Company is a Nevada corporation with its principal place of business in Las
Vegas, Nevada. (Compl., ¶ 3.)
Plaintiff argues that the Court has
general personal jurisdiction over the Company because it regularly does
business within California. Specifically, Plaintiff argues that the Company’s
website purports to list a Los Angeles office and phone number, projects within
California, and sale listings for various equipment located in California.
(Exhibits 2–4 of Partington Decl.)
The Court finds that Plaintiff has
met its initial burden of showing that the Company’s contacts with California
are so “substantial, continuous, and systematic” as to warrant the Court’s
general personal jurisdiction over it. (Strasner, 5 Cal.App.5th
at 222.) Defendants make no attempt to meet its responsive burden to show that
the exercise of such jurisdiction would be unreasonable. (Vons, 14
Cal.4th at 449.) Accordingly, the Court finds that it may exercise general
personal jurisdiction over the Company.
The question of whether a court may
exercise specific jurisdiction over a nonresident defendant involves examining
(1) whether the defendant has purposefully directed its activities at the forum
state; (2) whether the plaintiff's claims arise out of or are related to these
forum-directed activities; and (3) whether the exercise of jurisdiction is
reasonable and does not offend traditional notions of fair play and substantial
justice. (Bristol-Myers Squibb Co. v. Superior Court (2016) 1 Cal.5th
783, 799.)
Defendants argue that the Court
lacks specific jurisdiction over the Company because “the Complaint does not
allege any action by [the Company] that would connect it with California.”
(Defs.’ Mot., 3:14–16.) As set forth above, the Company has purposefully
directed its activities at the state of California by selling its equipment,
working on projects, and listing its local office’s contact information, all
within the state. Plaintiff argues that its claims arise out of these contacts
because the action relates to “Plaintiff’s lending activities as they relate to
[the Company’s] business” operations. (Pl.’s Opp., 8:8–9.) Additionally,
Plaintiff argues that traditional notions of fair play and substantial justice
would not be offended if the Company were to be hailed into a California court,
given the Company’s substantial contacts with the State as set forth above. (Id.,
8:13–15.)
The Court agrees with Plaintiff,
and finds that the instant litigation, which concerns business loans extended
by Plaintiff to the Company, is sufficiently related to the Company’s business
operations within the State of California. Accordingly, the Court finds that it
may exercise specific personal jurisdiction over the Company.
Dismissal for Forum Non
Conveniens
“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.”
(Investors Equity Life Holding Co. v. Schmidt (2011) 195 Cal.App.4th
1519, 1528.) “When a court upon motion of a party … 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.” (Code Civ. Proc. § 410.30.)
The threshold question for a court
on a forum non conveniens motion is whether a suitable alternative forum exists
for the case. (Shiley Inc. v. Superior Court, (1992) 4 Cal.App.4th 126,
132.) The subsequent balancing of private and public interests on a forum non
conveniens motion is within the court’s sound discretion. (Stangvik v.
Shiley Inc. (1991) 54 Cal.3d 744, 751–752.)
Here, Defendants argue that Nevada
is the more suitable forum for this action, because “Nevada is the home of both
defendants and the chosen forum in the contracts being litigated.” (Defs.’ Mot.,
4:14–15.) However, Defendants have not proffered any supporting facts or
evidence to substantiate their allegation of a forum selection clause in the
subject loan agreements.
The Company’s President also
declares that “any witnesses and evidence will be in Nevada.” (Decl. of Robert
Morrow, ¶ 4.) In opposition, Plaintiff argues that the most qualified witness
on behalf of Defendants would be Mr. Topolewski, as the individual who executed
the subject loan documents on behalf of the Company. (Pl.’s Opp., 8:28–9:1.)
Given the above facts indicating that Mr. Topolewski resides in California,
Plaintiff argues that California is the appropriate forum in which this action
should be heard. (Ibid.) Plaintiff further argues that the only relevant
evidence located in Nevada is the collateral equipment at issue, and given
Plaintiff’s allegations that Defendants do not actually possess the subject
equipment, it is questionable whether the evidence actually exists, let alone
within the State of Nevada. (Pl.’s Opp., 9:4–14.)
In consideration of the parties’
arguments, along with the findings supporting the Court’s above determination
that it may exercise general and specific personal jurisdiction over
Defendants, the Court finds California to be the appropriate forum for this
dispute. Accordingly, Defendants’ request to dismiss the action for forum non
conveniens is denied.
The Court takes note of the
parties’ arguments concerning the alter ego theory, rights to discovery, and
sanctions, but need not address them in relation to the instant motion.
CONCLUSION
Defendants’ motion to quash service
of process is denied. Defendants’ request to dismiss the action for
inconvenient forum is denied. Plaintiff’s request for judicial notice is
granted.