Judge: Robert B. Broadbelt, Case: 23STCV12290, Date: 2023-10-20 Tentative Ruling

Case Number: 23STCV12290    Hearing Date: October 20, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants Justin Ehrlich, Sorabh Maheshwari, Derrick Land, Stephen Travis Masters, and Caroline Harrell

RESPONDING PARTY:       Plaintiff Sunset Equity Partners, LLC

Motion to Quash for Lack of Personal Jurisdiction

The court considered the amended moving,[1] opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court rules on defendants Justin Ehrlich, Sorabh Maheshwari, Derrick Land, Stephen Travis Masters, and Caroline Harrell’s evidentiary objections,[2] filed on October 13, 2023, as follows:

The court overrules Objections Nos. 1-16, 20-22, 26-27, and 30-31.

The court sustains Objections Nos. 17-19, 23-25, 28-29, and 32.

DISCUSSION

Defendants Justin Ehrlich (“Ehrlich”), Sorabh Maheshwari (“Maheshwari”), Derrick Land (“Land”), Stephen Travis Masters (“Masters”) and Caroline Harrell (“Harrell”) (collectively, “Defendants”) move the court for an order quashing the summons served on them by plaintiff Sunset Equity Partners, LLC (“Plaintiff”) on the ground that the court lacks personal jurisdiction over Defendants. 

A defendant may move “[t]o 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).)  Personal jurisdiction may be general or specific.  (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 569.)  “General jurisdiction exists when a defendant is domiciled in the forum state or his activities there are substantial, continuous, and systematic.”  (F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782, 796.)  “‘Specific jurisdiction exists if: (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 assertion of jurisdiction would comport with fair play and substantial justice.’”  (Aquila, Inc., supra, 148 Cal.App.4th at p. 570 [emphasis in original].)  “‘On a motion to quash for lack of personal jurisdiction, the plaintiff bears the burden of establishing by a preponderance of the evidence that the defendant has such “ ‘minimum contacts’ ” with the forum state that being subjected to its jurisdiction will not offend traditional notions of fair play.  [Citation.]’”  (Moncrief v. Clark (2015) 238 Cal.App.4th 1000, 1005.)  Once the plaintiff has met the initial burden of demonstrating facts justifying the exercise of jurisdiction, “then the defendant has the burden of demonstrating that the exercise of jurisdiction would be unreasonable.”  (Id. at p. 1006 [internal quotations omitted].)  

As a threshold matter, the court notes that the parties do not appear to argue that the court has general jurisdiction over Defendants, who have presented evidence establishing that they are not domiciled in California.  (Travis Decl., ¶¶ 2, 4; Ehrlich Decl., ¶¶ 2, 4; Land Decl., ¶¶ 2, 4; Harrell Decl., ¶¶ 3-4; Maheshwari Decl., ¶¶ 2, 4.)

The court finds that (1) Plaintiff has not met its burden to establish the facts of specific jurisdiction by a preponderance of the evidence as to defendants Ehrlich, Maheshwari, and Land, and therefore grants Defendants’ motion as to those defendants, and (2) Plaintiff has met its burden to establish the facts of specific jurisdiction by a preponderance of the evidence as to defendants Masters and Harrell.  (Code Civ. Proc., § 418.10, subd. (a); Aquila, Inc., supra, 148 Cal.App.4th at p. 568.)

Plaintiff contends that Defendants directed their tortious activity to the parcel of real property in California that is the subject of this action and therefore they are subject to specific jurisdiction.  “Purposeful availment of forum benefits—‘ “is only satisfied when the defendant purposefully and voluntarily directs his [or her] activities toward the forum so that he [or she] should expect, by virtue of the benefit he [or she] receives, to be subject to the court’s jurisdiction based on” his [or her] contacts with the forum.  [Citation.]’”  (Moncrief, supra, 238 Cal.App.4th at p. 1006.)  “[I]n libel, defamation, and some other intentional tort cases, courts have applied an ‘effects test’ to assess the purposeful availment requirement.”  (Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215, 227; DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080, 1098 [“Personal jurisdiction can be based upon tortious conduct outside of California that is expressly aimed at causing tortious effects in this state”].)  The effects test “requires ‘evidence of express aiming or intentional targeting’ [citation], in addition to ‘the defendant’s knowledge that his intentional conduct would cause harm in the forum [citation].”  (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 20 [internal citations omitted]; DVI, Inc., supra, 104 Cal.App.4th at pp. 1098-1099 [“‘additional evidence of express aiming or intentional targeting’ is required to establish jurisdiction under the effects test”].)  

First, the court finds that Plaintiff has not presented competent evidence showing, by a preponderance of the evidence, that defendants Ehrlich, Maheshwari, and Land (1) were involved in the recording of the allegedly fraudulent documents, or (2) were involved in a conspiracy to record those documents or to cloud title to the subject property.  (Donel Decl., Exs. G [February 13, 2023 Deed of Trust “requested by Churchill MRA Funding I LLC”], H [April 3, 2023 Assignment of Security Interests signed by Masters as an Authorized Signer for Churchill MRA Funding I LLC and notarized by Harrell], I [April 6, 2023 Assignment of Security Interests “requested by Churchill MRA Funding I LLC” and signed by Masters as an Authorized Signer for Churchill MRA Funding I LLC and notarized by Harrell]; Compl., Ex. 7 [same as Exhibit I]; Taylor-Rush v. Multitech Corp. (1990) 217 Cal.App.3d 103, 114 [“Although the acts of a coconspirator within California may give rise to jurisdiction over a coconspirator in another state, the bland allegation of conspiracy without a prima facie showing of its existence is insufficient to establish personal jurisdiction”].)  Thus, the court finds that Plaintiff has not shown that these defendants expressly aimed or targeted their intentional acts toward California that would support the exercise of jurisdiction over them.  (Burdick, supra, 233 Cal.App.4th at p. 20.)

Second, the court finds that Plaintiff has shown that defendants Masters and Harrell expressly aimed their conduct at California in signing and notarizing the Assignments of Security Interests, recorded on April 3, 2023 and April 6, 2023 with the Los Angeles County’s Recorder’s Office.

The first Assignment of Security Interests, recorded on April 3, 2023, (1) was signed by defendant Masters as an Authorized Signer for Churchill MRA Funding I LLC (“Churchill”), and (2) was notarized by defendant Harrell on January 20, 2023.  (Donel Decl., Ex. H.)  As noted by Plaintiff, this recording appears to have been executed by those defendants before the Assignment was completely filled out.  Specifically, the Assignment references the “certain instrument recorded on 02/13/2023[,]” which was after the date that Masters signed and Harrell notarized the document.  (Ibid.)  Similarly, the second Assignment of Security Interests (1) was signed by Masters as an Authorized Signer for Churchill on March 28, 2023, and (2) was notarized by Harrell on March 28, 2023, but (3) references, on the first page, the Assignment of Security Instrument recorded on April 3, 2023, which was recorded after the date that Masters and Harrell signed and notarized, respectively, the second Assignment of Security Interests.  (Donel Decl., Ex. I; Compl., Ex. 7 [same].)  Both of the assignments concerned the real property that is the subject of this action.  (Donel Decl., Ex. H, p. 1, Ex. I, p. 3; Compl., ¶ 1.)  At the time these assignments were executed, Plaintiff was the owner of the property with a lien recorded in favor of Colorado Federal Savings Bank.  (Donel Decl., ¶¶ 20-21.)

The court finds that this evidence is sufficient to support, by a preponderance of the evidence, Plaintiff’s claims that (1) defendant Masters signed on behalf of, and therefore authorized, Churchill’s wrongful conduct, and also expressly aimed wrongful acts at the State of California; (2) defendant Harrell participated in notarizing the recorded documents and therefore expressly aimed her activity toward the State of California; (3) defendants Masters and Harrell knew that any harm would be felt in California, as the state where the subject property is located and the documents were recorded; and (4) the controversy alleged in the Complaint arises out of and is related to defendants Masters and Harrell’s conduct with California since Plaintiff seeks to quiet title of the subject property and to clear the slander of title therefor.  (Taylor-Rush, supra, 217 Cal.App.3d at p. 113 [“Corporate officers and directors cannot ordinarily be held personally liable for the acts or obligations of their corporation.  However, they may become liable if they directly authorize or actively participate in wrongful or tortious conduct”]; Strasner, supra, 5 Cal.App.5th at p. 228 [“to establish specific jurisdiction through the effects test a plaintiff must show the defendant committed an intentional act, expressly aimed at or targeting the forum state, with the knowledge that his act would cause harm in the state”]; Aquila, Inc., supra, 148 Cal.App.4th at p. 570.)

Thus, the court finds that Plaintiff has met its initial burden of demonstrating facts justifying the exercise of jurisdiction by a preponderance of the evidence as to defendants Masters and Harrell.  (Aquila, Inc., supra, 148 Cal.App.4th at p. 568.)  The burden therefore shifts to defendants Masters and Harrell to show that the exercise of jurisdiction would be unreasonable.  (Preciado v. Freightliner Custom Chassis Corporation (2023) 87 Cal.App.5th 964, 976.)  The court finds that they have not met that burden.

To determine whether the assertion of specific jurisdiction is fair and reasonable, “a court ‘must consider the burden on the defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief.  It must also weigh in its determination “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.” ’”  (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 476.)  It is the defendants’ burden “to ‘present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.’”  (Ibid.)  Here, defendants Masters and Harrell do not present evidence or argument establishing that any of the factors set forth above would render the exercise of jurisdiction over them unreasonable or unfair, and instead assert that “Plaintiff has not, and cannot, make the requisite showing that the exercise or personal jurisdiction . . . is proper.”  (Mot., p. 8:14-15.)  Further, the court finds that California has an interest in litigating this action since it concerns real property located in this state and the allegedly fraudulent and false recording of documents in this state.  (Vons Companies, Inc., supra, 14 Cal.4th at p. 476.)

Thus, the court finds that (1) Plaintiff has not met its burden to justify the exercise of specific jurisdiction over defendants Ehrlich, Maheshwari, and Land; (2) Plaintiff has met its burden to justify the exercise of specific jurisdiction over defendants Masters and Harrell; and (3) defendants Masters and Harrell have not met their burden to show that the exercise of jurisdiction would be unreasonable.  The court therefore grants Defendants’ motion as to defendants Ehrlich, Maheshwari, and Land, and denies Defendants’ motion as to defendants Masters and Harrell.

Finally, the court notes that, in its opposition, Plaintiff asserts that, “[a]t a minimum, Plaintiff seeks the opportunity to depose these Defendants to elucidate their precise involvement in the tortious scheme to slander title to real property.”  (Opp., p. 12:7-8.)  “‘A trial court has the discretion to continue the hearing on a motion to quash service of summons for lack of personal jurisdiction to allow the plaintiff to conduct discovery on jurisdictional issues.’  [Citation.]  ‘In order to prevail on a motion for a continuance for jurisdictional discovery, the plaintiff should demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction.’”  (Preciado, supra, 87 Cal.App.5th at p. 972.)  Here, Plaintiff has not met its burden to present evidence or argument showing that discovery is likely to lead to the production of evidence establishing jurisdiction over defendants Ehrlich, Maheshwari, and Land, and therefore denies that request.  (Ibid.)

ORDER

The court grants defendants Justin Ehrlich, Sorabh Maheshwari, and Derrick Land’s motion to quash service of summons.

The court denies defendants Stephen Travis Masters and Caroline Harrell’s motion to quash service of summons.

The court orders that the service of summons served on defendants Justin Ehrlich, Sorabh Maheshwari, and Derrick Land by plaintiff Sunset Equity Partners, LLC is quashed.

The court orders defendants Stephen Travis Masters and Caroline Harrell to file an answer to plaintiff Sunset Equity Partners, LLC’s Complaint within 15 days of the date of this order.

The court orders defendants Justin Ehrlich, Sorabh Maheshwari, and Derrick Land to give notice of this ruling.

IT IS SO ORDERED.

DATED:  October 20, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court