Judge: Salvatore Sirna, Case: 21PSCV00155, Date: 2022-11-21 Tentative Ruling
Case Number: 21PSCV00155 Hearing Date: November 21, 2022 Dept: A
Defendant Sunrex Technology Corporation’s Motion to
Quash Service of Summons
Respondent: Plaintiff Michael A. Shipman
TENTATIVE RULING
Defendant Sunrex Technology Corporation’s Motion to
Quash Service of Summons is DENIED.
BACKGROUND
This
is a breach of contract action arising from a licensing agreement. In June
2009, Plaintiff Michael A. Shipman entered into a confidential licensing agreement
with Sunrex Technology Corporation (Sunrex). On February 26, 2021, Plaintiff
filed a complaint for breach of contract against American Sunrex Corp.
(American Sunrex) and Does 1 through 25, alleging defendants failed to provide an
accounting of licensed products sold and to make full royalty payments. On
March 3, 2021, Plaintiff added Sunrex to the complaint as Doe 1.
Plaintiff has since amended the complaint three times, with the most recent Third Amended Complaint (TAC) being filed on March 10, 2022. On June 2, Plaintiff filed a proof of service, claiming to have served Sunrex by personally serving American Sunrex’s vice president in Walnut. On July 5, 2022, Plaintiff submitted a second proof of service, claiming to have served Sunrex by personally serving Yi Ren Tsai, “vice director of the administration department” for Sunrex, at Sunrex’s offices in Taiwan.
On July 28, 2022, Sunrex filed the instant motion to quash service of summons. Sunrex’s counsel states counsel met and conferred on the propriety of Plaintiff’s service methods and could not reach an agreement before Sunrex filed the present motion. (Lu Decl., ¶ 15.)
A hearing on this motion and a case management conference are set for November 21.
LEGAL STANDARD
A
defendant may file a motion to quash service of summons if the court lacks
jurisdiction. (Code Civ. Proc., § 418.10, subd. (a).) Although
defendant is the moving party, plaintiff bears the burden of proof to defeat
the motion by establishing jurisdictional grounds exist. (Mihlon v.
Superior Court (1985) 169 Cal.App.3d 703, 710.)
DISCUSSION
Sunrex
moves to quash Plaintiff’s service of summons on the grounds that American
Sunrex’s vice president in Walnut and Sunrex’s front office staff in Taiwan
were not authorized to accept service on Sunrex’s behalf. The court disagrees.
A foreign defendant may be successfully served through its domestic agent when allowed by state law. (Volkswagenwerk Aktiengesellschaft v. Schlunk (1988) 486 U.S. 694, 707.) Pursuant to California law, a corporation may be served by delivery of summons “[t]o the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process.” (Code Civ. Proc., § 416.10, subd. (b).) A foreign corporation may be served by personal service on “any officer of the corporation or its general manager in this state.” (Corp. Code, § 2110.) A foreign corporation’s domestic subsidiary is considered a general manager for the purposes of service. (Yamaha Motor Co., Ltd. v. Superior Court (2009) 174 Cal.App.4th 264, 274, citing Cosper v. Smith & Wesson Arms Co. (1959) 53 Cal.2d 77.)
Here, Plaintiff contends service is proper as American Sunrex is the domestic subsidiary of Sunrex. To determine if service on a domestic subsidiary is proper, the court must consider whether it is “reasonably certain” that American Sunrex will apprise Sunrex of being served in California. According to a “2020 Sunrex Corporate Social Responsibility Report,” American Sunrex is a wholly owned subsidiary of Sunrex and Huo-Lu Tsai is Sunrex’s chairman. (Russo Decl., Ex. 1, p. 16; Ex. 2.) The same individual is also listed as the director of American Sunrex in its corporate filings. (Russo Decl., Ex. 3-5.) Given American Sunrex is Sunrex’s only office in California or the United States and given the fact that the two entities share the same executive officer, the court finds it is reasonably certain that American Sunrex will apprise Sunrex of any service in California.
Sunrex maintains American Sunrex is “separate corporate entity distinct and apart from Sunrex.” (Kuo Decl., ¶ 5-8.) However, Sunrex does not deny that American Sunrex is its wholly owned subsidiary. Thus, because Plaintiff served Sunrex’s domestic subsidiary in California, service is proper.
Accordingly, the court DENIES Sunrex’s motion to quash service of summons.
CONCLUSION