Judge: Teresa A. Beaudet, Case: 22STCV22737, Date: 2023-05-17 Tentative Ruling

Case Number: 22STCV22737    Hearing Date: May 17, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Punk Me Tender (“Plaintiff”) filed this action on July 14, 2022 against Defendants Onessimo Fine Art and Debra Onessimo. The Complaint asserts causes of action for (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) breach of implied contract, (4) professional negligence, (5) unjust enrichment, (6) conversion, (7) fraudulent misrepresentation, and (8) unfair competition.

In the Complaint, Plaintiff alleges that in or around October 2021, defendants entered talks with Plaintiff regarding an agreement whereby Onessimo Fine Art would exhibit and sell Plaintiff’s artworks at art fairs in the Miami area and at Onessimo Fine Art. (Compl., ¶ 9.) On or around November 2, 2021, and at defendants’ request, Plaintiff sent defendants a consignment agreement consistent with the parties’ discussions (the “Agreement”), and on or around November 2, 2021, defendants objectively communicated their acceptance of the Agreement, indicating their intent to be bound by its terms. (Compl., ¶ 9.)

The Complaint alleges that per the terms of the Agreement, Plaintiff granted Onessimo Fine Art the exclusive right to sell and exhibit certain pieces from Plaintiff’s art collection (the “First Collection”) for a period of not more than three months. (Compl., ¶ 10.) On or around November 22, 2022, Plaintiff and defendant agreed to consign additional pieces owned by Plaintiff to defendant (the “Second Collection”). (Compl., ¶ 17.) On March 15, 2022, Plaintiff requested that defendants return the First Collection and Second Collection. (Compl., ¶ 21.) On or around March 24, 2022, Plaintiff was made aware that piece #312 from the Second Collection was irreparably damaged. (Compl., ¶ 22.) In April of 2022, defendants shipped some of Plaintiff’s works back to Plaintiff, and on or around April 26, 2022, Plaintiff received the shipment. (Compl., ¶¶ 23-24.) Upon inspection of the artwork, Plaintiff found that certain pieces from the collections were damaged. (Compl., ¶ 24.) In addition, certain items were missing. (Compl., ¶ 24.)

Plaintiff alleges that defendants breached Agreement by, inter alia, (i) failing to return to Plaintiff possession of the First Collection by February 10, 2022, (ii) failing to return to Plaintiff possession of the missing artworks within 30 days of April 4, 2020, (ii) failing to return to Plaintiff possession of the missing artworks at any date to present, (iii) failing to provide a certificate of insurance to Plaintiff, (iv) failing to insure the collections, (v) failing to compensate Plaintiff the net artist’s price of each of the damaged and missing artworks, (vi) failing to pay Plaintiff the net artist’s price within 10 days of the sale of pieces #130 and #313, and (vii) failing to compensate Plaintiff the net artist’s price for pieces #130 and #313, which defendants purported to have sold. (Compl., ¶ 34.)  

On August 2, 2022, Plaintiff filed proofs of service indicating that Onessimo Fine Art was served with the summons and Complaint on July 27, 2022 by personal service, and that Debra Onessimo was served with the summons and Complaint on July 30, 2022 by personal service.

Specially appearing defendants Debra Onessimo Fine Arts, Inc. dba Onessimo Fine Art (“Onessimo Fine Art”) and Debra Onessimo (jointly, “Defendants”) now move for an order quashing the purported service of summons on them and dismissing the claims against them for lack of personal jurisdiction. Plaintiff opposes.

Evidentiary Objections

The Court rules on Defendants’ evidentiary objections as follows:

Objection No. 1: sustained

Objection No. 2: overruled

Objection No. 3: overruled

Objection No. 4: overruled

Objection No. 5: overruled

Objection No. 6: overruled

Discussion

Code of Civil Procedure section 418.10 provides in part: “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 … (1) To 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).)

“California courts may exercise jurisdiction on any basis that is not inconsistent with the state and federal Constitutions. Thus, the inquiry in California is whether the assertion of personal jurisdiction comports with the limits imposed by federal due process.” (Young v. Daimler AG (2014) 228 Cal.App.4th 855, 865 [internal quotations and citations omitted].) Due process permits courts to exercise personal jurisdiction over nonresidents who have “minimum contact” with the forum state such that the exercise of jurisdiction does not offend “traditional notions of fair play and substantial justice.” (Int’l Shoe Co. v. Wash. (1945) 326 U.S. 310, 316.)

“Personal jurisdiction may be either general or specific.” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) “A defendant that has substantial, continuous, and systematic contacts with the forum state is subject to general jurisdiction in the state, meaning jurisdiction on any cause of action.” (HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1167.) A nonresident may be subject to specific jurisdiction if a three-prong test is met. “First, the defendant must have purposefully availed itself of the state’s benefits. Second, the controversy must be related to or arise out of the defendant’s contacts with the state. Third, considering the defendant’s contacts with the state and other factors, California’s exercise of jurisdiction over the defendant must comport with fair play and substantial justice.” (Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal.App.4th 1558, 1568 (emphasis in original) [internal citations omitted].)

“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., supra, 14 Cal.4th at p. 449 [internal citations omitted].)

            Defendants assert that neither Onessimo Fine Art nor Debra Onessimo has sufficient contacts with California to support general jurisdiction. Defendants provide evidence that

Debra Onessimo Fine Arts, Inc. does business under the name Onessimo Fine Art. (Onessimo Decl., ¶ 3.) Debra Onessimo Fine Arts, Inc. was incorporated in the State of Florida in 2001, and its principal place of business has always been in Florida. (Onessimo Decl., ¶ 3; see also Compl., ¶ 2 [alleging that Onessimo Fine Art has “its principal place of business in the County of Palm Beach, State of Florida”].) Debra Onessimo Fine Arts, Inc. has never had any offices or employees in the State of California, nor does it own any property in the State of California. (Onessimo Decl., ¶ 3.) In addition, Onessimo Fine Art’s business with Plaintiff was conducted entirely in the State of Florida. (Onessimo Decl., ¶ 8.)

            Defendants also provide evidence that Debra Onessimo has never been a resident of the State of California and has never owned any real property in California. (Onessimo Decl., ¶ 4.) Debra Onessimo does no business in the State of California, and she has never had any offices or employees in the State of California. (Onessimo Decl., ¶ 4.) The last time Debra Onessimo was physically in the State of California was years before Debra Onessimo Fine Arts, Inc. began displaying Plaintiff’s artwork. (Onessimo Decl., ¶ 4.)

            In the opposition, Plaintiff does not appear to dispute Defendants’ assertion that they are not subject to general jurisdiction in California. (See Opp’n at p. 6:19-21, “Defendants persuasively argue that neither the Gallery nor Ms. Onessimo have sufficient contacts with California to subject them to the general jurisdiction of California courts.”)

            However, Plaintiff asserts that California courts have personal jurisdiction over Defendants because they consented to California law and entered into a transaction with Plaintiff in excess of $250,000.00. Civil Code section 1646.5 provides, inter alia, that “[n]otwithstanding Section 1646, the parties to any contract, agreement, or undertaking, contingent or otherwise, relating to a transaction involving in the aggregate not less than two hundred fifty thousand dollars ($250,000), including a transaction otherwise covered by subdivision (a) of Section 1301 of the Commercial Code, may agree that the law of this state shall govern their rights and duties in whole or in part, whether or not the contract, agreement, or undertaking or transaction bears a reasonable relation to this state.”[1]

Plaintiff notes that the Complaint alleges that on or around November 2, 2021, Plaintiff sent defendants a consignment agreement (the “Agreement”) and on or around November 2, 2021, defendants objectively communicated their acceptance of the Agreement. (Compl., ¶ 9.) Plaintiff alleges that “Section 11 of the Agreement confirms that it ‘contains the entire understanding of the parties with respect to the subject matter hereof, may not be changed or amended except in writing signed by the parties, and shall be construed and governed in accordance with the laws of the state of California.’” (Compl., ¶ 14, emphasis added.) Plaintiff also asserts that the Agreement relates to a series of transactions in excess of $250,000, noting that the Complaint alleges that “[o]n May 6, 2022, Defendants provided Plaintiff with a copy of a claim form, totaling for $309,979.00, purportedly submitted to the shipping service hired to deliver the artworks.” (Compl., ¶ 26.)  Defendants assert that accordingly, Civil Code section 1646.5 applies such that the Court “has personal jurisdiction over [Onessimo Fine Art] as a matter of law.” (Opp’n at p. 5:23-24.)

As an initial matter, Plaintiff relies primarily on the allegations of its unverified Complaint in support of its opposition to the instant motion. As Defendants note, “[o]n a challenge to personal jurisdiction by a motion to quash, the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction. The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint. If the plaintiff meets this burden, it becomes the defendant’s burden to demonstrate that the exercise of jurisdiction would be unreasonable.” (ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 209-210 [internal quotations and citations omitted].) As Defendants note, Plaintiff cites to allegations of the Complaint in support of the assertion that Civil Code section 1646.5 applies here. Plaintiff has not proffered any evidence of a contract with a California choice-of-law clause.

 Defendants also note that even if Plaintiff had proffered such evidence, Plaintiff does not cite to any legal authority to support the proposition that a California choice-of-law confers personal jurisdiction. Defendants cite to Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 481-482, where the United States Supreme Court noted that “[t]he Court in Hanson and subsequent cases has emphasized that choice-of-law analysis -- which focuses on all elements of a transaction, and not simply on the defendant’s conduct -- is distinct from minimum-contacts jurisdictional analysis -- which focuses at the threshold solely on the defendant’s purposeful connection to the forum. Nothing in our cases, however, suggests that a choice-of-law provision should be ignored in considering whether a defendant has purposefully invoked the benefits and protections of a State’s laws for jurisdictional purposes. Although such a provision standing alone would be insufficient to confer jurisdiction, we believe that, when combined with the 20-year interdependent relationship [the defendant] established with [plaintiff’s] Miami headquarters, it reinforced his deliberate affiliation with the forum State and the reasonable foreseeability of possible litigation there.” (Internal quotations omitted, emphasis in original.)

Based on the foregoing, the Court does not find that Plaintiff has demonstrated that the Court has personal jurisdiction over Defendants pursuant to Civil Code section 1646.5.

            Defendants also assert that neither Onessimo Fine Art nor Debra Onessimo has purposefully availed themselves of the benefits of California to support specific jurisdiction.

Defendants note that “[a] contract with an out-of-state party does not automatically establish purposeful availment in the other party’s home forum.” (Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 907.) “Rather, a court must evaluate the contract terms and the surrounding circumstances to determine whether the defendant purposefully established minimum contacts within the forum.” (Ibid.)

            Defendants also cite to Interdyne Co. v. SYS Computer Corp. (1973) 31 Cal.App.3d 508, 509, where the “Plaintiff appeal[ed]…from an order granting the motion of defendant, a foreign corporation, to quash the service of summons on that defendant.” The Court of Appeal affirmed the order. (Ibid.) The Interdyne Court noted that “[w]hen a California business seeks out purchasers in other states -- purchasers who are not present in California for general purposes -- deals with them only by out-of-state agents or by interstate mail and telephone, it is not entitled to force the customer to come to California to defend an action on the contract. The arm of section 410.10 of the Code of Civil Procedure is not long enough to reach buyers who have only such minimal contact with California.” (Id. at pp. 511-512 [internal quotations omitted].) In Interdyne, “[t]he relations between the parties began in 1969, when, in New Jersey, K & J Associates, an authorized sales representative for plaintiff, solicited an order from defendant.” (Id. at pp. 509-510.) “Plaintiff [was] a California corporation, with its principal place of business in Los Angeles County. Defendant [was] a New York corporation, with its principal place of business in New Jersey.” (Id. at p. 509.) “[A]part from the contracts with plaintiff, defendant had no California contacts.” (Id. at p. 510.)

            Defendants assert that similarly here, Plaintiff’s representative contacted Onessimo Fine Art about the possibility of displaying and selling Plaintiff’s artwork at Onessimo Fine Art’s galleries in Florida, and that neither Debra Onessimo nor Onessimo Fine Art sought out the business relationship with Plaintiff. (Onessimo Decl., ¶ 5.) In addition, no representative of Onessimo Fine Art ever traveled to California in connection with its business with Plaintiff. (Onessimo Decl., ¶ 7.) Rather, Plaintiff’s principal (the artist) traveled to Florida to work in a booth that Onessimo Fine Art “jointly paid for” at “CONTEXT Art Miami” in 2021. (Onessimo Decl., ¶ 8.) Defendants cite to Floyd J. Harkness Co. v. Amezcua (1976) 60 Cal.App.3d 687, 691-692, where the Court of Appeal noted that “[i]n examining the quality and nature of the activities in this state, it is settled that we are not concerned with the performance of the plaintiff in California but exclusively with the nonresident defendant’s activities in this state. It is the latter activities which must provide the basis for jurisdiction. It follows that the fact that the plaintiff advanced money from California, a fact upon which plaintiff places heavy reliance, is virtually eliminated as a factor to be weighed herein.” (Internal citations omitted.)

            Defendants assert that Plaintiff’s theory for personal jurisdiction in California over Debra Onessimo is even more strained, as Plaintiff’s purported agreements were with Onessimo Fine Art, not with Debra Onessimo personally. (Onessimo Decl., ¶ 9.)

            In the opposition, Plaintiff asserts that Defendants are subject to the Court’s specific jurisdiction. Plaintiff contends that Onessimo Fine Art purposefully directed its activities at the State of California and purposefully availed itself of the privileges of conducting activities within California. In support of this assertion, Plaintiff points to allegations in the Complaint that defendants objectively communicated their acceptance of the subject Agreement (Compl., ¶ 9), that the Agreement allows Plaintiff to consign additional works to defendants without the need for an additional contract (Compl., ¶ 13), that Defendants arranged for the pickup and delivery of the First and Second Collections (Compl., ¶ 18), that Defendants shipped some of Plaintiff’s works back to Plaintiff (Compl., ¶ 23), and that Defendants agreed that Onessimo Fine Art “shall be responsible for the safekeeping of [the First Collection] while they are in its custody. Gallery shall be strictly liable to [Plaintiff] for their loss, theft, or damage (except for damage resulting from flaws inherent in the [First Collection])…” (Compl., ¶ 10.) However, as set forth above, “[o]n a challenge to personal jurisdiction by a motion to quash, the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction. The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint.” (ViaView, Inc. v. Retzlaff, supra, 1 Cal.App.5th at pp. 209-210 [internal citation omitted].)       

            Plaintiff also asserts that Onessimo Fine Art’s contacts with California go further than a one-off commercial transaction with a California company, because the nature of the consignment relationship created continuing obligations between Onessimo Fine Art and Plaintiff. (Opp’n at p. 8:23-25, citing to paragraphs 9-34 of the Complaint.) In addition, Plaintiff asserts that Onessimo Fine Art’s website indicates that Onessimo Fine Art represents at least one other California artist in addition to Plaintiff. More specifically, Plaintiffs counsel’s declaration provides, inter alia, “[a]ttached hereto as Exhibit B is a true and correct copy of a screenshot from [Onessimo Fine Art’s] website indicating that the [Onessimo Fine Art] represents a California-based artist named Alexandra Nechita.” (Sunshine Decl., ¶ 3, Ex. B.)

            Plaintiff alternatively requests a continuance to conduct jurisdictional discovery. “A trial court has 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.” (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 30; see also Magnecomp Corp. v. Athene Co. (1989) 209 Cal.App.3d 526, 533, “[When] jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that minimum contacts exist between defendant and the forum state to justify imposition of personal jurisdiction. The plaintiff has the right to conduct discovery with regard to the issue of jurisdiction to develop the facts necessary to sustain this burden.” [internal quotations and citations omitted].) Plaintiff asserts that “[a]dditional discovery will likely lead to the production of documents relevant to the Defendants’ contacts with the State of California.” (Opp’n at p. 11:13-14.)

            Defendants assert that Plaintiff’s request for a continuance to conduct jurisdictional discovery should be denied. Defendants cite to Preciado v. Freightliner Custom Chassis Corp. (2023) 87 Cal.App.5th 964, 972, where the Court of Appeal noted that “[i]n 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.” In Preciado, the Court of Appeal concluded that “[b]ecause Plaintiffs failed to articulate what specific facts they would seek to develop if granted a continuance, the trial court could reasonably conclude that Plaintiffs did not demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction. Accordingly, the trial court did not abuse its discretion by denying Plaintiffs’ request for a continuance of the motion to quash to conduct discovery.” (Id. at pp. 973-74 [internal quotations and citation omitted].) The Preciado Court also noted that “there were 85 days between the April 1, 2021 filing of FCCC’s motion to quash and the June 25, 2021 filing of Plaintiffs’ opposition to that motion, and 99 days between the filing of the motion and the hearing date. However, Plaintiffs did not use that time period to propound any discovery targeted to the issue of personal jurisdiction. On the contrary, on June 10, 2021, Plaintiffs propounded lengthy discovery requests on FCCC, but Plaintiffs did not design that discovery to lead to evidence relevant to issues of personal jurisdiction.” (Id. at      pp. 972-973.)

            Defendants note that here, Plaintiff does not identify any specific area of inquiry that it would pursue if it were allowed to conduct discovery. Defendants also assert, without citing to any supporting evidence, that Plaintiff failed to use the 106 days between when Defendants filed the instant motion to quash (September 13, 2022) and the date when Plaintiff filed its opposition (December 28, 2022) to propound any discovery targeted to the issue of personal jurisdiction.

            Although the Court agrees with Defendants that Plaintiff does not clearly identify the specific area of inquiry that it would pursue if it were allowed to conduct jurisdictional discovery, Plaintiff asserts that “[a]dditional discovery will likely lead to the production of documents relevant to the Defendants’ contacts with the State of California.” (Opp’n at p. 11:13-14.) As Plaintiff notes, “[a] plaintiff attempting to assert jurisdiction over a nonresident defendant is entitled to an opportunity to conduct discovery of the jurisdictional facts necessary to sustain its burden of proof. 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.” (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127 [internal citation omitted, emphasis added].) Plaintiff has proffered evidence as to at least one other California artist featured on Defendants’ website. Additionally, Plaintiff proffered evidence regarding the status of the Onessimo entity actually named in the complaint that may pertain to the alter ego allegations. Although Defendants proffer evidentiary responses to those issues in support of their Reply, Plaintiff should have an opportunity to conduct discovery on these issues that may affect the question of personal jurisdiction over the Defendants.

In light of the foregoing, the Court will continue the hearing on the instant motion to allow Plaintiff to conduct discovery on jurisdictional issues.

Conclusion

Based on the foregoing, the Court continues the hearing on Defendants’ motion to quash to ________________, 2023 at 10:00 a.m. Plaintiff may conduct discovery on jurisdictional issues only. Plaintiff may file a supplemental opposition to the instant motion and Defendants may file a supplemental reply. Any supplemental opposition and reply papers must be filed and served per Code of Civil Procedure section 1005, subdivision (b) based on the new hearing date.

Defendants are ordered to give notice of this Order.

DATED:  May 17, 2023                                                                                

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court