Judge Timothy Patrick Dillon, Case 22STCV02986 2022-10-14 Tentative Ruling

Judge: Timothy Patrick Dillon, Case: 22STCV02986, Date: 2022-10-14 Tentative Ruling

Case Number: 22STCV02986 Hearing Date: October 14, 2022 Dept: 73

GiddyUp EV Charging, Inc. v. John Yedinak, et al. THIS IS A TENTATIVE RULING

Counsel for Plaintiff/opposing party: Jesse Gessin

Counsel for Defendants/moving parties: (1) Brett D. Watson for Defendants Yedinak and Terme

Bancorp, Inc.

(2) Kenneth R. Morris for Defendants BlueDot Energies, LLC; BlueDot Power, LLC; BlueDot Energies, Inc.; and Christina Person

(1) MOtion to quash service FoR lack of personal jurisdiction (filed 05/25/2022) by Defendants John Yedinak and Terme Bancorp, Inc.

(2) motion to quash service for lack of personal jurisdiction (filed 05/26/2022) by Defendants BlueDot Energies, LLC; BlueDot Power, LLC; BlueDot Energies, Inc.; and Christina Person

TENTATIVE RULING

The Court GRANTS and DENIES in part Defendants John Yedinak and Terme Bancorp, Inc.’s motion to quash for improper service and lack of personal jurisdiction. The Court GRANTS the motion to quash as to Defendant Terme Bancorp, Inc., due to improper service. The Court DENIES the motion as to Defendant John Yedinak.

The Court GRANTS and DENIES in part Defendants BlueDot Energies, LLC; BlueDot Power, LLC; BlueDot Energies, Inc.; and Christina Person’s motion to quash service for lack of personal jurisdiction. The Court GRANTS the motion to quash as to Defendants BlueDot Energies, LLC and BlueDot Power, LLC.

The Court DENIES the motion as to Defendant Christina Person and BlueDot Energies, Inc.

The Court DENIES Plaintiff GiddyUp EV Charging, Inc.’s request for jurisdictional discovery.

Background

On January 25, 2022, plaintiff GiddyUp EV Charging, Inc. (“GiddyUp”) filed this action against defendants John Yedinak, Terme Bancorp, Inc., BlueDot Energies, LLC, BlueDot Power, LLC, BlueDot Energies, Inc., Christina Person, and Jofil Borja, asserting the following causes of action:

1. Misappropriation of trade secrets;

2. Breach of fiduciary duty;

3. Aiding and abetting breach of fiduciary duties;

4. Fraud; and

5. Intentional interference with contractual relations.

The Complaint alleges the following among other things.

GiddyUp is a California start-up company that designs, installs, and operates charging stations for electric vehicles. (Compl., ¶¶ 9, 11.) It is also “the owner of highly confidential trade secrets, including (i) research and development regarding the design, installation, and maintenance of large scale EV charging stations …, (ii) … strategic business plan in connection with the development, implementation, and financing of EV charging Stations, …; …; (v) [and a] ‘deal pipeline’ list consisting of the identity of targeted potential customers and their particular needs … as well as proposals and/or bids to those potential customers ….” (Compl., ¶ 41.)

Defendants John Yedinak (“Yedinak”) and Christina Person (“Person”) “worked on all aspects of GiddyUp’s early operations, including soliciting investors, developing a business plan … and identifying … customers.” (Compl., ¶ 13.)

Subsequently, however, GiddyUp discovered that Yedinak and Person were secretly sabotaging the company. For example, they stole GiddyUp’s trade secrets and solicited its potential clients by pilfering a highly confidential deal roster. (Compl., p. 1:13-14.) They also enlisted a California governmental employee Defendant Jofil Borja (“Borja”), at Sacramento Regional Transit District (“SacRT”), to join their scheme. (Compl., p. 1:14-15; ¶ 18.) Borja systematically undermined GiddyUp’s ability to perform its contract with SacRT. (Compl., p. 1:15-17.) On or around January 24, 2022, GiddyUp removed Yedinak as an officer and director of GiddyUp.

Discussion

A. Yedinak and Terme’s Motion to Quash

On May 25, 2022, Yedinak and his company, Defendant Terme Bancorp, Inc. (“Terme”), filed their instant motion to quash, arguing:

· The Court lacks general jurisdiction over the defendants.

o Yedinak is not domiciled in California because he permanently resides in Florida.

o Terme is a Maryland corporation with its principal place of business in Illinois.

· The Court also lacks specific jurisdiction because:

o The defendants did not purposefully avail themselves to California’s benefits.

¿ As discussed, Yedinak is domiciled in Florida and Terme is a Maryland corporation with its principal place of business in Illinois.

¿ Yedinak does not own, lease, or have any bank accounts in California. Moreover, his status as shareholder of GiddyUp is insufficient to satisfy purposeful availment prong.

¿ Similarly, Terme does not have a business presence, its employees, bank accounts, lease, or properties anywhere in California.

o The controversy is neither related to nor arises out of the defendants’ contacts with the forum.

¿ The only conduct that Yedinak arguably “directed at” California was a meeting that took place in Sacramento, California. However, there is no wrongful conduct tied to that visit. In fact, as GiddyUp admits, GiddyUp was awarded the SacRT Agreement.

¿ Accordingly, even if the Court finds that GiddyUp has satisfied the purposeful availment prong, Plaintiff cannot show that his claims arise out of the defendants’ contacts with California.

o The traditional notions of fair play and substantial justice favor the defendants.

¿ Litigating this action in California would be unreasonable and impose a significant burden on the defendants because (among other things) Yedinak is a disabled, 73-year-old, and California is thousands of miles away from his home in Florida.

o For those reasons, the Court should not exercise specific jurisdiction over the defendants.

· Notwithstanding the above, neither Yedinak nor Terme were properly served.

o GiddyUp filed a proof of service on March 24, 2022, alleging that it served Yedinak at his Florida home’s address. However, GiddyUp’s process server entered the premises without permission, trespassed onto the backyard, and broke a lock on a fully enclosed lanai on the back the porch just to drop off the papers. For that reason, GiddyUp’s service to Yedinak should be quashed.

o GiddyUp also filed a proof of service on March 10, 2022, alleging it served Terme on March 7, 2022, at a Maryland address. However, that address belonged to a corporate agent for service of process that was not appointed as Terme’s service of process agent at the time of service. Therefore, GiddyUp’s service on Terme is also defective.

· For those reasons, the Court should grant Yedinak and Terme’s motion to quash.

In opposition, GiddyUp contends,

· GiddyUp does not dispute that the Court cannot exercise general jurisdiction over Yedinak or Terme.

· However, the Court can exercise specific jurisdiction over Yedinak because (1) GiddyUp’s claims are based on Yedinak’s intentional conduct and (2) Yedinak created continuing obligations or relationship with GiddyUp.

o Case law establishes that intentional conduct that is directed at or causes harm to California residents is sufficient for specific jurisdiction.

¿ Here, the Complaint alleges that Yedinak misappropriated trade secrets and committed fraud among other things. Therefore, GiddyUp’s claims are based on Yedinak’s intentional conduct.

o Courts have routinely found specific jurisdiction where a defendant created “continuing obligations or relationship” between himself and the residents of the state.

¿ Here, Yedinak created obligations and relationships with California through his relationship with GiddyUp, a California corporation.

¿ Yedinak was a founder, officer, and director of GiddyUp, and remains a shareholder. He had numerous communications with other members of GiddyUp’s board, was heavily involved with the SacRT project in California, and helped develop (among other things) GiddyUp’s confidential “deal pipeline” project list. He also pursued deals on behalf of GiddyUp, and even worked with Defendant Borja (a California resident) to pursue some of those deals.

¿ Therefore, the fact that Yedinak lives in Florida does not matter.

o Yedinak relies on Rivelli v. Helm (2021) 67 Cal.App.5th 380 (“Rivelli”) to argue that the mere fact that he is a former GiddyUp executive and a current shareholder is insufficient for the Court to exercise personal jurisdiction over him.

¿ However, Rivelli did not address intentional misconduct as a basis for jurisdiction which is at issue here.

¿ Second, this case does not involve foreign defendants or implicate international issues like in Rivelli.

¿ Third, unlike Rivelli, where the defendants’ forum related conduct was not closely related enough to the plaintiffs’ claims, GiddyUp’s claims arise directly from Yedinak’s forum related conduct.

· The Court can also exercise specific jurisdiction over Terme because Yedinak was acting on behalf (and for the benefit) of Terme when he engaged in the alleged misconducts.

o For example, in emails sent to Defendant Borja relating to the SacRT project, Yedinak included “Terme Bancorp, Inc.” and its website below his “signature”.

o Further, during sales calls for GiddyUp, Yedinak attempted to solicit services on behalf of Terme and/or Defendant Person’s entities and signed a nondisclosure agreement with one of the customers in GiddyUp’s deal pipeline on behalf of Terme.

· The traditional notions of fair play and substantial justice prong do not weigh in favor of the defendants.

o Since GiddyUp has established that the defendants had sufficient contacts with California, the burden shifts to the defendants to show that the exercise of jurisdiction would be unfair or unreasonable.

o Here, the only argument the defendants make concerning “unreasonableness” is the distance between Florida (and Illinois) and California.

¿ However, distance alone does not make jurisdiction in California presumptively unreasonable.

¿ Indeed, with the prevalence of electronic communications and proceedings conducted by telephone and video, the burden of litigating in another state has been largely diminished.

o The defendants also ignore California’s substantial interest in litigating this matter in this state since GiddyUp is a California corporation and has developed a system of EV charging stations to benefit the state and its residents.

· Therefore, the Court should find that it can exercise specific jurisdiction over Yedinak and Terme.

· Yedinak’s claims of improper service is factually disputed by GiddyUp’s process server.

o In his declaration, process server David McGonigal testifies that there was a security guard from Yedinak’s gated community present during service. In addition, Yedinak claimed to be deaf during service.

o Yedinak’s failure to (1) provide a declaration from the security guard to support his trespass claims, (2) make a complaint to the police, or (3) file a claim with the Twentieth Judicial Circuit (which licenses process servers), proves his improper service arguments meritless.

· The claim that Terme was improperly served is also meritless.

o According to the Maryland State Business entity website, Terme’s principal office was located at 2405 York Rd., Suite 201, Lutherville-Timonium, MD 21093.

o That address was the same address as a company called “The Corporation Trust, Incorporated,” which is in the business of accepting service of process for corporations.

o Therefore, GiddyUp served Terme at that location on March 7, 2022.

o Terme cannot project to the public its principal place of business and then claim that the company at that address did not have the authority to accept service.

· For those reasons, the Court should deny the motion to quash.

· However, if the Court determines that GiddyUp has not met its burden of proving a sufficient basis for specific jurisdiction over Yedinak and Terme, GiddyUp requests the opportunity to conduct jurisdictional discovery.

In reply, Yedinak and Terme argue,

· GiddyUp is required to demonstrate by a preponderance of the evidence that the defendants’ contacts with the forum state are sufficient to establish personal jurisdiction.

o However, as reflected in the concurrently filed and served evidentiary objections of GiddyUp’s declarations, GiddyUp fails to satisfy that burden.

· The theory that intentional misconduct that causes harm to a Californian entity is sufficient to establish personal jurisdiction, is called the “effects test,” derived from Calder v. Jones (1984) 465 U.S. 783 (“Calder”).

o In that case, actress Shirley Jones sued two Florida residents in California in connection with an article published in the National Enquirer.

o The United States Supreme Court held that jurisdiction was proper in California because the defendants’ conduct was expressly aimed and intentionally directed toward a California resident – the defendants knew that Ms. Jones lived in California and would experience the “effects” in California.

· However, for at least the last decade, the 30+ year old test has not been the prevailing test in California, the Ninth Circuit, or the nation.

o “In the years that followed” Calder, many California courts struggled with the potential import of the Calder decision.

o Pavlovich v. Superior Court (2002) 29 Cal.4th 262 (“Pavlovich”), was the “turning point in the move away” from the effects test.

o In that case, the California Supreme Court explained that Calder cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction.

o Instead, the plaintiff must demonstrate that the defendant’s intentional conduct was expressly aimed at or targeted the forum state itself in addition to the effect on the plaintiff.

· The test outlined in Pavlovich “remained the operative test” until the United States Supreme Court’s decision in Walden v. Fiore (2014) 571 U.S. 277 (“Walden”).

o In Walden, a police officer in Georgia seized a suitcase filled with cash from professional gamblers that were from California and Nevada.

¿ The officer then drafted a false affidavit attempting to establish probable cause for the seizure of the suitcase.

¿ The gamblers sued the officer in Nevada even though the officer had seized their luggage in Georgia.

o The Ninth Circuit, applying the “expressly aimed” test, upheld personal jurisdiction in Nevada on the basis that the police officer “expressly aimed” his submission of the false affidavit at Nevada because he knew it would affect Nevada residents.

o The United States Supreme Court (“SCOTUS”) reversed in a unanimous decision, concluding that due process did not permit the exercise of personal jurisdiction over the police officer in Nevada, because the impact of the officer’s actions in Nevada did not create sufficient contact for jurisdictional purposes. Although the plaintiffs suffered an injury in Nevada, SCOTUS explained, “mere injury to a forum resident is not a sufficient connection to the forum.” (Walden, supra, 571 U.S. at p. 290.)

· Establishing a “defendant-focused” inquiry, the Supreme Court in Walden emphasized that a non-resident defendant’s forum-connection “must arise out of contacts that the ‘defendant himself’ creates with the forum State,” not from “contacts between the plaintiff (or third parties) and the forum State.” (Walden, supra, 571 U.S. at pp. 284-290.)

o A year after Walden, the California Court of Appeal in Burdick v. Superior Court (2015) 233 Cal.App.4th 8 (“Burdick”), was presented with an “effects test” case.

¿ The Burdick Court held that “Walden teaches that the correct jurisdictional analysis focuses on (1) the defendant’s contacts with the forum, not with the plaintiff, and (2) whether those contacts create the relationship among the defendant, the forum, and the litigation necessary to satisfy due process.” (Burdick, supra, 233 Cal.App.4th at pp. 23-24.)

o Although the California Supreme Court has not addressed the impact of the Walden decision, in 2017, the Ninth Circuit held that “Walden requires more” – specifically, courts must look “to the defendant’s ‘own contacts’ with the forum, not to the defendant’s knowledge of a plaintiff’s connections there.” (Axiom Foods, Inc. v. Acerchem International, Inc. (9th Cir. 2017) 874 F.3d 1064, 1070.)

· Therefore, GiddyUp’s attempt to persuade this Court to “apply a 30+ year old test” that is “now universally disregarded” must be rejected outright.

· Instead, this Court should find that it lacks personal jurisdiction because:

o (1) neither Yedinak nor Terme have purposefully availed themselves of the privileges of conductive activities in California (Motion, pp. 12-13);

o (2) GiddyUp’s claims do not arise out of relate to Yedinak or Terme’s forum-related activities (Motion, pp. 14-16); and

o (3) Exercising jurisdiction over Yedinak and Terme would be unreasonable.

· In addition, as argued in the moving papers, neither Yedinak nor Terme were properly served.

o The process server admitted that he served the papers by entering Yedinak’s house through the back door. However, the Legislature did not and would not endorse such an invasion into the “sanctity of a home, by trespassing onto the curtilage surrounding the back of the home, and attempting to effectuate service ….” Therefore, this Court should not condone the behavior.

o Similarly, GiddyUp’s attempt to service on Terme was defective because the company it served was not an agent appointed to accept service process on behalf of Terme.

· The Court should deny GiddyUp’s request to conduct jurisdictional discovery

o Typically, Code of Civil Procedure section 418.10, subdivision (b), provides that motions to quash are heard within 30 days after service.

o However, due to congestion, the first available hearing date was August 9, 2022, giving GiddyUp twice the amount of time typically allotted to determine if discovery could prove helpful.

o During that period, GiddyUp could have appeared before the Court and asked for the right to conduct discovery. Instead, it slept on that right.

· For those reasons, the Court should grant the motion to quash and dismiss this action against Yedinak and Terme.

B. Person and The BlueDot Entities’ Motion to Quash

On May 26, 2022, Person and her companies, BlueDot Energies, LLC, and BlueDot Energies, Inc., and BlueDot Power, LLC (collectively, the “BlueDot Entities”), filed a motion to quash, arguing:

· The Court does not have general jurisdiction over Person and the BlueDot Entities because Person is domiciled in Colorado and the BlueDot Entities are incorporated in Colorado and their principal place of business is in Colorado.

· In addition, the Court does not have specific jurisdiction over Person and the BlueDot Entities for the same reasons Yedinak and Terme argued that the Court does not have specific jurisdiction over them.

In opposition, GiddyUp contends,

· GiddyUp is not asserting that the Court can exercise general jurisdiction over Person and the BlueDot Entities.

· However, the Court can assert specific jurisdiction over the Person and the BlueDot Entities for more or less the same reasons it can exercise jurisdiction over Yedinak and Terme.

· Should the Court find that GiddyUp has not established a sufficient basis for personal jurisdiction over Person and the BlueDot Entities, GiddyUp requests the opportunity to conduct jurisdictional discovery.

In reply, Person and the BlueDot Entities argue the same points that Yedinak and Terme raised in their motion:

· GiddyUp has failed to meet its burden on a motion to quash.

· GiddyUp relies on the outdated “effects test,” which is no longer the prevailing view in California or the Ninth Circuit as Yedinak and Terme argue in their moving papers.

· The BlueDot Entities have not directed any conduct at California that is sufficient to establish personal jurisdiction over them.

· GiddyUp slept on its right to compel specially appearing defendants to participate in jurisdictional discovery.

· Accordingly, the Court should grant the defendants’ motion and deny GiddyUp’s request to conduct jurisdictional discovery.

EVIDENTIARY OBJECTIONS

A. Yedinak and Terme’s Objections

On August 2, 2022, Yedinak and Terme filed objections to GiddyUp’s evidence. The Court rules on those objections as follows.

Objections to the declaration of Jesse Gessin

Objection Nos. 1 and 2: OVERRULED.

Objection No. 3: SUSTAINED.

With regards to Objection No. 1, Yedinak and Terme argue that GiddyUp’s counsel Jesse Gessin has not authenticated the emails attached to his declaration. The defendants contend that Gessin did not include a custodian of records affidavit or any other document from the Sacramento Regional Transit District (“SacRT”) authenticating the documents.

“Authentication of a writing … is required before it may be admitted in evidence.” (People v. Goldsmith (2014) 59 Cal.4th 258, 266 (“Goldsmith”).)

“Authentication … is statutorily defined as ‘the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is’ or ‘the establishment of such facts by any other means provided by law’ ([Evid. Code] § 1400).” (Goldsmith, supra, 59 Cal.4th at p. 266.) “The first step [of authentication] is to determine the purpose for which the evidence is being offered” because the “purpose of the evidence will determine what must be shown for authentication, which may vary from case to case.” (Id. at p. 267.) “Essentially, what is necessary is a prima facie case. ‘As long as the evidence would support a finding of authenticity, the writing is admissible. The fact conflicting inferences can be drawn regarding authenticity goes to the document’s weight as evidence, not its admissibility.’ [Citation.]” (Ibid.)

In Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401 (“Landale-Cameron”), a homeowner’s association (“HOA”) filed suit against builder-developers for several causes of action, including negligence. (Id. at pp. 1403-1404.) The trial court granted one of the defendants’ motion for summary judgment and the HOA appealed. (Id. at p. 1404.)

In its opposition to the motion for summary judgment, the HOA cited two letters (Exhibits K and M) between its prior counsel and one of the defendants concerning a tolling agreement. (Landale-Cameron, supra, 59 Cal.4th at p. 1405.)

To authenticate the letters, HOA’s counsel only provided a declaration testifying that the letters were true and correct copies of letters. (Landale-Cameron, supra, 59 Cal.4th at p. 1405, fn. 3.) After the trial sustained the moving defendants’ authentication objection to the letters and granted summary judgment, the HOA filed a motion for reconsideration this time submitting “a declaration from its former counsel … explaining and verifying the validity of the letters in question which established the tolling agreement (Exhibits K and M).” (Id. at p. 1406.) The HOA also argued, among other things, that those letters were produced by its former counsel in response to subpoenas by one of the defendants, were served on all parties, lodged. (Ibid.) The relevant defendant “opposed the motion for reconsideration asserting that the request was untimely and improper as to form. The court thereafter denied the motion for reconsideration.” (Ibid.)

The Court of Appeal held the trial court erred in finding Exhibits K and M were not adequately authenticated at the motion for summary judgment hearing. (Landale-Cameron, supra, 59 Cal.4th at p. 1409.) The appellate court explained: “All that is required to authenticate a writing is that there be ‘evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is.’ (Evid. Code, § 1400.)” (Ibid.) “Although a more elaborate authentication could have been presented (as was done in the HOA’s motion for reconsideration), counsel for the HOA sufficiently authenticated the documents (Exhibits K and M) when he declared that they were true and correct copies of documents sent by and received from prior counsel for the HOA involved in this litigation.” (Ibid. [emphasis added].)

Here, GiddyUp’s counsel states that on or about February 7, 2022, he served SacRT with a Request for Public Records. (Declaration of Jesse Gessin, filed July 27, 2022 (“Gessin Decl.”), ¶ 2.) On or about March 10, 2022, counsel received several documents from SacRT in response to that request. (Gessin Decl., ¶ 2.) On or about April 21, 2022, he caused a second Request for Public Records to be served on SacRT. (Gessin Decl., ¶ 2.) On May 9, 2022, he received additional documents from SacRT. (Gessin Decl., ¶ 2.) Like the HOA’s counsel in Landale-Cameron, GiddyUp’s counsel testifies that the emails at issue (Exhibits 1 through 9 attached to his declaration) are true and correct copies of documents he received from SacRT. (Gessin Decl., ¶ 2.)

“A writing can [also] be authenticated by circumstantial evidence and by its contents” as is the case here. (People v. Landry (2016) 2 Cal.5th 52, 87.)

Here, the contents of the Exhibits authenticate they are from SacRT as each email was either sent or received by Defendant Borja, and Borja’s emails contained a signature block with his SacRT’s title (Senior Community Relations Officer), email address, and office location. In addition, for each email that “originated outside SacRT,” the following warning appeared on top of the email (bold font removed): “[EXTERNAL EMAIL] CAUTION: This email has originated from outside of SacRT. Please do not click on links, open attachments or respond to this email unless you are expecting the content.”

Accordingly, even though a more “elaborate” authentication could have been presented (e.g., GiddyUp’s counsel could have annexed a copy of the correspondence he used to make the public records request from SacRT), in light of the Court of Appeal ruling in Landale-Cameron, the Court finds that the emails have been sufficiently authenticated and overrules Objection No. 1.

Objections to the declaration of Christopher Jerome

Objections Nos. 1, 12, and 13: SUSTAINED.

Objection Nos. 2, 3, 4, 5, 7, 8, 9, 10, 14, 15, and 16: OVERRULED. With regards to the hearsay objections to statements the defendants allegedly made, “[e]vidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party in either his individual or representative capacity, regardless of whether the statement was made in his individual or representative capacity.” (Evid. Code, § 1220.)

Objection No. 6: SUSTAINED, on hearsay grounds as to Michael Corbera’s email in Exhibit 11, but otherwise OVERRULED.

Objection No. 11: SUSTAINED as to Paragraph 20, page 6, lines 22-23 for lack of foundation, otherwise OVERRULED.

Objections to the declaration of David McGonigal

Objection Nos. 1, 2, and 3: OVERRULED.

Objections to the declaration of Isabelle Andrade

Objection No. 1: SUSTAINED.

B. Person and the BlueDot Entities’ Objections

On August 2, 2022, Person and the BlueDot Entities filed a document titled “Evidentiary Objections to the Declarations of Christopher Jerome and Jesse Gessin,” but did not file or attach any objections to Gessin’s declaration. The Court rules on the objections to Jerome’s declaration as follows.

Objection Nos. 1 and 2: SUSTAINED, for lack of personal knowledge.

Objection No. 3: OVERRULED.

ANALYSIS

A. Legal Standard for Motion to Quash Service of Summons

“‘California’s long-arm statute authorizes California courts to exercise jurisdiction on any basis not inconsistent with the Constitution of the United States or the Constitution of California.’” (Luberski, Inc. v. Oleificio F.LLI Amato S.R.L. (2009) 171 Cal.App.4th 409, 413.)

“A motion to quash service of summons permits a defendant to challenge personal jurisdiction where the summons is improper or the statutory requirements for service of process are not fulfilled.” (Stancil v. Superior Court (2021) 11 Cal.5th 381, 402; Code Civ. Proc., § 418.10, subd. (a)(1) [“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… To quash service of summons on the ground of lack of jurisdiction of the court over him or her”].)

“The party seeking to establish jurisdiction over a nonresident defendant bears the burden of demonstrating by a preponderance of the evidence that the exercise of jurisdiction is appropriate.” (Bresler v. Stavros (1983) 141 Cal.App.3d 365, 367; see also Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 [“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”].)

B. Personal Jurisdiction

“California courts may exercise personal jurisdiction on any basis consistent with the Constitutions of California and the United States. (Code Civ. Proc., § 410.10.)” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 (“Pavlovich”).) “The exercise of jurisdiction over a nonresident defendant comports with these Constitutions ‘if the defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate “‘traditional notions of fair play and substantial justice.’”’ [Citations.]” (Ibid.)

“Personal jurisdiction may be either general or specific.” (Pavlovich, supra, 29 Cal.4th at pp. 268-269.)

“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 (“HealthMarkets”).)

“Absent such extensive contacts, a defendant may be subject to specific jurisdiction, meaning jurisdiction in an action arising out of or related to the defendant’s contacts with the forum state.” (HealthMarkets, supra, 171 Cal.App.4th at p. 1167.) (Ibid.) “A nonresident defendant is subject to specific personal jurisdiction only if (1) the defendant purposefully availed itself of the benefits of conducting activities in the forum state; (2) the controversy arises out of or is related to the defendant’s forum contacts; and (3) the exercise of jurisdiction would be fair and reasonable.” (Ibid.)

Here, the parties dispute whether the Court can exercise specific (not general) personal jurisdiction over the defendants.

1. Service of Summons

As an initial matter, “compliance with the statutory procedures for service of process is essential to establish personal jurisdiction.” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444.) “The notice requirement is not satisfied by actual knowledge of the action without service conforming to the statutory requirements, which are to be strictly construed.” (Taylor-Rush v. Multitech Corp. (1990) 217 Cal.App.3d 103, 111.) Where there is a defective notice, no jurisdiction is acquired. (Ibid. [“Due to the defective service on [a nonresident corporate officer], no jurisdiction was acquired over him”].)

Here, Yedinak and Terme argue that they were served improperly and move to quash service on that basis.

A summons may be served on a person outside California in several ways, including by personal service. (Code Civ. Proc., §§ 415.10, 415.40 [“A summons may be served on a person outside this state in any manner provided by this article or by sending a copy of the summons and of the complaint to the person to be served by first-class mail, postage prepaid, requiring a return receipt. Service of a summons by this form of mail is deemed complete on the 10th day after such mailing”].)

Code of Civil Procedure “section 416.10 permits service on a corporation that is not a bank by way of service on an individual or entity designated as an agent for service of process (§ 416.10, subd. (a)); service on one of the 11 officers or managers of the corporation specified in section 416.10, subdivision (b); service on a person authorized by the corporation to receive service (§ 416.10, subd. (c)); or service in a manner authorized by the Corporations Code (§ 416.10, subd. (d)).” (Ramos v. Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1441; Corp. Code, §§ 1701 [delivery to agent or corporate agent], 1702 [service upon secretary of state pursuant to court order], 2110 [concerning foreign defendants], or 2111 [service upon secretary of state pursuant to court order if agent cannot be found].)

If a person outside California was served by personal service, the proof of summons shall be made “by the affidavit of the person making the service showing the time, place, and manner of service and facts showing that the service was made in accordance with this chapter.” (Code Civ. Proc., §§ 417.10, subd. (a) [emphasis added], 415.40.) “The affidavit shall recite or in other manner show the name of the person to whom a copy of the summons and of the complaint were delivered, and, if appropriate, his or her title or the capacity in which he or she is served, and that the notice required by Section 412.30 appeared on the copy of the summons served, if in fact it did appear.” (Code Civ. Proc., § 417.10, subd. (a).)

Here, the Court finds that GiddyUp failed to serve Terme properly. GiddyUp filed a Proof of Service of Summons providing that it served the corporation on March 7, 2022, at 2405 York Rd., Suite 201, Lutherville Timonium, MD 21093. (Proof of Service, filed on March 10, 2022 (“POS Terme”), Item 4.) However, Yedinak testifies (and GiddyUp has not disputed) that although that address is linked to The Corporation Trust, Inc., a corporate agent for service of process in Maryland and that was Terme’s agent for service in the past, Terme had not appointed that company as its service of process at the time service was allegedly made or afterwards. (Yedinak and Terme’s Motion to Quash (“Yedinak’s Motion to Quash”), declaration of John Yedinak (“Yedinak Decl.”), ¶¶ 16-17.) Terme’s current registered agent is Maryland Registered Agent, Inc., at 5000 Thayer Center, Suite C, Oakland, MD 21550. (Yedinak Decl., ¶ 17.) As stated above, Code of Civil Procedure section 416.60 permits service on a corporation’s agent for service of process, officers or managers, service on a person authorized by the corporation to receive service, or service upon secretary of state pursuant to a court order. GiddyUp has failed to show that it served Terme according to the statute. Indeed, the Proof of Service Person does not even specify the name and relationship of the person that was served on Terme’s behalf even though the form requires that information. (POS Terme, Item 3b.)

Accordingly, the Court GRANTS the motion to quash as to Defendant Terme, Inc. due to improper service.

However, the Court finds that GiddyUp has established it served Yedinak. GiddyUp filed a Proof of Service of Summons indicating that on March 22, 2022, it effected personal service on Yedinak at 27188 Shell Ridge Circle, Bonita Springs, FL 34134. (Proof of Service, filed March 24, 2022 (“POS Yedinak”), Item 4.) The Proof of Service states that David McGonigal (“McGonigal”) was the server and that he delivered the documents to Yedinak after confirming the latter’s identity with his neighbor. (POS Yedinak, Items 5a and 7a.) Yedinak tried to refuse service by refusing to take documents and did not state reason for refusal and, therefore, the “documents [were] left, seen by subject.” (POS Yedinak, Item 5a.)

Yedinak testifies that on March 22, 2022, he was at his home which “has a fully enclosed, locked and screened-in porch, a lanai, that abuts the backyard and services the entryway into the living room of [his home].” (Yedinak’s Motion to Quash, Yedinak Decl., ¶ 10.) At some point in the late morning, Yedinak became startled because he saw a “stranger had somehow entered [his] locked lanai and was banging on the entryway to [his] living room.” (Yedinak Decl., ¶ 10.) Yedinak felt that McGonigal “was trespassing,” and therefore “did not give him permission to be on [his] property.” (Yedinak Decl., ¶ 10.) Apparently, he addressed McGonigal demanding to know who he was and what he was doing in his lanai, but McGonigal ignored his questions and failed to identify himself. (Yedinak Decl., ¶ 10.) After McGonigal departed, he went back to investigate the papers and noted that the McGonigal had broke the latch door of the lanai in forcing it open. (Yedinak Decl., ¶ 10.)

On the other hand, McGonigal testifies that he is a process server licenses to serve process in the Twentieth Judicial Circuit in the State of Florida. (Declaration of David McGonigal, filed on July 27, 2022 (“McGonigal Decl.”), ¶ 1.) The "community where [Yedinak’s residence is located requires a security guard for service of process.” (McGonigal Decl., ¶ 2.) “A security guard accompanied [him] to the residence on that date and at that time. When [they] arrived at the residence, [he] could see into the house that a person was sitting and watching television. [He] rang the doorbell and knocked on the door, but there was no movement in the house. The security guard and [McGonigal] became concerned that the person was unresponsive.” (McGonigal Decl., ¶ 2.) Therefore, McGonigal “went to the back of the house where there was an open screen door to a porch. It was not locked or closed. Neither [he] nor the security guard broke the latch to the screen door or any other door on the property.” (McGonigal Decl., ¶ 2.) “The porch door was open and a person was sitting near the opening. [McGonigal] explained who [he] was, but [Yedinak] claimed to be ‘deaf’ and not to hear [him].” (McGonigal Decl., ¶ 2.) “However, there was no closed captioning on the television. [Therefore, McGonigal] served process on the person as noted in [his] proof of service.” (McGonigal Decl., ¶ 2.) “[He] confirmed with neighbors that John Yedinak lives at the residence where [he] served the person.” (McGonigal Decl., ¶ 2.)

Yedinak submits a supplemental declaration. GiddyUp objects to the supplemental declaration contending that it adds new information. The Court exercises its discretion to consider the supplemental declaration.

In his supplemental declaration, Yedinak disputes that he claimed he was deaf or that a security guard was present at the time the service was made. (Supplemental Declaration of John Yedinak (“Supp. Yedinak Decl.”), ¶ 4.) Moreover, that it is the usual practice in his gated community that if a security guard escorts a visitor to his home, the security guard will typically wait in their vehicle, at the front of his home, until the security guard confirms that Yedinak has permitted the visitor entry. However, that did not happen here. (Supp. Yedinak Decl., ¶ 4(b).) Nevertheless, instead of calling the police, he “brought these facts to the attention of [his] counsel, and [he] understand it is appropriate for [him] to seek to have them addressed by this Court.” (Supp. Yedinak Decl., ¶ 4(f).)

In his reply, Yedinak argues that allowing service of process through the backyard is an “invasion into the sanctity of a home, by trespassing onto the curtilage surrounding the back of the home ….” (Yedinak and Terme’s Reply (“Yedinak’s Reply”), p. 9:17-20.)

“‘Personal service’ means the actual delivery of the papers to the defendant in person.” (Sternbeck v. Buck (1957) 148 Cal.App.2d 829, 832.) “[W]hen men are within easy speaking distance of each other and facts occur that would convince a reasonable man that personal service of a legal document is being attempted, service cannot be avoided by denying service and moving away without consenting to take the document in hand.” (In re Ball (1934) 2 Cal.App.2d 578, 579 (“Ball”).) For example, in Ball, it was enough that a “[w]hile petitioner was moving away in a sidewise manner and looking at the server, the server handed or tossed the process toward petitioner, it falling a few feet from him, at the same time saying, ‘Now you are served.’ Petitioner did not pick it up, but continued to walk away from the premises.” (Id. at p. 579.)

Here, it is evident that there was actual delivery of the papers to Yedinak. Yedinak testifies that McGonigal did not identify himself but only told him “you have been served,” and left the papers. (Supp. Yedinak Decl., ¶ 4(d).) That is sufficient for personal service and, under California law, there is nothing facially deficient about the Proof of Service of Summons that GiddyUp filed with the Court. Yedinak claims that when a security guard escorts a visitor to his home, the security guard stays outside the home to ensure that entry is authorized. However, Yedinak has not submitted any declaration from his community’s security indicating that this procedure or some deviation of it did not take place. Most importantly, whether McGonigal in fact trespassed into Yedinak’s property is a matter of Florida (not California) law since the alleged trespass took place in Florida and McGonigal is a licensed process server of Florida. However, even if California law was relevant, Yedinak has failed to present any evidence that his lanai in his backyard was broken into or that he suffered harm. (See Ralphs Grocery Co. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 262 [“The elements of trespass are: (1) the plaintiff’s ownership or control of the property; (2) the defendant’s intentional, reckless, or negligent entry onto the property; (3) lack of permission for the entry or acts in excess of permission; (4) harm; and (5) the defendant’s conduct was a substantial factor in causing the harm”].)

For those reasons, the Court finds that GiddyUp effected personal service on Yedinak and denies granting the motion on the ground of improper service as to that defendant.

2. Specific Personal Jurisdiction When Intentional Conduct is Concerned

In his oppositions, GiddyUp argues that the Court can exercise specific jurisdiction over Yedinak, Person, and the BlueDot Entities (collectively, the “Moving Defendants”) because he is asserting intentional torts against them.

In their replies, the Moving Defendants argue that GiddyUp relies on the “effects test,” a “30+ year old test” derived from Calder v. Jones (1984) 465 U.S. 783 (“Calder”) that is “now universally disregarded.”

Contrary to the Moving Defendants’ contentions, the “effects test” has not been “universally disregarded,” but instead further elaborated, including by the United Supreme Court in Walden v. Fiore (2014) 571 U.S. 277 (“Walden”). As shown below, Walden relied on Calder (and did not abrogate it, as the Moving Defendants suggest).

“The Due Process Clause of the Fourteenth Amendment constrains a State’s authority to bind a nonresident defendant to a judgment of its courts.” (Walden, supra, 571 U.S. at p. 283.)

“Although a nonresident’s physical presence within the territorial jurisdiction of the court is not required, the nonresident generally must have ‘certain minimum contacts ... such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”’ [Citations.]” (Walden, supra, 571 U.S. at p. 283 [emphasis added].)

Walden “addresses the ‘minimum contacts’ necessary to create specific jurisdiction.” (Walden, supra, 571 U.S. at p. 283.)

In that case, the United States Supreme Court concluded that a Drug Enforcement Agency (“DEA”) agent from Georgia lacked “minimal contacts” with Nevada for specific jurisdiction. (Walden, supra, 571 U.S. at p. 288.)

In so holding, the Court explained as follows. “The proper focus of the ‘minimum contacts’ inquiry in intentional-tort cases is ‘“the relationship among the defendant, the forum, and the litigation.”’ [Calder, supra, 465 U.S. at p. 788].” (Walden, supra, 571 U.S. at p. 291.) “And it is the defendant, not the plaintiff or third parties, who must create contacts with the forum State.” (Walden, supra, 571 U.S. at p. 291.)

“In [Walden], the application of those principles [was] clear: Petitioner’s relevant conduct occurred entirely in Georgia, and the mere fact that his conduct affected plaintiffs with connections to the forum State [did] not suffice to authorize jurisdiction.” (Walden, supra, 571 U.S. at p. 291 [emphasis added].)

“[Calder] [also] illustrates the application of these principles.” (Walden, supra, 571 U.S. at p. 286.) “In Calder, a California actress brought a libel suit in California state court against a reporter and an editor, both of whom worked for the National Enquirer at its headquarters in Florida.” (Id. at pp. 286–287.) “The plaintiff’s libel claims were based on an article written and edited by the defendants in Florida for publication in the National Enquirer, a national weekly newspaper with a California circulation of roughly 600,000.” (Id. at p. 287.) “[The United States Supreme Court] held that California’s assertion of jurisdiction over the defendants was consistent with due process,” after “examin[ing] the various contacts the defendants had created with California (and not just with the plaintiff) by writing the allegedly libelous story.” (Ibid.) “[The Court] found those forum contacts to be ample: The defendants relied on phone calls to ‘California sources’ for the information in their article; they wrote the story about the plaintiff’s activities in California; they caused reputational injury in California by writing an allegedly libelous article that was widely circulated in the State; and the ‘brunt’ of that injury was suffered by the plaintiff in that State.” (Ibid.) “‘In sum, California [wa]s the focal point both of the story and of the harm suffered.’ [Citation.] Jurisdiction over the defendants was ‘therefore proper in California based on the ‘effects' of their Florida conduct in California.’ [Citation.]” (Ibid.)

Therefore, the effects test formulated in Calder is still relevant and has not been universally disregarded as the Moving Defendants contend.

“In Pavlovich, for example, [the California] Supreme Court concluded the effects test requires ‘intentional conduct expressly aimed at or targeting the forum state in addition to the defendant’s knowledge that his intentional conduct would cause harm in the forum.’ [Citation.]” (Zehia v. Superior Court (2020) 45 Cal.App.5th 543, 554 [italics in original] (“Zehia”).)

“Applying this standard, the court held that a nonresident defendant did not expressly aim his tortious conduct at or intentionally target California merely by posting a California plaintiff’s proprietary information on a publicly-accessible Internet website.” (Zehia, supra, 45 Cal.App.5th at p. 554.) “As the court explained, the post was insufficient to establish express aiming because it was ‘accessible to any person with Internet access’ in any forum, and there was no evidence in the record suggesting that the website ‘“targeted California”’ or ‘“any California resident ever visited”’ the website or downloaded the proprietary material. [Citation.]” (Ibid.)

In Integral Development Corp. v. Weissenbach (2002) 99 Cal.App.4th 576 (“Integral”), the California Court of Appeal applied the effects test where a nonresident was sued for business-related torts.

For example, in Integral, “Plaintiff Integral Development Corporation, a California corporation, filed … [a] lawsuit against Helmut Weissenbach, a German citizen hired by plaintiff to manage its German subsidiary.” (Id. at p. 580.) “The complaint contained various tort claims centering around allegations of misappropriation of trade secrets and unfair competition.” (Ibid.) “Weissenbach made a special appearance and brought a motion to quash service of summons on grounds that there were not sufficient contacts with California to support the assertion of personal jurisdiction over him.” (Ibid.) “The trial court granted the motion and dismissed the case.” (Ibid.)

In reversing the trial court’s order granting the motion to quash for lack for personal jurisdiction, the California Court of Appeal in Integral explained as follows. “[T]he commission of an intentional tort that is directed at a California resident may provide sufficient minimum contacts to support the exercise of personal jurisdiction over the non-resident defendant.” (Integral, supra, 99 Cal.App.4th at p. 587 [citing Calder and other cases].) “[In Integral] the allegations [were] that defendant misappropriated trade secrets and other confidential information from plaintiff and used this information to injure plaintiff, a California corporation.” (Id. at p. 588.) “Defendant knew when he was hired and at all times thereafter that plaintiff, the parent company supplying the products and technology for the business, was a California-based corporation.” (Ibid.) Therefore, “[u]nder the “effects” test of [Calder, supra, 465 U.S. at p. 789], defendant’s tortious conduct, aimed at a California plaintiff, provide[d] a reasonable basis for the assertion of jurisdiction.” (Ibid.)

Notwithstanding the above, “the effects test is not the sole purposeful availment test used in tort cases.” (Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal.App.4th 1558, 1570 (“Gilmore”).) “In Calder, Pavlovich, and [another case], the respective defendants’ only direct contact with California was the effect in California of a nationally or internationally disseminated publication created by the defendants in another state.” (Id. at p. 1571.) “Consequently, the only purposeful availment test which could potentially apply to establish California’s specific jurisdiction was the effects test.” (Ibid.) “The effects test was not meant to restrict a court’s jurisdictional reach, but rather to serve as an additional tool for a forum to exercise constitutional jurisdiction.” (Ibid.)

“In [Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434 (“Vons”)], a tort case, [the California] Supreme Court applied the forum benefits test for purposeful availment, not the effects test.” (Gilmore, supra, 223 Cal.App.4th at p. 1570 [italics in original].)

“There, Vons Companies, Inc. (Vons), the California cross-complainant, alleged negligence and other tort causes of action against a franchisor whose principal place of business was California (Jack-in-the-Box) [footnote omitted] and several of Jack-in-the-Box’s Washington-based franchisees.” (Ibid.)

“[The California] Supreme Court held that California had specific jurisdiction over the Washington franchisees because they had ‘purposefully availed themselves of benefits in the forum by reaching out to forum residents to create an ongoing franchise relationship.’ [Citation.]” (Ibid.) Specifically, the “Washington franchisees had ‘purposefully availed themselves of the benefits of doing business with [Jack-in-the-Box]. They formed a substantial economic connection with this state. To require them to answer Vons’s claim, as well, is not to allow a third party unilaterally to draw them into a connection with the state; rather, it was [the Washington franchisees] who established the connection.’ [Citation.]” (Id. at pp. 1570-1571.) In additional, although “Vons ‘was not a party to the franchise contract, and thus the claim is not on the contract.... This distinction, however, [did] not render the exercise of specific jurisdiction improper.’ [Citation.]” (Id. at p. 1571.) “‘The due process clause is concerned with protecting nonresident defendants from being brought unfairly into court in the forum, on the basis of random contacts.’” (Ibid.) “‘That constitutional provision, however, [did] not provide defendants with a shield against jurisdiction when the defendant purposefully has availed himself or herself of benefits in the forum.’ [Citation.]” (Ibid.)

“Thus, the test for purposeful availment does not hinge mechanically on whether the plaintiff’s claim sounds in tort or contract.” (Gilmore, supra, 223 Cal.App.4th at p. 1571.) “Rather, a court must apply ‘“a ‘highly realistic’ approach”’ on a case-by-case basis and select the most appropriate test for purposeful availment based on the particular facts presented.” (Ibid.)

Nevertheless, the main principle was best summarized in Walden. When intentional torts are involved, “it is … insufficient to rely on a defendant’s ‘random, fortuitous, or attenuated contacts’ or on the “unilateral activity” of a plaintiff.” (Walden, supra, 571 U.S. at p. 286.) “A forum State's exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on intentional conduct by the defendant that creates the necessary contacts with the forum.” (Ibid.)

The question here is whether GiddyUp has shown through a preponderance of the evidence that the Moving Defendants intentional conduct created the necessary contacts with California such that this Court can exercise specific jurisdiction over them.

3. Whether Specific Jurisdiction Over Yedinak is Proper

“‘[A] plaintiff must provide specific evidentiary facts, through affidavits and other authenticated documents, sufficient to allow the court to independently conclude whether jurisdiction is appropriate’ and ‘cannot rely on allegations in an unverified complaint or vague and conclusory assertions of ultimate facts.’ [Citations.]” (Swenberg v. Dmarcian, Inc. (2021) 68 Cal.App.5th 280, 291.) “If the plaintiff meets this burden, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable.” (Ibid.)

GiddyUp brings his first cause of action for misappropriation of trade secrets, second cause of action for breach of fiduciary duty, and fourth cause of action for fraud against Yedinak.

a. Purposeful Availment as to Defendant Yedinak

To show that Yedinak had sufficient minimum contacts with California that he himself created with the State, GiddyUp presents the declaration of Christopher Jerome (“Jerome”), its director, shareholder, and chairman. (Declaration of Christopher Jerome (“Jerome Decl.”), ¶ 2.) Jerome attests to the following facts.

Yedinak was a co-founder of GiddyUp, was part of the initial board of directors, and remains one of GiddyUp’s shareholders. (Jerome Decl., ¶¶ 2)

Yedinak worked on all aspects of GiddyUp’s early operations, including soliciting investors, developing a business plan and financial model, designing EV installation projects, identifying and soliciting customers, and communicating with vendors and representatives of public agencies. (Jerome Decl., ¶ 5.)

In spring of 2021, Yedinak and Jerome proposed a pilot project to the Sacramento Regional Transit Authority (“SacRT”), whereby GiddyUp would design, install, and operate a large scale solar powered charging stations at the Power Inn Transit Station. (Jerome Decl., ¶ 7.) GiddyUp’s primary contact of SacRT for the project was Defendant Borja, a Senior Community Relations Officer at SacRT. (Jerome Decl., ¶ 7.)

On or about September 1, 2021, Yedinak advised Jerome and another board member, Michael Corbera (“Corbera”), that he (Yedinak) would arrange for an investment between $10 and $20 million from BioLargo, Inc. (“BioLargo”), which according to the California Secretary of State website, was a Delaware Corporation doing business in California. Yedinak insisted that he and Person would negotiate that investment and that neither Jerome nor Corbera should get involved since Yedinak and Person had preexisting relationships with major investors of BioLargo. (Jerome Decl., ¶ 10.) As a result, Yedinak and Person were the only ones with direct communication with the company. (Jerome Decl., ¶ 10.) However, instead of securing a $10-$20 million investment from BioLargo, Yedinak and Person presented GiddyUp with small loan, contingent upon Yedinak and Person being allotted specific equity interests in GiddyUp, as well as imposing limits on the equity of GiddyUp’s other executives. (Jerome Decl., ¶ 11.) The offer also required Plaintiff to pay Person significant management fees. (Jerome Decl., ¶ 11.) On behalf of the Board of Directors, Corbera and Yedinak instructed Yedinak and Person to present a counteroffer and nondisclosure agreement to BioLargo, but BioLargo did not respond to the counteroffer, did not execute the nondisclosure agreement, and had no further communications with Corbera or Jerome. (Jerome Decl., ¶ 11.) Thereafter, on or around October 12, 2021, Yedinak and Person told Corbera and Jerome that Person was no longer going to work for GiddyUp, but was going to pursue opportunities through her own companies (the BlueDot Entities), and that BioLargo was going to invest in Person’s companies, two of which unbeknownst to Jerome, had been formed by Person before working with GiddyUp. (Jerome Decl., ¶ 12.) Yedinak and Person had not disclosed to Jerome that they were seeking an investment from BioLargo for the BlueDot Entities instead of GiddyUp. (Jerome Decl., ¶ 12.)

Yedinak and Person told GiddyUp that the BlueDot entities would use the BioLargo money to make the previously promised investment of $10-$20 million in GiddyUp. (Jerome Decl., ¶ 12.) Moreover, Yedinak stated that he had sold another company for $50 million and that he was going to invest several million dollars in GiddyUp. (Jerome Decl., ¶ 12.) Therefore, based upon those representations (that GiddyUp would be getting an investment from BioLargo, via the BlueDot Entities, and that Yedinak was going to make his own substantial investment in Plaintiff), on or about October 14, 2021, Yedinak, Corbera, and Jerome, executed corporate resolution to distribute Plaintiff’s shares, with 8% of the shares going to Yedinak. (Jerome Decl., ¶ 12.) However, Yedinak and Person thereafter reneged on their promises to GiddyUp and never made the investment. (Jerome Decl., ¶ 13.) In fact, Jerome later learned from Terme’s corporate counsel that Yedinak never made the sale of $50 million of another company. (Jerome Decl., ¶ 13.)

Yedinak registered GiddyUp’s website (giddupevcharging.com) under his company Terme, and not GiddyUp. (Jerome Decl., ¶ 14.) Yedinak refused to provide the website credentials insisting that the domain name belonged to him, not GiddyUp. (Jerome Decl., ¶ 14.) Yedinak demanded $20,000 for the credentials but Jerome refused and, therefore, GiddyUp was forced to use a different domain name (giddyuppower.com) for its new website. (Jerome Decl., ¶ 14.)

On December 4, 2021, Yedinak presented GiddyUp with an offer from the BlueDot Entities to purchase GiddyUp, but Corbera and Jerome rejected the offer. (Jerome Decl., ¶ 20.) Thereafter, Yedinak stopped participating in the management calls, despite remaining as an officer and director. (Jerome Decl., ¶ 20.)

The Court has reviewed the Exhibits attached to GiddyUp’s counsel’s declaration. The Court notes that in one of the Exhibits, on November 17 and December 3, 2021, Sloane Morgan from “AAA + GIG Car Share,” asked Borja to connect them to GiddyUp. (Gessin Decl., Exhibit 7, pp. 1-2.) Borja replied to the email introducing Morgan to Yedinak and Person. (Exhibit 7, p. 1, top-most email.) In that email Borja introduced Yedinak as “one of the co-founders of GiddyUp, a private tech company that has partnered with SacRT,” and Person as the person that “has been managing the project delivery, financing, and many of the moving pieces of this charging hub.” (Exhibit 7, p. 1.) However, Jerome states that neither Yedinak nor Person informed him that they were pursuing those opportunities which were well within the scope of GiddyUp’s business model which GiddyUp could have pursued. (Jerome Decl., ¶ 24.)

Yedinak was in communication with a California government employee, Borja, who connected Yedinak to Morgan.

In opposition, Yedinak testifies that he has never lived in California, and does not own (or lease) any real property or (b) maintain any bank account in California. (Motion, Yedinak Decl., ¶¶ 5-7.) When he spent two days in California, it was to negotiate the terms of a potential contract between SacRT and GiddyUp, which were successful, and the parties signed a written contract on or around October 1, 2021. (Yedinak Decl., ¶ 9.) At no time did he sign any employment or corporate agreements with GiddyUp mandating that litigation regarding GiddyUp be venued in California. (Yedinak Decl., ¶ 12.) In addition, even though he registered the website giddyupevcharging.com under Terme’s account, he only did so because at the time of registration, GiddyUp was not even incorporated, let alone fully formed or capitalized. (Yedinak Decl., ¶¶ 24-25.) In the time leading to his termination, Jerome started making unreasonable demands, for example, that he provide him with the website registration while refusing to fairly compensate or reimburse him for his “expenses and contributions to the business.” (Yedinak Decl., ¶ 26.)

The Court finds that Yedinak purposefully availed himself of the benefits and privileges of California.

This is not a case like Walden where the DEA agent did not have any relationship with the forum state (Nevada) whatsoever and the entire conduct at issue occurred in another state (Georgia). It is also not like Pavlovich where a nonresident merely posted a plaintiff’s proprietary information in a publicly accessible website and there was no evidence suggesting that the website targeted California.

Yedinak’s contacts with California were not random, fortuitous, or attenuated contacts such he should not expect to be sued in this state. (Walden, supra, 571 U.S. at p. 286.)

They were intentionally directed at California and intertwined with his interactions with GiddyUp. As “[t]he Walden court noted … ‘a defendant’s contacts with the forum [s]tate may be intertwined with his transactions or interactions with the plaintiff or other parties.’ ([Walden, supra, 571 U.S. at p. 286]; see also [David L. v. Superior Court (2018) 29 Cal.App.5th 359, 375] [cautioning that courts should not ‘mechanically apply Walden’s directive to distinguish a defendant’s contacts ‘“with the forum [s]tate itself”’ from his contacts ‘“with persons who reside there.”’’].)” (Zehia, supra, 45 Cal.App.5th at p. 555, fn. 3.) For example, Yedinak has not denied that he is GiddyUp’s co-founder and that he worked on all aspects of GiddyUp’s early operations, including soliciting investors and communicating with representatives of California public agencies. He has also not denied that (1) BioLargo is a California company, (2) he insisted that only he and Person will be communicating with the company on behalf of GiddyUp, (3) he promised GiddyUp that he would arrange for an investment between $10 and $20 million from BioLargo, (4) BioLargo instead only offered GiddyUp a small loan (along with equity restrictions that favored Yedinak), (5) BioLargo subsequently decided to invest in the BlueDot Entities, (6) Yedinak and Person promised to use the investment BioLargo made in the BlueDot Entities to make the promised investment of $10-$20 million but instead renegaded on that promise. Yedinak has also not disputed that Borja introduced him to Sloane Morgan from AAA + GIG Car Share, in his capacity as GiddyUp’s co-founder, but that he failed to inform GiddyUp of that connection. Finally, Yedinak has admitted to owning a GiddyUp website address. Therefore, Yedinak has sufficient minimum contacts with California.

b. Forum-Related Prong as to Defendant Yedinak

The Court also finds the forum-related prong of specific jurisdiction met as to Yedinak. “There must be ‘a connection between the forum and the specific claims at issue.’ [Citation.] ‘If the operative facts of the allegations of the complaint do not relate to the [nonresident]’s contacts in this state, then the cause of action does not arise from that contact such that California courts may exercise specific jurisdiction.’ [Citation.]” (Rivelli, 67 Cal.App.5th at p. 399.) Here, under the fourth cause of action for fraud, the Complaint alleges that Yedinak and Person arranged for BioLargo to invest $10 and $20 million in GiddyUp’s business, even though they knew that promise was false. (Yedinak Decl., ¶¶ 65, 67.) Indeed, there was never an investment, but a loan and that Yedinak never intended to invest personally in GiddyUp. (Yedinak Decl., ¶ 68.) The second cause of action for breach of fiduciary duty alleges that Yedinak used his position as an officer and director of GiddyUp to gain access to strategic persons at GiddyUp’s potential customers. (Yedinak Decl., ¶ 52.) Yedinak also refused to provide credentials for GiddyUp’s former website. (Yedinak Decl., ¶ 52.) Therefore, GiddyUp’s claims against Yedinak arise out of or are related to Yedinak’s contacts with California.

Accordingly, the Court finds that GiddyUp has established facts justifying the exercise of specific jurisdiction on Yedinak.

c. Reasonableness of Exercising Jurisdiction as to Yedinak

The burden is now on Yedinak to show that “‘the assertion of jurisdiction would be unfair or unreasonable.’ [Citation.]” (Dongxiao Yue v. Wenbin Yang (2021) 62 Cal.App.5th 539, 549 (“Dongxiao”).)

“‘An otherwise valid exercise of personal jurisdiction “is presumed to be reasonable.” [Citation.] Therefore, [the] defendant “must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”’” (Dongxiao, supra, 62 Cal.App.5th at pp. 549–550 [italics in original].)

“‘“A determination of reasonableness rests upon a balancing of interests: the relative inconvenience to defendant of having to defend an action in a foreign state, the interest of plaintiff in suing locally, and the interrelated interest the state has in assuming jurisdiction. [Citation.] The factors involved in the balancing process include the following: ‘the relative availability of evidence and the burden of defense and prosecution in one place rather than another; the interest of a state in providing a forum for its residents or regulating the business involved; ... and the extent to which the cause of action arose out of defendant’s local activities.”’” (Dongxiao, supra, 62 Cal.App.5th at p. 550, quoting Integral, supra, 99 Cal.App.4th at p. 591.)

Here, the above factors favor litigating the dispute in California not Florida, or Maryland where Yedinak’s company Terme is located. Granted, it is inconvenient for Yedinak, who testifies he is a 73-year-old disabled individual to have to litigate this lawsuit in California, approximately a thousand of miles away from his home. However, California has an interest in providing a forum for its residents (including corporations) to litigate their grievances. In addition, the availability of evidence and burden of defense and prosecution favors this forum as there is another defendant named in this lawsuit (i.e., Borja) that is based in California, and the claims mainly arise from the defendants’ contacts with California not Florida or Maryland.

Accordingly, the Court finds that Yedinak has not met his burden of establishing that litigating this action in California would be unreasonable.

For those reasons, the Court DENIES Yedinak’s motion to quash.

4. Whether Specific Jurisdiction Over Person and the BlueDot Entities is Proper

GiddyUp brings his first cause of action for misappropriation of trade secrets, third cause of action for aiding and abetting breach of fiduciary duties, fourth cause of action for fraud, and fifth cause of action for intentional interference with contractual relations against Person and the BlueDot Entities.

a. Purposeful Availment as to Person and the BlueDot Entities

Jerome testifies that Person worked with Yedinak “on all aspects of Plaintiff’s early operations, including soliciting investors, developing a business plan and financial model, designing EV installation projects, identifying and soliciting customers, and communicating with vendors and representatives of public agencies.” (Jerome Decl., ¶ 5.)

However, the Court has sustained Person’s objection to that statement for lack of personal knowledge because Jerome does not explain how he knows that Person worked with Yedinak on “all aspects” of GiddyUp’s operations. In addition, even if the Court overruled the objection, such facts would be insufficient to satisfy the minimum contacts requirements because “a defendant’s relationship with a plaintiff …, standing alone, is an insufficient basis for jurisdiction.” (Walden, supra, 571 U.S. at p. 286.)

Jerome also testifies that he finds it significant that on January 13, 2022, Borja arranged a call between the Chicago Transit Authority (“CTA”), Yedinak, Person, and Borja to discuss potential revenue streams for bus electrification. (Jerome Decl., ¶ 25, referring to Exhibit 8 in Gessin’s Declaration.) Jerome testifies that CTA is in GiddyUp’s deal pipeline. (Jerome Decl., ¶ 25.) However, even if CTA was GiddyUp’s potential client, GiddyUp fails to explain how a communication between Person and Chicago-based employee establishes minimum contacts between Person and California. (Jerome Decl., ¶ 25.)

Nevertheless, the Court finds that Person purposefully availed herself to the benefits of California, by entering into an investment deal with BioLargo. Jerome has testified (and Person has not disputed) the following facts. Person and Yedinak were the main contacts with the investors in BioLargo, a California corporation. (Jerome Decl., ¶ 10.) On or about October 12, 2021, Yedinak and Person told Corbera and Jerome that Person (1) was no longer going to work for GiddyUp, (2) was going to pursue opportunities through her own companies (the BlueDot Entities), and that (3) BioLargo a was going to invest in Person’s companies, two of which unbeknownst to Jerome, had been formed by Person before working with GiddyUp. (Jerome Decl., ¶ 12.)

In her motion, Person argues that she never availed herself of California benefits and protections because she is domiciled in Colorado, and like Yedinak, does not own (or lease) property, or maintain bank accounts in California. (Person’s Motion, Person Decl., ¶¶ 1, 7.)

However, by soliciting investment from California corporation, Person created minimum contacts with California. (See Anglo Irish Bank Corp., PLC v. Superior Court (2008) 165 Cal.App.4th 969, 974 [“[B]y soliciting investors in California through the personal visits of their employees and others, Petitioners established sufficient contacts with California to justify the exercise of specific personal jurisdiction in this state”].)

Accordingly, the Court finds that GiddyUp has established the purposeful availment prong of specific jurisdiction as to Person.

However, GiddyUp has not established purposeful availment as to some of Person’s companies.

“[C]ourts must assess ‘[e]ach defendant’s contacts with the forum State ... individually.’” (Rivelli, supra, 67 Cal.App.5th at p. 395, quoting Calder, supra, 465 U.S. at p. 790.) “It is the defendant’s intentional conduct … directed at the forum that creates the necessary contacts to assert jurisdiction [citation], not the mere fact that an officer of the foreign corporation also exercised director duties in-forum.” (Id. at pp. 395–396.)

For example, in Rivelli, the Court of Appeal found that “because uncontradicted evidence supports [the] appellants’ claim that [a corporate officer] acted on behalf of [a nonresident defendant company] in negotiating the transaction with [a corporation headquartered in California], the evidence of [the officer’s] role in the transaction [was] relevant in determining whether [the nonresident defendant company] purposefully directed its strategic business activities at California.” (Rivelli, supra, 67 Cal.App.5th at p. 396.)

Here, Person testifies that BlueDot Energies, LLC, and BlueDot Power, LLC, have never been operational. Therefore, there is no evidence that Person was working on behalf of those entities when she obtained investment from BioLargo or otherwise created contacts with California.

With regards to BlueDot Energies, Inc., the Court notes that Person wrote the following in the “Ask for Funding” page of her company’s website:

My name is Christina [Person] and I am the CEO of BlueDot Energies. …. ¶ BlueDot is an EV charging station company. We generate contracts with public entities to use their property on which to build charging stations. …. ¶ We have a current contracted project in partnership with GiddyUp Power that we would like to fund. The project consist of 20 EV chargers, 150kw of solar, and battery storage that will aid in storing and selling excess energy to the grid. The station will be located at a major transit station in the city of Sacramento. We will be able to recoup at least 50% of the capital outlay via verified grants and tax incentives. The site will be able to pay for the remaining capital expenditure and turn cash flow positive from conservatively projected charging revenue within 14 months of operation, assuming a 25% usership whereas area usership throughout the pandemic was 40%. ¶ The ask is $5,000,00. …. BlueDot will receive a 1$% upfront fee for the financing and a 30% management fee for the project. Once the site is live, BlueDot will continue to receive $15,000 a month to manage the site until the note is fully repaid.

(Gessin Decl., ¶ 12, Exhibit 10, p. 1.)

The above facts would support a finding of minimum contacts because they show that Person and BlueDot Energies, Inc. purposefully availed themselves to the benefits of California by (1) indicating that they generate contacts with public entities, (2) indeed, they are currently in a partnership with GiddyUp to build an EV station in the City of Sacramento, and (3) that BlueDot Energies, Inc., will receive financial benefits from the California-based project.

However, “[t]he relevant time period for measuring the nature and quality of a nonresident defendant’s contacts with the forum for purposes of specific jurisdiction is at the time the plaintiff’s cause of action arose.” (Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215, 226.)

Here, GiddyUp filed this action on January 25, 2022. However, the above referenced webpages were downloaded on July 25 by its counsel. (Gessin Decl., ¶ 12.) Therefore, there is no evidence that at the time GiddyUp’s claims against Person and BlueDot Energy, Inc., they were making such representations.

Therefore, those webpages are not relevant for the purposes of the instant motion to quash.

In any event, Person has not disputed Jerome’s testimony that she obtained investment from BioLargo for her company. Since BlueDot Energies, Inc. is the only company she testifies is operational and Person has not disputed that she acted on her company’s behalf in obtaining the investment from BioLargo, GiddyUp has established purposeful availment as to BlueDot Energies, Inc.

Accordingly, the Court finds that GiddyUp has established purposeful availment as to BlueDot Energies, Inc., but not BlueDot Energies, LLC, or BlueDot Power, LLC.

b. Forum-Related Prong as to Person and BlueDot Energy, Inc.

The Complaint alleges that even though Yedinak and Person “arranged” for BioLargo to invest between $10 and $20 million in GiddyUp’s business, that “investment” was never an investment but a loan. (Compl., ¶¶ 65(a), 68(b).) The loan came “with strict requirements that Yedinak and Person be allotted specific equity interests in GiddyUp as well as putting particular caps on the ownership of other GiddyUp executives, including Jerome and [Corbera]. Another odd requirement included paying Person significant management fees.” (Compl., ¶ 16.) “BioLargo was solicited to invest in BlueDot, not GiddyUp.” (Compl., ¶ 68(c).) Indeed, apparently there were “were numerous phone calls involving Person and Yedinak discussing the BioLargo ‘offer,’ which made clear that Person and Yedinak were not acting as agents for GiddyUp but rather using the BioLargo offer as leverage to enrich themselves.” (Compl., ¶ 16.)

Based on those allegations, the Court finds that GiddyUp’s claims against Person and BlueDot Energy, Inc. arise from their contacts in California.

c. Reasonableness of Exercising Jurisdiction as to Person and BlueDot Energy, Inc.

The burden is now on Person and BlueDot Energy, Inc. to show that the assertion of jurisdiction would be unfair or unreasonable. Here, the defendants make the same arguments that Yedinak made regarding the unreasonableness of the forum. They argue that litigating this action in California, more than a thousand miles from Person’s home and the BlueDot Entities principal offices in Colorado would be a significant burden on the defendants.

The Court finds that Person and BlueDot Energies, Inc. have not met their burden of establishing that litigating this action in California would be unreasonable, for the same reasons Yedinak failed to meet that burden.

Accordingly, the Court DENIES the motion to quash as to Person and BlueDot Energies, Inc., but GRANTS it as to BlueDot Energies, LLC, and BlueDot Power, LLC.

5. Request for Jurisdictional Discovery

“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 re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127.) “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.” (Ibid.)

Here, Plaintiff has not demonstrated that discovery would likely lead to the production of evidence of facts establishing jurisdiction over BlueDot Energies, LLC, and BlueDot Power, LLC.

Accordingly, the Court DENIES the request for jurisdictional discovery.

TENTATIVE ORDER

The Court DENIES the motion as to Defendant Christina Person and BlueDot Energies, Inc.

The Court DENIES Plaintiff GiddyUp EV Charging, Inc.’s request for jurisdictional discovery.

THIS IS A TENTATIVE RULING