Case Name:   Chandramohan Ammini, et al. v. Dana Ichinotsubo, et al.

Case No.:       1-10-CV-167069

 

After full consideration of the evidence, arguments, authorities, and papers submitted by each party, the Court makes the following rulings:

 

Currently before the Court are the motions of defendants Mark Sandground (“Mr. Sandground”) and Taryn Waiter (“Ms. Waiter”) (collectively “Defendants”) to quash service of summons on the ground that the Court lacks personal jurisdiction pursuant to Code of Civil Procedure Section 418.10, subdivision (a)(1).  Plaintiffs[1] oppose the motions and argue that Defendants are subject to specific jurisdiction because they have sufficient minimum contacts with the forum state under “the effects test.”

 

Defendants’ objections to exhibits A, D, J, and K of the declaration of James De Los Reyes, submitted in support of Plaintiffs’ opposition, on the grounds of hearsay, lack of authentication, and lack of foundation are SUSTAINED.  (See Evid. Code, §§ 1200, 1400, 1401.)

 

“A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice.”  (Anglo Irish Bank Corp., PLC v. Sup. Ct., (2008) 165 Cal.App.4^th 969, 978.) 

 

Here, the Court finds that Plaintiffs have not presented sufficient competent evidence demonstrating that Defendants purposefully availed themselves of the benefits and protections of the state of California.  (See Weil & Brown, California Practice Guide: Civil Procedure Before Trial (Rutter Group 2012) at § 3:387 [“Jurisdictional facts must be proved by competent evidence at the hearing on the motion to quash … This generally requires affidavits or declarations by competent witnesses”]; see Evangelize China Fellowship, Inc. v. Evangelize China Fellowship, Hong Kong (1983) 146 Cal.App.3d 440, 444;  see also In re Automobile Antitrust Case I and II (2005) 135 Cal.App.4th 100, 109-110 [allegations in an unverified complaint are not sufficient to demonstrate competent evidence of jurisdictional facts.].)

 

The only evidence provided by Plaintiffs with respect to Ms. Waiter indicating that she may have been a manager and member of defendant Bedford Funding LLC (“Bedford”) is not competent evidence, as indicated above.  (See De Los Reyes Dec., Ex. A, pp. 10, 15, Ex. B, p. 167-168.)  Even assuming arguendo that Ms. Waiter was a member and manager of Bedford, Plaintiffs have not presented any evidence demonstrating that Ms. Waiter engaged in acts on behalf of Bedford that caused effects in California.  (See Seagate Technology v. A. J. Kogyo Co. (1990) 219 Cal.App.3d 696, 701 [“It is well settled that corporate directors cannot be held vicariously liable for the corporation’s torts in which they do not participate. … [A]n officer or director will not be liable for torts in which he does not personally participate, of which he has no knowledge, or to which he has not consented … While the corporation itself may be liable for such acts, the individual officer or director will be immune unless he authorizes, directs, or in some meaningful sense actively participates in the wrongful conduct”]; see also Taylor-Rush v. Multitech Corp. (1990) 217 Cal. App. 3d 103, 114; see also Mihlon v. Super. Ct. (1985) 169 Cal. App. 3d 703, 712 [the court found that defendant’s corporate counsel was subject to personal jurisdiction when the corporate counsel traveled to California and participated in settlement negotiations with the plaintiff on behalf of her corporate client].)  Plaintiffs’ general allegations in their third amended complaint (“TAC”) that Ms. Waiter “was personally involved in some of the events” described in the pleadings and conspired to defraud Antara Biosciences, Inc. (“Antara”) are insufficient to establish that Ms. Waiter performed any acts on behalf of Bedford.  (See Automobile Antitrust Cases, supra, 135 Cal.App.4th at 110.)

 

With regards to Mr. Sandground, Plaintiffs do not provide any evidence demonstrating that Mr. Sandground was a member of Bedford, and Plaintiffs’ allegations in the TAC that Mr. Sandground was a member of Bedford and participated in the conspiracy to defraud Antara in his capacity as a member are insufficient to establish purposeful availment.  (See Automobile Antitrust Cases, supra 135 Cal.App.4th at 110.)

 

While the evidence Plaintiffs submitted in support of their argument that Mr. Sandground was a member of defendant Luxury Image Group LLC (“LIG”) is not competent, as indicated above, Mr. Sandground declares that he was a director of LIG for three to four months.  (See Sandground Reply Dec., ¶¶ 3-7.)  However, Plaintiffs have not established that he performed any acts on behalf of LIG such that he actively participated in the alleged wrongful conduct.  (See Seagate v.  Kogyo, supra, 219 Cal.App.3d at 701; see also Taylor-Rush v. Multitech, supra, 217 Cal. App. 3d at 114; see also Mihlon v. Super. Ct., supra, 169 Cal.App.3d at 712.)

 

Finally, the mere act of serving as an escrow agent for the singular transfer of funds from Mount Vernon to Antara’s bank account is insufficient to establish purposeful availment.  The evidence submitted by Plaintiffs does not indicate that Mr. Sandground knew or could have reasonably known as the escrow agent that Antara had its principal offices in California or that the transaction would otherwise cause effects in California.  (See Bowling v. Founders Title Co., 773 F.2d 1175, 1179 (11th Cir. Ala. 1985) [finding that the defendant escrow agent did have sufficient minimum contacts with the forum state because it knew that its contacts would impact the forum state].)  Moreover, the one-time act of agreeing to hold funds in trust in Virginia, and subsequently causing the funds to be transferred to Antara, without more, does not rise to the level of purposeful and deliberate contact that was targeted at the forum state.  (See Aeropower, Ltd. v. Matherly, 511 F. Supp. 2d 1139, 1156 (M.D. Ala. 2007) [finding that the defendant escrow agent did not have sufficient minimum contacts with the forum state because they did not deliberately reach out to or contact the forum state].)

 

Furthermore, Plaintiffs have not shown that the controversy is related to or arises out of Defendants’ contacts with the forum state.  (Anglo Irish Bank Corp., PLC v. Sup. Ct., supra, 165 Cal.App.4^th at p. 979 [“A controversy is related to or arises out of the defendant’s forum contacts, so as to satisfy the second requirement for the exercise of specific personal jurisdiction, if there is a substantial connection between the forum contacts and the plaintiff’s claim”].)

 

With respect to Ms. Waiter, Plaintiffs did not submit any evidence demonstrating that she had any contacts with California. Accordingly, the controversy is not related to or arises out of her contacts with the forum state.

 

With respect to Mr. Sandground, the TAC alleges that he participated in the transfer of funds from Antara to Mount Vernon, but the evidence only demonstrates that he caused funds from Mount Vernon to be deposited into Antara’s bank account.  (See TAC, ¶¶ 21, 69(e), 70(a).)  Thus, the controversy does not arise out of Mr. Sandground’s contact with the forum state.  While the transfer of $200,000 in funds into Antara’s bank account may somehow be related to the transfer of $426,720 away from Antara to Mount Vernon, Plaintiffs do not establish such a connection in their papers.

 

Based on the evidence presented, the Court finds that the assertion of personal jurisdiction over Defendants would be unreasonable and inconsistent with notions of fair play and substantial justice.  (Anglo Irish Bank Corp., PLC v. Sup. Ct., supra, 165 Cal.App.4^th at pp. 979-980 [“In determining whether the exercise of jurisdiction would be fair and reasonable, so as to satisfy the third requirement for the exercise of specific personal jurisdiction, a court must consider (1) the burden on the defendant of defending an action in the forum, (2) the forum state’s interest in adjudicating the dispute, (3) the plaintiff’s interest in obtaining relief, (4) the interstate [or international] judicial system’s interest in obtaining the most efficient resolution of controversies, and (5) the states’ or nations’ shared interest in furthering fundamental substantive social policies”].)

 

Defending the action in California would place a burden on Defendants because they are Virginia residents, they have never lived in California, and they have never been employed in California.  While California has an interest in protecting its citizens and providing them with relief, Ms. Waiter had no contacts with the forum state and Mr. Sandground had de minimus contacts with the forum state such that it would be unreasonable and unfair to exercise jurisdiction over their persons. (See Sandground Dec., ¶¶ 1-14; see also Waiter Dec., ¶¶ 1-8.)

 

Plaintiffs do not request a continuance of the matter to conduct jurisdictional discovery and it does not appear that further discovery would likely lead to production of evidence establishing jurisdiction over Ms. Waiter or Mr. Sandground. (See Beckman v. Thompson (1992) 4 Cal.App.4th 481, 486-487.)

 

Accordingly, the motions to quash service of summons by Defendants are GRANTED.

 

The Court will prepare the order.

 

[1] Chandramohan Ammini, Sarah Brashears, Gregory Bogdan, Kilian Dill, Luz Maria Garcia, Robert Gordon, George Jokhadze, Mark Kozlowski, Peter Lobban, Bich Nguyen, Michael Norris, Joelle Ogi, Bradley Scherer, Mark Trulson, and LaVonne Young.