Case Number: BC523809    Hearing Date: July 16, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
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Hearing Date: Wednesday, July 16, 2014
Calendar No: 14
Case Name: Executive Consulting, Inc. v. Kilmer
Case No.: BC523809
Motion: (1) Demurrer
(2) Court’s Motion to Stay or Dismiss
Moving Party: (1) Defendant Val E. Kilmer
Responding Party: (1) Plaintiff Executive Consulting, Inc.
(2) Plaintiff and Defendant
Notice: OK

Tentative Ruling: The Court’s own motion to stay or dismiss for forum non conveniens is denied.

Demurrer is overruled. Defendant to answer within 10 days.
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On 10/7/13, Plaintiff Executive Consulting, Inc. filed this action against Defendant Val E. Kilmer, V arising out of the alleged failure to pay for business consulting services. On 2/5/14, Defendant filed a notice of removal of this action to federal court. On 2/20/14, the District Court remanded this action pursuant to the parties’ stipulation. On 4/8/14, in response but prior to the hearing on a demurrer filed by Defendant, Plaintiff filed a First Amended Complaint. On 4/30/14, the Court set its own motion to stay or dismiss pursuant to CCP § 410.30.

I. Motion to Dismiss or Stay
CCP § 410.30(a) provides: “When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” “In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternate forum is a ‘suitable’ place for trial. If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California.” Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.

Although the burden of proof on this motion normally would rest with Defendant and the Court (see id.), the Court notes that both Plaintiff and Defendant request that the Court exercise its discretion to deny its own motion

1. Request for Judicial Notice
Plaintiff requests judicial notice of various New Mexico authorities and of Plaintiff’s Complaint filed in New Mexico (Case No. D-412-CV-2012-00435). The RJN is granted.

2. Alternative Forum
“A forum is suitable if there is jurisdiction and no statute of limitations bar to hearing the case on the merits.” Chong v. Superior Court (1997) 58 Cal.App.4th 1032, 1036-37 (citing Shiley Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 131).

This action arises out of an alleged agreement for consulting services for the sale of a ranch owned by Defendant located in New Mexico, with meetings occurring in New Mexico, California, and Nevada. See Complaint ¶¶ 4-5. Defendant appears to be subject to jurisdiction in New Mexico. See N.M.S.A. § 38-1-16(A). Notably, a substantively identical action was filed in New Mexico. See Pl.’s RJN Ex. E. Additionally, the parties dispute whether New Mexico law applies. Therefore, New Mexico is a suitable alternative forum.

3. Private and Public Factors
The burden is on the moving party to demonstrate that California is a seriously inconvenient forum. See, e.g., In re Marriage of Taschen (2005) 134 Cal.App.4th 681, 691. “The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation.” Stangvik, 54 Cal.3d at 751.

Plaintiff’s choice of California as a forum is entitled to great weight despite Plaintiff being a non-resident of California. See Ford Motor Co. v. Insurance Co. of North America (1995) 35 Cal.App.4th 604, 610-11; Morris v. AGFA Corp. (2006) 144 Cal.App.4th 1452, 1465 n.6. But see Campbell v. Parker-Hannifin Corp. (1999) 69 Cal.App.4th 1534, 1543. The Court finds the analysis in Morris to be persuasive in interpreting Stangvik (54 Cal.3d at 754-55, n.7).

Notably, Plaintiff is a resident of Arizona and Defendant is a resident of California. Complaint ¶¶ 1-2. Both Plaintiff and Defendant request that the Court retain this action in California. Both parties assert that all witnesses and evidence are either located in California or are as easily transported to California, making New Mexico more inconvenient than California. Although California does not have a great interest in adjudicating an agreement alleged to have been made in New Mexico concerning property located in New Mexico, this is balanced by California’s interest in providing a forum for Plaintiff’s action against a California resident. Therefore, the Court finds that neither the private nor public interest factors strongly weigh in favor of disturbing Plaintiff’s choice of forum. See Morris, 144 Cal.App.4th at 1465.

The motion to dismiss or stay is denied.

II. Demurrer
The operative FAC asserts causes of action for (1) breach of oral contract, (2) breach of the covenant of good faith and fair dealing, (3) open book account, and (4) unjust enrichment. Defendant demurs to the FAC on the ground that all claims are barred by the statute of limitations.

1. Factual Allegations of the FAC
In late 2010 or early 2011, Defendant contacted Plaintiff to assist in obtaining an investment or sale of a New Mexico ranch owned by Defendant: Plaintiff’s president and CEO, Ellen Colemire, travelled to New Mexico where she met Defendant and reached an oral agreement for Plaintiff to provide consulting services in exchange for Defendant paying $3,000 per day, $400 per hour, and expenses. ¶ 4. Through June 2011, Ms. Colemire attending meetings in New Mexico, California, and Las Vegas. ¶ 5.

The parties subsequently decided to conclude their business relationship, agreeing that Defendant’s payment of Plaintiff’s services (totaling $128,466.58) would not be due until an investment or sale of the property. ¶ 6, Ex. A. Defendant sold the property in the fourth quarter of 2011, and Defendant has failed to make any payment to Plaintiff. ¶ 7. On 9/9/12, Plaintiff filed an action in New Mexico state court, which Defendant removed to District Court and successfully obtained dismissal for insufficient service. ¶ 8.

2. Request for Judicial Notice
Defendant requests judicial notice of the Complaint filed in this action, the warranty deed executed on 9/30/11 transferring the property, and the District Court’s order on Defendant’s motion to dismiss. The RJN is granted.

3. Statute of Limitations
Defendant argues that the 1st COA is barred by the two-year statute of limitations for an oral contract (CCP § 339(1)), which applies to the 2nd COA for breach of the covenant of good faith and fair dealing (see Ladd v. Warner Bros. Entertainment, Inc. (2010) 184 Cal.App.4th 1298, 1309 n.7), the 3rd COA for open book account (Filmservice Laboratories, Inc. v. Harvey Bernhard Enterprises, Inc. (1989) 208 Cal.App.3d 1297, 1307), and the 4th COA for unjust enrichment (see F.D.I.C. v. Dintino (2008) 167 Cal.App.4th 333, 347-48). Defendant asserts that Plaintiff alleges breach as of either 6/10/11 or 9/30/11, and argues that this action filed on 10/7/13 is untimely.

a. Choice-of-Law
Defendant’s demurrer must establish that the FAC reveals that the applicable statute of limitations necessarily bars the FAC. See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881. However, in opposition, Plaintiff argues that New Mexico law applies which provides a four-year statute of limitations for oral contracts. N.M.S.A. § 37-1-4. This raises a choice-of-law issue. See Frontier Oil Corp. v. RLI Ins. Co. (2007) 153 Cal.App.4th 1436, 1454-55 (distinguishing between Civil Code § 1646 and the governmental interest analysis).

Because this action is based on an alleged oral contract, Civil Code § 1646 applies. See Frontier Oil Corp., 153 Cal.App.4th at 1459-60. To determine the choice-of-law issue, the Court takes into account the place of contracting, the place of negotiation, the place of performance, the location of the subject matter of the contract, and the domicile and residence of the parties. Henderson v. Superior Court (1978) 77 Cal.App.3d 583, 592-93. The parties dispute as to which law applies is not properly determined at the pleading stage: the alleged facts in the FAC do not indisputably show that all factors support application of California law. See Beech Aircraft Corp. v. Superior Court (1976) 61 Cal.App.3d 501, 516.

b. Equitable Tolling
Plaintiff’s opposition also asserts that equitable tolling applies based on Plaintiff’s New Mexico action. See, e.g., Cal. Restaurant Management Systems v. City of San Diego (2011) 195 Cal.App.4th 1581, 1593-94. Defendant argues that the dismissal of the New Mexico action based on insufficient service results in equitable tolling being unavailable to Plaintiff. See Wood v. Elling Corp. (1977) 20 Cal.3d 353, 359. However, Wood concerned the dismissal of a first timely-filed action based on the failure to promptly prosecute the action. See id. at 357. Unlike in Wood, the New Mexico action was dismissed for insufficient service (Def.’s RJN Ex. C) and, at the pleading stage, Defendant fails to establish that the application of equitable tolling to this action would result in “an indefinite extension of the statutory period” (Wood, 20 Cal.3d at 359-60).

c. Open Book Account
Plaintiff’s opposition also argues that, even if California law applies, the 3rd COA for open book account is subject to a four-year statute of limitation (CCP § 337). Without determining whether California law applies, the Court notes that Defendant’s reliance on Filmservice Laboratories, Inc. (208 Cal.App.3d at 1307) may be distinguishable at the pleading stage. In Filmservice Laboratories, Inc., the Court of Appeal held that the four-year statute of limitations for an open book account does not apply where there were no allegations that an oral contract was superseded by an open book account. Id. at 1307-8. However, the FAC alleges that the oral agreement between the parties (Complaint ¶ 4) was superseded by an agreement that the final invoice would not be due until an investment in or sale of the property occurred (id. ¶ 6).

4. Ruling
As discussed above, Defendant fails to establish at the pleading stage that the statute of limitations necessarily bars the FAC. There are issues of choice-of-law, equitable tolling, and the nature of the open book account claim that are not properly determined at the pleading stage. Therefore, the demurrer is overruled.