Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. BC381147. Mel Red Recana, Judge. Affirmed.
Greenberg Glusker Fields Claman & Machtinger and Garret L. Hanken for Plaintiff and Appellant.
Palarz & Williams and Herman S. Palarz for Defendant and Respondent.
CHAVEZ J.
Plaintiff and appellant Showplace Development, Inc. (plaintiff) appeals from the trial court’s order granting a motion to quash service of summons for lack of personal jurisdiction filed by defendant and respondent Robert J. Saex (defendant). We affirm the order.
BACKGROUND
Plaintiff is a California corporation with its principal place of business in California. Defendant is a 77-year-old Florida resident who owned a three percent limited partnership interest in a limited partnership whose general partner is an Ohio corporation with offices located in Cleveland, Ohio. The limited partnership owned and operated a low-income family and elderly residential housing development in Michigan.
In April 2007, defendant received by mail in Florida an unsolicited written offer from plaintiff to purchase his limited partnership interest for $10,000. Defendant signed a consent document indicating his interest in accepting the purchase offer and faxed the document to plaintiff.
Shortly thereafter, plaintiff sent to defendant, via Federal Express, a purchase and sale agreement and a check for $10,000. The purchase and sale agreement consisted of four pages clipped together. The first page was a cover sheet entitled “Purchase and Sale Agreement” that identified the parties and stated the basic economic terms of the transaction. The second and third pages were entitled “Terms and Conditions” and set forth the terms and conditions of the agreement. The second page of the terms and conditions (the third page of the purchase and sale agreement) contained a choice of law provision that stated: “This Agreement shall be governed by and construed under the internal laws of California.” The fourth page of the purchase and sale agreement was an assignment of defendant’s limited partnership interest.
Defendant deposited the $10,000 check, signed the purchase and sale agreement, and initialed all pages of the purchase and sale agreement except the third page containing the choice of law provision. Plaintiff asserts that defendant returned all four pages of the purchase and sale agreement, including the page that defendant had failed to initial. Defendant maintains he never received the page he did not initial.
In May 2007, defendant received a communication from another potential buyer inquiring about the purchase of defendant’s limited partnership interest for $15,000. When defendant received that communication, he wrote to plaintiff, expressing his belief that plaintiff knew the limited partnership interest was worth more than the $10,000 purchase price plaintiff had offered.
In late June 2007, defendant received a letter from the general partner of the limited partnership, objecting to the transfer and sale of defendant’s limited partnership interest. The general partner cited a provision of the limited partnership agreement restricting the right or ability of a limited partner to transfer or sell any partnership interest without the prior written consent of the general partner. Defendant then sold his limited partnership interest to the general partner, and on July 1, 2007, returned by mail the $10,000 purchase price to plaintiff with a notice of rescission of the sale.
In mid-September 2007, plaintiff notified defendant that he had breached the terms of the purchase and sale agreement. Defendant denied any breach. On November 21, 2007, plaintiff filed in California a complaint for breach of contract against defendant. On January 16, 2008, defendant filed a motion to quash service of summons for lack of personal jurisdiction, or alternatively, to stay or dismiss the action for forum non conveniens. Defendant’s motion was supported by his own declaration stating that he is a resident of and domiciled in the State of Florida; he has not conducted any business activity in California; and during the past 20 years, he has only vacationed in California for a few days on two or three occasions. Defendant’s declaration further states that he is 77 years old and in poor health. He was recently diagnosed with prostate cancer and underwent eight and a half weeks of intensive radiation treatments. In addition to cancer, defendant recently suffered mild seizures that have temporarily interfered with his ability to function and move about.
Plaintiff opposed the motion and filed declarations of Gil Seton and of its legal counsel. Defendant filed a reply and evidentiary objections, which the trial court granted in part.
On April 28, 2008, the trial court granted defendant’s motion to quash. The trial court’s order granting the motion to quash states in part: “The Agreement, on page 2, contains a ‘Choice of Law’ provision selecting California law as governing the agreement. Plaintiff uses this to argue that defendant purposefully availed himself of the laws of the State of California. [¶] While a ‘Choice of Law’ provision in a contract does not, by itself, subject the parties to local jurisdiction, it is a relevant ‘contact’ for jurisdiction purposes; i.e., agreement to be bound by forum law shows ‘purposeful availment’ of the benefits and protection of local laws. California Practice Guide, Civil Procedure Before Trial (Rutter) 3:315.3. [¶] However, the defendant’s initials are not on page 2 containing the ‘Choice of Law’ clause, and defendant denies ever receiving the page with the agreement. Defendant makes this assertion despite the fact that page one at PAR 1c indicates the ‘Terms and Conditions’ is two pages. [¶] Whether defendant knew of the ‘Choice of Law’ provision or not, the Court determines that it would not be reasonable or fair to require the 77 year old defendant to defend the action in California courts and this Court declines to assert specific jurisdiction over defendant.” This appeal followed.
On October 7, 2008, plaintiff filed a breach of contract action against defendant in Palm Beach County, Florida. Defendant moved to dismiss the Florida action, or in the alternative, to stay that action while this appeal is pending. On February 4, 2009, the court in Florida granted the motion to stay the action.
DISCUSSION
I. Standard of Review
“When a nonresident defendant challenges personal jurisdiction, the burden shifts to the plaintiff to demonstrate, by a preponderance of the evidence, that all necessary jurisdictional criteria have been met. The plaintiff can meet this burden only by the presentation of competent evidence in affidavits or declarations and authenticated documentary evidence. [Citation.] Affidavits or declarations consisting primarily of vague assertions of ultimate fact rather than specific evidentiary facts are not sufficient. [Citation.] Once the plaintiff has met the burden of demonstrating facts justifying the exercise of jurisdiction, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable. [Citations.] [¶] Thus, the process is essentially an evidentiary one and the applicable standard of appellate review is the familiar substantial evidence rule. Therefore, if there is conflicting evidence presented by the parties, we are called upon to determine whether the trial court’s decision is supported by substantial evidence [citations], and, in doing so, we resolve all conflicts in the relevant evidence ‘against the appellant and in support of the order’ [citation]. If there is no conflict in the relevant evidence, the question is one of law as to which we exercise our independent judgment. [Citation.]” (Paneno v. Centres For Academic Programmes Abroad Ltd. (2004) 118 Cal.App.4th 1447, 1454 (Paneno).)
II. Applicable Law
“Pursuant to California’s long-arm statute, California courts may exercise jurisdiction on any basis not inconsistent with the California or United States Constitution. (Code Civ. Proc, § 410.10.) ‘A state court’s assertion of personal jurisdiction over a nonresident defendant who has not been served with process within the state comports with the requirements of the due process clause of the federal Constitution 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.] In other words, the exercise of jurisdiction must be reasonable. [Citations.]” (Paneno, supra, 118 Cal.App.4th at pp. 1454-1455.)
“‘The “substantial connection” [citations] between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. [Citations.]’ [Citation.] A defendant’s physical presence in the state is not required, as long as his or her efforts were “‘purposefully directed’” toward residents of that state. [Citations.] Thus, personal jurisdiction may be exercised over a defendant who has caused an effect in the forum state by an act or omission occurring elsewhere. [Citations.]” (Taylor-Rush v. Multitech Corp. (1990) 217 Cal.App.3d 103, 112.)
“That a nonresident entered into a contract with a forum resident does not by itself establish ‘minimum contacts’ between the nonresident and forum state. Nor is it enough that the forum was the ‘place of contracting’ or ‘place of performance’ or that breach has ‘caused an effect’ (financial loss) in California.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶ 3:315, p. 3-77.) When a contract is alleged to form the basis of personal jurisdiction, “a court must evaluate the contract terms and the surrounding circumstances to determine whether the defendant purposefully established minimum contacts within the forum. Relevant factors include prior negotiations, contemplated future consequences, the parties’ course of dealings, and the contract’s choice-of-law provision. [Citation.]” (Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 907 (Goehring).) A contract’s choice of law provision, standing alone, is insufficient to confer jurisdiction, but may, under certain circumstances be a relevant “contact” for jurisdictional purposes. (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 482 (Burger King).)
“Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’ [Citation.]... [M]inimum requirements inherent in the concept of ‘fair play and substantial justice’ may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities.” (Burger King, supra, 471 U.S. at pp. 476-477.)
III. Substantial Evidence Supports the Trial Court’s Ruling
Although the trial court did not expressly find that there were insufficient minimum contacts between defendant and the State of California as the basis for declining to assert personal jurisdiction over defendant, there is substantial evidence in the record to support such a finding. Defendant’s contacts with California consisted of accepting in Florida an unsolicited written offer by plaintiff to purchase defendant’s interest in an Ohio limited partnership with business operations in the State of Michigan; depositing in Florida a $10,000 check sent by plaintiff as the purchase price for that limited partnership interest; signing in Florida a formal purchase and sale agreement; participating in three telephone conversations initiated by plaintiff concerning the purchase and sale transaction; and sending four letters to plaintiff repudiating that transaction.
Although the purchase and sale agreement signed by defendant contained a choice of law provision stating that California law shall apply to the transaction, a contract’s choice of law provision alone is insufficient to confer jurisdiction. (Burger King, supra, 471 U.S. at p. 482.) There was also conflicting evidence as to whether defendant ever saw, much less agreed to be bound by this provision. Defendant denies ever receiving the page of the contract containing the choice of law provision. Defendant did not sign or initial the contract page containing the choice of law provision, although his signature or initials appear on all of the other pages of the purchase and sale contract.
The circumstances surrounding the parties’ transaction do not indicate that defendant purposefully established minimum contacts with the State of California, despite plaintiff’s argument that the agreement opened up a whole relationship. There were no prior negotiations between the parties, and no contemplated future consequences apart from the transfer of a limited partnership interest in a limited partnership with business operations located in Ohio and Michigan. Plaintiff cites Hall v. LaRonde (1997) 56 Cal.App.4th 1342, as support for its argument that defendant’s correspondence and telephone contacts with plaintiff are grounds for asserting jurisdiction over him. That case, however, is distinguishable. In Hall, the defendant’s contacts with California consisted of more than a single purchase transaction, but included working with the plaintiff, a California resident, to adapt and integrate computer software into a larger software package. The purchase contract in Hall also contemplated continuing royalty payments by defendant to plaintiff, thereby creating a continuing obligation between defendant and a California resident. (Id. at p. 1347.) Here, in contrast, the parties’ course of dealings was limited to a single transaction, and the majority of their contacts with one another concerned the purported rescission of that transaction. These circumstances do not establish purposeful minimum contacts with California nor do they provide a basis for asserting personal jurisdiction over defendant. (Goehring, supra, 62 Cal.App.4th at p. 907.)
There is also substantial evidence to support the trial court’s finding that the assertion of jurisdiction over defendant would be unreasonable. The burden on defendant, an ailing 77-year-old Florida resident, to defend against an action in California would be considerable. The State of California has little interest in a contract dispute concerning plaintiff’s unsolicited attempt to acquire defendant’s limited partnership interest in an Ohio limited partnership with business operations in the State of Michigan. Plaintiff has advanced no public policy reason for requiring defendant to litigate this action in California. Under the circumstances presented, the assertion of personal jurisdiction over defendant would not comport with fair play and substantial justice. (See Stone v. State of Texas (1999) 76 Cal.App.4th 1043, 1050.)
We reject plaintiff’s argument, advanced without any supporting authority, that defendant’s filing of a motion to dismiss, or in the alternative, to stay the Florida action, estops him from contending that California courts do not have jurisdiction over this matter.
DISPOSITION
The order is affirmed. Defendant is awarded his costs on appeal.
We concur: DOI TODD Acting P. J., ASHMANN-GERST J.