Opinion
G055103
07-26-2018
4444 W. SUNSET RD., LLC et al., Plaintiffs and Appellants, v. Y TRAVEL, LLC, Defendant and Respondent.
Law Offices of John A. Belcher, John A. Belcher and Nicholas W. Song for Plaintiffs and Appellants. Wolfe & Wyman, Michael H. Shen; Marquis Aurbach Coffing, Terry A. Coffing and Candice E. Renka for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2016-00831120) OPINION Appeal from a judgment of the Superior Court of Orange County, Catherine Evans, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed and remanded with directions. Law Offices of John A. Belcher, John A. Belcher and Nicholas W. Song for Plaintiffs and Appellants. Wolfe & Wyman, Michael H. Shen; Marquis Aurbach Coffing, Terry A. Coffing and Candice E. Renka for Defendant and Respondent.
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Plaintiffs Michael P. Haggerty (Haggerty) and 4444 W. Sunset Rd., LLC (Sunset), appeal from a judgment dismissing with prejudice their breach of contract action on forum non conveniens grounds, pursuant to Code of Civil Procedure section 410.30. Although the issue was never raised by Nevada-based defendant Y Travel, LLC, during the 14-month pendency of the case, the trial court raised the issue sua sponte and stayed the case two months before the anticipated three-to-five day trial was set to begin. Plaintiffs contend it was error for the court to dismiss the case because the evidence did not demonstrate California is a seriously inconvenient forum. Viewing the facts and circumstances as a whole, we conclude the court abused its discretion when it determined a balancing of the relevant private and public interest factors weighed in favor of dismissal. Accordingly, we reverse the judgment.
All subsequent statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTS
Defendant is a Nevada limited liability company (LLC), which provides custom motor coach bus services for tourists in Nevada, California, Arizona and Utah. Its main office is located in Las Vegas, Nevada.
Sunset is a revoked Nevada LLC. Its sole manager is another Nevada LLC, whose respective managers are Haggerty and his wife. Haggerty had houses in Laguna Beach and Las Vegas; he also owned property on which he is building a house in La Quinta, California.
After a business relationship between Haggerty and defendant soured, plaintiffs filed suit against defendant and its designated manager, Yvonne Tang (Tang). The complaint set forth two causes of action for breach of contract, one concerning a lease agreement for real property owned by Sunset and located in Las Vegas, and the other concerning a consultant agreement by which Haggerty agreed to provide certain services to defendant. The lease agreement cause of action alleged defendant failed to pay rent and caused the property's market value to decrease by "caus[ing] or allow[ing] a substantial amount of vehicle fuel to be spilled onto the [p]roperty." In addition, it alleged Tang and her late husband breached personal guarantee obligations by failing to remedy those issues. The consultant agreement cause of action alleged defendant failed to pay Haggerty pursuant to the agreement.
Defendant filed an answer to the complaint, generally denying all the allegations and raising a variety of affirmative defenses. Tang, represented by the same counsel as defendant, did not file an answer and instead filed a motion to quash service of process based on lack of personal jurisdiction. Plaintiffs opposed the motion, but the court granted it, finding Tang "had zero contact with California relating to the lease agreement" at issue.
A few months later, and after conducting discovery, defendant filed a motion for summary adjudication concerning the lease agreement cause of action. In its brief, it recognized California procedural laws applied because plaintiffs chose to file suit in California, but it urged the court to apply Nevada substantive law based on a choice of law provision contained in the lease agreement. Plaintiffs opposed defendant's motion, basing their arguments on both California and Nevada law without taking a position on which should govern.
The hearing took place two months before the date scheduled for trial. In its ruling, the court never reached the substance of defendant's summary adjudication motion. It first concluded Nevada substantive law governed. Then, sua sponte, the court raised the issue of forum non conveniens—whether in the interest of substantial justice the case should be heard in Nevada instead of California. It expressed concern that the case appeared to have been "filed here in California for no apparent reason: the parties, the witnesses, the properties, everything is in Nevada." Because the parties had not raised or briefed the issue, the court invited briefing and simultaneously stayed the case, and vacated the imminent trial date.
Plaintiffs argued against a forum non conveniens stay or dismissal. They asserted that (1) Haggerty was a California resident; (2) Sunset should be deemed a California resident; (3) defendant actively and voluntarily engaged in the litigation during its 14-month pendency in California; (4) the parties had been preparing to move forward with trial on the previously scheduled date; and (5) the simple breach of contract matters at issue would not impose an undue burden on California courts.
Defendant took the opposite position despite the fact it had never previously raised any concern about plaintiffs' chosen forum. It acknowledged Haggerty had a house in Laguna Beach, but challenged his claim that he was a California resident. According to defendant, Haggerty lived and worked in Las Vegas. Among other evidence, defendant cited the consultant agreement at issue which stated the Las Vegas address was Haggerty's "personal residence." Additionally, defendant argued: the relevant agreements were executed in Nevada; "all the witnesses" were residents of Nevada; Nevada courts would be more familiar with the applicable Nevada laws; there was related litigation already pending in Nevada; and it would be unwarranted to burden the California courts with the case given the litigation's complete lack of connection to the state.
The matter came on for hearing and the case was dismissed. First, the court rejected Haggerty's claim that he was purely a California resident, characterizing him instead as a "fair-weathered resident," who only "claims Nevada residence when it suits his interests." Second, relying on its first finding, the court concluded "everything is in Nevada"— the parties, the witnesses (one of which the court believed would only be "subject to jurisdiction in Nevada"), the relevant property, the consultant services at issue, and related litigation. Third, it reasoned plaintiffs would not be harmed if forced to refile their action in Nevada because defendant agreed it would waive any statute of limitation defenses and ratify all prior discovery and depositions so they could be used in Nevada proceedings.
The court entered judgment dismissing the case with prejudice, and plaintiffs timely appealed.
Plaintiffs prematurely filed their notice of appeal before an appealable order or judgment was filed in the trial court. Judgment was later entered, and a copy was lodged with this court, so we exercise our discretion to deem their appeal to be from the judgment of dismissal. (See Cal. Rules of Court, rule 8.104(d)(2) ["The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment."].) --------
DISCUSSION
Plaintiffs contend the trial court abused its discretion by dismissing the case sua sponte under the doctrine of forum non conveniens just 10 days prior to the scheduled trial date. They characterize the court's actions as a "last second 'docket dump[,]'" unsupported by a showing that California is a seriously inconvenient forum. Though we must accord great deference to the court's determination, we nonetheless find the court abused its discretion given the specific facts and circumstances of this case.
"Forum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere." (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751 (Stangvik).) Codified in section 410.30, the doctrine permits a court to stay or dismiss an action in whole or in part and on conditions it finds just, if it concludes substantial justice compels hearing the action outside California. (§ 410.30, subd. (a).) The issue may be raised sua sponte by the court or by a motion of one of the parties.
The analysis is a two-step process. To begin, "a court must . . . 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. 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, supra, 54 Cal.3d at p. 751.) No one factor necessarily overrides any other; a court's decision should always be based on a balancing of all factors implicated by the facts and circumstances of the case before it. (Id. at p. 753.)
Because the ruling on a motion to dismiss for an inconvenient forum involves both nondiscretionary and discretionary issues, we employ two different standards of review. (Morris v. AGFA Corp. (2006) 144 Cal.App.4th 1452, 1464.) De novo review applies to the nondiscretionary determination of whether the alternate forum is suitable. (Ibid.) The abuse of discretion standard applies to a trial court's balancing of the public and private interests. Under such standard, "we must accord substantial deference to the trial court's balancing of the factors" (ibid.), and we review any factual findings made by the court in the course of its analysis for substantial evidence (Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, 1006).
Plaintiffs do not challenge the suitability of Nevada as a forum. Thus, we focus on the public and private interests at play.
One of the most disputed private interest factors is Haggerty's residence. When a plaintiff is a California resident, the plaintiff's choice of a California forum is accorded great weight and should rarely be disturbed unless the balance of the interests is strongly in favor of the defendant. (Stangvik, supra, 54 Cal.3d at pp. 753-754.) An out-of-state, non-foreign plaintiff's forum choice is accorded due deference, but generally carries less presumptive weight than when the plaintiff is a California resident. (Id. at p. 753; Century Indemnity Co. v. Bank of America (1997) 58 Cal.App.4th 408, 412; Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1195.)
Substantial evidence supports the trial court's conclusion that Haggerty is a Nevada resident. It is undisputed he owns a house in Las Vegas, and he admitted to living there throughout the pendency of this case. He claimed it was a temporary living arrangement while construction of another home was completed in La Quinta, California. But in the consultant agreement at issue in this action, Haggerty proclaims to be a Nevada resident, and the Las Vegas property is listed as his "personal residence."
As for witnesses, it is generally undisputed that most, if not all, of the witnesses on both sides are located in Las Vegas. The witnesses, like defendant's counsel, will need to travel to California for trial. The trial court noted as much. However, the fact that they must travel misses the heart of the inconvenience analysis. "[T]he inquiry is not whether any out-of-state witness or evidence might be needed, but whether, on balance, the location of the witnesses and evidence makes California an inconvenient forum." (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 474].) Defendant did not state how many witnesses will be coming from out-of-state or estimate how long they would be needed for trial, nor did it provide any evidence of the anticipated travel costs. Though the costs would certainly be higher than if the witnesses were living in southern California, we question whether such costs would be so high as to render California "inconvenient" given the proximity of Las Vegas to Orange County and the availability of multiple methods of travel between the two locations. At the end of the day, as this court observed during argument, the witnesses will travel from Nevada, not New Hampshire. (Compare Price v. Atchison, T. & S. F. Ry. Co. (1954) 42 Cal.2d 577, 580 [evidence demonstrated need for 18 out-of-state witnesses who would travel about 1,000 miles each way, including professionals who would be paid for their time in addition to travel expenses].)
Another conclusion the trial court used to support its ultimate determination is that one of the key witnesses, Tang, is only "amenable to suit in Nevada." Focusing on a witness's amenability to suit is misplaced. The question is whether any unwilling witnesses are "unavailable" because, for example, they cannot be compelled to testify in a California court. (See Dendy v. MGM Grand Hotels, Inc. (1982) 137 Cal.App.3d 457, 461-462.) Defendant claimed Tang and other witnesses were unavailable for that reason, but it never argued or provided evidence they would be unwilling to testify without being compelled to do so if the case remained in California. Bald assertions of unavailability are not evidence. (Ford Motor Co. v. Insurance Co. of North America (1995) 35 Cal.App.4th 604, 610.)
Plaintiffs assert, as they did below, moving the case out of California would require them to start over and to obtain suitable new legal counsel in Nevada. However, like California, Nevada allows out-of-state attorneys to seek pro hac vice status so they may represent clients in Nevada state court proceedings. (Nev. Sup. Ct. R. 42.) Defendant's counsel has done as much in this case and has associated local counsel. As the trial court appropriately concluded, there is nothing to suggest plaintiffs' counsel could not do so if plaintiffs had to refile their case in Nevada.
Turning to public interest factors, the trial court did not expressly evaluate in its written decision what, if any, burden this case would have on California courts. Defendant argued below it would be more burdensome for California courts to apply Nevada law because Nevada courts "are undoubtedly more familiar" with it. But, as plaintiffs countered, California courts regularly apply the laws of other states and there is no reason to believe they could not do so in this case. (Animal Film, LLC, supra, 193 Cal.App.4th at p. 475.)
Another factor is the nature of the matters in dispute. Plaintiffs characterized this case as simple, and defendant did not disagree. There are two breach of contract causes of action, one of which potentially would have been eliminated by defendant's motion for summary adjudication. There is no evidence in the record showing the issues involved in either cause of action are so complex as to render the case an undue burden on California courts. (See Animal Film, LLC, supra, 193 Cal.App.4th at p. 475 [rejecting undue burden argument in "garden-variety contract dispute with only one plaintiff, two defendants and narrow issues"].)
This leads us to a final issue which we find particularly compelling under the circumstances: timing. The trial court concluded plaintiffs would not be prejudiced by a dismissal because little of their effort would need to be repeated in order for them to pursue the case in Nevada. Defendant verbally agreed at the hearing on the matter to waive any statute of limitations and repose defenses, and to ratify or adopt all prior discovery, including depositions, so that they would be admissible under Nevada law.
We recognize there is no express statutory time limit for a court to raise a forum non conveniens concern. (§ 410.30, subd. (a); Britton v. Dallas Airmotive, Inc. (2007) 153 Cal.App.4th 127, 133-135.) Nevertheless, unreasonable delay that lends an unfair advantage to the party advocating for a stay or dismissal, or otherwise prejudices an opposing party, is a factor for a court to consider and balance among all others. (See Britton, supra, 153 Cal.App.4th at p. 135; Martinez v. Ford Motor Co. (2010) 185 Cal.App.4th 9, 21 (Martinez); Roulier v. Cannondale (2002) 101 Cal.App.4th 1180, 1191.)
Here, defendant litigated this case for 14 months and never raised the forum non conveniens issue. It filed an answer to the complaint, engaged in discovery, and filed a motion for summary adjudication. Trial was just two months away, and the parties were preparing to exchange expert witness information when the court on its own motion introduced the forum non conveniens issue into the mix. Only then did defendant seize the opportunity to argue California was such an inconvenient forum that plaintiffs should be forced to litigate their claims elsewhere.
While defendant removed some obstacles that had the potential to prejudice plaintiffs (i.e., statute of limitation defenses, and admissibility of obtained discovery), plaintiffs would still be forced to "get in line" in Nevada and run the litigation gauntlet anew before being able to reach the finish line. Had the court permitted the parties to continue on the path they all seemed comfortable with for more than a year, the finish line would in all likelihood have already been reached. Pending before this court, at most, might be an appeal based on the trial's outcome.
Grounded in fairness, the purpose of the discretion afforded a court by the forum non conveniens doctrine "is to see that equity is done." (Martinez, supra, 185 Cal.App.4th at p. 18.) Staying or dismissing a case pursuant to this doctrine is '"a drastic remedy to be exercised . . . with caution and restraint.'" (Delfosse v. C.A.C.I, Inc. Federal (1990) 218 Cal.App.3d 683.) Given the specific facts and circumstances of this case, we conclude the trial court abused its discretion in dismissing plaintiffs' action on forum non conveniens grounds. Consequently, we do not reach plaintiffs' argument that the court erred in dismissing the case rather than simply staying it.
DISPOSITION
The judgment is reversed. The matter is remanded to the superior court with directions to vacate the order finding dismissal of the action appropriate on forum non conveniens grounds. Plaintiffs are entitled to their costs on appeal.
GOETHALS, J. WE CONCUR: BEDSWORTH, ACTING P. J. MOORE, J.