Opinion
C082372
05-05-2017
VIRGINIA PRICE, Petitioner, v. THE SUPERIOR COURT OF SACRAMENTO COUNTY, Respondent; KI DAE OH, Real Party in Interest.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 34201500184337CUPOGDS)
An Arizona dentist has not answered, demurred, filed a motion to strike, conducted discovery, or performed any acts in this lawsuit for breach of contract, trespass, and conversion other than to challenge the jurisdiction of the California courts. Her lawyers adopted a judicious strategy in their first two motions to quash, challenging only the inadequacy of the service and not the plaintiff's failure to establish the minimum contacts necessary to acquire personal jurisdiction. After the second motion to quash was denied because the plaintiff belatedly re-served the defendant dentist, she filed a third motion to quash alleging the court did not have personal jurisdiction. The trial court denied the motion on procedural grounds without considering the merits of the jurisdictional challenge. We grant defendant's petition for a writ of mandate to set aside the order denying the motion to quash, and remand the case to the trial court to determine whether there are the requisite minimum contacts necessary to establish personal jurisdiction.
FACTS
The relevant procedural facts are simply stated. On September 16, 2015, petitioner Ki Dae Oh, doing business as Dream Works Oral Design Dental, Inc. (hereafter plaintiff), filed a complaint against real party in interest Ginger (aka) Virginia Price, D.D.S. (hereafter defendant) for unpaid purchase orders for materials to be used for cosmetic dental work. On December 3, 2015, defendant moved to quash the summons "on the grounds that this Court lacks personal jurisdiction over the moving defendant in that defendant is not present and does not reside in California, and summons was not properly served on defendant pursuant to Code of Civil Procedure sections 417.20 and 415.20." The only issue briefed was the lack of personal jurisdiction due to the failure of service of process on an out-of-state defendant. The trial court granted the motion to quash.
On March 20, 2016, plaintiff re-served the summons and complaint. Defendant filed a second motion to quash on April 4, 2016, asserting again the same grounds set forth in the first motion to quash. And again the only issue briefed was the lack of personal jurisdiction due to the failure of service of process on an out-of-state defendant.
On April 25, 2016, plaintiff mailed a service of summons of the complaint. On April 29, 2016, the court issued a tentative ruling denying the motion. The court explained, "Plaintiff filed a proof of service showing that the summons and complaint were mailed by first class mail on April 25, 2016, to Defendant's office. While the Court recognizes that this document was filed late and that Defendant did not have a chance to respond, it nevertheless reflects that service has been made in compliance with CCP § 415.20(b). The motion to quash is denied. The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required."
On May 6 defendant filed her third motion to quash, this time arguing that the court lacked personal jurisdiction because defendant did not have minimum contacts with the state of California. The court denied the motion on June 16, 2016. The court ruled: "Defendant has made a general appearance in this action when her previous motion to quash was denied on April 29, 2016. In that regard, Defendant requested oral argument on the tentative ruling but then withdrew the request for oral argument, which made the tentative ruling final and the minute order effective immediately. No writ was taken. Pursuant to CCP 418.10(e)(1), when the court denied the motion and defendant withdrew the request for oral argument, the minute order is effective immediately, and the defendant is deemed to have generally appeared." (Code of Civil Procedure, section 418.10, subdivision (e)(1).)
All further undesignated statutory references are to the Code of Civil Procedure. --------
Defendant did not raise the minimum contacts argument at the time she filed her motion to quash under section 418.10. For that reason, the court also found that defendant waived the jurisdictional defect. The court explained, "The policy behind the waiver analysis is consistent with longstanding precedents making it 'the defendant's obligation to raise the jurisdictional defect at the first possible instance.' Roy v. Superior Court (2005) 127 Cal.App.4th 337, 341."
Defendant petitions for a writ of mandate "to prevent California's improper and void attempt to exercise personal jurisdiction over her." Her petition raises two dispositive issues: (1) whether the denial of a motion to quash pursuant to section 418.10, subdivision (e) automatically triggers a general appearance, and (2) whether both grounds for challenging personal jurisdiction must be raised at the earliest opportunity to avoid a waiver of the remaining ground. A subsidiary question presented by the second issue is whether defendant raised both grounds in her first and second motions to quash, and therefore, waived her right to challenge the lack of minimum contacts because she failed to argue the lack of minimum contacts on the merits.
DISCUSSION
Code of Civil Procedure section 418.10, subdivision (e): Statutory Construction
Personal jurisdiction over a nonresident defendant depends upon the existence of essentially two criteria: first, a basis for jurisdiction must exist due to defendant's minimum contacts with the forum state; second, given that basis for jurisdiction, jurisdiction must be acquired by service of process in strict compliance with the requirements of our service statutes. "On a challenge to personal jurisdiction by a motion to quash, the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction. [Citation.] The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint." (ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 209-210.)
At plaintiff's urging, the trial court found that defendant entered a general appearance by operation of law; that is, pursuant to section 418.10, subdivision (e)(1) she was deemed to have entered a general appearance once her second motion to quash was denied and she did not seek writ relief. The plaintiff did not attempt to establish, and the court did not find, defendant had minimum contacts with the state of California. Rather the only jurisdictional criterion considered by the court in denying the second motion to quash was whether plaintiff had acquired jurisdiction by proper service. The court's denial of the third motion to quash is based on a misreading of section 418.10, subdivision (e)(1).
Prior to statutory amendments in 2002, the California law on special and general appearances was considered " ' "a quagmire filled with traps for the unwary." ' " (Roy v. Superior Court (2005) 127 Cal.App.4th 337, 342 (Roy).) Subdivision (e), added to section 418.10 in 2002, provides that, "A defendant or cross-defendant may make a motion under this section and simultaneously answer, demur, or move to strike the complaint or cross-complaint," and "no act by a party who makes a motion under this section, including filing an answer, demurrer, or motion to strike constitutes an appearance." Before these amendments, a defendant who answered, demurred, or filed a motion to strike entered a general appearance and thereby waived any objection to the court's exercise of personal jurisdiction. (Roy, at p. 340; Factor Health Management v. Superior Court (2005) 132 Cal.App.4th 246, 250.)
The amendments permit a party to file a responsive pleading along with a motion to quash. The filing of the responsive pleading does not constitute a general appearance and thereby foreclose any further effort to challenge personal jurisdiction. Rather, the motion to quash is considered on its merits and no general appearance is entered until after the motion is finally resolved, at which point the moving party will be deemed to have entered a general appearance and the responsive pleading is considered on the merits.
By construing the language of subdivision (e)(1) to mean that a general appearance follows as a matter of law upon the denial of a motion to quash, absent a writ challenging the denial, the trial court distorts the language of the statute and its purpose. Indeed, it is hard to imagine a more clandestine trap for the unwary, a result completely at odds with the purpose of the amendments. (See also Air Machine Com SRL v. Superior Court (2010) 186 Cal.App.4th 414, 426.) Rather than protecting a defendant from an unwitting entry of general appearance when filing a responsive pleading, the statute would effectively require a party to lump all jurisdictional challenges together.
And that is also the thrust of the second ground relied upon by the trial court to deny the motion to quash—that defendant waived her right to contest personal jurisdiction by failing to argue a lack of minimum contacts in her previous motions.
Roy, supra, 127 Cal.App.4th 337, the case relied on by the trial court, is factually and legally inapposite. There is but one sentence in the opinion that lends credence to the court's reliance, but that sentence cannot be extracted from the factual and legal context in which it was made. We begin with the factual distinctions.
In Roy, the nonresident defendants actively engaged in the litigation for a protracted period of time. They answered the complaint asserting 24 affirmative defenses, including a lack of personal jurisdiction; they filed a case management statement and attended conferences; they conducted discovery and filed many motions to compel; they requested continuances; and they filed a summary judgment motion. (Roy, supra, 127 Cal.App.4th at p. 340.) They did not file a motion to quash. Rather, just before the scheduled hearing on their motion for summary judgment, they filed a motion to dismiss for lack of personal jurisdiction. (Ibid.) The trial court denied the motion finding that the defendants had submitted to California's jurisdiction by filing an answer and participating in the litigation. (Ibid.)
The Court of Appeal in Roy gave a blistering assessment of the defendants' conduct. Characterizing the defendants' strategy as a " 'poster case' " against a scheme permitting a defendant to withhold a jurisdictional challenge essentially until trial, the court chronicled the defendants' missteps. (Roy, supra, 127 Cal.App.4th at p. 343.) "Defendants 'buried' their jurisdictional challenge in the middle of literally dozens of mostly boilerplate 'defenses.' They proceeded to vigorously, and no doubt expensively, litigate the action, which generated the filing of numerous motions and many appearances, and twice proceeded to the point of setting a trial date. Only then did defendants bring their jurisdictional objection up for actual review and decision, thereby creating the very real possibility that much or even all of the previous activity would have been wasted." (Ibid.)
Here, by contrast, defendant did not answer the plaintiff's complaint and did not participate in the litigation in any manner other than to challenge jurisdiction by filing a motion to quash. Defendant did not, as the defendants did in Roy, vigorously litigate at great expense and wait until the eve of trial to dismiss the case for lack of jurisdiction. To the contrary, defendant lodged her motions to quash quickly in response to plaintiff's failure to properly serve the summons and complaint and, when the plaintiff finally achieved an effective service, she pursued the alternative ground of lack of minimum contacts within a few days of the denial of her motion to quash. Simply put, there is no hint of the type of duplicity found in Roy whereby the plaintiff incurred substantial expense in litigating motions, conducting discovery, and participating in management conferences only to face a belated jurisdictional challenge that would have mooted all the ensuing litigation.
Nor was the legal issue the same. In Roy, the defendants answered the complaint. (Roy, supra, 127 Cal.App.4th at p. 340.) They argued that pursuant to the 2002 amendments to section 418.10 they did not need to bring a timely challenge to personal jurisdiction by filing a motion to quash. (Roy, at p. 340.) In their view, they could raise their jurisdictional challenge as an affirmative defense and wait to resolve the issue immediately before or during trial. The Roy defendants relied on section 418.10, subdivision (e)(3) to absolve them of the duty to file a motion to quash at the same time, or before, they filed their answer. (Roy, at p. 341.)
Subdivision (e)(3) states that "[f]ailure to make a motion under this section at the time of filing a demurrer or motion to strike constitutes a waiver of the issue[] of lack of personal jurisdiction . . . ." (§ 418.10, subd. (e)(3), italics added.) The court explained the defendants' argument this way: "Tacitly applying the doctrine inclusio unius est exclusio alterius (the inclusion of one is the exclusion of another), they argue that although the statute provides for a waiver of objections for a defendant who files either a demurrer or motion to strike without a concurrent motion to quash or dismiss, it implicitly preserves the objection for a defendant who answers, even if he does not simultaneously challenge jurisdiction by motion." (Roy, supra, 127 Cal.App.4th at p. 341.) The court rejected the defendants' invitation to establish "an entire set of new procedures sub silentio" and the "implied invalidation of literally decades of established practice." (Id. at p. 344.) Subdivision (e)(3), the court held, "merely cautions that a defendant who chooses to demur or move to strike must also move to quash; he cannot reserve the jurisdictional objection and later file it with his answer if his challenge to the pleadings fails." (Ibid.) When read with subdivision (e)(1), at issue in the case before us, "Nothing could be clearer: a defendant may move to quash coupled with any other action without being deemed to have submitted to the court's jurisdiction. However, the motion to quash remains essential." (Id. at 345.)
In this factual and legal context, the court gave as a secondary reason for rejecting the defendants' attempt to preserve the right to challenge jurisdiction without bringing a motion to quash. "Secondly, it serves the cause of judicial economy by confirming the defendant's obligation to raise the jurisdictional defect at the first possible instance, because all other objections become moot if the motion to quash is granted." (Roy, supra, 127 Cal.App.4th at p. 344.) The court did not, as the trial court's citation would imply, hold that both jurisdictional criterion must be raised in a solitary motion to quash. Indeed, the defendants never filed a motion to quash in Roy but lured the plaintiff into expensive and lengthy litigation before seriously pursuing the jurisdictional defect. Thus, Roy makes the unremarkable admonition that jurisdictional defects should be litigated promptly so as to avoid unnecessary litigation.
That is a far cry from defendant's diligent attempts to promptly, but efficiently, challenge California's jurisdiction over her. Unlike her counterparts in Roy, she filed motions to quash at her earliest opportunities but chose to pursue one ground at a time. Perhaps it would be a good idea and would promote judicial economy to require parties to raise all objections to personal jurisdiction in a single motion to quash. But, as a court of appeal, we are not given carte blanche to impose good ideas on litigants and even if we were so inclined, we would not impose the new restriction urged by plaintiff after the fact on a defendant who had no reason to doubt that she could raise the minimum contacts objection in the future.
In our introduction we identified a secondary issue regarding waiver. The trial court denied the motion, not only based on the necessity to raise both jurisdictional criterion in the first motion to quash as the court erroneously believed was necessary pursuant to Roy, supra, 127 Cal.App.4th 337, but also because defendant had in fact raised the issue of minimum contacts in her prior motions to quash but had failed to argue the merits. Again we must disagree with the trial court's reading.
Nowhere in the motion to quash appears the critical phrase "minimum contacts." There is no dispute that minimum contacts were not argued in the moving papers in support of the motion to quash. The trial court does not suggest otherwise. The only language in the motion to quash that could have even arguably raised the issue states that defendant moved to quash the summons "on the grounds that this Court lacks personal jurisdiction over the moving defendant in that defendant is not present and does not reside in California, and summons was not properly served on defendant pursuant to Code of Civil Procedure sections 417.20 and 415.20." During the hearing on the motion to quash, defense counsel vehemently argued that this language did not raise the issue of minimum contacts since minimum contacts is not used and the concept was not argued on the merits.
Defense counsel explained: "So I am saying in -- when I was making the notice, I was trying to say, 'Look, I have got an out of state client who the jurisdiction of the Court is improper over because of the failure to -- to effectuate proper service pursuant to the Code of Civil Procedures.' I didn't mean to say that, 'I'm going to make a full lack of personal jurisdiction argument based on the lack of personal jurisdiction.' "
When pressed further by the trial court as to his failure to raise both grounds at the earliest possible opportunity, defense counsel responded: "Well, your Honor, I mean, I would say, first of all, that we've had service problems with this case stretching back even prior to the case before us. So there was no reason for us to anticipate that we would have to do anything beyond the service argument.
"But that question aside, there is nothing in the statute. There are no rules at all. There are no case law that says that one cannot bring two motions to quash on different jurisdictional grounds. The only time limit that seems to be -- or that is articulated is prior to a general appearance. It's the general appearance that triggers the -- the end of time to bring a jurisdictional argument. That's it."
We agree with defendant her first two motions to quash did not raise the lack of minimum contacts as a challenge to personal jurisdiction. The entire thrust of the motion was the defect in service. The first motion was granted on this basis and the second was denied only after the defect in service was belatedly remedied. We will not construe the general complaint that the trial court lacked personal jurisdiction to mean that defendant had not established minimum contacts with California and conclude from the mere mention of "personal jurisdiction" that defendant waived her right to contest jurisdiction based on a lack of the contacts that were never mentioned or identified. Thus, we hold, not only did defendant not waive her opportunity to raise the alternative ground for challenging California's jurisdiction by failing to raise it in her first motion to quash, but also that she did not raise the issue and thereafter waive her right to argue it on the merits by failing to argue the lack of minimum contacts in the first two motions to quash.
DISPOSITION
Let a peremptory writ of mandate issue directing the superior court to vacate its order of June 16, 2016, denying defendant's motion to quash service of summons entered in Sacramento County Superior Court case No. 34-2015-00184337-CU-PO-GDS, and thereafter to determine the issue of minimum contacts on its merits. The stay issued by this court on August 4, 2016, is vacated upon finality of this opinion. Defendant is awarded her costs in this proceeding.
RAYE, P. J. We concur: NICHOLSON, J. ROBIE, J.