Opinion
D040349.
7-15-2003
ALICE CORRELL, Plaintiff and Appellant, v. DAVID LEE SPURGEON, Defendant and Respondent.
This appeal involves an action arising from the defendant David Lee Spurgeons alleged oral agreement to provide lifetime support to the plaintiff Alice Correll. (Marvin v. Marvin (1976) 18 Cal.3d 660, 674, 134 Cal. Rptr. 815, 557 P.2d 106 (Marvin): an implied contract may be alleged concerning an agreement for unmarried partners to share earnings and property in a manner similar to married persons.) When Spurgeon allegedly breached that agreement, Correll sued him in San Diego County Superior Court. Spurgeon, who is a resident of the State of Washington, responded with a motion to quash service of summons, asserting that he did not have sufficient contacts with the State of California to allow him to be sued here upon this dispute. The court granted Spurgeons motion, finding that Correll had not established sufficient jurisdictional contacts and that it was not reasonable or fair to require Spurgeon to defend this action in California. (Code Civ. Proc., § 418.10.)
Correll appeals, asserting that the trial court erred in granting Spurgeons motion because (1) Spurgeon had sufficient contacts with California, both generally and specifically with respect to this dispute; and (2) it was fair and reasonable for Spurgeon to defend against this lawsuit in California. We agree that on the whole record, there is a lack of substantial evidence to support the courts ruling to grant Spurgeons motion to quash. We therefore reverse the judgment with directions to enter a new order denying the motion and reinstating the complaint on the basis that specific jurisdiction has been shown to exist here.
FACTUAL AND PROCEDURAL BACKGROUND
A
In February 2002, Correll filed a complaint for breach of contract and declaratory relief. Correll alleged that she and Spurgeon, who met and began dating in 1991, entered into an oral agreement in San Diego County that was to be performed in San Diego County. The agreement consisted of her promise to leave her teaching position and provide companionship and services to him, in return for his promise to provide her "with lifetime financial security." Correll asserted that beginning in 1994 they cohabited and she "provided care, comfort and companionship to [Spurgeon] as well as provided business, personal and household services to [Spurgeon] for which [Spurgeon] had previously paid others to perform." Those services included (1) assistance with his company called Mileage Master; (2) being his personal driver, as he is legally blind; (3) providing domestic and household labor; and (4) decorating his Washington residence.
The complaint also alleged that a trust agreement was prepared to memorialize the parties agreement. This 1996 trust agreement, which Correll attached as an exhibit to her complaint, was executed in Washington and provided that it was governed by the laws of the State of Washington. Correll asserted that in March 2000 Spurgeon breached the agreement via facsimile when he informed her that he would no longer make his money available to her. She was informed and believed that Spurgeon had become involved with another woman whom he ultimately married.
In the declaratory relief cause of action, Correll asserted that Spurgeon gave her various gifts, including two automobiles. Correll asserted that he refused to deliver those items to her or to remove himself from title to the automobiles. Correll sought a judicial declaration concerning her rights in the automobiles, although it appears that the remaining gifts are no longer in dispute.
B
Following the filing of the action, Spurgeon specially appeared ex parte to transfer the matter to the Family Law Division because the case was a Marvin action and therefore subject to the jurisdiction of that court. The matter was reassigned to the Family Law Division. Concurrently with the motion to transfer, Spurgeon filed a motion to quash service, arguing he lacked sufficient general contacts with California to be sued here. Spurgeon also argued that there could be no specific jurisdiction as none of his contacts with this state related to this action. Spurgeon further argued that his contacts with California were not such that it would be reasonable to exercise jurisdiction over him for the purposes of this action.
In support of the motion, Spurgeon filed declarations detailing the parties relationship and his contacts with California. He states he is a semi-retired businessman who resides in Washington State and maintains a home office there. He has not resided in California for over 10 years. According to Spurgeon, he and Correll met and began dating in 1991 in Washington, cohabited there, had a joint checking account there, and eventually ended the relationship there. During the time of his relationship with Correll, 1997 to 1999, they mainly cohabited at his home in Washington but occasionally spent some weekends in San Diego. Also, during the summer months, they lived in San Diego for periods of time between travels around the country in his motor home.
Spurgeon denied that he had asked Correll to leave her job or retire. Rather, she did so voluntarily so that they could travel together. When their relationship ended in July 1999, Spurgeon shipped 26 boxes of her personal belongings to San Diego that she had left behind at his home in Washington. Spurgeon further denied that he ever promised that he would provide for her financial needs indefinitely into the future. He merely told her that he would provide for her while they were together and if she was with him when he died, she would be provided for. The trust agreement was drafted in Washington and subject to Washington law. It made provision for her if they were still together upon his death. However, Correll was advised that the trust was revocable if their relationship ever terminated.
Although Spurgeon owned automobiles registered and licensed in California, he never drove them because he was legally blind. Title to the two automobiles was in both their names for insurance purposes, not because they intended to marry.
Spurgeon stated that the California business of which he was part owner (CANAM) was not connected in any way to this lawsuit. He only received royalty checks from that business. Spurgeon claimed that Correll did not contribute any significant work to the Mileage Master business (a California corporation he formed in 1993 for research into a gasoline additive he was attempting to bring to market). When the business failed, she did not, as she claimed, "work closely" with his CPA to wind up its business affairs. Rather, his CPA was in charge of the wrap-up and dissolution of that company.
C
Correll filed opposition to the motion to quash, asserting that jurisdiction over this controversy was proper here. She argued that the contract was made, performed and breached in California. To support a claim of general jurisdiction over Spurgeon, she asserted he had substantial, continuous and systematic business activities in California through the California company, CANAM, which had its headquarters in this state and was partially owned by Spurgeon. Correll states that Spurgeon received income from one of its affiliates, True Grit Abrasives. According to Correll, because of these business interests Spurgeon came to California frequently.
After Spurgeon formed Mileage Master in 1993 for research into a gasoline additive, Correll worked for that corporation testing and evaluating the products, and she assisted in closing the business when it failed, including working closely with accountants in winding up business affairs. Part of the consideration for the implied Marvin contract was her services to benefit that company, Mileage Master. Correll also pointed to the fact that Spurgeon was a co-owner with her of two automobiles registered and insured in California and located in San Diego.
Correll asserted that Spurgeon had adequate contacts with California related to this dispute such that it was reasonable to require him to defend that action here. She argued the evidence supporting her case was located in California. Her retirement programs are in California, as are witnesses concerning her case against Spurgeon. The witnesses included a counselor who allegedly heard Spurgeons representation in March 2000 that he would provide for Correll financially. Correll asserts that she has had no contact with the State of Washington other than the times she was living there with Spurgeon.
Although Correll conceded that an action to enforce the trust could be maintained in Washington State, she was not seeking in this action to enforce the trust itself under Washington law. Correll asserted that it was much more burdensome for her to travel to Washington than for Spurgeon to travel to San Diego, given his business interests in the state, his resources and her lack of resources. Although he is legally blind, and she previously acted as his driver, he is able to conduct business travel. On the whole, Correll contended that California had a greater interest in the litigation than Washington because it involved (1) property owned jointly in California (the automobiles); (2) Corrells services for his California corporation; and (3) the pension funds of a California teacher.
Corrells opposition declaration further detailed the parties relationship and Spurgeons asserted contacts with California. She states that when she and Spurgeon began dating in 1991, she was a teacher for the Sweetwater Union High School District. In 1994 he asked her to quit her job so that they could be together at all times. Correll was reluctant because she did not want to lose her pension benefits. However, Spurgeon told her not to worry as he would provide for all of her financial needs in the future. Based upon Spurgeons representations, Correll took a leave of absence from her teaching position in 1994, and from that time until 1996 she lived with Spurgeon in his home in Washington. Correll rented out her house in San Diego during that time.
In 1996, Correll informed Spurgeon that under the conditions of her employment she would either have to return to work or retire. Spurgeon asked her to retire and repeated his promise to take care of her financial needs. Relying upon his representations, Spurgeon retired from her teaching position. According to Correll, the living trust was executed in September 1996 to memorialize Spurgeons intention to provide for her future needs.
Beginning in September 1996 Correll stopped renting her home in San Diego so that she and Spurgeon could use it. From that time, through December 1999, Correll and Spurgeon split their time between Washington and San Diego. The parties would spend roughly June through October in Washington and October through June in San Diego. During those summers, they traveled together in his motor home.
Correll and Spurgeon shared a bank account in San Diego for approximately three years from 1995 through 1998. She kept the books and financial records for the parties during their time together. Correll asserted that Spurgeon gave her two 1998 and 1999 automobiles that were purchased in California. According to Correll, title to the automobiles was in both their names as they planned to marry. The automobiles are registered in California and she maintained insurance on those vehicles in California. (Spurgeon has Washington insurance on one of the cars.) These documents were lodged as exhibits with the trial court.
From October 1999 through December 1999, the parties spent time together in San Diego. Although they went to counseling together in San Diego in March 2000 to try to work things out, he ended their relationship and informed her via facsimile that she no longer had access to his money. She stayed in San Diego and filed this action.
D
After hearing Spurgeons motion to quash, the court granted it by a brief written order and dismissed plaintiffs complaint. At the hearing on the motion, the court focused on the facts that Spurgeon was a Washington resident, the parties spent the majority of their time cohabiting in Washington, and the trust that allegedly evidenced their agreement was prepared and executed in the State of Washington. The court found that Correll had failed to meet her burden of showing that Spurgeon had sufficient contacts with California for it to exercise jurisdiction over him. The court noted that Spurgeon owned no real estate in California and did not have a California drivers license. The court found that although Spurgeon had California business activities and co-owned automobiles here, those activities did not relate to Corrells action.
This timely appeal followed.
DISCUSSION
I
INTRODUCTION: GENERAL OR SPECIFIC PERSONAL JURISDICTION
Correll is claiming the trial court erred in granting Spurgeons motion to quash because the record will support findings of both general and specific personal jurisdiction. "A nonresident defendant may be subject to the general jurisdiction of the forum if his or her contacts in the forum state are substantial . . . continuous and systematic. [Citations.] In such a case, it is not necessary that the specific cause of action alleged be connected with the defendants business relationship to the forum." (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445, 926 P.2d 1085 (Vons Companies).)
As a threshold matter, we first note that the trial court was correct in finding a lack of general jurisdiction over the claims alleged in the complaint against Spurgeon, which are of an intensely personal nature. Corrells claim that general jurisdiction exists here is based upon Spurgeons partial ownership of the California corporation, CANAM. Specifically, Correll asserts that the company "brings [Spurgeon] into the state frequently, he derives income from this company and he used this income to support [Correll] when she was in the state." However, Corrells declaration is only conclusory on this point, and lacks a showing of any facts establishing that the business brought Spurgeon to California "frequently." She has not made any showing to establish the amount of income she derived from this entity. The only evidence of CANAM income Correll submitted was one 1999 check for $ 9,939.99 made out to Spurgeon at his address in Washington from an "affiliate" of CANAM, True Grit Abrasives. The purpose of this check or its relation to Spurgeons overall business dealings in California is not made clear. On the whole, Correll has not supported her assertion on appeal that income from CANAM was used to support her while she was in California. Based on the facts shown, "the defendants activities are not so wide ranging as to justify general jurisdiction." (Vons Companies, supra, 14 Cal.4th at p. 448.)
Notwithstanding this conclusion on general jurisdiction, the real question here is whether the trial court had an adequate basis in the record to conclude the exercise of specific jurisdiction was unwarranted, either because Spurgeon lacks the necessary connection to this state with respect to Corrells Marvin cause of action, or further, because the necessary balancing of the convenience of the parties and the interests of justice should not allow this exercise of specific jurisdiction. (Vons Companies, supra, 14 Cal.4th passim.) We address these claims in turn.
II
STANDARD OF REVIEW
On Spurgeons motion to quash, the initial burden fell on Correll as the plaintiff to demonstrate facts justifying the exercise of jurisdiction. (Vons Companies, supra, 14 Cal.4th at p. 449.) The plaintiffs burden is to show jurisdictional facts by a preponderance of the evidence. (As You Sow v. Crawford Laboratories, Inc. (1996) 50 Cal.App.4th 1859, 1866 (As You Sow).) "When the evidence conflicts, we review the trial court for abuse of discretion. [Citation.] When the parties do not dispute the facts, we review the issue of jurisdiction de novo. [Citation.]" (Ibid.)
After the plaintiff has responded to the motion to quash to establish facts showing minimum contacts with the forum state, "it becomes the defendants burden to demonstrate that the exercise of jurisdiction would be unreasonable. [Citation.] When there is conflicting evidence, the trial courts factual determinations are not disturbed on appeal if supported by substantial evidence. [Citation.] When no conflict in the evidence exists, however, the question of jurisdiction is purely one of law and the reviewing court engages in an independent review of the record. [Citation.]" (Vons Companies, supra, 14 Cal.4th at p. 449.)
In conducting substantial evidence review, an appellate court will consider the whole record, not merely the supporting or opposing evidence in isolation. (Kroopf v. Guffey (1986) 183 Cal. App. 3d 1351, 1359, 228 Cal. Rptr. 807 (Kroopf ).) "The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record. [Citation.] While substantial evidence may consist of inferences, such inferences must be a product of logic and reason and must rest on the evidence [citation]; inferences that are the result of mere speculation or conjecture cannot support a finding [citation]." (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633 (Kuhn).)
A motion to quash service is strictly limited to the question of jurisdiction over the defendant, and does not involve a determination of the merits of the complaint. (Kroopf, supra, 183 Cal. App. 3d at p. 1360.) The question of jurisdiction cannot be decided by the application of any precise formula, but rather through a flexible approach which considers "the quality and nature of the activity of the defendant in the state seeking to exercise jurisdiction over him, fairness to the parties, and the orderly administration of the law." (Cornelison v. Chaney (1976) 16 Cal.3d 143, 150, fn. 7, 127 Cal. Rptr. 352, 545 P.2d 264.)
III
BASES FOR SPECIFIC JURISDICTION
Code of Civil Procedure section 410.10 permits California courts to "exercise jurisdiction on any basis not inconsistent" with state or federal constitutional principles. Courts take a "highly realistic" approach in contract actions to determine if a nonresident contracting party is subject to local jurisdiction. (Burger King Corporation v. Rudzewicz (1985) 471 U.S. 462, 479, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (Burger King ).) Jurisdiction is not automatically established in such cases merely because the place of suit was the "place of contracting" or "place of performance," or because the alleged breach "caused an effect" in the forum state. (Id. at pp. 478-479; see also Sibley v. Superior Court (1976) 16 Cal.3d 442, 446-447, 128 Cal. Rptr. 34, 546 P.2d 322.) However, under the accepted tests, specific jurisdiction will exist if: "(1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendants contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice. [Citations.]" (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 536.)
In determining whether specific jurisdiction exists, a court will first examine whether the nonresident defendant has purposefully availed himself or herself of the benefits of conducting activities in the subject forum. "The United States Supreme Court has described the forum contacts necessary to establish specific jurisdiction as involving variously a nonresident who has purposefully directed his or her activities at forum residents (Burger King, supra, 471 U.S. at p. 472), or who has purposefully derived benefit from forum activities (id. at p. 473), or "purposefully avail[ed himself or herself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." (Id. at p. 475.) The court also has referred to the requisite forum contact as involving a nonresident defendant who "deliberately" has engaged in significant activities within a State [citation] or has created "continuing obligations" between himself and residents of the forum [citation] (id. at pp. 475-476), concluding that in such cases the defendant manifestly has availed himself of the privilege of conducting business [in the forum], and because his activities are shielded by "the benefits and protections" of the forums laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well. [Citation.]" (Vons Companies, supra, 14 Cal.4th at p. 446; italics added.)
Even where general jurisdiction for all causes of action asserted against a defendant is not warranted, or where ordinary specific jurisdiction is not established, "less extensive activity may support jurisdiction for purposes of a particular cause of action depending upon the nature and quality of the acts, the degree of relation to the asserted cause of action, and the balance between the convenience of the parties and the interest of the state in asserting jurisdiction. [Citations.] California has recognized that a state may exercise jurisdiction over one who causes effects in the state by an act or omission done elsewhere with respect to causes of action arising from the effects. This is so unless the nature of the effects and of the individuals relationship to the state make exercise of jurisdiction unreasonable. [Citations.]" (Secrest Machine Corp. v. Superior Court (1983) 33 Cal.3d 664, 669, 190 Cal. Rptr. 175, 660 P.2d 399 (Secrest) (italics added).)
Correll asserts several theories to support the exercise of specific jurisdiction here. Her main argument is that Spurgeon "purposefully availed" himself of the benefits of conducting activities or doing business in California, so as to justify the exercise of specific jurisdiction, by deliberately engaging in significant activities in California which created "continuing obligations" between himself and herself as a resident of the forum. (Burger King, supra, 471 U.S. at pp. 475-476.) This is said to be shown by his entry into the implied contract to provide her "with lifetime financial security," which, together with her consideration for it, was to be performed here at least in part and was breached here. As support for her showing of his "significant activities" within California and/or his creation of "continuing obligations" here, she refers to the formation in 1993 of his corporation, Mileage Master, and her work for it until it failed, as "part of the consideration for the implied contract sued upon." She further asserts that due to the relationship they formed, he provided for their needs, here and elsewhere, using a California bank account and income, in return for various efforts on her part. She contends specific jurisdiction is proper here based upon California activities, such as the parties co-ownership of the two automobiles registered here.
As an alternative ground for California specific jurisdiction, she argues that even if Spurgeon is considered to be "one who causes effects in the state by an act or omission done elsewhere with respect to causes of action arising from the effects," (Secrest, supra, 33 Cal.3d at p. 669; italics added), the nature of those effects and his relationship to the state make an exercise of jurisdiction reasonable. (Ibid. )
We examine the record with respect to these claims and Spurgeons arguments to the contrary. In doing so, we keep our focus on Spurgeons activities, and not those of plaintiff, as "the key element in the determination of jurisdiction." (Walter v. Superior Court (1986) 178 Cal. App. 3d 677, 681, 224 Cal. Rptr. 41 (Walter).) However, this does not preclude a consideration of effects that took place here, caused by his actions elsewhere (i.e., while in Washington). (Secrest, supra, 33 Cal.3d at p. 669.)
1. Purposeful Availment
Correll contends that the circumstances surrounding the Marvin contract established Spurgeon purposefully availed himself of the benefits of conducting activities in this jurisdiction. These circumstances consist not only of her contentions concerning the amount of time the parties spent in San Diego from 1996 through 1999, but also the California joint bank accounts, co-ownership of automobiles and Spurgeons various business activities from which her support was derived. We first observe that although the respective declarations contain some conflicting evidence over who said what to whom, and who promised what to whom, certain important facts regarding the time frame of the beginning and end of the parties relationship are not disputed. Different inferences can be drawn from those undisputed facts, but at the stage of determining the existence of specific personal jurisdiction, it is not our concern at this point to resolve the merits of the case. Rather, we look to whether substantial evidence supports the trial courts determination that no such specific jurisdiction is proper. While substantial evidence may consist of inferences, "such inferences must be a product of logic and reason and must rest on the evidence, [citation] [and] inferences that are the result of mere speculation or conjecture cannot support a finding." (Kuhn, supra, 22 Cal.App.4th 1627, 1633.)
Turning to the bare-bones facts that must be considered undisputed, from a reading of the declarations in light of each other, it is established that the parties met in 1991, and it was in August 1994 that Spurgeon allegedly first promised Correll that her financial needs would be met, and she began living with Spurgeon in August 1994 at his house in Washington. She alleges she left San Diego to join him in Washington based on that promise, while he contends the contract was formed in Washington. An inference can be drawn either way, as to which came first, for purposes of determining where the contract was created.
With respect to performance of the implied contract, Spurgeon in his declaration states that the parties cohabited in Washington and only spent a few weekends in San Diego. The documentary evidence submitted by Correll concerning their joint bank accounts showed that their mailing addresses were in Washington in 1995 and in San Diego in 1998. The automobiles were registered in 1998 and 1999 in California using the California address. On appeal, Correll argues that the performance of the implied contract was to take place equally in California and in Washington. In any case, the location of their cohabitation is not dispositive but only one factor of many to consider in determining jurisdiction based on sufficient contacts.
Correll asserts that Spurgeon again agreed in August 1996 to provide her with lifetime financial security in exchange for her decision to retire from her teaching position. According to Correll, Spurgeon then executed a living trust to memorialize this promise. That trust was executed in September 1996 in Washington and provided that it was subject to the laws of that state. She does not seek to enforce the trust in this action, but rather seeks to draw inferences from it supporting the alleged Marvin contract. Similarly, although she does not make clear when her work for Mileage Masters was performed, she has shown that corporation was formed in 1993 and dissolved by 2000, and the work took place in the interim, which coincides with the approximate period of their cohabitation. Even though the declaration does not state, as Correll does in her complaint and in her appellate brief, that this work formed part of the consideration for the alleged Marvin agreement, inferences could be drawn either way. Spurgeon disputes the type and amount of work Correll did for Mileage Masters. However, he does not dispute her statement that she kept the financial books and records for the couple during their time together. At this point in the litigation, it cannot be said that substantial evidence supports the order to quash service of summons on the basis of out-of-state entry into and performance of the alleged contract, because only inferences that are speculative will support that finding, and other inferences are equally available from the evidence. (Kuhn, supra, 22 Cal.App.4th 1627, 1633.)
Moreover, according to Corrells evidence, Spurgeon broke the agreement by faxing her a letter in March 2000, indicating that he would no longer make funds available to her. Correll indicates in her declaration that thereafter she "stayed in San Diego" in March 2000 and the parties "had various discussions about the financial arrangements that he had promised, but were unable to reach an agreement." From this evidence, it can as readily be inferred that the breach of the contract took place in California, as they were together here the last time until he left her here, as that it took place in Washington. Again, none of these factors individually is dispositive for justifying specific jurisdiction, for purposes of deciding whether there is a sufficient connection between the defendant and the forum. However, based on the different inferences that can be drawn, these factors cannot constitute substantial evidence to support the trial courts conclusion that there was no available basis for personal jurisdiction. Rather, on a preliminary basis, it appears that Correll as the plaintiff has met her burden of proving specific jurisdiction by a preponderance of the evidence. (As You Sow, supra, 50 Cal.App.4th 1859, 1866.)
This is a case much like Kroopf in which a California resident brought suit against his former live-in male companion, who no longer lived within the state, for breach of an alleged oral agreement to share earnings and property. The defendant brought a motion to quash service, arguing that he was not living in California at the time of the alleged agreement and he had no other contacts with the state. (Kroopf, supra, 183 Cal. App. 3d at p. 1355.) The plaintiff filed opposition, which included evidence that the contract was entered into in California and that the two lived in this state from 1976 through 1980, during the time the alleged agreement was performed. (Ibid.) The court granted the motion to quash and the plaintiff appealed. (Ibid.) The Court of Appeal reversed, holding that "domicile at the time the cause of action arose, in addition to allegations that the action is based on the defendants activities within the forum state, afford the state a constitutional basis for personal jurisdiction." (Id. at p. 1358.) Here, although Spurgeon was never a full time California resident, it is sufficiently alleged and not disproven by substantial evidence that the Marvin action is based upon his financial and other activities within the forum state.
Correll also asserts that the disputed ownership of personal property (the vehicles) in California serves as an additional basis for jurisdiction in this matter. She contends her declaratory relief claim "arises out of" the ownership or registration of the two automobiles in California and ownership of the vehicles is in dispute. The presence of property over which there is an ownership dispute within a state may confer "in rem" jurisdiction there even where the parties are not residents there. (Shaffer v. Heitner (1977) 433 U.S. 186, 207, 53 L. Ed. 2d 683, 97 S. Ct. 2569.) Although "the presence of the property alone would not support the States jurisdiction," (id. at p. 209), this factor may be viewed with others in light of the entire record to determine the sufficiency of forum contacts for specific jurisdiction. (See Khan v. Superior Court (1988) 204 Cal. App. 3d 1168, 251 Cal. Rptr. 815, a dissolution action, in which the Court of Appeal held that the trial court properly exercised jurisdiction over a nonresident husband because the case involved, among other things, "the disposition of real and personal property in California;" id. at p. 1179.) This dispute over the vehicles, therefore, adds to Corrells showing of sufficient contacts.
On substantial evidence review, in light of the evidence produced by both parties, this record cannot now be construed as demonstrating conclusively that Spurgeon never purposefully derived benefit from forum activities, never "deliberately" engaged in significant activities in California, and never created "continuing obligations" between himself and a resident of the forum. (Burger King, supra, 471 U.S. at pp. 475-476.) Correll has brought forward a framework of undisputed facts and related reasonable inferences that supply a preponderance of the evidence to successfully oppose the motion. Moreover, to the extent the evidence conflicts, we review the trial courts ruling for abuse of discretion. (As you Sow, supra, 50 Cal.App.4th at p. 1866.) We cannot say the trial court made an appropriate exercise of discretion in evaluating all the evidence here regarding Spurgeons purposeful availment of the benefits of conducting California activities.
2. Relation of the Controversy to the Defendants Contacts with the Forum.
Even though Correll has set forth sufficient opposition to create a preponderance of the evidence showing that Spurgeon purposefully availed himself of the benefits of conducting activities and business within California, we must also inquire whether Corrells cause of action arises out of or has a substantial connection with this financial or business relationship he established with California. (Cornelison v. Chaney, supra, 16 Cal.3d at p. 149.) Correll asserts that she established this prong of the test for specific jurisdiction by showing she performed services for his corporation Mileage Masters in California and the implied contract sued upon was entered into and to be performed in this state. Mainly, the financial security that she alleged she was promised was to be provided through, at least in part, the income Spurgeon derived from his California business activities and made available to her here through bank accounts, support, and vehicles.
A state may exercise specific jurisdiction over a nonresident who purposefully avails himself or herself of forum benefits, because the state has "a manifest interest in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors. [Citations.] Moreover, where individuals purposefully derive benefit from their interstate activities [citation] it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities." (Burger King, supra, 471 U.S. at pp. 473-474.) Further, because "modern transportation and communications have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity," it usually will not be unfair to subject him to the burdens of litigating in another forum for disputes relating to such activity." (Vons Companies, supra, 14 Cal.4th 434, 447.) Such is the case here because the gravamen of the action arises out of the parties joint financial affairs, such that the extent of Spurgeons contacts with California gave rise to economic and related benefits for him, if Correll is correct. On this record, the trial court did not have a sufficient basis in the evidence to make a finding Spurgeon had not significantly availed himself of the benefits of conducting activities in California, with respect to Corrells specific allegations.
3. Causing of Effects in California.
As an additional ground of jurisdiction, Correll asserts that even if the contract were found to be entered into, wholly performed in, and breached in Washington, jurisdiction is still proper here because Spurgeons actions caused "effects" in California. A state may exercise jurisdiction over one who causes effects in the state "by an act or omission done elsewhere with respect to causes of action arising from the effects," unless such an exercise of jurisdiction would be unreasonable. (Secrest, supra, 33 Cal.3d 664, 669; italics added.)
Correll refers to her work for Mileage Master as an "effect" in California, created by the parties economic relationship. As Correll concedes, there is a difference between her being personally "affected" by Spurgeons actions and his actions having "effects" in California for jurisdictional purposes. To explore this distinction, we turn to Walter, supra, 178 Cal. App. 3d 677, 681. In Walter, the defendant allegedly, by telephone, induced the plaintiff to quit her job in California and move to New Jersey to be his companion there in exchange for his promise of lifetime financial security. When the relationship ended, the plaintiff returned to California, and sued the defendant for lost income from the job she had quit and other financial benefits allegedly promised by the defendant but not received. (Id. at p. 679.) In response to the complaint the defendant brought a motion to quash for lack of personal jurisdiction. The trial court denied the motion, finding that the defendants actions "resulted in substantial economic effect in California and little or none in New Jersey. The agreement alleged to have been reached was accepted in California by Plaintiff. Defendant contacted plaintiff not infrequently or even occasionally, but innumerable times over a period of months, making telephone calls from New Jersey to plaintiff in California. Plaintiff alleges that she gave up her job and lost her pay and benefits associated with that job in California. She gave up her apartment and departed California to live in New Jersey. Further, defendant sent money from New Jersey to plaintiff in California." (Ibid. )
The defendant filed a petition for writ of mandate and the Court of Appeal reversed. The court found that "having an effect" in the forum state was not the same thing as an act that "affects" a California resident. (Walter, supra, 178 Cal. App. 3d at p. 681.) The court found that the defendants actions caused no "wide-ranging" effects in California and that the case involved only "a private dispute between two individuals in which neither the general population of California nor California courts have any particular interest (aside from providing a forum for plaintiff, a California resident)." (Ibid. )
We think this Walter, supra, 178 Cal. App. 3d 677 case is distinguishable on the basis that Correll has made a showing that in reliance on the alleged implied contract, she worked for Spurgeons California company and provided him with companionship and care in California, and the parties shared a residence, bank accounts and personal property in California. These activities in California were directly related to the alleged Marvin agreement and were significant to both of the parties, and Spurgeon has had much more of a presence and impact in California than did the defendant in Walters, who mainly dealt with plaintiff long distance by telephone. Also, Correll has an interest in obtaining a forum for her claims, which include two California automobiles co-owned and registered with Spurgeon, and include her loss of pension benefits allegedly in reliance on his 1994 and 1996 promises to take care of her lifetime financial needs. In conclusion, those facts that are undisputed, and reasonable inferences that can be drawn from them, made it inappropriate for the trial court to resolve against Correll her contention that even from afar, Spurgeon caused an effect in California on property and economic interests that justifies an exercise of specific jurisdiction over him.
4. Remaining Inquiry: Whether Assertion of Jurisdiction Comports with Fair Play and Substantial Justice.
Even though we have determined Spurgeons contacts with California were sufficient to establish specific jurisdiction, on several grounds, we must still analyze whether it is "reasonable" and "fair" to subject him to California jurisdiction to resolve this dispute. In determining this issue, we must assess (1) the inconvenience to defendant in defending the action here; (2) the interests of plaintiff in suing locally; and (3) the interest of the state in assuming jurisdiction. (Sibley v. Superior Court, supra, 16 Cal.3d at p. 448.)
Correll asserts that it is reasonable and fair to require Spurgeon to defend this action in California because he has been able to travel to California on business, and he is part owner of a business headquartered in San Ramon, California. Correll also contends that it would be unreasonable for her to have to sue in Washington because (1) she has no business in that state; (2) witnesses to Spurgeons alleged promises are here; (3) witnesses with knowledge concerning her retirement programs are here; and (4) the personal property in dispute (vehicles) are in this state. At oral argument before the trial court, the parties discussed her interests in suing locally, in part because California, but not Washington, recognizes a Marvin cause of action.
In opposition, Spurgeon contends his presence in California was limited to "some weekends in San Diego" with Correll. There are evidently witnesses and evidence in both California and Washington. His main argument is that it would be unreasonable for him to have to defend this action in California, because he is legally or industrially blind. However, the record of this litigation reveals he is able to sign declarations and to travel for business and pleasure. At all relevant times, he has had the same vision impairment and has not shown it has changed in any significant way so as to materially impair his ability to conduct a defense. We "cannot resolve a constitutional issue based upon sympathy for a litigant." (Walter, supra, 178 Cal. App. 3d at p. 682.)
On the whole record, we conclude the trial court abused its discretion in finding that California has no substantial interest in having this dispute heard here. (As You Sow, supra, 50 Cal.App.4th at p. 1866.) The significant undisputed facts in the record support a conclusion that it is both "reasonable" and "fair" to subject Spurgeon to specific California jurisdiction as to this particular dispute. (Sibley v. Superior Court, supra, 16 Cal.3d at p. 448.)
DISPOSITION
The judgment is reversed with directions to deny the motion to quash and to reinstate the complaint. Costs are awarded to Correll.
I CONCUR: HALLER, J.
NARES, J., concurring and dissenting:
I agree with much of the majoritys thoughtful analysis of the law applicable to the subject of personal jurisdiction and the proper standard of review for this appeal. I also agree with the majoritys holding that there are insufficient facts to support a finding of general jurisdiction over Spurgeon in this state. However, I disagree with the majoritys rejection of the substantial evidence supporting the trial courts decision declining to exercise specific jurisdiction, its substitution of its judgment for that of the trial court, and its drawing of "inferences" that are not based upon any evidence submitted by Correll in opposition to Spurgeons motion.
I. Introduction
As the majority notes, where the facts are in dispute the findings of the trial court as to whether a plaintiff has shown facts justifying an exercise of jurisdiction will not be disturbed if supported by substantial evidence. (Felix v. Bomoro Kommanditgesellschaft (1987) 196 Cal. App. 3d 106, 110-111, 241 Cal. Rptr. 670 (Felix).) The majority also notes that even if a plaintiff puts forward sufficient facts showing a defendants minimum contacts with a state, the trial courts finding that the exercise of jurisdiction would be unreasonable will also not be disturbed if supported by substantial evidence. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449, 926 P.2d 1085 (Vons).)
The majority at one point characterizes the standard of review as abuse of discretion. (Maj. opn., p. 11.) However, the case the majority relies on, As You Sow v. Crawford Laboratories, Inc. (1996) 50 Cal.App.4th 1859, itself relies on authority citing the proper standard of review, substantial evidence. (Id. at p. 1866; Felix, supra, 196 Cal. App. 3d at pp. 110-111.) The California Supreme Court has recently confirmed that where there are conflicting facts a trial courts determination of the question of jurisdiction is governed by the substantial evidence standard of review. (Pavlovich v, Superior Court (2002) 29 Cal.4th 262, 273.)
Under this standard, we resolve all conflicts in the relevant evidence against Correll and in favor of the order. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 535 (Sonoma Diamond).) ""An appellate court will not disturb the implied findings of fact made by a trial court in support of an order, any more than it will interfere with express findings upon which a final judgment is predicated. When the evidence is conflicting, it will be presumed that the court found every fact necessary to support its order that the evidence would justify. So far as it has passed on the weight of evidence or the credibility of witnesses, its implied findings are conclusive. This rule is equally applicable whether the evidence is oral or documentary. In the consideration of an order made on affidavits involving the decision of a question of fact, the appellate court is bound by the same rule as where oral testimony is presented for review." [Citations.] When an issue is tried on affidavits, the rule on appeal is that those affidavits favoring the contention of the prevailing party establish not only the facts stated therein but also all facts which reasonably may be inferred therefrom, and where there is a substantial conflict in the facts stated, a determination of the controverted facts by the trial court will not be disturbed." (Kulko v. Superior Court (1977) 19 Cal.3d 514, 519, fn. 1, 138 Cal. Rptr. 586, 564 P.2d 353 (Kulko ), quotingGriffith Co. v. San Diego Col. for Women (1955) 45 Cal.2d 501, 507-508, 289 P.2d 476, revd. on other grounds Kulko v. California Superior Court (1978) 436 U.S. 84, 56 L. Ed. 2d 132, 98 S. Ct. 1690.)
However, in reaching its decision the majority does not apply the applicable standard of review, resolves inferences in favor of Correll, reweighs facts found against her by the trial court, and draws inferences in her favor from statements in pleadings, not evidence submitted by Correll. Thus, the majority has substituted its judgment of the disputed facts for that of the trial court. Because substantial evidence supports the trial courts decision, its findings cannot be disturbed on appeal.
I. Analysis
A. General Jurisdiction
I agree with the majoritys holding that substantial evidence supports the courts decision that Correll has not submitted sufficient evidence to demonstrate that Spurgeons contacts with California are so "substantial . . . continuous and systematic" (Vons, supra, 14 Cal.4th at p. 445) as to warrant the exercise of general jurisdiction in this matter. I discuss this holding only because of the majoritys conclusion that there was a lack of evidence submitted by Correll to support general jurisdiction. As the majority correctly concludes, Corrells assertions that (1) Spurgeons business CANAM brought him to California "frequently", (2) she derived income from that business, and (3) income from that business was used to support her in California, were not supported by admissible evidence. (Maj. opn., p. 9.) This is important because, as I shall discuss in more detail, post, the majority later holds, contrary to this conclusion, that there are sufficient facts to support specific jurisdiction based in part upon Corrells admittedly unsupported allegations that part of the consideration for the alleged Marvin agreement was work Correll performed for Spurgeons other business in California, Mileage Masters. (Maj. opn., pp. 17, 20-21.)
Marvin v. Marvin (1976) 18 Cal.3d 660, 134 Cal. Rptr. 815, 557 P.2d 106.
B. Specific Jurisdiction
1. Purposeful availment
In determining whether specific jurisdiction exists, a court must first examine whether the nonresident defendant has purposefully availed him or herself of the subject forum. "The United States Supreme Court has described the forum contacts necessary to establish specific jurisdiction as involving variously a nonresident who has purposefully directed his or her activities at forum residents (Burger King [Corp. v. Rudzewicz (1985) 471 U.S. 462, 85 L. Ed. 2d 528, 105 S. Ct. 2174,] 472), or who has purposefully derived benefit from forum activities (id . at p. 473), or "purposefully avail[ed himself or herself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." (Id . at p. 475.) The court also has referred to the requisite forum contact as involving a nonresident defendant who "deliberately" has engaged in significant activities within a State [citation] or has created "continuing obligations" between himself and residents of the forum [citation] (id. at pp. 475-476), concluding that in such cases the defendant manifestly has availed himself of the privilege of conducting business [in the forum], and because his activities are shielded by "the benefits and protections" of the forums laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well. [Citation.]" (Vons, supra, 14 Cal.4th at p. 446.)
Correll asserts that Spurgeon "purposefully availed" himself of the benefits of doing business in California through his corporation Mileage Master, thereby supporting the exercise of specific jurisdiction in this case. Correll maintains that the contract sued upon "arises, in part, out of Mileage Master because [Correll] performed services for this company in California." She further asserts that these services were "part of the consideration for the implied contract sued upon." She also asserts that purposeful availment is shown here because the contract was entered into here, it was to be performed here, and it was breached here. Substantial evidence supports the courts determination that these contentions do not support specific jurisdiction in this case.
Corrells declaration states in general terms that she performed work for Mileage Master. However, the declaration does not establish, contrary to the assertion made in her brief, that Correll performed that work in California, as opposed to Washington. Nor does her declaration state the time period of the work or how much work was done. The declaration also does not state, as Correll does in her brief, that the work formed part of the consideration for the alleged Marvin agreement. Corrells complaint does make such an allegation. However, as that pleading was not verified, it was not proper evidence that could be considered upon Spurgeons motion to quash. (Mihlon v. Superior Court (1985) 169 Cal. App. 3d 703, 710, 215 Cal. Rptr. 442.) An unverified complaint has no evidentiary value in meeting plaintiffs burden of proving minimum contacts. (Ibid.)
The majority recognizes that these allegations are unsupported by admissible evidence. (Maj. opn., p. 17.) However, inexplicably, it then states that, despite the lack of evidence on this point, "inferences could be drawn either way." (Maj. opn., p. 17.) We may not draw "inferences" from allegations that are only stated in pleadings or briefs, not declarations. (See College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 720, fn. 7, 882 P.2d 894.) Further, there are no "inferences" to draw, as the declaration simply does not state that work she performed was part of the consideration for the alleged Marvin agreement. The majority properly rejects allegations made by Correll in support of her claim of general jurisdiction that are not supported by evidence. (Maj. opn., p. 10.) However, the majority then ignores these same deficiencies in its discussion of specific jurisdiction.
Further, even if "inferences could be drawn either way" (maj. opn., p. 17) from Corrells declaration, those inferences must on this appeal be resolved against Correll, not in her favor. (Sonora Diamond, supra, 83 Cal.App.4th at p. 535.) Additionally, Spurgeon disputes the type and amount of work Correll did for Mileage Masters. Because the evidence was in dispute on this issue, the courts resolution of the conflicts in favor of Spurgeon cannot be disturbed on appeal. (Kulko, supra, 19 Cal.3d at p. 519, fn. 1.)
Nor does the alleged Marvin contract evidence purposeful availment. Courts take a "highly realistic" approach in contract actions to determine if a nonresident contracting party is subject to local jurisdiction. (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at p. 479.) In such cases, jurisdiction is not automatically established because the place of suit was the "place of contracting" or "place of performance," or because the alleged breach "caused an effect" in the forum state. (Ibid.; see also Sibley v. Superior Court (1976) 16 Cal.3d 442, 446-447, 128 Cal. Rptr. 34, 546 P.2d 322.) The place a contract is executed "is of far less importance than where the consequences of performing that contract come to be felt." (Stone v. State of Texas (1999) 76 Cal.App.4th 1043, 1048.) Due process requires a "substantial connection" between the contract at issue and the forum state. (McGee v. International Life Insurance Company (1957) 355 U.S. 220, 223, 2 L. Ed. 2d 223, 78 S. Ct. 199.)
The evidence surrounding the alleged contract at issue here does not support Corrells contention that Spurgeon purposefully availed himself of California sufficient to confer jurisdiction. First, although Correll asserts that the contract was entered into and to be performed in California, the record demonstrates otherwise. Correll asserted in her complaint that the defendant first promised in August 1994 that her financial needs would be met. Her declaration states that she began living with Spurgeon in August 1994 at his house in Washington. Thus, the evidence supports the fact the contract was first entered into in Washington, and the courts resolution of this fact in Spurgeons favor is thus supported by substantial evidence.
Although, as discussed, ante, allegations in Corrells complaint do not constitute evidence that may support jurisdiction, they do constitute judicial admissions by Correll, binding upon her on this appeal. (Heater v. Southwood Psychiatric Center (1996) 42 Cal.App.4th 1068, 1079-1080, fn. 10.)
The majority addresses this contention again by stating, "An inference can be drawn either way . . . for purposes of determining where the contract was created." (Maj. opn., p. 16.) To the extent this is true, we must resolve that inference in Spurgeons favor and uphold the trial courts findings. (Sonora Diamond, supra, 83 Cal.App.4th at p. 535.)
Correll asserts that Spurgeon again agreed in August 1996 to provide her with lifetime financial security in exchange for her retiring from her teaching position. According to Correll, Spurgeon then executed a living trust to memorialize this promise. However, that trust was executed in September 1996 in Washington and provided that it was subject to the laws of that state. According to Corrells own contentions, she and Spurgeon would have been in Washington in August 1996 when the asserted promise was made, as they allegedly spent the summers there.
Corrells own evidence shows that she lived with Spurgeon in Washington from 1994 through 1996 and lived at least part of the years from 1996 through 1999 in Washington. Spurgeon in his declaration states that the parties cohabited only in Washington and only spent a few weekends in San Diego. The documentary evidence submitted by Correll concerning Spurgeons businesses showed that the mailing addresses for his businesses were at all times Spurgeons home in Washington.
The majority summarizes the evidence concerning where the alleged Marvin agreement was entered into and performed by stating, "At this point in the litigation, it cannot be said that substantial evidence supports the order to quash service of summons on the basis of out-of-state entry into and performance of the alleged contract, because only inferences that are speculative will support that finding, and other inferences are equally available from the evidence." (Maj. opn., p. 17.) However, we are not dealing with "inferences" here, but direct evidence on these issues, a great deal of them admissions made by Correll herself. Again, any conflicts or "inferences" must be resolved on this appeal in Spurgeons favor. Finally, if there are any inferences that are "speculative," it is Corrells assertions that she performed the alleged agreement by performing work in California. As discussed, ante, and as the majority admits, Correll has submitted no evidence to support such an assertion.
Finally, according to Corrells evidence, Spurgeon broke the agreement by faxing her a letter in March 2000, indicating that he would no longer make funds available to her. Correll indicates in her declaration that she had "stayed in California" in March 2000 and that the parties thereafter "had various discussions about the financial arrangements that he had promised, but were unable to reach an agreement."
This evidence directly refutes Corrells contention that the agreement was breached in California. If they were together in California when Spurgeon broke off their relationship, he would not have faxed that announcement. Again, the majority does not dispute that there is substantial evidence to support Spurgeons position on this point. Rather, the majority states again that it could "as readily be inferred" that the breach occurred in California as Washington. (Maj. opn., p. 18.) Further, as Correll bore the initial burden of proof of providing admissible evidence to establish jurisdictional facts, any deficiencies in the evidence warranted granting of Spurgeons motion to quash. As discussed above, Corrells declaration in many places does not support the assertions made to establish jurisdiction or in fact actually support Spurgeons position.
In support of her contention that jurisdiction is proper because the oral contract was made, performed and breached in California, Correll cites, and the majority relies on, Kroopf v. Guffey (1986) 183 Cal. App. 3d 1351, 228 Cal. Rptr. 807 (Kroopf), another Marvin action. In that case, a California resident brought suit against his former live-in male companion who no longer lived within the state for breach of an alleged oral agreement to share earnings and property. The defendant brought a motion to quash service, arguing that he was not living in California at the time of the alleged agreement and that he had no other contacts with the state. (Id. at p. 1355.) The plaintiff filed an opposition, which included evidence that the contract was entered into in California and that the two lived in this state from 1976 through 1980, during the time the alleged agreement was performed. (Ibid.) The court granted the motion to quash and the plaintiff appealed. (Ibid.) The Court of Appeal reversed, holding that "domicile at the time the cause of action arose, in addition to allegations that the action is based on the defendants activities within the forum state, afford the state a constitutional basis for personal jurisdiction." (Id. at p. 1358.)
Here, by contrast, Corrells evidence does not establish residence or substantial activities in the state during the performance of the alleged Marvin contract. From 1994 through 1996, the parties lived only in Washington. Moreover, according to Spurgeon, from 1996 through 1999 they also cohabited in Washington, only spending a few weekends in San Diego, and traveling in his motor home the remainder of the time. As discussed, ante, the remainder of Corrells allegations of Spurgeons activities in this state are either not supported by evidence or contradicted by Spurgeons own declarations. Accordingly, Kroopf does not support Corrells assertion that Spurgeon purposefully availed himself of the benefits of this state by performing the alleged contract here.
The majority applies Kroopf to this action with a one-sentence analysis, simply stating, "Here, although Spurgeon was never a full time California resident, it is sufficiently alleged and not disproven by substantial evidence that the Marvin action is based upon his financial and other activities within the forum state." (Maj. opn., p. 19.) However, as discussed, ante, and as the majority admits in its discussion on general jurisdiction, much of Corrells assertions concerning Spurgeons alleged "financial and other activities" in this state are not supported by any evidence.
2. "In rem" jurisdiction
Correll also asserts that the disputed ownership of personal property (the vehicles) in California serves as an independent basis for jurisdiction in this matter. The majority, with minimal analysis, agrees that this is another factor in support of finding specific jurisdiction. (Maj. opn., pp. 19-20.)
However, "in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be . . . the minimum-contacts standard elucidated in International Shoe [Co. v. Washington (1945) 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154]." (Shaffer v. Heitner (1977) 433 U.S. 186, 207, 53 L. Ed. 2d 683, 97 S. Ct. 2569 (Shaffer).) "The presence of the property alone would not support the States jurisdiction." (Id. at p. 209.)
Thus, in Khan v. Superior Court (1988) 204 Cal. App. 3d 1168, 251 Cal. Rptr. 815, a dissolution action, the Court of Appeal held that the trial court properly exercised jurisdiction over a nonresident husband because the case involved, among other things, "the disposition of real and personal property within California." (Id. at p. 1179.) The California property consisted of two unimproved lots and his bank account. (Id. at pp. 1172, 1178.)
The court first held that, consistent with the Shaffer case, presence of the property alone in California would be insufficient to confer jurisdiction. (Khan v. Superior Court, supra, 204 Cal.App.4th at p. 1178.) However, the court found that the husbands other contacts with California were so extensive and wide-ranging that jurisdiction was appropriate. (Id. at pp. 1177-1179.) This included the fact that the parties were married in and resided in California, purchasing a residence there. (Id. at p. 1177.) Even when working overseas he represented himself to his employer as a California resident, and he returned frequently to the state. (Id. at p. 1179.) With regard to the property in California, he made installment payments and paid taxes on the real property. He had the property managed by a California firm, and it was purchased for investment and resale. (Ibid.)
Here, by contrast, Spurgeons contacts with this state, and in particular with regard to this dispute, are not "extensive and wide-ranging." Also, unlike the marriage in Khan, the alleged Marvin agreement here was not entered into, performed or breached in this state. There is not the same manifest interest in the resolution of this dispute in California as there is for a marriage dissolution action based upon a California marriage with marital property within its borders that is in dispute. (Khan v. Superior Court, supra, 204 Cal. App. 3d at p. 1180.) The presence of disputed personal property in this state therefore does not provide a further basis for the exercise of jurisdiction in this case.
3. Causing "effects" in California
Correll asserts, and the majority agrees, that even if the contract was entered into and to be performed in Washington, jurisdiction was still proper here because Spurgeons actions caused an "effect" in California. It is true that "if a defendant commits an act or omission outside the forum state with the intent to cause a tortious effect within the state, the state may exercise jurisdiction over the defendant as to any cause of action arising from the effects." (Taylor-Rush v. Multitech Corp. (1990) 217 Cal. App. 3d 103, 113, 265 Cal. Rptr. 672.) However, the record does not support Corrells contention that Spurgeon caused such an effect in California that jurisdiction is proper.
Correll first points to her work for Mileage Master as an "effect" in California. However, Correll did not submit any evidence that her alleged work for this company was part of the consideration for the Marvin contract. Additionally, Corrells declaration does not state that the work was actually performed while she was in California. Thus, there is no evidence that the alleged contract caused an "effect" in California simply because Correll performed some services for this company.
The majority, in concluding that Spurgeon caused an "effect" in California, again relies upon Corrells unsupported assertions that she performed work and other services for Spurgeon in California and that "these activities were directly related to the alleged Marvin agreement." (Maj. opn., p. 23.) Thus, the majority relies upon allegations with no evidentiary substance to overturn the trial courts decision.
Further, as Correll concedes and the majority acknowledges, there is a difference between her being "affected" by Spurgeons actions and his actions having "effects" in California for jurisdictional purposes. Thus, the fact that she allegedly gave up her job in California to move to Washington to be with Spurgeon is not a sufficient "effect" caused by his actions to establish jurisdiction in this state. Walter v. Superior Court (1986) 178 Cal. App. 3d 677, 224 Cal. Rptr. 41 (Walter ), a case with similar facts to this one, is instructive.
In Walter, the defendant allegedly induced the plaintiff by telephone to quit her job in California and move to New Jersey to be his companion in exchange for his promise of lifetime financial security. After the relationship soured and the plaintiff returned to California, she sued the defendant for lost income from the job she had quit and other financial benefits allegedly promised by the defendant but not received. (Walter, supra, 178 Cal. App. 3d at p. 679.) In response to the complaint, the defendant brought a motion to quash for lack of personal jurisdiction. The trial court denied the motion, finding that the defendants actions "resulted in substantial economic effect in California and little or none in New Jersey. The agreement alleged to have been reached was accepted in California by plaintiff. Defendant contacted plaintiff not infrequently, or even occasionally, but innumerable times over a period of months, making telephone calls from New Jersey to plaintiff in California. Plaintiff alleges that she gave up her job and lost her pay and benefits associated with that job in California. She gave up her apartment and departed California to live in New Jersey. Further, defendant sent money from New Jersey to plaintiff in California." (Ibid.)
The defendant filed a petition for writ of mandate and the Court of Appeal reversed. The court found that "having an effect" in the forum state was not the same thing as an act that "affects" a California resident. (Walter, supra, 178 Cal. App. 3d at p. 681.) The court found that the defendants actions caused no "wide-ranging" effects in California and that the case involved only "a private dispute between two individuals in which neither the general population of California nor California courts have any particular interest (aside from providing a forum for plaintiff, a California resident)." (Ibid. )
The majority attempts to distinguish Walter not only by pointing to the unsupported assertion by Correll concerning her work for Spurgeon in California, but also by concluding that Correll has "an interest in obtaining a forum for her claims" (maj. opn., p. 23), which include the automobiles and the loss of her pension benefits. As to the loss of her job and pension benefits, the Walter case involved just such a claim, and it held that these damages are not the type of "effect" that would confer jurisdiction. (Walter, supra, 178 Cal. App. 3d at p. 681.)
With regard to her ability to pursue her claim concerning the automobiles and pension benefits, there is no allegation that Correll does not have a forum for these claims in Washington as part of her Marvin action. Indeed, contrary to the implied finding of the majority, Washington State does recognize Marvin-type actions. (See Marriage of Lindsey (1984) 101 Wn. 2d 299 [678 P.2d 328, 330-331]; 21 Weber, Wash. Practice Series (2002 supp.) Family and Community Property Law, § 57.10.)
Finally, as discussed, ante, the trial court found that the extent of activities in California related to the Marvin agreement were insignificant and not the sort that would establish serious or wide-ranging effects in this state. Indeed, the majority does not explain what "effects" were caused by Spurgeons actions in California.
4. Cause of action "arising out of" contacts with state
Even if Correll could establish that Spurgeon purposefully availed himself of the benefits of conducting business within California, we must next inquire whether Corrells cause of action "arises out of or has a substantial connection with a business relationship defendant has purposefully established with California." (Cornelison v. Chaney (1976) 16 Cal.3d 143, 149, 127 Cal. Rptr. 352, 545 P.2d 264.)
Correll asserts (and the majority agrees) that she established this prong of the test for specific jurisdiction as she performed services for Mileage Masters in California. (Maj. opn., pp. 20-21.) The majority also states that "the financial security that she alleged she was promised was to be provided through, at least in part, the income Spurgeon derived from his California business activities." (Maj. opn., pp. 20-21.) The only problem with this statement is that, once again, while Correll may have alleged such a scenario, she submitted no evidence to support it. The majority provides no other explanation for its holding that there was no evidence to support the trial courts conclusion that Spurgeons activities in California did not "arise from" the alleged Marvin agreement. Indeed, the majoritys conclusion is again at direct odds with its holding finding a lack of evidence to establish general jurisdiction. The majority concluded that Correll had submitted no evidence concerning the nature of Spurgeons business activities in California, income he derived from those alleged dealings, or any support Correll received from that income. (Maj. opn., pp. 9-10.) In its discussion on specific jurisdiction the majority also recognizes that Corrells declaration did not state that her alleged work for Spurgeons business occurred in California or that it formed the basis of consideration for the alleged Marvin agreement. (Maj. opn., p. 17.) Despite the admitted lack of evidence supporting Corrells position, the majority concludes that the trial court "did not have a sufficient basis in the evidence" (maj. opn., p. 21) to find that Corrells claims did not "arise from" Spurgeons activities in this state. Indeed, it is Correll who failed to meet her burden of proof by submitting admissible evidence to support her claim that jurisdiction is proper here.
5. Reasonableness of exercise of jurisdiction
Even if Spurgeons contacts with California are sufficient to establish jurisdiction in this state, we must still analyze whether it is "reasonable" or "fair" to subject him to California jurisdiction as to this dispute. In determining this issue, we must assess (1) the inconvenience to defendant in defending the action here; (2) the interests of plaintiff in suing locally; and (3) the interest of the state in assuming jurisdiction. (Sibley v. Superior Court, supra, 16 Cal.3d at p. 448.)
Correll asserts that it is reasonable and fair to make Spurgeon defend this action in California because he "comes to California frequently because of his business interests . . . [and] he is part owner of a business headquartered in San Ramon, California with [an] affiliate business in San Diego." Correll also contends that it would be unreasonable for her to have to sue in Washington because (1) she has no business in that state; (2) witnesses to Spurgeons alleged promises are here; (3) witnesses with knowledge concerning her retirement programs are here; and (4) the personal property in dispute is in this state. However, these assertions do not support a reversal of the courts finding that it was not reasonable or fair to have the action tried in this state.
Spurgeon is a resident of Washington who claims his presence in California was limited to "some weekends in San Diego" with Correll. Corrells declaration on the other hand does not attempt to specify how often Spurgeon allegedly came to California or what the nature of his alleged business trips were. There are no facts showing that the alleged trips related in any manner to the claims alleged in this action. There also was no evidence submitted supporting Corrells claim that CANAM has an "affiliate" business in San Diego. The only evidence submitted concerning True Grit Abrasives is a check made out to Spurgeon at his Washington address. That check lists True Grits business address as San Ramon, California.
In addressing this factor, the majority ignores its conclusion that Correll had failed to submit competent evidence to show the extent of Spurgeons contacts with California through his business. (Maj. opn., p. 10.) Despite the fact that the majority at one point concludes there is no evidence "establishing that the business brought Spurgeon to California frequently" (maj. opn., pp. 9-10), the majority accepts Corrells assertion that he "has been able to travel to California on business" in support of its holding that jurisdiction is reasonable here. (Maj. opn., p. 25.)
The majority also supports its holding by noting that the record in this litigation demonstrates that Spurgeon "is able to sign declarations . . . ." (Maj. opn., p. 25.) There is no indication given as to what the relevance of this statement is to the question of whether it would be unduly burdensome for Spurgeon to travel to this state to defend this action.
The majority, without discussion, rejects the fact Spurgeon is legally blind as a factor supporting the courts ruling that jurisdiction would be unreasonable here. The majority appears to conclude that because Spurgeon has been able to defend himself in this state so far, continuation of the litigation here would not be unreasonable. This conclusion is irrelevant to the issue before the court. The issue is the relative burden to the parties of litigating the case here or in Washington. There is no evidence that Correll has any impairment that would burden her pursuit of litigation in Washington. Further, there is a difference between filing declarations in support of an initial motion to quash (which were faxed from out-of-state) and appearing for depositions and the trial of this matter. Spurgeons uncontroverted declaration establishes that he is industrially blind and has not driven an automobile in 20 years.
The majority ignores without discussion the remaining factors supporting a finding that it would be unreasonable for the defendant to have to defend this action in California. These include the fact that Spurgeon is a Washington resident, the contract sued upon was entered into, performed and allegedly breached in Washington, witnesses to the agreement (including the two persons acting as witnesses to the signing of the trust agreement) would be in Washington, and records concerning Spurgeons business income would be at his office in Washington.
Further, California has no substantial interest in having the dispute heard here. First, the majority implies that California has an interest in this litigation because there was a "discussion" during oral argument at the trial court on Spurgeons motion to quash whether Washington State recognizes Marvin actions. (Maj. opn., pp. 24-25.) However, Washington State does recognize Marvin-type actions. (See Marriage of Lindsey, supra, 678 P.2d at pp. 330-331.) Thus, California has no greater interest in this dispute than Washington. "This is a private dispute between two individuals in which neither the general population of California nor the California courts have any particular interest (aside from providing a forum for plaintiff, a California resident)." (Walter, supra, 178 Cal. App. 3d at p. 681.)
Corrells assertion that her witnesses and evidence are in California also does not render jurisdiction reasonable and fair in California. There are also witnesses and evidence in Washington, the place the contract was entered into and performed. Correll does not assert in her declaration that it would be an undue financial burden to try this matter in Washington. Further, even if it would be burdensome for Correll to litigate this matter in Washington, this fact would not change the result. As the court in Walter explained in rejecting such a claim by the plaintiff there, "[We] cannot resolve a constitutional issue based upon sympathy for a litigant." (Walter, supra, 178 Cal. App. 3d at p. 682.)
The majority attempts to overcome the evidence supporting the courts finding that the exercise of jurisdiction would be unreasonable here and the applicable standard of review that forbids this court from substituting its judgment for that of the trial court. The majority cites "significant undisputed facts" that show there was no basis for the courts finding of unreasonableness (maj. opn., p. 25), but does not identify them. In fact, as with the other factors to be considered upon Spurgeons motion, the relevant facts were disputed, and the court properly resolved them in Spurgeons favor. Viewing the facts in the light most favorable to Spurgeon and resolving all factual disputes and inferences in his favor, as we must, substantial evidence supports the courts determination that it would be unreasonable for Spurgeon to have to defend Corrells action in this state.