Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Los Angeles County Super. Ct. No. YC052166. Ramona See, Judge. Affirmed.
Law Offices of Shelley Weinstein, Anthony A. Roach and Shelley A. Weinstein for Plaintiff and Appellant.
Golob, Bragin & Sassoe and Albert L. Sassoe, Jr., for Defendant and Respondent.
DOI TODD, J.
The question presented is whether California courts may exercise personal jurisdiction, in the form of specific jurisdiction, over Red River Machinery, Inc. (Red River), an Oklahoma corporation with a principal place of business in Texas, in a lawsuit filed by California resident Samuel Lopresto (Lopresto). We conclude that substantial evidence supports the trial court’s finding that personal jurisdiction does not exist. We therefore affirm the judgment of dismissal.
FACTUAL AND PROCEDURAL BACKGROUND
Lopresto is a California resident and the president of JR Metals, Inc. (JR Metals), a Nevada corporation doing business in Nevada. Red River is an Oklahoma corporation with a principal place of business in Texas.
While attending a national trade convention, Lopresto learned that Red River could produce a rollformer machine for bending metal. He telephoned Red River in Texas from his home in California, and spoke with Eddie Richardson, Sr. (Richardson), the president of Red River. Lopresto identified himself as an officer of JR Metals. He and Richardson had several telephone conversations, including calls returned by Richardson to Lopresto’s California home, regarding specifications of the machine and the form of payment.
Lopresto’s verified complaint alleged that on or about August 5, 2003, Lopresto and Red River entered into an oral contract for the purchase and sale of a rollformer machine. Lopresto agreed to pay Red River $38,200 in two installments for a machine manufactured in accordance with his specifications. He made the first payment of $15,000 by check drawn from his trust account with California Bank and Trust. He made the second payment of $23,200 by wire transfer from California to Texas. Lopresto’s declaration states that he personally made the payments because JR Metals lacked sufficient capital to purchase the rollformer machine, and he leased the machine to his company.
Red River arranged for the manufacture of the machine by a Texas company, Rollformers of Texas, which delivered the machine to the Nevada headquarters of JR Metals. Red River’s invoice for the machine identifies the customer as JR Metals. According to his declaration, Richardson understood at all times that Lopresto was acting on behalf of JR Metals and that Red River was contracting with JR Metals in Nevada and not with an individual in California. Richardson further stated that Lopresto never advised that he was acting individually or apart from JR Metals.
Lopresto alleged that the rollformer machine delivered to JR Metals did not meet the promised specifications and did not operate correctly. He contacted Rollformers of Texas, which attempted unsuccessfully to repair the machine. The machine was shipped back to Rollformers of Texas and has never been repaired or returned.
Lopresto sued Red River in California for breach of oral contract, restitution and intentional misrepresentation. Red River specially appeared and moved to quash service of summons for lack of personal jurisdiction. Red River relied on Richardson’s declaration, in which he stated that Red River did not own or lease property in California, maintain an office or post office box in California, do business in California, or market, advertise or sell products in California.
Lopresto opposed the motion to quash, arguing that Red River had sufficient contacts with California to support specific jurisdiction over Red River. Lopresto submitted his own declaration. He also relied on his attorney’s declaration, which attached a printout from Red River’s Internet Web site (http://www.redrivermach.com) stating that it has “sold re-conditioned equipment in all 50 states and also Canada.” In reply, Red River submitted a further declaration from Richardson.
The trial court granted the motion to quash, finding that Lopresto had failed to show that Red River “purposefully established contacts with California by conducting business in California.” The court entered a judgment of dismissal, and Lopresto filed this appeal.
DISCUSSION
I. Standard of Review
“When a nonresident defendant challenges personal jurisdiction, the burden shifts to the plaintiff to demonstrate, by a preponderance of the evidence, that all necessary jurisdictional criteria have been met. The plaintiff can meet this burden only by the presentation of competent evidence in affidavits or declarations and authenticated documentary evidence. [Citation.] Affidavits or declarations consisting primarily of vague assertions of ultimate fact rather than specific evidentiary facts are not sufficient. [Citation.]” (Paneno v. Centres for Academic Programmes Abroad Ltd. (2004) 118 Cal.App.4th 1447, 1454 (Paneno).) Nor is hearsay evidence sufficient. (Judd v. Superior Court (1976) 60 Cal.App.3d 38, 43.) Once the plaintiff has established jurisdictional facts, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable. (Paneno, supra, at p. 1454.)
“Thus, the process is essentially an evidentiary one and the applicable standard of appellate review is the familiar substantial evidence rule. Therefore, if there is conflicting evidence presented by the parties, we are called upon to determine whether the trial court’s decision is supported by substantial evidence [citations], and, in doing so, we resolve all conflicts in the relevant evidence ‘against the appellant and in support of the order’ [citation].” (Paneno, supra, 118 Cal.App.4th at p. 1454.) “‘“When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deduction for those of the trial court.”’ [Citation.]” (Kazanteno v. Cal.-Western etc. Ins. Co. (1955) 137 Cal.App.2d 361, 363.) Absent conflicts in the evidence, jurisdiction is a question of law which we review under the de novo standard of review. (Paneno, supra, at p. 1454.)
II. Jurisdictional Principles
“‘California courts may exercise personal jurisdiction on any basis consistent with the Constitution of California and the United States.’” (Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1061 (Snowney); Code Civ. Proc., § 410.10.) That means a foreign defendant who has not been served with process in California may be subject to jurisdiction if the defendant has the requisite “minimum contacts” with the state such that the assertion of jurisdiction would not offend “‘“traditional notions of fair play and substantial justice.”’” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444 (Vons), quoting Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316; Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 (Pavlovich).) “In other words, the exercise of jurisdiction must be reasonable.” (Paneno, supra, 118 Cal.App.4th at p. 1455.)
“Under the minimum contacts test, ‘[p]ersonal jurisdiction may be either general or specific.’” (Snowney, supra, 35 Cal.4th at p. 1062; see also Helicopteros Nacionales de Colombia v. Hall (1984) 466 U.S. 408, 414 (Helicopteros).) Because Lopresto does not claim general jurisdiction, we only consider whether specific jurisdiction exists here.
When determining whether specific jurisdiction exists, courts consider the “‘relationship among the defendant, the forum, and the litigation.’” (Helicopteros, supra, 466 U.S. at p. 414.) A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice. (Ibid.; Vons, supra, 14 Cal.4th at pp. 446–447; Snowney, supra, 35 Cal.4th at p. 1062; Pavlovich, supra, 29 Cal.4th at p. 269.) We conclude that none of these requirements are met here.
III. Specific Jurisdiction Does Not Exist
A. Purposeful Availment
“‘“The purposeful availment inquiry . . . focuses on the defendant’s intentionality. [Citation.] This prong is only satisfied when the defendant purposefully and voluntarily directs [its] activities toward the forum so that [it] should expect, by virtue of the benefit [it] receives, to be subject to the court’s jurisdiction based on” [its] contacts with the forum.’” (Snowney, supra, 35 Cal.4th at p. 1062.) “Thus, purposeful availment occurs where a nonresident defendant ‘“purposefully direct[s]” [its] activities at residents of the forum’ [citation], ‘“purposefully derive[s] benefit” from’ its activities in the forum [citation], ‘create[s] a “substantial connection” with the forum’ [citation], ‘“deliberately” has engaged in significant activities within’ the forum [citation], or ‘has created “continuing obligations” between [itself] and residents of the forum’ [citation].” (Id. at p. 1063.) “By limiting the scope of a forum’s jurisdiction in this manner, the ‘“purposeful availment” requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated” contacts . . . .’” (Ibid.) “Instead, the defendant will only be subject to personal jurisdiction if “‘it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the state.”’” (Ibid.)
The trial court found that Lopresto failed to satisfy the purposeful availment prong. This finding is amply supported by the evidence. Richardson’s declaration established that Red River does not maintain an office in California and does not do business, market or advertise products in California. Lopresto argues that Richardson’s additional statement in his declaration that Red River does not sell products in California is contradicted by Red River’s Internet Web site, which states that Red River has sold re-conditioned equipment in all 50 states. But the Web site, which was not written under penalty of perjury, may simply be inaccurate. Furthermore, there was no evidence that Lopresto ever saw or relied on the Web site. To the contrary, the evidence showed that Lopresto solicited Red River in Texas; Red River did not reach out to California.
Lopresto further argues that Red River purposefully availed itself of the benefits of doing business in California “[b]y entering into a contract with a California resident, and accepting a large sum of money from a California resident.” Red River disputes that it entered into a contract with Lopresto as opposed to JR Metals. For purposes of addressing the jurisdictional question, we need not resolve who were the contracting parties since that issue goes to the merits of the lawsuit. But the factual dispute is relevant to answering the question of whether Red River intentionally directed its activities at California. Based on the evidence, the answer to that question is no.
Red River’s assertion that it believed it was entering into a contract with a Nevada corporation instead of a California resident is supported by the evidence. Lopresto identified himself to Richardson as an officer of JR Metals, the rollformer machine was to be used by JR Metals in Nevada, the machine was shipped to JR Metals in Nevada at Lopresto’s request, and Red River’s invoice for the machine identifies the customer as JR Metals. Lopresto also admitted that he personally paid money for the machine only because JR Metals lacked sufficient capital, and he leased the machine to JR Metals. There is no evidence that Lopresto stated that he would be the contracting party and not JR Metals. As noted above, we must resolve conflicts in the evidence in favor of the judgment and against the appellant. (Paneno, supra, 118 Cal.App.4th at p. 1454.) Under these facts, there is no evidence of intention by Red River to direct its business at a California resident.
Furthermore, Red River’s acceptance of Lopresto’s personal check drawn on a California bank and mailed from California is immaterial for purposes of establishing jurisdiction. “There is no indication that [Red River] ever requested that the checks be drawn on a [California] bank or that there was any negotiation between [Lopresto and Red River] with respect to the location or identity of the bank on which checks would be drawn. Common sense and everyday experience suggest that, absent unusual circumstances, the bank on which a check is drawn is generally of little consequence to the payee and is a matter left to the discretion of the drawer. Such unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction.” (Helicopteros, supra, 466 U.S. at pp. 416–417, fn. omitted.)
We conclude that Lopresto failed to establish that Red River purposefully availed itself of the privilege of conducting business in California.
B. Relatedness Requirement
We also conclude that Lopresto cannot satisfy the second prong of the specific jurisdiction test—the relatedness requirement. “[T]he relatedness requirement is satisfied if ‘there is a substantial nexus or connection between the defendant’s forum activities and the plaintiff’s claim.’” (Snowney, supra, 35 Cal.4th at p. 1068.) The intensity of forum contacts and the connection of the claim to those contacts are inversely related. (Ibid.) In other words, “‘[t]he more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.’” (Ibid.)
Lopresto alleged three causes of action for breach of oral contract, restitution and intentional misrepresentation. He claims that the oral contract was entered in California because he accepted the terms of Red River’s proposal over the telephone at his home in California. He cites to Wilson v. Scannavino (1958) 159 Cal.App.2d 369, 371 for the proposition that “‘[t]he law is that a contract made by telephone is entered into at the place where the recipient of the call is at the time he accepts the offer.’” But this case is of no assistance. Lopresto initiated the transaction by telephoning Red River in Texas. That Red River may have returned some of Lopresto’s calls for the purposes of working out the details of the specifications and price is of no import.
“In any event, the place of contracting is not dispositive.” (Stone v. State of Texas (1999) 76 Cal.App.4th 1043, 1048, citing to Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 478–479.) “‘[T]he place where 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, supra, at p. 1048.) Due process requires a “substantial connection” between the contract at issue and the forum state. (McGee v. International Life Ins. Co. (1957) 355 U.S. 220, 223.) Here, there is no connection, let alone a substantial connection, between the contract and California. The allegedly defective rollformer machine was manufactured in Texas and delivered to JR Metals in Nevada, where it was to be used. The machine was never delivered nor intended to be used in California. Nor is there any evidence that the contract contemplated an ongoing relationship or future dealings between the parties.
Lopresto makes no arguments regarding a substantial connection between Red River and California regarding his cause of action for restitution. With respect to his cause of action for intentional misrepresentation, he simply claims, without citing any authority, that misrepresentations were made in California. We disagree for the same reasons discussed in connection with his contract claim.
In sum, Red River’s only contacts with California consisted of a few telephone calls in response to Lopresto’s initial solicitation. Because these contacts were so limited and attenuated, Lopresto was required to make an even greater showing of a connection between these contacts and his claims. He failed to do so.
C. Fairness Requirement
The third prong of the specific jurisdiction analysis addresses “whether the assertion of specific jurisdiction is fair.” (Vons, supra, 14 Cal.4th at pp. 475–476.) “In making this determination, the ‘court “must consider the burden on the defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief. It must also weigh in its determination ‘the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.’”’” (Snowney, supra, 35 Cal.4th at p. 1070.)
It would be unreasonable and unfair for a California court to exercise personal jurisdiction over Red River where its only contacts with this state were telephone calls returned to a California resident in response to his solicitation of Red River’s business in Texas. The purchase and sale transaction between the parties was an isolated one that did not contemplate future dealings between the parties and the allegedly defective machine supplied by Red River was never delivered to this state. Under these circumstances, a California court would have little interest in adjudicating this matter against a foreign defendant.
DISPOSITION
The judgment of dismissal following the order granting Red River’s motion to quash is affirmed. Red River is entitled to recover its costs on appeal.
We concur: BOREN, P. J., CHAVEZ, J.