Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of Riverside County Nos. RIC470398, RIC470421, Edward D. Webster, Judge. Reversed.
Blakely Law Group, Brent H. Blakely and Tiffany Joseph for Defendants and Appellants.
Kutak Rock and Christopher D. Glos for Plaintiff and Respondent.
OPINION
RICHLI, Acting P.J.
Plaintiff QTS & CTFC, L.L.C. (QTS), a Nebraska corporation, obtained a default judgment in Nebraska against defendants PrivacyWear, Inc. (PrivacyWear) and Carolyn M. Jones (Jones). QTS then obtained California judgments on the sister-state judgment. (See generally Code Civ. Proc., §§ 1710.10-1710.65.) Defendants moved to vacate the California judgments, arguing that Nebraska lacked personal jurisdiction over them, but the trial court denied the motion. Defendants appeal.
QTS supported its opposition to the motion with legal conclusions and vague assertions of ultimate fact, rather than with evidentiary facts, as required. Most critically, it failed to show, except by way of legal conclusions, that the underlying contract was actually between PrivacyWear and QTS, rather than between PrivacyWear and the president of QTS, Jonathan Nash (Nash), individually; it likewise failed to show that Nash was a Nebraska resident or that the negotiation, execution or performance of the contract substantially involved Nebraska.
We will therefore hold that the trial court erred by denying the motion to vacate.
I
FACTUAL BACKGROUND
The following evidence was introduced in connection with defendants’ motion to vacate the judgment. To the extent that we go on to hold in part III, post, that certain evidence either was erroneously admitted or was not substantial evidence, we will not discuss that evidence here. Consistent with the applicable standard of review (see part IV.A, post), we resolve any evidentiary conflicts in favor of the trial court’s order.
PrivacyWear is a Nevada corporation with its principal place of business in California. Jones is the president of PrivacyWear and a resident of California. PrivacyWear sells and distributes clothing promoting breast cancer awareness. It currently advertises on national television, on national radio, and in national magazines such as Women’s Health and O. It also operates a website, www.privacywear.com, on which it sells its clothing directly to individuals.
Jones, however, testified: “PrivacyWear does not have any . . . internet customers . . . in the State of Nebraska. [¶] . . . PrivacyWear has not derived any revenue from sales . . . to the state of Nebraska.”
QTS is a Nebraska limited liability company, with its principal place of business in Omaha, Nebraska. Nash is the “sole member and manager” of QTS.
Defendants claim that the address that Nash identified as QTS’s principal place of business is actually a private mailbox in a UPS Store. However, they did not introduce any evidence of this in the trial court, nor have they asked us to take judicial notice of it. We therefore cannot consider it.
In 2004, during a conference call, a third party introduced Nash to Jones. Thereafter, Nash and Jones communicated with each other concerning a possible investment in PrivacyWear. Jones mailed written materials, including PrivacyWear’s business plan and financial statements, to Nash in Nebraska. Nash had three fax numbers, with Iowa, Nebraska, and California area codes. Jones sent at least one fax to his Iowa fax number. She also emailed him at least once, at jnashomaha@aol.com.
On April 9, 2004, Nash faxed to Jones a proposed investment contract, in the form of a letter. The words “NASH HOLDINGS in partnership with QTS & CTFC, L.L.C.” were typed at the top. The letter stated that it was “From: Jonathan Nash, Jr.” and “To: Carolyn Jones, Founder/President [¶] PrivacyWear, Inc.” It then stated: “This letter reflects my understanding of our conversation. . . . [¶] . . . [¶]
“1. I am not a board member and will not vote at board meetings, but will have the option to attend board meetings for the purpose of contributing to the success of PrivacyWear.
“2. I will receive biweekly and monthly status updates for the purpose of contributing to the success of PrivacyWear.
“3. I will be indemnified from lawsuits filed against PrivacyWear.
“4. . . . I am purchasing 2,500,000 shares of PrivacyWear for $.02 per share. . . . I will be permitted to sell my shares with board consent, which will not be unreasonably withheld. [¶] . . . [¶]
“Carolyn, if the above is fine with you and Robin, please sign below, fax a copy to me and I will transfer funds per your wire instructions.”
This refers to Robin Spencer, who was then the chief financial officer of PrivacyWear.
The letter was signed, “Jonathan Nash, Jr.” When Nash signed the letter, he was in Omaha, Nebraska. The letter provided a signature line for “Carolyn M. Jones, Founder and President, PrivacyWear, Inc.” After receiving the letter, Jones signed on this line. QTS, in Nebraska, then wired $50,000 to PrivacyWear, in California.
After the investment contract was signed, between April and October 2004, Jones continued to send Nash emails asking him for input, advice, and assistance regarding PrivacyWear’s business.
According to Nash, PrivacyWear breached the contract by failing to notify him of board meetings and by failing to send him financial statements. He also testified that the financial information that Jones had sent him turned out to be inaccurate and misleading.
After the filing of the Nebraska action, Jones and Nash continued to communicate via phone and email. They agreed to have one face-to-face meeting in Omaha on September 18, 2006. However, this meeting never actually took place. Jones testified that she met Nash only once, in Los Angeles in 2004. In April 2007, Jones told Nash, “[J]ust let me know where I can travel to so that we could just sit down face to face and . . . just resolve this . . . .”
II
PROCEDURAL BACKGROUND
On November 7, 2005, QTS filed an action against defendants in Nebraska state court, alleging that it had entered into the investment contract, and asserting causes of action for breach of contract, breach of fiduciary duty, fraud, and conversion. The complaint was served on defendants by certified mail. Defendants failed to file a timely answer. Accordingly, on April 21, 2006, the Nebraska court entered a default judgment. As against PrivacyWear and Jones, it awarded QTS $50,000, plus interest and costs; in addition, as against PrivacyWear, it awarded QTS “the value of 2.5% of PrivacyWear’s stock . . . .”
Between September and November 2006, PrivacyWear wired a total of $400,000 to Nash’s bank account in Omaha. According to Jones, QTS agreed to accept this in full satisfaction of the Nebraska judgment. According to Nash, however, this was only in partial satisfaction of the Nebraska judgment.
On April 9, 2007, acting on QTS’s applications, the Riverside Superior Court entered two judgments on the sister-state judgment — one against PrivacyWear and one against Jones — both in the amount of $53,778.46. On June 12, 2007, QTS served notice of entry of the California judgments on defendants.
On June 27, 2007, defendants filed a motion to vacate the California judgments, on the ground that Nebraska did not have personal jurisdiction over them. QTS filed an opposition, including declarations by Nash and by Robin Spencer. Defendants filed objections to the Nash and Spencer declarations.
On July 27, 2007, at the hearing on the motion, the trial court sustained some of defendants’ objections and overruled others. It then denied the motion to vacate. It explained, “ . . . Ms. Jones entered into negotiations with investors in Nebraska. Those conversations extended over a period of time with communications going back and forth where she solicited an investment of $50,000 in return for which the people in Nebraska were going to receive 2.5 percent of the corporation. They were going to continue to receive information about the operation of the corporation, financial report[s], and so forth.
“And it seems to me that that ongoing — that agreement where a major shareholder or major investor is now in another state, given the nature of that negotiation, given the fact further . . . that Privacy[W]ear was, in fact, doing business in Nebraska by way of the internet, further, that her conduct in acquiescing in the judgment, in fact, making $4,000 [sic] in payments, are all rather compelling bits of evidence to say that . . . in this case Nebraska does have sufficient contacts . . . .” It added that it was finding specific jurisdiction, rather than general jurisdiction.
III
EVIDENTIARY RULINGS
Defendants contend that the trial court erred by overruling their relevance and lack of foundation objections to the Nash and Spencer declarations submitted by QTS.
Preliminarily, defendants raised some objections on grounds other than relevance and lack of foundation. However, they do not argue that the trial court erred by overruling any of those objections. They have forfeited any such argument for purposes of this appeal.
We need not deal with defendants’ relevance objections in detail. As we will discuss in part IV.A, post, the existence of jurisdiction is a question of law. Even assuming the trial court did admit some evidence that was irrelevant to the jurisdictional inquiry, we can cure the error by explaining, in the course of our analysis, why that evidence does not call for a different result — or by simply disregarding it. Accordingly, here, we discuss only defendants’ lack of foundation objections.
A. General Principles.
Personal knowledge “must be shown by facts set forth in [an] affidavit or declaration and not merely by conclusory statements to that effect. The bare statement that the facts are within the affiant’s or declarant’s knowledge does not fulfill the requirement where the facts set forth do not show this. [Citations.] The text of the affidavit or declaration itself must demonstrate the requisite personal knowledge and competency. [Citation.]” (6 Witkin, Cal. Procedure (4th ed. 1997) § 203, p. 615.)
“Evidence may be excluded for lack of personal knowledge ‘“only if no jury could reasonably find that [the witness] has such knowledge.”’ [Citation.] Thus, ‘“if there is evidence that the witness [can perceive and recollect the events at issue], the determination whether he [or she] in fact perceived and does recollect is left to the trier of fact.”’ [Citation.]” (People v. Zambrano (2007) 41 Cal.4th 1082, 1140, quoting People v. Anderson (2001) 25 Cal.4th 543, 573-574.)
A witness cannot testify to a legal conclusion. This is true even if the witness is an attorney. (Summers v. A. L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1178-1184.) “‘[It] is thoroughly established that experts may not give opinions on matters which are essentially within the province of the court to decide.’ [Citations.]” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 884, quoting Carter v. City of Los Angeles (1945) 67 Cal.App.2d 524, 528.) Even if a legal conclusion is admitted, it does not constitute substantial evidence. (Downer v. Bramet (1984) 152 Cal.App.3d 837, 841-842.)
Nash is an attorney admitted to practice in Nebraska.
Moreover, “[d]eclarations cannot be mere vague assertions of ultimate facts, but must offer specific evidentiary facts permitting a court to form an independent conclusion on the issue of jurisdiction. [Citations.]” (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 110.)
“We review a trial court’s ruling on the sufficiency of the foundational evidence under an abuse of discretion standard. [Citation.]” (People v. Tafoya (2007) 42 Cal.4th 147, 165.)
B. Analysis.
1. Nash declaration.
Nash made the following statements in his declaration.
a. Paragraph 3.
Paragraph 3: “PrivacyWear . . ., by and through Carolyn Jones . . ., solicited investment funds from QTS in Omaha, Nebraska starting in January 2004.”
Defendants objected:
“Paragraph 4 [sic]:
“Foundation — Mr. Nash fails to offer any evidence to support his statement that Privacy[W]ear solicited investment funds from QTS in Nebraska.”
At the hearing on the motion, the trial court pointed out that this objection did not appear to apply to paragraph 4 (which actually dealt with PrivacyWear’s domain names and trademarks). Counsel for defendants failed to explain that the objection actually applied to paragraph 3. The trial court overruled the objection.
Defendants failed to make it clear that they were, in fact, objecting to paragraph 3. Hence, they forfeited their objection. (Evid. Code, § 353, subd. (a).) Paragraph 3, however, is ambiguous (perhaps deliberately so) about what exactly was “in Nebraska” — the solicitation, or just QTS? If it means that the solicitation took place in Nebraska, it is a legal conclusion. Moreover, the assertion that the entity solicited was QTS, rather than Nash individually, is a legal conclusion. These conclusions are not substantial evidence.
b. Paragraphs 5-7.
Paragraph 5: “PrivacyWear has on its website, among other solicitations and interactive features, aggressive ‘click through’ solicitations whereby customers can shop online by browsing, selecting and placing PrivacyWear products in a checkout cart before purchasing the items by entering credit card information. Customers can also check their order status online.”
Paragraph 6: “PrivacyWear, through its interactive and aggressive website, makes direct solicitations to individuals, including Nebraska residents, . . . to purchase the PrivacyWear apparel.”
Paragraph 7: “In 2004, I purchased PrivacyWear merchandise and had it shipped to Omaha, Nebraska using the www.privacywear.com website.” (Underscoring omitted.)
Defendants objected to these paragraphs based on lack of foundation. The trial court did not expressly rule on defendants’ objection to paragraphs 5 and 6. However, it did overrule the objection to paragraph 7.
Obviously, Nash would have personal knowledge of whether he himself had made a purchase using PrivacyWear’s website. Presumably, if Nash could buy from the website, anyone could. Thus, given this testimony, paragraphs 5 and 6 were almost cumulative. In any event, they could be reasonably based on Nash’s perceptions in the course of making his purchase.
c. Paragraphs 9-11.
Paragraph 9: “PrivacyWear uses national and international publications (such as Cosmopolitan, O The Oprah Magazine, Women’s Health, etc[.]) to promote and sell its products through Internet websites that allow customers to shop online. I have seen PrivacyWear’s advertisements in these magazines in Omaha, Nebraska. True and correct copies of PrivacyWear’s advertisements found in O The Oprah Magazine and Women’s Health, distributed in Omaha, Nebraska, are collectively attached hereto as Exhibit ‘1’.”
Exhibit 1 consisted of ads for PrivacyWear that had run in the June 2007 edition of Women’s Health and the April, May and June 2007 editions of O. Two of the ads stated, “Shop [o]nline [a]t PrivacyWear.com.”
Paragraph 10: “PrivacyWear uses national and local radio stations to promote and sell its products through Internet websites that allow customers to shop online.”
Paragraph 11: “PrivacyWear uses national television stations (such as Black Entertainment Television ‘BET’) to promote and sell its products through Internet websites that allow customers to shop online.”
Defendants objected to these paragraphs based on lack of foundation. They also objected that they were irrelevant, absent any evidence that the magazine, radio, or television ads appeared in Nebraska and/or at any time prior to 2007.
The trial court ruled: “Number 10, . . . I will sustain the objection . . ., lack of personal knowledge and the basis for which he knows that. If he had testified that in the period of time leading up to him buying stock in the corporation that he had . . ., in fact, heard the radio stations and seen it on the TV set and accessed the website, I would have overruled that. I think it’s too conclusionary.”
It added, “Number 11, . . . I believe that evidence has . . . shown that Privacy[W]ear uses TV and other national media, but the problem is the documents show it from 2006 [sic] which is after the date in question. Those are the exhibit. So . . . I’ll overrule the objection to 11, but I don’t think that’s overly relevant to what was going on in 2005.”
It seems reasonable that Nash could have both seen and heard PrivacyWear ads. Hence, the trial court could have overruled personal knowledge objections to all three paragraphs. Instead, it sustained one while overruling two. While this seems somewhat inconsistent, PrivacyWear cannot complain of the one ruling in its favor. Moreover, as the trial court indicated, all Nash had shown was that PrivacyWear advertised in 2007. The trial court referred to paragraph 11, but it seems to have intended its ruling to apply equally to paragraphs 9 and 10; after all, the exhibits that it also referred to were the magazine ads that were the subject of paragraph 9.
In sum, as we understand the trial court’s ruling, it excluded the radio ads (paragraph 10); it admitted the magazine ads (paragraph 9) and television ads (paragraph 11), but only as evidence of advertising activity in 2007, not in 2004 or 2005. This was in no way a prejudicial abuse of discretion.
d. Paragraph 12.
Paragraph 12: “Jones initiated and pursued QTS in Nebraska to invest in PrivacyWear and to promote PrivacyWear through numerous telephone calls and electronic mail messages (estimated to exceed 100 calls and messages through the course of the relevant times discussed herein).”
Defendants objected based on lack of foundation. The trial court overruled the objection.
Nash reasonably would have personal knowledge regarding Jones’s communications, through him, with QTS. While words such as “initiate” and “pursue” are somewhat conclusory, they are not legal conclusions; ordinarily, they would be the kind of opinions to which a lay witness can testify. (Evid. Code, § 800.) In the jurisdictional context, however, these are mere vague assertions of ultimate facts. Absent specific evidentiary facts to support them, they are not proof of personal jurisdiction.
The testimony that there were over 100 calls and messages during “the relevant times” was a legal conclusion. What times did Nash consider relevant? Over defendants’ objection, QTS was offering evidence of defendants’ conduct in 2006, after the Nebraska judgment had been entered, and in 2007. This evidence, however, was not particularly relevant to whether Nebraska had jurisdiction when defendants were served in the Nebraska action.
Finally, paragraph 12, suffered from much the same vices as paragraph 4 — testimony that the “pursuit” took place in Nebraska or that it was aimed at QTS was a legal conclusion. Once again, such conclusions are not substantial evidence.
e. Paragraph 15.
Paragraph 15: “In April 2004, after repeated communications between Jones and me, QTS executed an investment contract in Omaha, Nebraska . . . .”
Defendants objected based on lack of foundation. The trial court overruled the objection.
Once again, Nash reasonably would have personal knowledge regarding Jones’s communications with him and regarding his execution of the contract. Hence, the trial court properly overruled the objection. However, the statement that the contract was executed by QTS, rather than by Nash individually, was a legal conclusion, which we will disregard.
f. Paragraph 16.
Paragraph 16: “The contract provisions were negotiated between Jones and me, with Jones believed to be in California on the one hand and me in Nebraska on the other.”
Defendants objected based on lack of foundation. The trial court overruled the objection.
Nash reasonably would have personal knowledge as to where he was when he negotiated the contract. However, he did not plainly state that he was, in fact, in Nebraska; he merely stated that he was “believed to be” in Nebraska. This was not relevant. Moreover, Nash had no personal knowledge of what Jones believed. Hence, we disregard this testimony.
2. Spencer declaration.
Spencer made the following statements in her declaration.
a. Paragraph 3.
Paragraph 3: “ . . . Jones traveled throughout the US, including Nebraska[,] to promote, market and find investors for Privacy Wear.”
Defendants objected based on lack of foundation and hearsay. The trial court overruled the objection, stating: “[A]s chief financial officer I think [Spencer] would have sufficient foundation to testify as to Ms. Jones’ traveling through the United States since she would be responsible for paying the expenses . . . .”
We agree with the trial court’s implicit ruling that there was no showing that Spencer had personal knowledge of Jones’s travels. By further ruling that she could testify based on her experience as chief financial officer, it erred. There was no evidence that Spencer in fact relied on PrivacyWear’s business records, much less that these qualified under the business records exception to the hearsay rule. (Evid. Code, § 1270 et seq.) We will therefore disregard this testimony.
b. Paragraph 6.
Paragraph 6: “On April 9, 2004, I participated with Ms. Jones in a telephone call to Mr. Nash who was in Omaha, Nebraska to finalize terms of Mr. Nash’s PrivacyWear investment.”
Defendants objected based on lack of foundation. The trial court overruled the objection.
Absent evidence as to how Spencer knew that Nash was in Nebraska, the trial court should have sustained this objection.
c. Paragraph 7.
Paragraph 7: “PrivacyWear employed an e-commerce business model with multi-channel distribution. Primary sales were generated via the Internet and additional sales were generated via a regional retailer in the United States. PrivacyWear purposefully availed itself to [sic] and solicited customers throughout the US, including Nebraska.”
Defendants objected based on lack of foundation. The trial court overruled the objection.
Spencer reasonably would have had personal knowledge of whether PrivacyWear offered products for sale to the public on its website. In any event, that fact alone added little to Nash’s testimony that he himself made an internet purchase from PrivacyWear. (See part III.B.1.b, ante.) By contrast, Spencer’s attempt to testify that this constituted “purposeful availment” was a legal conclusion and not substantial evidence.
d. Paragraph 8.
Paragraph 8: “I know PrivacyWear maintained contacts with the State of Nebraska via the www.PrivacyWear.com website and with Mr. Nash, because I was carbon copied (i.e., cc:) on emails from Carolyn Jones to Mr. Nash via jnashomaha@aol.com and was aware of Carolyn Jones’ telephone calls to Omaha, NE to discuss PrivacyWear matters with Mr. Nash[.]” (Underscoring omitted.)
Defendants objected based on lack of foundation. The trial court overruled the objection.
Spencer did not explain how she knew that emails to jnashomaha@aol.com were going to Nebraska; indeed, unless she was with Nash when he read them, there does not seem to be any way that she could have known. Similarly, as we have already discussed (see part III.B.2.b, ante), she did not explain how she knew that, during Jones’s phone calls, Nash was in fact in Nebraska. Hence, we will disregard these statements.
3. Meeting in California.
Finally, defendants appear to contend that the trial court erred by admitting evidence that Jones and Nash met in California. However, evidence to this effect was introduced by defendants themselves. In any event, we cannot imagine how it could have been prejudicial.
IV
PERSONAL JURISDICTION
Having resolved these evidentiary issues, we turn to the substantive question of whether Nebraska had personal jurisdiction over defendants.
A. General Principles.
A judgment debtor may move to vacate a California judgment entered on a sister-state judgment “on any ground which would be a defense to an action in this state on the sister state judgment.” (Cal. Law Revision Com. com., reprinted at 20 West’s Ann. Code Civ. Proc. (2007 ed.) foll. § 1710.40, p. 385.) These grounds include that “the judgment is not enforceable in the state of rendition” and “the judgment was rendered in excess of jurisdiction.” (Ibid.)
“A judgment rendered in excess of jurisdiction includes one entered by a court lacking personal jurisdiction over a party. [Citation.]” (Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 203.) Accordingly, “lack of personal jurisdiction . . . is a defense that may be raised on a motion to vacate a California judgment entered on another state’s judgment. [Citations.]” (Ibid.)
Under the Nebraska “long-arm” statute, a Nebraska court can exercise personal jurisdiction on any basis consistent with the United States Constitution. (Neb. Rev. Stat. § 25-536, subd. (2).) “‘[The] constitutional touchstone’ of the determination whether an exercise of personal jurisdiction comports with due process ‘remains whether the defendant purposefully established “minimum contacts” in the forum State.’ [Citation.] . . . [M]inimum contacts must have a basis in ‘some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.’ [Citation.] ‘Jurisdiction is proper . . . where the contacts proximately result from actions by the defendant himself that create a “substantial connection” with the forum State.’ [Citation.]” (Asahi Metal Industry Co. v. Superior Court (1987) 480 U.S. 102, 108-109 [107 S.Ct. 1026, 94 L.Ed.2d 92] [plur. opn. by O’Connor, J.], quoting Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 474 & 475 [105 S.Ct. 2174, 85 L.Ed.2d 528].)
“‘The concept of minimum contacts embraces two types of jurisdiction — general and specific. General jurisdiction results where the defendant’s contacts with the forum state are so “systematic and so continuous as to make it consistent with traditional notions of fair play and substantial justice to subject the defendant to the jurisdiction of the forum, even where the cause of action is unrelated to the contacts.” [Citations.] Specific jurisdiction results when the defendant’s contacts with the forum state, though not enough to subject the defendant to the general jurisdiction of the forum, are sufficient to subject the defendant to suit in the forum on a cause of action related to or arising out of those contacts. [Citations.]’” (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 569-570, quoting Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 536.)
In their opening brief, defendants argued that QTS had the burden of proving that Nebraska had personal jurisdiction. QTS has not disputed this; it merely argues that there is sufficient evidence to support a finding of personal jurisdiction. Accordingly, it has waived any argument that defendants had the burden of proof. In any event, QTS did have the burden of proof. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 [motion to quash]; Floveyor Internat., Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 792-794 [motion to vacate default judgment and motion to quash]; Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1439-1441 [motion to vacate default judgment and motion to dismiss] [Fourth Dist., Div. Two]; but see Tsakos Shipping & Trading, S.A. v. Juniper Garden Town Homes, Ltd. (1993) 12 Cal.App.4th 74, 88 [motion to vacate judgment on sister-state judgment [Fourth Dist., Div. Two].)
QTS, as the judgment creditor, could have conducted at least some types of postjudgment discovery; defendants, as the judgment debtors, could not. (See Code Civ. Proc., §§ 708.020, 708.030, 708.110, 708.130, 2016.070.)
“On review, the question of jurisdiction is, in essence, one of law.” (Dorel Industries, Inc. v. Superior Court (2005) 134 Cal.App.4th 1267, 1273.) “When the evidence of jurisdictional facts is not in dispute, whether the defendant is subject to personal jurisdiction is a legal question subject to de novo review. [Citation.] When evidence of jurisdiction is in dispute, the trial court’s determination of factual issues is reviewed for substantial evidence. [Citations.] We must accept the trial court’s resolution of factual issues and draw all reasonable inferences in support of the trial court’s order. [Citation.]” (Thomson v. Anderson (2003) 113 Cal.App.4th 258, 266-267.) “Even then, we review independently the trial court’s conclusions as to the legal significance of the facts. [Citations.]” (Dorel Industries, Inc.,at p. 1273.)
Because the Nebraska statute incorporates the federal constitutional standard, the issue ultimately requires us to interpret and to apply the federal Constitution. Accordingly, decisions of the United States Supreme Court and the California Supreme Court are controlling; decisions by other California courts have greater precedential value than decisions by other federal and state appellate courts (including Nebraska’s).
B. General Jurisdiction.
QTS argues that Nebraska had general jurisdiction over PrivacyWear based on PrivacyWear’s internet activities and national advertising. (Obviously, this argument does not apply to Jones.) We have no doubt that, if QTS’s cause of action arose out of PrivacyWear’s sale of products to Nebraska residents through its website, Nebraska would have specific jurisdiction. (See Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062-1065.) The general jurisdiction analysis, however, is very different.
“[I]n order to confer general jurisdiction a defendant must have a business presence in [the forum state]. [Citation.] It is not enough that a corporation do business with [the forum state]. [Citation.]” (Johnston v. Multidata Systems Intern. Corp. (5th Cir. 2008) 523 F.3d 602, 611; accord, Bancroft & Masters, Inc. v. Augusta Nat. Inc. (9th Cir. 2000) 223 F.3d 1082, 1086.) “This is because engaging in commerce with residents of the forum state is not in and of itself the kind of activity that approximates physical presence within the state’s borders. [Citations.]” (Bancroft & Masters, Inc. v. Augusta Nat. Inc., supra, at p. 1086.) Accordingly, “most courts require more than merely maintaining an interactive website to support general personal jurisdiction.” (Jensen, Personal Jurisdiction In Federal Courts Over International E-Commerce Cases (2007) 40 Loyola L.A. L.Rev. 1507, 1533, fn. omitted.)
In Helicopteros Nacionales de Colombia, S.A. v. Hall (1984) 466 U.S. 408 [104 S.Ct. 1868, 80 L.Ed.2d 404], a Colombian corporation that was in the business of providing helicopter transportation (id. at p. 409) purchased over $4 million worth of helicopters, including approximately 80 percent of its fleet, from a Texas company between 1970 and 1977. (Id. at p. 411.) The United States Supreme Court held that Texas nevertheless did not have general jurisdiction over the corporation: “[M]ere purchases, even if occurring at regular intervals, are not enough to warrant a State’s assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.” (Id. at p. 418, fn. omitted.)
We perceive no meaningful distinction between purchases, as in Helicopteros, and sales. Of course, in a purchase, the product goes to the defendant in the foreign jurisdiction, whereas in a sale, the product goes to some stranger in the forum state; arguably, then, a nonresident seller might have more reason to expect to be sued in the forum state than does a nonresident purchaser. This distinction, however, is relevant only to specific jurisdiction, i.e., only to actions arising out of such a purchase or sale. When the issue is general jurisdiction, we see no way to argue that sales are somehow more continuous or systematic than purchases. We conclude, then, that the mere fact that PrivacyWear makes sales to Nebraska residents through its website, without more, is insufficient to give Nebraska general jurisdiction over PrivacyWear. (See Bird v. Parsons (6th Cir. 2002) 289 F.3d 865, 873-874 [fact that defendant had done business with 4,666 Ohio residents through its website did not show that Ohio had general jurisdiction; “the website . . . simply enables [it] to do business with Ohio residents, a fact that does not permit general jurisdiction”].)
Separately and alternatively, even assuming that selling products through a website could create general jurisdiction, infrequent or sporadic sales would be inadequate; the website sales would have to be “continuous and systematic . . . .” (Helicopteros Nacionales de Colombia, S.A. v. Hall, supra, 466 U.S. at p. 416; see also Perkins v. Benguet Consolidated Mining Co. (1952) 342 U.S. 437, 445, 448 [72 S.Ct. 413, 96 L.Ed. 485].) QTS failed to prove that PrivacyWear made continuous and systematic internet sales to Nebraska residents. The only “evidence” to that effect consisted of inadmissible conclusions. Nash testified to only one such sale, i.e., to himself. Spencer testified that PrivacyWear had “an e-commerce business model with multi-channel distribution,” and that PrivacyWear “generated” “[p]rimary sales” “via the Internet,” as well as “additional sales” “via a regional retailer.” She did not specify, however, how many sales were made through the internet as opposed to through a retailer. Moreover, she did not testify that PrivacyWear made even a single internet sale to a Nebraska resident, much less that it did so continuously and systematically. (See Lakin v. Prudential Securities, Inc. (8th Cir. 2003) 348 F.3d 704, 712-713 [evidence that nonresident corporation offered online loans was insufficient to establish general jurisdiction, absent evidence of number of resident consumers who had applied for and obtained loans online]; see also Revell v. Lidov (5th Cir. 2002) 317 F.3d 467, 471 [no general jurisdiction over nonresident periodical that never obtained more than 20 internet subscriptions from residents of the forum state].)
In support of its argument that Nebraska had general jurisdiction, QTS makes several representations about PrivacyWear’s website that are neither cited to nor supported by the record. For example, it states that “PrivacyWear, as can be viewed on its website, advertises in . . . Cosmopolitan . . . and VIBE.” Similarly, it states that “PrivacyWear, as can be viewed on its website, has partnerships with American Express, Hewlett Packard, Amazon.com, Citigroup, and CDW.” While it would be improper for us to consider these assertions, we note that even if we did consider them, they would not change the result.
QTS states: “Nash is personally aware of at least five other residents of Nebraska having purchased PrivacyWear products through the Internet.” The trial court, however, excluded this evidence as hearsay. QTS does not claim that this was error. Thus, it is improper for QTS to rely on this evidence.
Much like website advertising, national magazine advertising, standing alone (i.e., absent evidence of significant sales in the forum state), does not give rise to general jurisdiction. (Boaz v. Boyle & Co. (1995) 40 Cal.App.4th 700, 717; see also Roman v. Liberty University, Inc. (2008) 162 Cal.App.4th 670, 680-681.) National advertising does not target the residents of any particular state. (See Shisler v. Sanfer Sports Cars, Inc. (2006) 146 Cal.App.4th 1254, 1261.) In any event, the only evidence that PrivacyWear advertised in national magazines dated from 2007. There was no evidence of any such advertising in the time period leading up to entry of the Nebraska judgment.
We therefore conclude that QTS failed to prove that Nebraska had general jurisdiction over PrivacyWear.
C. Specific Jurisdiction.
In analyzing specific jurisdiction, we must focus on the contacts with Nebraska (if any) out of which the cause of action arises. These would be the negotiation, execution, and performance of the investment contract. In this context, PrivacyWear’s advertising and internet activities are irrelevant.
“The purposeful availment inquiry focuses on the defendant’s ‘“intentionality”’ and is satisfied ‘“when the defendant purposefully and voluntarily directs his activities toward the forum so that he should expect, by virtue of the benefit he receives, to be subject to the court’s jurisdiction based on” his contacts with the forum.’ [Citation.] The purposeful availment requirement is intended to ensure a defendant will not be haled into a jurisdiction solely as a result of ‘“random,” “fortuitous,” or “attenuated”’ contacts, or as a result of the ‘“unilateral activity”’ of another party or a third person. [Citation.] Purposeful availment asks whether the defendant’s ‘conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.’ [Citation.]” (Archdiocese of Milwaukee v. Superior Court (2003) 112 Cal.App.4th 423, 436, quoting Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269 and World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297 [100 S.Ct. 559, 62 L.Ed.2d 490].)
“[W]ith respect to interstate contractual obligations, [the United States Supreme Court has] emphasized that parties who ‘reach out beyond one state and create continuing relationships and obligations with citizens of another state’ are subject to regulation and sanctions in the other State for the consequences of their activities. [Citations.]” (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at p. 473, quoting Travelers Health Assn. v. Virginia (1950)339 U.S. 643, 647 [70 S.Ct. 927, 94 L.Ed. 1154].)
“[A]n individual’s contract with an out-of-state party alone can[not] automatically establish sufficient minimum contacts in the other party’s home forum . . . .” (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at p. 478.) “[A] ‘contract’ is ‘ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.’ [Citation.] It is these factors — prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing — that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.” (Ibid., quoting Hoopeston Canning Co. v. Cullen (1943)318 U.S. 313, 317 [63 S.Ct. 602, 87 L.Ed. 777].)
In Hall v. LaRonde (1997) 56 Cal.App.4th 1342, the plaintiff, a California resident, sued the defendant, a New York resident, for breach of a software licensing agreement. (Id. at p. 1344.) The agreement called for the defendant to make continuing royalty payments to the plaintiff. (Id. at p. 1347.) In the course of performing under the agreement, the plaintiff and the defendant had to work together to integrate and, thereafter, to upgrade their respective software; they did so via telephone and email. (Id. at pp. 1345, 1347.) The appellate court held that the telephone and email contacts were sufficient to establish specific jurisdiction. (Id. at p. 1347; see also id. at p. 1344.) It explained that the software licensing agreement “created a ‘“continuing obligation[]”’ between [the defendant] and a resident of California. [Citation.] [¶] [The defendant]’s contacts with California were more than ‘“random,” “fortuitous,” or “attenuated.”’ [Citation.] Nor were the contacts the ‘“unilateral activity of another party or third person.”’ [Citation.] [The defendant] purposefully derived a benefit from interstate activities. [Citation.] It is fair to require that he account in California for the consequences that arise from such activities. [Citation.]” (Id. at p. 1347, quoting Burger King Corp. v. Rudzewicz, supra, 471 U.S. at pp. 475-476.)
Shisler v. Sanfer Sports Cars, Inc., supra, 146 Cal.App.4th 1254 affords an instructive contrast. There, the action arose out of the purchase of a car by the plaintiff, a California resident, from the defendant, a Florida corporation. (Id. at pp. 1257-1258.) The plaintiff first saw the car advertised on the defendant’s website. (Id. at pp. 1259-1260.) In the negotiations leading up to the sale, the parties communicated via telephone, fax, mail, and email. (Id. at p. 1260.)
The appellate court held that there was insufficient evidence of purposeful availment. (Shisler v. Sanfer Sports Cars, Inc., supra, 146 Cal.App.4th at pp. 1260-1262.) It distinguished Hall as follows: “There the parties, a New York defendant and a California plaintiff, had a continuing relationship. That relationship included the ongoing payment of royalties by the defendant to the plaintiff. There is no evidence of any such relationship in this case. Although there were an unknown number of communications between the parties in this case, there is no evidence that this was anything other than a one-time transaction. Further, there is no evidence that defendant ever expressly reached out to California in search of this or any other business opportunity. After the vehicle left defendant’s business in Florida, defendant’s only further contact with plaintiff concerned the dissatisfaction that led to the instant lawsuit. There was no ongoing business relationship.” (Id. at pp. 1261-1262.)
Here, obviously, Jones and Nash had to have some communications with each other about the investment contract before it was executed, and they did. QTS also points to emails that Jones sent to Nash in April, July, and October 2004 (plus one in February 2006) in which she asked him for input, advice, and assistance; it argues that these show an ongoing business relationship above and beyond a mere passive investment. The evidence that any of these communications targeted Nebraska, however, was negligible. Rather conspicuously, Nash never testified that he was a resident of Nebraska. At oral argument, QTS objected that defendants failed to raise this point below. Insufficiency of the evidence, however, can be raised for the first time on appeal. (Tahoe National Bank v. Phillips (1971) 4 Cal.3d 11, 23, fn. 17.) He had fax numbers in Nebraska, Iowa, and California. Jones emailed him at jnashomaha@aol.com, and may have phoned him, but there is no evidence that any of these emails or phone calls were directed at Nebraska. Jones did also mail written materials to Nash in Nebraska. However, there is no evidence that she did so more than once. One fortuitous contact is insufficient to support jurisdiction.
There was evidence that QTS was a Nebraska corporation. However, there was insufficient evidence that QTS, rather than Nash, was a party to the investment contract. The written investment contract itself, which Nash drafted, indicated that the investor was Nash. It stated that it was from Nash, and it was signed by Nash, without adding that he was acting as an officer of QTS. By contrast, it was addressed to Jones, and it was to be signed by Jones, expressly in her capacity as president of PrivacyWear. Nash consistently referred to the party making the investment as “I” or “my.” For example, he stated, “I am purchasing 2,500,000 shares of PrivacyWear for $.02 per share.” He also stated, “I will be permitted to sell my shares with board consent . . . .”
The only mention of QTS was at the very top of the letter, where the words “NASH HOLDINGS in partnership with QTS & CTFC, L.L.C.” were typed. This created some ambiguity, such that QTS would have been entitled to introduce extrinsic evidence of the parties’ intent. (See Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37 [extrinsic evidence is admissible to prove a meaning to which the language of the instrument is reasonably susceptible].) However, it did not do so. As we discussed in part III.B.1.e, ante, Nash’s testimony that QTS was a party to the contract was a legal conclusion, which we may disregard. Accordingly, the principle of construction against the drafter applies. (Civ. Code, § 1654.) On this record, we cannot say that defendants intended to have an ongoing relationship with a Nebraska corporation.
We therefore conclude that QTS failed to prove that Nebraska had specific jurisdiction over PrivacyWear or Jones.
D. Waiver/Forfeiture.
QTS contends that PrivacyWear waived any challenge to personal jurisdiction by making payments, totaling $400,000, toward satisfaction of the Nebraska judgment.
Under Nebraska law, “[L]ack of personal jurisdiction may be waived and such jurisdiction conferred by the conduct of the parties. [Citation.]” (Hunt v. Trackwell (2001) 262 Neb. 688, 692-693.) “For purposes of personal jurisdiction, the voluntary appearance of a party is equivalent to service of process. [Citation.] One who invokes the power of the court on an issue other than the court’s jurisdiction over one’s person makes a general appearance so as to confer on the court personal jurisdiction over that person. [Citation.]” (Id. at p. 693.) California law is in accord. (Code Civ. Proc., § 410.50, subd. (a); Roy v. Superior Court (2005) 127 Cal.App.4th 337, 341 [Fourth Dist., Div. Two].)
Here, making payments toward the judgment was not a general appearance because it was not an appearance at all. PrivacyWear did not appear in any Nebraska court. It did not invoke the power of the court. It did not even submit to the power of the court. Yes, it did make payments on a judgment which, if the court lacked personal jurisdiction, was invalid. Nevertheless, it could reasonably do so simply to settle the case. Jones testified that the $400,000 was paid in full settlement of the Nebraska judgment, which QTS claims is now worth $1.4 million. Even if the Nebraska judgment was invalid, QTS could still have sued PrivacyWear and Jones in California. Accordingly, making payments toward the Nebraska judgment was not the kind of voluntary submission to the power of a court that would waive an objection to lack of personal jurisdiction.
V
DISPOSITION
The order denying the motion to vacate is reversed, and the trial court is directed to enter an order granting the motion.
It strikes us, however, that the parties and the trial court were all laboring under a certain lack of clarity regarding the evidentiary and substantive standards applicable to the motion — clarity which (we hope) this opinion has provided. Hence, even though, on this record, the motion should have been granted, we do not mean to preclude QTS from filing a motion for reconsideration based on any “new or different facts, circumstances, or law . . . .” (Code Civ. Proc., § 1008, subd. (a).) To be timely, such a motion must be filed within 10 days after service upon QTS of written notice of entry of the order granting the motion to vacate. (Ibid.) We express no opinion on the merits of such a motion.
Defendants are awarded costs on appeal.
We concur: KING, J., MILLER, J.