The motions by specially appearing defendants APG-DET, LLC (APG) and APM-DET, LLC?s (APM) to quash service of summons are DENIED.
The deposition testimony of Saman Shams (Shams), APG?s and APM?s designated person most qualified, shows APG and APM purposefully availed themselves of California benefits by maintaining an office in California, hiring California residents to conduct their business, and performing some of their business operations at their California office. (See Shams Depo. at 14:11-24, 16:18-19:16, 63:23-68:13, 72:7-76:12, 96:4-100:15, 161:18-20, 169:2-15.) Shams?s deposition testimony shows, among other things, that APG and APM operated and functioned together as a single company for the same purpose, i.e., ?the APG business,? and shared the same executives and employees without segregating or assigning employees to one entity or the other. (See?id.?at 63:23-68:13, 96:4-100:15.) It also shows APG and APM, acting together as ?the APG business,? acted through the same employees, and their employees acted on behalf of both entities in performing their responsibilities. (See?ibid.)
The evidence also shows that this action, which arises out of plaintiffs? property management relationship with APM and APG, and APM and APG?s alleged conversion and mismanagement of plaintiffs? rental income and security deposits (see Complaint at ?? 35-44), is related to and arises out of their contacts with California through their employee Blake Hatcher (Hatcher). (See Shams Depo.?at 49:8-50:3, 51:19-22, 124:18-126:22, 127:4-128:6, 136:13-137:24, 139:5-20, 140:4-17, 171:15-172:6; see Paparella Decl. at ? 1 & Exh. A.) ?A corporation or other business entity acts through authorized individuals, and the activities of its employees are attributed to the business entity for purposes of personal jurisdiction.? (Anglo Irish Bank Corp., PLC v. Superior Court?(2008) 165 Cal.App.4th 969, 981, 984.) As a whole, the evidence strongly suggests Hatcher performed at least some of his responsibilities with respect to plaintiffs? properties and accounts while working in California, given Hatcher?s significant, continuing responsibilities with respect to the APG business?s relationship with plaintiffs, the fact that he worked out of the California office approximately 20-50 percent of the time (see Shams Depo. at 24:3-25:13, 25:21-34:7, 129:4-130:21), the fact that plaintiffs? principal executive offices were located in California (Paparella Decl. at ?? 4-7), and the fact that both Hatcher and his stepfather, plaintiffs? managing member Paparella, have at all relevant times been residents of California (id.?at ? 1; see Shams Depo. at 50:1-11, 24:3-25:13, 25:21-34:7, 129:4-130:21, 162:8-15). Plaintiffs? claims in this action are related to those contacts and activities in California.
This shifts the burden to APM and APG to show that California?s exercise of jurisdiction would be unreasonable. (Pavlovich v. Superior Court?(2002) 29 Cal.4th 262, 273 (Pavlovich);?Burger King Corp. v. Rudzewicz?(1985) 471 U.S. 462, 476.) APM and APG have failed to present any evidence on the issue and have therefore failed to meet this burden.
The motion by specially appearing defendant American Property Group Holdings, LLC (American Property) to quash service of summons is GRANTED.
American Property does not lack the capacity to defend this action. It is undisputed that American Property is a Delaware limited liability company. Thus, Delaware law governs this issue. (See?CM Record Corp. v. MCA Records, Inc. (1985) 168 Cal.App.3d 965, 967-969.) Delaware law provides that a limited liability company whose status has been cancelled for the failure to pay taxes lacks the capacity to maintain or prosecute an action (Del. Code Ann. tit. 6, ? 18-1107(l)), but does not lack the capacity to defend one (Del. Code Ann. tit. 6, ? 18-1107(m)).
Plaintiffs have failed to meet their burden of demonstrating personal jurisdiction over American Property. The parties do not dispute the lack of general jurisdiction, and plaintiffs have failed to demonstrate specific jurisdiction over American Property. Plaintiffs? evidence does not show American Property has purposefully availed itself of California benefits or that the controversy is related to or arises out of its contacts with the forum. (See?Pavlovich, supra,?29 Cal.4th at p. 269.)
The motion to transfer venue and supporting documents filed by ?American Property Group, LLC,? Shams, and Henry Fuhs III in the unrelated Marin County action (see Molnar Decl. at Exhs. A-B) are irrelevant because the entity sued here is ?American Property Group Holdings, LLC,? and the entity sued in the Marin County action is ?American Property Group, LLC,? and nothing shows these entities are one and the same. They are also irrelevant because the Marin County action appears to concern an operating agreement not at issue in this litigation, which, among other things, provides for the application of California law and places venue in Marin County, California. (See Molnar Decl. at Exh. A, p. 4.) As for American Property?s ?Application for Certificate of Authority? filed with the Michigan Department of Licensing and Regulatory Affairs, which designates Shams as its backup agent for service of process in the event American Property?s designated agent cannot be found or served (Molnar Decl. at Exh. C), the mere fact that American Property may have made such a backup designation does not in any manner demonstrate American Property availed itself of California benefits at any time. Finally, paragraph 9 of Paparella?s declaration is vague and uncertain as to time regarding when American Property maintained an office in Irvine which it represented was its principal office. (See?Strasner v. Touchstone Wireless Repair and Logistics, LP?(2016) 5 Cal.App.5th 215, 226.)
Plaintiffs only new evidence with respect to American Property consists of its responses to plaintiffs? requests for admission and requests for production, and Shams?s deposition testimony. (See Supp. Opp. at Exhs. E, H, J.) Plaintiffs have failed to authenticate American Property?s responses to plaintiffs? written discovery, rendering them inadmissible, and in any event, the responses are unverified. (See Supp. Opp. at Exhs. E, H.) Even if the court were to overlook these fatal deficiencies, American Property?s responses do not demonstrate purposeful availment or that the controversy is related to or arises out American Property?s contacts with California. (See?Burger King Corp. v. Rudzewicz, supra,?471 U.S. at pp. 478-479.)
Finally, Shams?s deposition testimony does not show American Property had any contacts with California or that it was involved in the subject matter of this lawsuit, or that it was the alter ego of Shams or any of the other defendants. (See?Associated Vendors, Inc. v. Oakland Meat Co.?(1962) 210 Cal.App.2d 825, 837-840 [elements of alter ego, relevant factors].) Shams?s only testimony with respect to American Property was that he could not recall using or interacting with the entity or why the entity was set up or what its role was, and that he believed ?it was a dead entity.? (Shams Depo. at 65:8-19.)
The motion by specially appearing defendant Henry Fuhs, III (Fuhs) to quash service of summons is GRANTED.
Plaintiffs have failed to meet their burden of demonstrating personal jurisdiction over Fuhs. The parties do not dispute the lack of general jurisdiction, and plaintiffs have failed to demonstrate specific jurisdiction over Fuhs. Nothing shows Fuhs has purposefully availed himself of California benefits or that the controversy is related to or arises out of his contacts with the forum. (See?Pavlovich, supra,?29 Cal.4th at p. 269.)
Plaintiffs to give notice.