Hadler v. Western Greyhound Racing Circuit

• Decision Date: 23 August 1973
• Citation: 34 Cal.App.3d 1,109 Cal.Rptr. 502
• Parties: Blanche Loretta Funk HADLER, also known as Blanche Loretta Funk, Plaintiff and Appellant, v. WESTERN GREYHOUND RACING CIRCUIT et al., Defendants and Respondents. Civ. 40733.
• Court: California Court of Appeals Court of Appeals

Page 502

109 Cal.Rptr. 502

34 Cal.App.3d 1

Blanche Loretta Funk HADLER, also known as Blanche Loretta Funk, Plaintiff and Appellant, v. WESTERN GREYHOUND RACING CIRCUIT et al., Defendants and Respondents.

Civ. 40733.

Court of Appeal, Second District, Division 4, California.

Aug. 23, 1973.

Rehearing Denied Sept. 11, 1973.

Chester Leo Smith, Beverly Hills, for plaintiff and appellant.

Manatt, Phelps & Rothenberg, and John Gaims, Los Angeles, for defendants and respondents.

JEFFERSON, Acting Presiding Justice.

Plaintiff Blanche Funk Hadler, a California resident, brought this action for breach of contract, conversion and fraud (the latter cause of action added to her complaint by amendment) against two of her brothers, David and Arthur Funk; two nephews, Albert and Bradley Funk; Western Greyhound Racing Circuit, an Arizona partnership controlled by the defendants Funk and engaged in the management of dog racing tracks; and various corporations, also engaged in dog racing. Plaintiff is seeking an accounting and damages of $20,000,000.00, as well as other remedies, including the imposition of a trust, and injunctive relief.

The only defendant served in the lawsuit is David K. Funk served, as an individual and as a member of the partnership, at Newport Beach, California. David, for himself and for the partnership, brought a motion in the trial court to (1) quash service of summons or (2) to dismiss or stay the action on the ground of Forum non conveniens or (3) to stay the action pending disposition of his application in the Superior Court of Maricopa County, State of Arizona, for arbitration of the dispute (as provided by the written partnership agreement between him and his brothers creating Western Greyhound Racing Circuit). ¹

The trial court denied the motion to quash service of the summons, but granted the defendant's motion to stay the action, on the ground of Forum non conveniens. ² Plaintiff has appealed the trial court decision, pursuant to Code of Civil Procedure, section 904.3(d).

The question presented on this appeal is whether the trial court's denial to the plaintiff of access to the courts of California constituted an abuse of judicial discretion. We have concluded that it was such an abuse.

Plaintiff alleges, in her complaint, that in September 1957, three of her brothers, David, Arthur and Charles John, formed a partnership in Arizona, the Western Greyhound Racing Circuit, for the purpose of conducting management of dog racing tracks. On September 30, 1957, after a dispute had arisen between plaintiff and her brothers over the probate of their father's estate, plaintiff entered into a written agreement in Arizona with David, Arthur, Charles and Albert Funk, whereby in return for her releasing them from claims arising up to the time of the agreement, plaintiff was to be paid $6,000 by the partnership, Western Greyhound, and was thereby assigned, by each of the Funks, two percent of each's interest in the partnership, for a total of eight percent. The agreement further provided that 'in the event any stock in any corporation can be purchased by Western Greyhoud Racing Circuit that Blanche Loretta Funk shall be entitled to purchase said stock, excepting promotional stock, to the extent of eight (8) percent of the total stock offered or contracted by Western Greyhound Racing Circuit.' The agreement further provided that Blanche was neither to have the authority to bind the partnership in any business dealings nor to have a voice in the management of partnership business.

Plaintiff alleges that in June 1961, Charles John withdrew from the partnership, and that after his withdrawal it was agreed that she would be entitled to a 10.4% Interest in the partnership. Plaintiff alleges that the defendants breached the agreement with her, by transferring, without her knowledge and consent, all of the partnership assets to a Delaware corporation, also controlled by the Funks, entitled Funks' Greyhound Racing Circuit, Inc., which is engaged in business in Arizona. Plaintiff has enumerated various breaches by the defendants Funk of the partnership agreement, which she claims has resulted in diminution of her interest in the partnership, and resulting damage: failure to deposit income earned by the partners in the partnership bank accounts; failure to include in partnership assets the stock and management contracts acquired by the partnership; failure to divide profits; failure to account; failure to keep accurate books; and failure to give to plaintiff the opportunity to purchase stock in the corporation which acquired the assets of the partnership. Plaintiff pleads that the relationship between her male relatives and herself was a fiduciary one; that because of it she reposed her trust and confidence in the Funks, and that the transfer of the assets of the partnership constituted a breach of that relationship. She claims that she did not learn of her exclusion from the acquiring corporation until January 1971.

Plaintiff seeks a wide range of remedies against her brothers and against various business entities she claims were a part of a conspiracy to defraud her of her interest. Our concern, however, is with her complaint only as it concerns the defendant served, David K. Funk. Plaintiff's wideranging complaint does not dispel the fact that her complaint is basically one alleging breach of contract; that action is a transitory one.

Code of Civil Procedure section 410.10 provides that 'A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.' In the matter before us, the trial court determined that a valid service had been made on defendant David Funk. Therefore, the issue presented to us is not jurisdictional, in the precise meaning of that term.

The Forum non conveniens doctrine 'is an equitable one embracing the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action before it may more appropriately and justly be tried elsewhere.' (Leet v. Union Pac. R.R., 25 Cal.2d 605, 609, 155 P.2d 42, 44.) The doctrine has recently been incorporated into California statutory law. (Code Civ.Proc., § 410.30.)

It has typically been applied, however, to provide relief to a nonresident defendant in an action brought by a nonresident plaintiff, where the forum state has little or no connection with the matter in litigation. (Price v. Atchison, T. & S.F. Ry. Co., 42 Cal.2d 577, 268 P.2d 457; see 21 Hastings L.J. 1245.) Where the plaintiff Is a California resident, as the plaintiff herein is, the doctrine has extremely limited application. (Thomson v. Continental Insurance Co., 66 Cal.2d 738, 59 Cal.Rptr. 101, 427 P.2d 765; Goodwine v. Superior Court, 63 Cal.2d 481, 485, 47 Cal.Rptr. 201, 407 P.2d 1.)

'Forum non conveniens has only an extremely limited application to a case where, as here, the plaintiff is a bone (sic) fide resident of the forum state. . . . 'A determination that a plaintiff is domiciled...