ANGLO IRISH BANK Corp. v. The SUPERIOR COURT of Los Angeles County
| Decision Date | 04 August 2008 |
| Docket Number | No. B206714,B206715.,B206714 |
| Citation | 165 Cal.App.4th 969,81 Cal.Rptr.3d 535 |
| Court | California Court of Appeals Court of Appeals |
| Parties | ANGLO IRISH BANK CORPORATION, PLC, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent; Kal Brar et al., Real Parties in Interest. Stewart Davies et al., Petitioners, v. The Superior Court of Los Angeles County, Respondent; Kal Brar et al., Real Parties in Interest. |
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Holland & Knight, Richard T. Williams and D. Casey Flaherty, Los Angeles, for Petitioners.
No appearance for Respondent.
Goldfarb, Sturman & Averbach, Steven L. Feldman and Steven L. Crane, Encino, for Real Parties in Interest.
In these consolidated writ proceedings, several nonresident defendants challenge the denial of their motions to quash service of summons based on lack of personal jurisdiction. 1 They contend their contacts with the State of California are insufficient to justify the exercise of personal jurisdiction in this state. They also contend the trial court applied an improper standard of proof and erred in finding that two individual defendants made false representations to the plaintiffs at a meeting in California. We reject these arguments.
We conclude that by soliciting investors in California through the personal visits of their employees and others, Petitioners established sufficient contacts with California to justify the exercise of specific personal jurisdiction in this state. We further conclude that activities that are undertaken on behalf of a defendant may be attributed to the defendant for purposes of personal jurisdiction if the defendant purposefully directed those activities at the forum state, regardless of the specific requirements of alter ego or agency, and that state law of alter ego and agency does not determine the constitutional limits to the exercise of specific personal jurisdiction. The denial of the motions to quash was proper.
The Irish bank is incorporated in and has its principal place of business in Ireland. The Isle of Man bank and the trust company are incorporated in and have their principal places of business in Isle of Man, and are subsidiaries of the Irish bank. Davies is a citizen and resident of the United Kingdom. Davies became managing director of the trust company in December 1999 and became a director of the Isle of Man bank in October 2000. 3 Connolly is a citizen and resident of Ireland.
Connolly preceded Davies as managing director of the trust company and was a director of the trust company from December 1999 to October 2000. Connolly was a director of the Isle of Man bank from January 1999, or earlier, to December 2000 and was a senior manager for the Irish bank from October 2000 to June 2001.
The Irish bank, the Isle of Man bank, and the trust company sought investors who would borrow funds from the Isle of Man bank to purchase investments known as “with profit bonds” to be held in trust by the trust company. The Irish bank would review and approve the investors' applications for credit. Davies visited California to meet with individuals who might be interested in such a leveraged investment. At the request of the Irish bank, Connolly accompanied Davies on the visit. The primary purpose of their meetings with potential investors was to determine whether the potential investors were suitable investors. Part of their responsibility in that connection was to satisfy Isle of Man's “know your customer” anti-money laundering requirements by determining that the funds were from legitimate sources.
Davies and Connolly jointly met with 10 or 11 potential clients in California in March 2000, 9 or 10 of whom decided to invest through the trust company. Their business cards handed out at the meetings bore a logo for “Anglo Irish Bank.” Davies's card identified him as managing director of the trust company. Connolly's card identified him as “Head of Offshore Trust Operations” for the Irish bank. 4 Mike McGee, who was then managing director of the Isle of Man bank, also met with several potential investors in California a few months later.
Kal Brar and Imelda Brar are California residents. They are cotrustees of the Satnam Trust. They met with investment advisors in late 1999 who encouraged them to invest abroad in “with profit bonds” and to leverage their investments. The Brars caused more than $4 million from the Satnam Trust to be transferred to the Kivrar Trust, a trust organized under the laws of Isle of Man, for the purpose of investing abroad in “with profit bonds.” More than $3.3 million of the funds held by the Kivrar Trust were so invested as of early 2000. The investment advisors then arranged for a meeting to take place at the Brars' home in California to discuss the potential leveraging of their investments.
Accordingly, the Brars met with Davies and Connolly at the Brars' home in California in March 2000. The Brars' attorney, Robert Klueger, and two investment advisors, Stanley Chesed of PrimeGlobal and Andrew Peat, also were present at the meeting. The meeting included discussions of the Brars' background, the source of their wealth, and leveraging “with profit bonds.” After the meeting, the leveraging was approved and put in motion. The trust company was appointed trustee of the Kivrar Trust in June 2000, a new trust called Kivrar Trust II was created, and Kivrar Trust II borrowed funds in order to purchase additional “with profit bonds.”
Davies visited California again in November 2000 to attend conferences in Los Angeles and San Francisco on the subject of asset protection. The conferences were sponsored by PrimeGlobal and included presentations on leveraging “with profit bonds.” Davies visited California again in May 2001 to meet with investment advisors and at least one potential investor regarding leveraged “with profit bonds.” 5
The Brars' investments eventually suffered substantial losses. The Brars estimated that as of December 2007 they had lost approximately $2 million of their initial investment.
The Brars individually and Imelda Brar as a trustee of the Satnam Trust filed a complaint against Petitioners and others in May 2005. Their first amended complaint filed in July 2005 alleges that based on the advice of their investment advisors, the Brars caused over $4 million held by Satnam Trust to be invested abroad in “with profit bonds.” They allege that the investments were made through Kivrar Trust and other intermediaries. They allege that their investment advisors represented that the investments were unique and that their principal was “absolutely guaranteed” as long as they did not withdraw the money for five years. They allege that the defendants, including Petitioners, conspired to deceive and defraud them. The Brars allege counts against all defendants for (1) intentional misrepresentation, (2) fraudulent concealment, (3) securities fraud (Corp.Code, § 25401), (4) breach of fiduciary duty, (5) negligent misrepresentation, and (6) an accounting.
Petitioners moved to quash service of summons based on lack of personal jurisdiction. The trial court determined that Petitioners each had sufficient contacts with the State of California to be subject to specific personal jurisdiction and denied the motions. The court stated that the operations of the Irish bank, the Isle of Man bank, and the trust company were “integrated” with respect to the leveraged with profit bonds investments and that personal jurisdiction over the Irish bank could be based on “the agency and/or representative services basis.”
The Irish bank, the Isle of Man bank, the trust company, Davies, and Connolly filed two separate petitions for writ of mandate in this court, challenging the denial of their motions to quash. We consolidated the two writ proceedings, stayed the trial court proceedings, and issued an order to show cause.
Petitioners contend (1) they have insufficient contacts with California to justify the exercise of personal jurisdiction in this state; and (2) the trial court applied an improper standard of proof and erred in finding that Davies and Connolly made false representations to the Brars.
A California court may exercise personal jurisdiction over a nonresident defendant to the extent allowed under the state and federal Constitutions. (Code Civ. Proc., § 410.10.) The exercise of personal jurisdiction is constitutionally permissible only if the defendant has sufficient “minimum contacts” with the state so that the exercise of jurisdiction ( Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 ( Internat. Shoe ); accord, Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268, 127 Cal.Rptr.2d 329, 58 P.3d 2 ( Pavlovich ).) In other words, the defendant's contacts with the forum state must be such that the defendant had “ ‘fair warning’ ” that its activities might subject it to personal jurisdiction in the state. ( Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 ( Burger King ); accord, World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490.)
( Calder v. Jones (1984) 465 U.S. 783, 788, 104 S.Ct. 1482, 79 L.Ed.2d 804.) “Each defendant's contacts with the forum State must be assessed individually.” ( Id. at p. 790, 104 S.Ct. 1482.) “ ‘Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.’ ” ( Asahi...
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