Ault v. Dinner for Two, Inc.
Decision Date | 10 August 1972 |
Citation | 103 Cal.Rptr. 572,27 Cal.App.3d 145 |
Parties | Jeffrey AULT, Plaintiff and Appellant, v. DINNER FOR TWO, INC., Defendant and Respondent. Civ. 11225. |
Court | California Court of Appeals |
Plaintiff Jeffrey Ault * appeals from an order quashing service of summons made on a foreign corporation by serving the corporation's managing agent at the corporation's office in New Jersey. 1
The question presented is whether the trial court erred in determining there was no basis for jurisdiction over the defendant foreign corporation. We conclude the statutory requirements for service of process were met, the constitutional basis for jurisdiction existed, and that the trial court erred in granting the motion to quash service of summons.
The facts are not in dispute. Defendant Dinner For Two, Inc., is a New Jersey corporation which publishes and sells books of tickets enabling the purchaser to obtain two dinners for the price of one at participating restaurants. In 1970 plaintiff contacted Jerry Stadin, President of Dinner For Two, and presented a plan to represent and solicit business for the corporation in California. As the result of these negotiations, a contract was signed on May 6, 1970, under which plaintiff was employed as an Area Representative with the exclusive right to represent and solicit business for Dinner For Two in California. Before that time, Dinner For Two had no representatives and conducted no business in California.
Plaintiff began to solicit business for the defendant corporation in California in June 1970. The orders he obtained were forwarded to the corporation in New Jersey, along with information concerning the nature of the restaurant involved. If Dinner For Two decided to accept an order, a letter was sent from New Jersey to the California restaurant owner confirming acceptance. The last such letter sent by Dinner For Two was dated November 2, 1970.
In the latter part of 1970, disagreements developed between plaintiff and Dinner For Two which resulted in the termination of the relationship. No orders taken by plaintiff in California were ever completed, and Dinner For Two derived no income or money from the orders. The only business transacted by Dinner For Two in California was the solicitation of orders from restaurant owners by the plaintiff, and the letters written by the corporation to the restaurant owners confirming them. The corporation later canceled all orders which it had originally accepted.
Plaintiff filed this action for damages for breach of contract in the San Diego Superior Court, naming Dinner For Two and its President Jerry Stadin as defendants. The complaint was filed in March 1971, some four months after the corporation ceased doing business in California. In May 1971 copies of the summons and complaint were personally served upon Stadin and upon the corporation's managing agent, Mrs. Chernak, at the corporation's office in New Jersey.
Defendants moved to quash service of the summons for lack of jurisdiction, on the ground service had been made in New Jersey when they were neither residents of California nor doing business in California. In their points and authorities defendants relied on Detsch & Co. v. Calbar, Inc., 228 Cal.App.2d 556, 39 Cal.Rptr. 626, which held no statutory authority existed for serving a foreign corporation which was engaged solely in interstate business and had withdrawn from California before it was served with process. The trial court concluded the Detsch case was still controlling and granted the motion to quash as to both defendants. Plaintiff has appealed only from that part of the order which quashed service of summons on the corporate defendant; the order has therefore become final as to the individual defendant, Jerry Stadin, and he is no longer a party to the action.
State court jurisdiction over the person of a defendant is dependent upon three factors: (1) jurisdiction of the state in the constitutional sense; (2) due process in the form of adequate notice and the opportunity for a hearing; and (3) compliance with the state's statutory requirements for the service of process (1 Witkin, Cal. Proc.(2d), Jurisdiction, § 75, p. 600; C.E.B., Cal. Jurisdiction and Process, pp. 15--16.) In this case, the corporate defendant concedes it was afforded adequate notice and the opportunity for a hearing. It claims it was not served with process in accordance with California statutory requirements and that there exists no constitutional basis for California jurisdiction.
In 1969 California enacted the new Jurisdiction and Service of Process Act (Code Civ.Proc. § 410.10 et seq.), to become effective July 1, 1970. This comprehensive revision of the statutes was designed to modify and up-date California law in the area and was the product of years of study by the State Bar and the Judicial Council. 2
The heart of the 1969 revisions is Code of Civil Procedure section 410.10, which defines bases of state jurisdiction and which had no counterpart in pre-existing California statutes. The section reads: 'A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.'
Section 410.10 defines the bases of jurisdiction of this state's courts in broad and flexible terms:
'(Its effect) is to incorporate in California law, without specific statute or decision by our own courts, any basis of jurisdiction established now or in the future by courts properly appraising constitutional limitations.' (1 Witkin, Cal. Proc.(2d), Jurisdiction, § 7, p. 532.)
The breadth of the provision was recently recognized in Michigan Nat. Bank v. Superior Court, 23 Cal.App.3d 1, at page 6, 99 Cal.Rptr. 823, at page 826 where the court stated:
The sweep of the 1969 revision was not limited to the addition of Code of Civil Procedure section 410.10, defining the bases of jurisdiction. The provisions relating to the manner of serving process, both in and outside the state, were substantially changed. (Code Civ.Proc. § 413.10--416.90.) Moreover, the new California law separates service of process from bases of jurisdiction, thereby limiting service of process to its true function of giving a defendant notice of the pending action and directing his appearance. (C.E.B., Cal. Jurisdiction and Process, p. 57.)
Code of Civil Procedure section 416.10 provides for service of process on corporations generally. It makes no distinction between corporations, foreign or domestic, resident or nonresident. 3
Section 416.10 reads:
'A summons may be served on a corporation by delivering a copy of the summons and of the complaint;
'(a) To the person designated as agent for service of process as provided by any provision of Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code;
'(b) To the president or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a general manager, or a person authorized by the corporation to receive service of process;
'(c) If the corporation is a bank, to a cashier or assistant cashier or to a person specified in subdivision (a) or (b); or
'(d) When authorized by any provision in Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code, as provided by such provision.'
In the instant case, the summons and complaint were served upon the corporate defendant's managing agent (general manager) in New Jersey. Such service fully complies with subdivision (b) of Section 416.10.
The contention service of process could only be made on the corporate defendant under subdivision (d) of section 416.10, and could...
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