Belmont Industries, Inc. v. Superior Court

• Decision Date: 23 March 1973
• Citation: 107 Cal.Rptr. 237,31 Cal.App.3d 281
• Court: California Court of Appeals Court of Appeals
• Parties: BELMONT INDUSTRIES, INC., Petitioner, v. The SUPERIOR COURT OF STANISLAUS COUNTY, Respondent; VIKING DRAFTING, INC., Real Party in Interest. Civ. 1899.

Page 237

107 Cal.Rptr. 237

31 Cal.App.3d 281

BELMONT INDUSTRIES, INC., Petitioner, v. The SUPERIOR COURT OF STANISLAUS COUNTY, Respondent VIKING DRAFTING, INC., Real Party in Interest.

Civ. 1899.

Court of Appeal, Fifth District, California.

March 23, 1973.

Hearing Denied May 23, 1973.

[31 Cal.App.3d 283] McCaw & Barnum and June L. Barnum, San Francisco, for petitioner.

James & James and Stewart W. James, Hughson, for real party in interest.

OPINION

FRANSON, Associate Justice.

Petitioner seeks a writ of mandate directing respondent to enter its order quashing service of summons for lack of jurisdiction over petitioner.

Viewing the affidavits in a light most favorable to real party in interest (hereinafter 'Viking') ¹ the following is established:

Petitioner is a Pennsylvania corporation with its principal offices at Philadelphia, and is engaged in the fabrication and erection of structural steel framework for construction projects on the East Coast of the United States. It is not authorized to do business in California; it has never had an office or agent in this state and it has never sold or purchased any goods here. Other than as hereinafter described, petitioner has never engaged in any activity in California. It does not own, use or possess property here.

Viking is a California corporation engaged in drafting services, with its principal place of business at Modesto.

In August 1969 Bechtel Corporation, operating out of its Gaithersburg, Maryland office, was the general contractor for the Baltimore Gas & Electric Company on a project to be constructed at Calvert Cliffs, Maryland. Bechtel accepted petitioner's bid for steel framework on the project; thereafter petitioner telephoned Viking in regard to submitting a bid for a subcontract on drafting work. At Viking's request, petitioner mailed to Viking a set of preliminary drawings, and Viking mailed at written bid to petitioner. Thereafter, at petitioner's request, Viking sent a representative to Pennsylvania to confer about the job; subsequently petitioner mailed to Viking a written 'purchase order' confirming the award of the contract to Viking. ²

After the project was completed, a dispute arose over whether Viking was entitled to some $18,899.85 for extra work claimed to have been done by it on the contract at the request of the general contractor. In order to settle the dispute, petitioner and Viking, at Philadelphia, by written agreement dated February 4, 1971, agreed that petitioner would assist Viking in collecting the money from the owner and/or the general contractor.

On May 24, 1972, Viking filed an action in respondent court against petitioner for $18,899.85. The first three causes of action are in common count for the services rendered, and the fourth cause of action is for breach of the written contract entered into on February 4 at Philadelphia and alleges that petitioner failed to assist Viking in collecting for the 'extras.' ³ A copy of a summons and complaint was served on petitioner's treasurer in Pennsylvania. Petitioner filed a motion to quash service of summons on the ground of respondent's lack of personal jurisdiction over petitioner. After respondent denied the motion, petitioner sought relief in this court pursuant to Code of Civil Procedure section 418.10, subdivision (c).

This case presents the question whether an out-of-state purchaser of services from a California resident by way of a contract negotiated through interstate communications, consummated outside of California, is subject to the judicial jurisdiction of California in a suit to enforce payment for the services. We hold that it is not.

Code of Civil Procedure section 410.10 provides:

'A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.'

As noted in Michigan National Bank v. Superior Court, 23 Cal.App.3d 1, at page 6, 99 Cal.Rptr. 823, at page 826:

'Section 410.10 of the Code of Civil Procedure . . . manifests an intent to exercise the broadest possible jurisdiction. The constitutional perimeters of this jurisdiction are found in the decisions of the United States Supreme Court.'

In International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 316--317, 66 S.Ct. 154, 158, 90 L.Ed. 95, it was held:

'. . . due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' (Citation.)

'. . .iti

'An 'estimate of the inconveniences' which would result to the corporation from a trial away from its 'home' or principal place of business is relevant in this connection.'

The outer limits beyond which a state may not go in subjecting a nonresident to its jurisdiction have been set in Hanson v. Denckla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, where it is stated:

'The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, But it is essential in each case that there be 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.' (Emphasis added.) 357 U.S. at p. 253, 78 S.Ct. at pp. 1239--1240.)

' Minimum contact' for due process purposes requires more than a 'foot-fall' within the state (Erlanger Mills v. Cohoes Fibre Mills, 4th Cir., 239 F.2d 502, 509); it requires at the very least an act by the defendant which produces an effect within the state so as to make the exercise of jurisdiction Reasonable. (International Shoe Co. v. State of Washington, Supra; McGee v. International Life Ins. Co. (1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Hanson v. Denckla, Supra; Rest.2d Conflicts of Law, § 50.)

In deciding whether jurisdiction reasonably may be assumed we must analyze the nature and quality of petitioner's activities in relation to the state. (Henry R. Jahn & Son v. Superior Court, 49 Cal.2d 855, 860--862, 323 P.2d 437.) This requires a consideration of the following criteria: the interest of the state in providing a forum for its resident and in regulating the business involved (see McGee v. International Life Ins. Co., Supra; Fisher Governor Co. v. Superior Court, 53 Cal.2d 222, 225, 1 Cal.Rptr. 1, 347 P.2d 1); the relative availability of evidence and the burden of defense and prosecution in one place rather than another (International Shoe Co. v. Washington, Supra; Henry R. Jahn & Son v. Superior Court, Supra, 49 Cal.2d at pp. 861--862, 323 P.2d 437); the ease of access to an alternative forum (Travelers Health Assn. v. Virginia (1950) 339 U.S. 643, 647--648, 70 S.Ct. 927, 929--930, 94 L.Ed. 1154; American Continental Import Agency v. Superior Court, 216 Cal.App.2d 317, 30 Cal.Rptr. 654; Beirut Universal Bank v. Superior Court, 268 Cal.App.2d 832, 74 Cal.Rptr. 333); the avoidance of multiplicity of suits and conflicting adjudications (Henry R. Jahn & Son v. Superior Court, Supra); and the extent to which the cause of action arose out of the defendant's activities in the forum state (International Shoe Co. v. Washington, Supra; McGee v. International Life Ins. Co., Supra; Hanson v. Denckla, Supra; Henry R. Jahn & Son v. Superior Court, Supra.)

In Henry R. Jahn & Son v. Superior Court, Supra, it was held that a foreign corporation's regular purchase of goods in this state from a California resident under an exclusive right to sell agreement subjected it to suit in California on causes of action arising out of a breach of this relationship. The court noted that the defendant took title to the goods in this state that it directed its agent how and where to ship them, that after it ceased doing business with the plaintiff it entered into a similar course of business dealings with another defendant, a resident partnership. It was also noted that the causes of action grew directly out of the corporation's relationship with the plaintiff and the defendant partnership in this state and if the action were filed in the foreign jurisdiction two actions, rather than one, would be needed because of the resident partnership defendant. (49 Cal.2d at p. 862, 323 P.2d 437.)

In American Continental Import Agency v. Superior Court, Supra, 216 Cal.App.2d 317, 30 Cal.Rptr. 654, it was held that California had jurisdiction in a suit by a resident plaintiff against a German corporation and several domestic corporations for payment for aircraft parts purchased on a systematic and substantial basis by orders mailed from Germany. While this case is somewhat similar to the case at bench in that it involved the purchase of California goods by a foreign corporation, it is distinguishable in that on four occasions the foreign corporation had sent one of its directors to California to expedite the sales agreements which gave rise to the litigation. In addition, the court noted:

'Aside from the problem of obtaining jurisdiction over all of the parties in a German court, inasmuch as most of the relevant facts with respect to the present controversy have their origin in California the burden on the plaintiff and the defendants, other than (petitioner), of prosecuting or defending in Germany would far outweigh the burden on (petitioner) of defending here.' (216 Cal.App.2d at p. 323, 30 Cal.Rptr. at p. 657.)

In Tiffany Records, Inc. v. M. B. Krupp Distributors, Inc., Supra, 276 Cal.App.2d 610, 81 Cal.Rptr. 320, foreign purchasers of products from a California resident were held not to be subject to suit in California despite substantial purchases of phonograph records by out-of-state orders accepted in California. The court stated, at...