Brunzell Const. Co., Inc., of Nev. v. Harrah's Club
| Decision Date | 23 March 1964 |
| Citation | 37 Cal.Rptr. 659,225 Cal.App.2d 734 |
| Parties | BRUNZELL CONSTRUCTION CO., INC., OF NEVADA, a corporation, Plaintiff and Appellant, v. HARRAH'S CLUB, a corporation, Defendant and Respondent. Civ. 27678. |
| Court | California Court of Appeals Court of Appeals |
Leon J. Garrie, Los Angeles, for appellant.
Burton & Marshall, Adrian Marshall, Beverly Hills, Pacht, Ross, Warne, Bernhard & Sears, Harvey M. Grossman, Los Angeles, for respondent.
This is an appeal from an order which grants the motion of Harrah's Club to quash and set aside the service of summons and complaint.
The complaint filed on June 11, 1962, sets forth among other things that plaintiff (hereinafter sometimes referred to as Brunzell), a Nevada corporation, on January 9, 1962, made a written contract with Harrah's Club, a corporation, for the construction of a casino building in Reno, Nevada. Several other defendants are joined in the action, among such being William C. Wagner, Robert Raimist, William Harrah, Dames & Moore, a partnership, Vernon A. Smoot, Trent R. Dames, William W. Moore, William W. Brewer, Jr., Le Roy Crandall, John A. Martin, Harrah's South Shore Corporation, a corporation, and Glen Falls Insurance Company, a corporation.
It is stated in the complaint (and admitted in the answer to interrogatories by William F. Harrah) that William Harrah is the sole stockholder of both Harrah's Club, a Nevada corporation, and Harrah's South Shore Corporation, a California corporation, and that the officers and directors of the two corporations are identical.
The first cause of action is for fraud and misrepresentation against all of the defendants with the exception of Glen Falls Insurance Company. There are set out certain misrepresentations appearing in the contract documents which were prepared in Los Angeles. The second cause of action is against Harrah's Club, William Harrah, Harrah's South Shore Corporation, and some fictitious defendants and therein it is alleged that there was a breach of contract evidenced by the same documents referred to in the first cause of action. The third cause of action is against William C. Wagner, the architect, Robert Raimist, the architect's employee, Dames & Moore, a partnership, Vernon A. Smoot, Trent R. Dames, William W. Moore, William W. Brewer, Jr., Le Roy Crandall, soils engineers, John A. Martin, structural engineer, and various fictitious defendants. It is therein alleged that the said defendants negligently created and prepared the contract documents including the plans and specifications and that plaintiff was damaged as a proximate result of such negligence. It is alleged that the 'contract documents are defective, unfit, inaccurate, incomplete, self-contradictory and unsuitable for the purpose for which they were intended. * * *' The fourth cause of action is against the architect defendants and certain fictitious defendants for tortiously interfering with the contract between plaintiff and Harrah's Club. The fifth cause of action is against Harrah's Club, William Harrah, Harrah's South Shore Corporation and certain fictitious defendants. It is therein alleged that said defendants refused to make payments for stockpiled materials all to the end that plaintiff would thereby be weakened and by economic compulsion be forced to abandon the casino contract. The sixth cause of action is against all defendants with the exception of Glen Falls Insurance Company and therein it is alleged among other things that there was a breach of an express warranty with reference to the sufficiency of the contract documents. The seventh cause of action is against Harrah's Club, William Harrah, Harrah's, South Shore Corporation, Glen Falls Insurance Company, and certain fictitious defendants and seeks among other things a determination of the liability of plaintiff and the named defendants with reference to a surety bond issued to Harrah's Club with Glen Falls Insurance Company as the surety.
It is further alleged that Dames, Moore, Brewer, Crandall, Smoot, Martin, Raimist and Wagner are residents of Los Angeles County. Harrah's South Shore Corporation has admitted that it is a California corporation, and Wagner, Dames, Smoot and (in effect) John Martin admit that they are residents of Los Angeles County.
A copy of the summons and of the complaint were served upon defendant Harrah's Club by serving the California Secretary of State pursuant to a court order. Harrah's Club has appeared specially and contends that the court 'lacks personal jurisdiction over defendant, Harrah's Club. * * *'
The matter was presented to the court by affidavits and declarations of various officers of the corporations and individuals.
There should be little question about the facts in the matter as extensive discovery proceedings were had and voluminous interrogatories and answers thereto are in the record. The great preponderance of the facts supporting the appellant's affidavits declarations and contentions with reference to whether Harrah's Club is doing business in this state is taken from the records produced by Harrah's Club, or the answers by Harrah's Club officers or employees to interrogatories of the plaintiff. In other words there is no material question of fact in this case but there is a question as to the legal consequences which necessarily flow from the activities or facts.
A resume of some of the pertinent facts is as follows: The contract was in fact signed in Reno, Nevada, January 9, 1962, and provided for the construction of a multi-million dollar casino building in that city, within which casino Harrah's Club presumably would operate its gambling activities, bar, recreation, entertainment, restaurant and other activities. The contract documents were prepared in Los Angeles by the architects, Wagner and Raimist, and others, who are residents of Los Angeles County, for example, by the soil engineers, Dames & Moore, the structural engineer, Martin, and others.
Harrah's Club maintains offices in San Francisco and is listed in the telephone directory of that city as follows:
Harrah's Club controls through Harrah's South Shore Corporation an employment office in San Francisco and designates the office by a painted sign on the door which is in the same design and form as appears on Harrah's Club letterheads and forms, with the wording, 'Harrah's Club--Reno and Lake Tahoe, Employment Office, Enter.' Photographs of the office door above mentioned are in the file and clearly depict that the office in question is an office of Harrah's Club and that it is an employment office. There is no telephone listing for Harrah's South Shore Corporation in San Francisco.
The records of Harrah's Club supplied by Mr. MacMichael, Harrah's Club personnel supervisor at Harrah's Club personnel office, Stateline, Nevada, on January 29 and 30, 1963, show that in the year 1961, 13,902 employment applications were processed by Harrah's Club San Francisco office and 524 applicants were hired by Harrah's Club, many of them being hired in San Francisco. It is interesting to note that Harrah's Club correspondence and records disclose many summer placements in categories such as change girls, cocktail waitresses, crap dealers, keno runners and writers, 21 dealers, et al, and that the placement offices of at least six colleges or universities in the San Francisco district are contacted for personnel to fill such jobs. Correspondence from John Smolley, an employee of Harrah's South Shore Corporation, the employment agent of Harrah's Club in San Francisco is sent directly to Frank Raye Harrah's Club employment supervisor in Reno on stationery reading 'Harrah's Club--Reno and Lake Tahoe.' Smolley's interoffice correspondence in effect refers to the San Francisco employment office as Harrah's Club's San Francisco employment office, and Smolley with respect to answering inquiries as to whether the Harrah's Club office in San Francisco is an employment office for the Reno and Tahoe operations has indicated that it is such an employment office.
The Harrah's South Shore Corporation or the Harrah's Club office in San Francisco was in operation in June of 1962 when this action was commenced. A monthly report of Smolley (July 1, 1962) indicates that 1069 applicants were interviewed in June 1962 (something less than the year before). It is noted from Smolley's correspondence with the office in Reno that he thought there was no cause for alarm because 'the quality of hires improved this year, since we are dealing almost exclusively with college students * * * a secondary benefit was the reduced cost of advertising.'
The records of Harrah's Club disclose that Smolley through Harrah's South Shore Corporation hires employees for Harrah's Club in San Francisco. The application form which the employment prospect fills out indicates that the application is being made to go to work for Harrah's Club. The application for a fidelity bond by the prospective employee sets forth that the applicant will work for Harrah's Club. The interview rating form is clearly on Harrah's Club stationery with the name imprinted thereon. There is nothing on the documents indicating that the applicant is dealing with Harrah's South Shore Corporation. Harrah's Club, either directly or through its agents, as a continuous and substantial part of its business for over two years operated the employment office in San Francisco and processed on the...
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