Casey v. Hill

Decision Date23 May 2022
Docket NumberD079221
Citation79 Cal.App.5th 937,294 Cal.Rptr.3d 298
Parties Matthew C. CASEY et al., Plaintiffs and Appellants, v. Patrice HILL et al., Defendants and Respondents.
CourtCalifornia Court of Appeals Court of Appeals

Grant & Kessler, Melisa N. McKellar, La Jolla, and Alexander Kessler, San Diego, for Plaintiffs and Appellants.

Law Offices of John M. Siciliano and John M. Siciliano, Temecula, for Defendants and Respondents.

DO, J.

INTRODUCTION

A husband and wife, both residents of Missouri, filed a lawsuit in Missouri state court against a California resident and California corporation for making deceptive and fraudulent representations to the couple in the course of providing them with adoption facilitation services. Although the California defendants were properly served with notice of the action, they did not respond, and a default judgment was entered.

The Missouri couple then applied in San Diego Superior Court for entry of judgment on the sister state judgment. In response, the California defendants, now also judgment debtors, moved to vacate entry of judgment. They asserted the Missouri court's exercise of personal jurisdiction over them violated their right to federal due process because they had insufficient minimum contacts with Missouri. The trial court agreed and granted the motion to vacate entry of the Missouri judgment.

We reverse. Although the California defendants disagreed that "any allegation of fraud committed upon a Missouri resident establishes Missouri jurisdiction," they did not challenge or refute the Caseys' claims that they directed communications claimed to be fraudulent and harmful into Missouri at Missouri citizens. Indeed, the trial court found the Caseys' suit "arose out of allegations that defendants committed a ‘tortious act’ in Missouri (i.e., fraud)." (Italics added.) On this record of undisputed facts, we review the trial court's order vacating the sister judgment de novo. Doing so, we conclude Missouri's exercise of personal jurisdiction over the California defendants in this case was constitutional. We further conclude the other defenses raised by the California defendants against recognition of the sister state judgment lack merit. Accordingly, we remand with instructions to the trial court to enter a new order denying the motion to vacate entry of the Missouri judgment.

FACTUAL AND PROCEDURAL BACKGROUND
I.The Missouri Action
A. The Alleged Fraud1

In 2015, Missouri residents Matthew Casey and his wife, Rebecca Casey,2 were pursuing child adoption. While exploring adoption opportunities, they were introduced to Patrice Hill, a resident of Murrieta, California and the sole owner of Unique Adoptions, Inc. (Unique), a California corporation operating out of Murrieta (together, Defendants).

Unique, which "holds itself out as a ‘Nationwide Adoption Facilitator,’ " provides services to couples seeking to adopt a child, including by helping them navigate the complexities of the adoption process. An agent of Unique told the Caseys that Unique had a "wonderful, viable adoption opportunity" through an expectant mother named "Jessica," who lived in Weldon, California. The agent said Jessica had been thoroughly vetted by Hill, and that Jessica wanted to put her baby up for adoption.

Unique's agent presented the Caseys with a written "Adoption Facilitation Agreement" (agreement). (Capitalization omitted.) The agreement stated that in exchange for a fee of $15,500, Unique would provide the following scope of services for the period of one year or until a successful adoption, whichever occurred first: "[A]ct as Clients' advertising service by advertising Unique's services, gathering information from prospective birthmothers and passing [it] on to Clients, their attorneys and/or licensed agencies that Clients have chosen to represent their legal interests in the adoption process. As an adoption facilitator, Unique may advertise for the purpose of soliciting parties to an adoption or locating children for an adoption, and may act as an intermediary between parties to an adoption."

Unique's agent told the Caseys the agreement was non-negotiable and if they did not sign it, they would lose the adoption opportunity. On July 13, 2015, Matthew and Rebecca signed the agreement, in Missouri, and Hill signed on behalf of Unique. The Caseys paid the $15,500 fee by wire transfer from Missouri to Unique's California bank account. They also began paying a monthly $1,255 fee to Unique to cover Jessica's monthly expenses, which they were told was customary.

For the next 10 months or so, between July 2015 and May 2016, Unique communicated with the Caseys regarding its adoption facilitation services, in dozens of texts, emails, and phone calls. The Caseys were in Missouri when these communications took place. Unique's communications included discussions about payment instructions, Jessica's willingness to place her child for adoption, the requirement that the Caseys pay Jessica's monthly expenses before her third trimester, Jessica's health, promises to obtain Jessica's medical records, Jessica's birth plan, and that Unique was in contact with Jessica's adoption attorney.

From July until September 2015, the Caseys' communications with Unique went through its employees or agents other than Hill. Hill was in the hospital from July 3 to 12, 2015, and then was recovering from the medical condition for which she had been hospitalized. Pat Boucher, a Unique employee, was the Caseys' main point of contact during this period. Boucher and the other Unique employees who communicated with the Caseys "always represented that Unique was [Hill's] company, that [Hill] was in charge, and that [Hill] was overseeing and directing" all of their work. Boucher told the Caseys that "everything related to the adoption goes through [Hill]." Boucher and the other employees, whom the Caseys communicated with during this initial period, served as "go-betweens" relaying information back and forth between the Caseys and Hill. Starting in September 2015, Matthew began communicating directly with Hill.

After months of believing they would be adopting a baby, the Caseys were devastated to learn "it was all a scam." Hill had never met with Jessica, "no proper screening ever took place," and Jessica would not be placing her child up for adoption. In fact, Jessica had never been a viable adoption opportunity, because she was married and under California's adoption laws she could not unilaterally place her child up for adoption. The Caseys also learned it was not, in fact, customary to pay a birthmother's monthly expenses prior to the third trimester.

Matthew confronted Hill about the "fraudulent adoption" by phone and email. Although Hill denied any wrongdoing and claimed Jessica had simply changed her mind about adoption, in a December 2015 email to Matthew, Hill offered to refund "$7500.00 of [their] 1 Year agreement." Matthew and Hill then had numerous communications to try and settle their dispute, all of which took place while Matthew was in Missouri.

Ultimately, Matthew agreed in a phone call with Hill that the Caseys would not pursue legal action and would consider the matter resolved, so long as Hill immediately refunded them the agreed-upon $7,500. Hill failed to provide the promised refund. On March 3, 2016, Matthew sent an email to Hill demanding payment. Hill responded that she would " ‘send you what we can.’ " Matthew told Hill that he and his wife would not accept payment in installments. After a number of weeks, Unique sent the Caseys a check for $2,500. Matthew told Hill the check would be rejected unless she paid the agreed amount in full. Hill never made the additional payment.

B. The Caseys Sue Defendants in Missouri

On October 7, 2016, the Caseys filed a lawsuit against Defendants (the Missouri action) in the Judicial Circuit Court of St. Louis County, Missouri (the Missouri court). In their operative pleading, they stated claims for violation of the Missouri Merchandising Practices Act (MMPA),3 negligence, and breach of fiduciary duty.

In connection with their MMPA claim, the Caseys alleged Defendants had made deceptive, false, and misleading representations to them in the course of providing them with adoption facilitation services, including that Unique had met with Jessica and counseled her; had properly screened her; that Jessica presented a viable adoption opportunity; that Unique would provide copies of Jessica's medical records, including drug and alcohol screenings, on a regular basis; that Unique had an attorney who would perform the legal work necessary to finalize the adoption; and that it was "customary and appropriate" for the Caseys to pay Jessica's monthly expenses prior to the third trimester of pregnancy. They alleged Defendants committed these acts "willfully, intentionally, fraudulently, maliciously, and knowingly, and with the conscious disregard of [their] rights." They sought compensatory and punitive damages.

C. The Missouri Default Judgment

The Caseys filed a motion for default judgment against Defendants in the Missouri court. On October 10, 2019, following an evidentiary hearing that included testimony from Matthew and Rebecca, the Missouri court found that Defendants had each been duly served with a proper summons and operative pleading by a registered process server on April 8 and September 1, 2018, respectively, and that they were each in default because they had failed to file an answer within the prescribed time period.4 Accordingly, the Missouri court issued a judgment and order granting the Caseys' motion for default judgment against Defendants (the Missouri judgment).

The Missouri court found Defendants "were in the business of providing adoption services to couples seeking to adopt a child for a fee" and "sold their services and held themselves out for hire to the citizens and residents of Missouri, including [the Caseys]." For a fee paid, Defe...

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