Central Bank v. Superior Court

• Decision Date: 02 June 1978
• Citation: 146 Cal.Rptr. 503,81 Cal.App.3d 592
• Parties: CENTRAL BANK NATIONAL ASSOCIATION, Petitioner, v. SUPERIOR COURT, etc., COUNTY OF SAN DIEGO, Respondent; Darryl L. BRYANT et al., Real Parties in Interest. Civ. 18167.
• Court: California Court of Appeals Court of Appeals

Page 503

146 Cal.Rptr. 503

81 Cal.App.3d 592

CENTRAL BANK NATIONAL ASSOCIATION, Petitioner, v. SUPERIOR COURT, etc., COUNTY OF SAN DIEGO, Respondent Darryl L. BRYANT et al., Real Parties in Interest.

Civ. 18167.

Court of Appeal, Fourth District, Division 1, California.

June 2, 1978.

Hearing Denied Aug. 16, 1978.

C. Robert Mackay, Hayward, and Roy C. Zukerman, Fountain Valley, for petitioner.

William M. Shernoff, Claremont, Frank V. Crudo, San Diego, Dunne, Shallcross & Kane, by Mark Kane, Los Angeles, for real parties in interest.

No appearance for respondent.

GERALD BROWN, Presiding Justice.

Central Bank, National Association (Central Bank), a chartered national banking association, seeks a writ of mandate directing the superior court to grant its motion for change of venue (Code Civ.Proc., § 400).

The central issue is whether petitioner has impliedly waived its federal statutory right to be sued only in a county in which it is located (12 U.S.C. § 94).

In the underlying civil action, real party in interest, Darryl L. Bryant, is suing American Reserve Insurance Company (American); Coast Program, a division of Central Bank; Karen Laseter, dba Laseter Insurance Agency; and doe defendants, seeking compensatory and punitive damages for (1) breach of duty of fair dealing and good faith, (2) breach of fiduciary duties, (3) fraud, and (4) breach of statutory duties.

The unverified complaint alleges Laseter and American issued an automobile insurance policy to cover Bryant, and Bryant and Central Bank entered into an insurance premium financing agreement under which Central Bank would pay American's annual premium and Bryant would pay monthly loan installments to Central Bank. Bryant alleges he has made all "loan installments due under the loan agreement to (Central Bank) through its agent, defendant Laseter." The complaint is silent as to where the premium financing agreement was entered into.

Central Bank moved for change of venue based upon 12 U.S.C. § 94, which provides:

"Actions and proceedings against (national banking associations) may be had in any district or Territorial court of the United States held within the district in which such association may be established, or in any State, county, or municipal court in the county or city in which said association is located having jurisdiction in similar cases." (Italics added.)

The United States Supreme Court

"has had prior occasion to consider section 94. It is now settled that the statute's provision concerning venue in state courts, despite the presence of what might be regarded as permissive language, 'is not permissive, but mandatory, and, therefore, "that national banks may be sued only in those state courts in the county where the banks are located. " ' (Citations.) The venue provision, however, has been held to be a privilege personal to the bank, and to be subject to waiver. (Citations.)" (Citizens & Southern Nat. Bank v. Bougas, --- U.S. ----, ----, 98 S.Ct. 88, 90, 54 L.Ed.2d 218, 222.)

In support of Central Bank's motion, Bonnie M. Emert, a vice president and manager of its Coast Program Division, declared:

"The principal office of the Bank is established at . . . Oakland, California . . . , pursuant to Charter No. 6919, issued by the Comptroller of the Currency of the United States, under his statutory authority to authorize the establishment and operation of national banks. The Coast Program Divisional Office is located at . . . Long Beach, California . . . , on the premises of the Long Beach Branch of said bank, pursuant to Branch Certificate No. 13789A issued by said Comptroller of the Currency.

"There is no branch of said Bank authorized, established, or located within the County of San Diego, or any city therein. The action herein does not affect, nor purport to affect, title to real property; nor does it arise out of, or in any way involve, the acceptance by the Bank of appointment as a fiduciary by this Honorable Court, or any other Court.

"The Bank has not consented to suit in this matter in the County of San Diego, nor has it consented generally to suit in said County." ¹

This declaration is a prima facie demonstration of entitlement to transfer.

Bryant opposed Central Bank's motion on the asserted ground the bank had impliedly waived its rights under section 94 by conducting business in San Diego County. His theory, as revealed by the transcript of the motion hearing, was that Central Bank, through its agent, Laseter Insurance Agency, financed Bryant's insurance premium in that county and thereby consented to be sued there.

In support of his opposition, Bryant averred by counter-declaration:

"1. On or about November 5, 1976, I entered into a written agreement wherein defendant COAST PROGRAM would pay defendant AMERICAN RESERVE'S insurance premium from November 5, 1976 until November 5, 1977. I agreed to make monthly installment payments to defendant COAST PROGRAM. Said monthly installment payments were made through the LASETER INSURANCE AGENCY OF SAN DIEGO, CALIFORNIA. Attached are the receipts of said payments. Said receipts are marked as EXHIBIT 'A' and incorporated herein.

"2. I am now and at all times herein mentioned, was a resident of the COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.

"3. It is my understanding that payments made through the LASETER INSURANCE AGENCY were forwarded directly to COAST PROGRAM, a division of CENTRAL BANK NATIONAL ASSOCIATION.

"4. I received the cancellation notice of the insurance policy which is the subject of the instant action directly from LASETER INSURANCE."

The trial court denied Central Bank's motion for reasons not entirely clear. ² The bank then filed a timely, verified petition seeking a writ of mandate from this court (see Code Civ.Proc. § 400). Bryant filed no points and authorities in opposition (see Cal.Rules of Court, rule 56, subd. (b)).

On April 25, 1978 we issued an alternative writ of mandate requiring respondent court to:

"(a) vacate (its) order of February 23, 1978, and make a new order granting petitioner's motion for change of venue, upon the ground that real parties in interest failed to meet their burden (see Buffum v. Chase Nat. Bank of City of New York (7th Cir.) 192 F.2d 58, 61) of proving, by competent evidence, that petitioner impliedly waived its right to be sued in a county in which it is located (12 U.S.C. § 94; see Central Bank v. Superior Court, 30 Cal.App.3d 913, (106 Cal.Rptr. 696)) or "(b) in the alternative, show cause before this court why a peremptory writ of mandate ordering (it) to do so should not issue."

An unverified answer to the petition was filed by Bryant's counsel. The answer admits all of the allegations of the petition except paragraphs 4 and 13 which state:

"4. Petitioner does not now have, and never has had, any branch office in the County of San Diego, State of California. Petitioner: does not now make, and never has made, loans in the County of San Diego; does not now accept, and never has accepted, deposits in the County of San Diego; and does not now pay, and never has paid, checks in the County of San Diego.

". . .osi

"13. Real Party in Interest Karen Laseter is not now, and never has been, authorized by Petitioner to accept payments of money on its behalf, or to receipt for the same in Petitioner's name, and was not authorized by Petitioner to accept any of the installment payments provided for in the contract referred to in paragraph 12 above on behalf of Petitioner."

Those allegations were denied.

Central Bank has filed a replication to the answer raising the fact that the answer is unverified.

Code of Civil Procedure section 1089 provides in part:

"On the date for return of the alternative writ, or on which the application for the writ is noticed, or, if the Judicial Council shall adopt rules relating to the return and answer, then at the time provided by those rules, the party upon whom the writ or notice has been served may make a return by demurrer, verified answer or both." (Italics added.)

Likewise, rule 56, subdivision (c) of the California Rules of Court provides in part:

"If the petition is granted, with or without prior service or opposition, and a writ or order to show cause issues, the respondent or real party in interest or both, separately or jointly, may make a return, by demurrer, verified answer or both." (Italics added; see also Cal.Civil Writs (C.E.B.1970) § 15.6, pp. 383-384.)

Here respondent and real party in interest have neither complied with the alternative writ by granting petitioner's motion for change of venue, nor made a return by demurrer or verified answer. Despite objection in petitioner's replication, real party in interest has failed to procure and submit verification of the answer.

The general rules of pleading and practice apply (Code Civ.Proc. § 1109). The return must conform to the rules governing an answer in a civil action (Dulaney v. Municipal Court, 11 Cal.3d 77, 81, fn. 3, 112 Cal.Rptr. 777, 520 P.2d 1). In a civil action, "failure to verify the answer, where this is required, results in an admission of the allegations of the complaint" (3 Witkin Cal. Procedure (2d ed. 1971) Pleading, § 356, p. 2020; see Hearst v. Hart, 128 Cal. 327, 60 P. 846). Thus, the unverified answer before us is ineffective in denying the allegations of the verified petition, and we deem those allegations, including paragraphs 4 and 13, to be true. The right to relief is clear, and a peremptory writ should issue.

Even assuming the return were sufficient, we hold, as a second basis for decision, the evidence before the trial court is insufficient to sustain a finding Central Bank impliedly waived its right to be sued only in a county where it is located.

"Waiver is a voluntary and intentional relinquishment or abandonment of a known existing right or privilege, which, except for such waiver, would have been enjoyed. 67 C.J. 289. It may be expressed formally or it may be implied as a necessary...