Circus Circus Hotels, Inc. v. Superior Court

• Decision Date: 17 June 1981
• Citation: 174 Cal.Rptr. 885,120 Cal.App.3d 546
• Court: California Court of Appeals Court of Appeals
• Parties: CIRCUS CIRCUS HOTELS, INC., Petitioner, v. The SUPERIOR COURT OF ORANGE COUNTY, Respondent, James B. HAYNIE, Jr., et al., Real Parties in Interest. Civ. 25386.

Page 885

174 Cal.Rptr. 885

120 Cal.App.3d 546

CIRCUS CIRCUS HOTELS, INC., Petitioner, v. The SUPERIOR COURT OF ORANGE COUNTY, Respondent, James B. HAYNIE, Jr., et al., Real Parties in Interest.

Civ. 25386.

Court of Appeal, Fourth District, Division 2, California.

June 17, 1981.

Roper & Folino and Michael J. Irwin, Los Angeles, for petitioner

No appearance for respondent.

R. M. Cantillon, Newport Beach, for real parties in interest.

OPINION ON REHEARING

McDANIEL, Associate Justice.

The broad question presented for decision is whether the Orange County Superior Court has jurisdiction to entertain a tort action against a Nevada hotel corporation.

                The suit was brought by California residents and arose out of the hotel's alleged negligence as the proximate cause of the loss by theft or mysterious disappearance of plaintiffs' personal property from their hotel room in Las Vegas.  Because the offending events causing plaintiffs' loss occurred solely in Nevada, the narrower question to be resolved is whether the Nevada hotel corporation, under applicable constitutional standards of due process, enjoyed sufficient contacts with California such that to allow the California action to proceed would not offend "traditional notions of fair play and substantial justice." 1  Those contacts consisted of the hotel's substantial and regular advertising in the Los Angeles Times and the maintenance of a so-called "800" telephone number which readers of the advertising could use without cost to themselves to call the hotel and make reservations
                

After the complaint was filed by the Haynies, the defendant Circus Circus Hotels, Inc., appeared specially for the purpose of moving to quash service of summons upon it. Such motion was based both upon a claimed absence of in personam jurisdiction (Code Civ.Proc., § 410.10) and an inconvenient forum (Code Civ.Proc., § 410.30). The trial court denied the motion, and defendant petitioned us for a writ of mandate to redress the error assigned, i. e., denial of the motion. After argument following issuance of the alternative writ, we directed the trial court to vacate its order and to grant the motion. 118 Cal.App.3d 53, 173 Cal.Rptr. 115. The plaintiffs petitioned for rehearing, which we granted, and, after further argument, the matter is once again before us for disposition.

The plaintiffs, a husband and wife and their 21-year old son, all residents of Orange County, California, along with two other sons, minors, took a recreational trip to Nevada in the early winter of 1980. After visiting the Mt. Charleston ski area, the family "by majority vote" decided to spend a night in Las Vegas. The parents in turn decided that the Circus Circus Hotel would be a good place to stay because "two of our three sons were underage and (that hotel) offered attractions and games for minors ..." ²

The family did stay at the Circus Circus Hotel, and during the first night there their room was burglarized. As a result, the plaintiffs claimed to have lost cash and personal property, including jewelry and a mink coat.

After returning to Orange County, the plaintiffs filed suit there against the hotel, alleging negligence of the hotel as the reason for the theft or mysterious disappearance of their property. The complaint sought recovery of $7,100 compensatory damages for the property loss plus $10,000 exemplary damages. Yet otherwise, plaintiffs alleged "because of the matter complained of herein, and the anguish visited the plaintiffs and because of the losses they sustained, plaintiffs cut short their excursion at a cost to plaintiffs Jas. B. and Henrietta Haynie of at least $1,500, all to these plaintiffs' additional damages in this sum ($1,500 total)."

As it relates to the issue raised by these original proceedings, the complaint also alleged, "Defendants, at all times herein mentioned, advertise their said business in newspapers and other publications in the State of California including the counties of Los Angeles and Orange, and employ other methods of advertisement in California and within said counties; defendants know, therefore, or should know, that many of their Californian guests sojourn to and stay over within their said hotel facility (as was the case with plaintiffs) as a direct or indirect result of this publicity."

As previously noted, after the complaint had been filed and the defendant hotel

served personally in Nevada, it appeared specially and moved to quash that service for the reason that the California court had no personal jurisdiction over it and, if the court did, that it was nevertheless an inconvenient forum.

SUMMARY OF FILINGS IN SUPPORT OF THE MOTION

In support of its motion, the defendant filed the affidavit of Carl E. Lovell, Jr., the secretary-treasurer of the defendant corporation. According to Lovell's affidavit, defendant Circus Circus Hotels, Inc., is a Nevada corporation with its principal place of business in Las Vegas, its business is the operation of hotels and casinos in Las Vegas and Reno, Nevada, and it does not own or operate any hotels or casinos in California or in any other state besides Nevada.

Further, according to the Lovell affidavit, the defendant has never filed its articles of incorporation with the Secretary of State of the State of California; neither has it designated any person residing in California upon whom process may be served. Likewise, per the affidavit, the defendant never has filed with the Secretary of State of the State of California its irrevocable consent to such service or to service of process upon it by the Secretary of State.

The Lovell affidavit further shows that the alleged tortious conduct complained of by the plaintiffs occurred at 2880 Las Vegas Boulevard South, Las Vegas, Nevada. It also shows that defendant, at the time of the incidents referred to in the complaint, did not own any real or personal property in California, did not lease or maintain any office, residence or place of business in California, and did not have any agents in California.

From the Lovell affidavit it also appears that the defendant at no time ever had any bank accounts in California; neither did it ever own stock of any kind in California. The affidavit also states that the defendant has never paid any income taxes or any real property taxes in the State of California. The affidavit concluded with the statement that defendant has never conducted any business in California. ³

SUMMARY OF FILINGS IN OPPOSITION TO THE MOTION

In opposition to the motion, the plaintiffs filed the declaration of plaintiff Jas. B. Haynie, Jr., a Californian by birth and by his own assertion a "natural US citizen."

The declaration contains much folksy detail about the Haynies' trip to Las Vegas, ⁴ However, with reference to factual circumstances arguably relevant to the constitutional inquiry into the trial court's in personam jurisdiction or lack of it, the declaration points to the extensive advertising done by the defendant in the Los Angeles Times. Copies of a representative sampling of such advertisements are attached as exhibits to the declaration. In this regard, the declaration states, "For a number of years I have purchased the Los Angeles Times on Sundays. In 1979 and on 1/5/80 I read several ads run therein by Las Vegas hotels and casinos, usually appearing on the first two pages of the classified section, in the Calendar and in the funnies. In so doing I often saw the defendant's advertisements. While the exhibits attached hereto are subsequent to January 12, 1980, like ads appeared in the LA Times, on Sunday, throughout 1979 and earlier this year; my lawyer tells me that defendant has admitted advertising in California and maintaining an 800 telephone # available at no charge to California residents."

about its unfortunate consequences, and about why they concluded that it was the defendant's fault that their room was burglarized. It also explains that his "present atty. has been my attorney and my family's atty. for about 15 years and we definitely do not want to go to the trouble of locating and hiring a Las Vegas attorney and paying more attorney's fees, court costs and sheriff expenses. In fact, neither I nor Mrs. Haynie know a Las Vegas or Nevada attorney and our own lawyer tells me that the only one he knew died about 2 or 3 years ago (John McNamee)." The declaration concludes indignantly by stating that "(d)uring my stay at this hotel or upon checking out I paid $103.05 (three nights) for the room but under protest, also with money I had earned in California."

After referring to particular kinds of ads which appeared in the Los Angeles Times on specific dates, all many months after the events alleged in the complaint, the declaration states, "On 11/24/80 ⁵ I placed a telephone call to Phyllis Shannon of (the) LA Times, Orange County office, 957-2000. I was informed that a like ad printed in the funnies would cost $2,332 per Sunday and the square ad, $816.20. The ads appearing in the funnies are in color (black, white, blue, yellow and red.)" ⁶

DISCUSSION

Before proceeding to a resolution of the particular issue noted at the outset, i. e Both in their return to the initial petition and in their petition for rehearing, the plaintiffs are categorically insistent that the trial court, in denying the motion to quash, made a finding of fact that the defendant hotel was doing business in California with the result that we are not at liberty to review, let alone reverse, that determination. Such insistence ignores that the presentations to the trial court involved no disputed issues of fact. As a consequence, the trial court was confronted only with a question of law, and, institutionally it is our function to review the trial court's disposition of that legal question.

whether the defendant, under applicable constitutional standards of due process, enjoyed such minimal contacts with California that to allow the California action...