Macri v. Carson Tahoe Hospital, Inc.

• Decision Date: 07 December 1966
• Citation: 247 Cal.App.2d 63,55 Cal.Rptr. 276
• Court: California Court of Appeals Court of Appeals
• Parties: Virginia MACRI, Cross-Complainant and Appellant, v. CARSON TAHOE HOSPITAL, INC., Cross-Defendant and Respondent. Civ. 696.

Page 276

55 Cal.Rptr. 276

247 Cal.App.2d 63

Virginia MACRI, Cross-Complainant and Appellant, v. CARSON TAHOE HOSPITAL, INC., Cross-Defendant and Respondent.

Civ. 696.

Court of Appeal, Fifth District, California.

Dec. 7, 1966.

[247 Cal.App.2d 64] Morgan, Beauzay & Holmes and Robert Morgan, San Jose, for appellant.

John J. Hannegan, Sacramento, for respondent.

OPINION

STONE, Justice.

Respondent, Carson Tahoe Hospital, Inc., a Nevada corporation located in the State of Nevada, assigned its claim for unpaid charges for hospital services furnished appellant in Nevada, to Credit Corporation of Sacramento, a collection agency. Attorneys employed by Credit Corporation filed an action in the name of the corporation, based on a common count, against appellant and her husband. The complaint alleged assignment of the claim.

Appellant answered and also filed a cross-complaint against Carson Tahoe Hospital, Inc., as a new party cross-defendant, alleging malpractice. Service of the cross-complaint was made upon the California attorneys hired to institute the collection suit by Credit Corporation, the assignee of Carson Tahoe Hospital, Inc.

Respondent employed independent counsel and by special appearance moved to quash service of summons and cross-complaint on the ground of lack of jurisdiction. The supporting declarations aver that Carson Tahoe Hospital, Inc. is a Nevada corporation not licensed to do business in California; that the corporation appears in this action solely for the purpose of pursuing its motion to quash; that the corporation has no place of business in California and none of its officers or agents has an office in or resides in California; that the corporation owns no real or personal property of any kind situate in California; that it is not doing business nor has it at any time mentioned in the complaint or cross-complaint done business in the State of California.

Appellant appeals from the order granting motion to quash service of summons on cross-complaint.

Appellant does not contend that respondent corporation, by assigning the account for collection, was doing business within the due process concept of jurisdiction that requires 'certain minimum contacts' within the state of the forum in order that 'the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice. " (International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 158, 90 L.Ed. 95; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 22 L.Ed.2d 223; Fisher Governor Co. v. Superior Court, 53 Cal.2d 222, 1 Cal.Rptr. 1, 347 P.2d 1; Waco-Porter Corp. v. Superior Court, 211 Cal.App.2d 559, 27 Cal.Rptr. 371.) Indeed, appellant would have little to gain from taking this position as she did not comply with Corporation Code sections 6502 through 6504, which govern service of process upon a foreign corporation doing business within the State of California.

Appellant argues that by assigning its claim to Credit Corporation for collection respondent impliedly authorized the California corporation to hire attorneys to bring the action. Within this implied authority, argues appellant, reposes the indisputable inference that the attorneys were acting for and on behalf of respondent assignor, so that respondent made a voluntary appearance in California through the attorneys who filed the action in the name of Credit Corporation, assignee. Appellant points out that where a party has an attorney of record, the service of papers, when required, must be made upon the attorney (Spencer v. Barnes, 6 Cal.App.2d 35, 37, 43 P.2d 847), and cites a number of cases (United States of Mexico v. Rask, 118 Cal.App. 21, 4 P.2d 981; Adam v. Saenger, 303 U.S. 59, 58 S.Ct. 454, 82 L.Ed. 649; Slosberg v. Municipal Court, 101 Cal.App.2d 238, 255 P.2d 312) holding that a counterclaim or cross-complaint authorized by statute may be served upon an attorney representing a nonresident litigant in a California court.

Certainly a nonresident submits to the jurisdiction of the court when he authorizes the filing of an action on his behalf in California, but the critical question here is whether the attorneys hired by the assignee, a California corporation, were, as a matter of law, representing respondent assignor, a Nevada corporation. Appellant makes two approaches to the problem: one, that Credit Corporation was an agent of respondent; the other, that Credit Corporation acted as trustee for respondent.

Looking first at the agency theory, there is nothing in the record reflecting that by the language of the assignment respondent authorized Credit Corporation, the assignee, to hire an attorney on respondent's behalf or, for that matter, to hire an attorney at all. Appellant argues the delegation of authority to an assignee to hire an attorney need not be expressed; that because the assignor retains equitable title to the account the attorney-client relationship is implied in law.

The legal effect of an assignment for collection is delineated in Cohn v. Thompson, 128 Cal.App.Supp. 783, at page 788, 16 P.2d 364, at page 365, as...