Schmidt v. Trinut Farm Mgmt., Inc.
| Citation | 92 Cal.App.5th 997,309 Cal.Rptr.3d 877 |
| Docket Number | F083763 |
| Decision Date | 27 June 2023 |
| Parties | Jon SCHMIDT, Plaintiff and Appellant, v. TRINUT FARM MANAGEMENT, INC., Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Certified for Partial for Partial Publication.*
Law Office of Hastings & Ron and Natali A. Ron, Stockton, for Plaintiff and Appellant.
Petrie Leath Larrivee & O'Roarke and Sean T. O'Rourke for Defendant and Respondent.
POOCHIGIAN, Acting P. J. Appellant and plaintiff Jon Schmidt appeals from a judgment of dismissal entered in favor of respondent and defendant Trinut Farm Management, Inc. (TFMI) after TFMI successfully brought a motion to quash pursuant to Code of Civil Procedure section 418.10. 1 We construe the appeal as encompassing not only the judgment but also the order that led to its entry – i.e., the court's ruling on TFMI's motion to quash. We reverse the judgment and remand with instructions for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
On February 17, 2021, Schmidt filed a complaint alleging seven causes of action against TFMI. Schmidt alleged he entered into two oral contracts with TFMI for which he has not been paid – one for his management of TFMI farms located in Arizona and New Mexico (out-of-state management services) and the other for consulting services he rendered in connection with the management of TFMI orchards located in California (in-state consulting services). In addition, Schmidt alleged he is the assignee of claims against TFMI assigned to him by a third party, Midwest Distributing, Inc. dba Summit Gold (Summit Gold). As assignee, Schmidt alleged TFMI is obligated to pay him the outstanding balance on invoices issued by Summit Gold for goods sold to TFMI (assigned Summit Gold invoices).
Schmidt's first cause of action was for breach of contract in connection with both the out-of-state management services contract and in-state consulting services contract. His second cause of action was for breach of contract in connection with the assigned Summit Gold invoices. In his third cause of action, Schmidt sought restitution in connection with all of his claims. In his fourth cause of action, Schmidt alleged TFMI fraudulently induced him to enter into the in-state consulting services contract and out-of-state management services contract. Schmidt's fifth cause of action was brought in connection with all of his claims and alleged TFMI breached the implied covenant of good faith and fair dealing implied at law in all contracts. His sixth and seventh causes of action alleged common counts for an open book account and an account stated, respectively, in connection with the assigned Summit Gold invoices.
On September 2, 2021, TFMI moved to quash service of the summons and complaint pursuant to section 418.10. TFMI stated its "grounds for [the] motion are that the Second, Third, Fifth, Sixth and Seventh Causes of Action of the Complaint are based on a series of contracts with ... Summit Gold" and that each of the assigned Summit Gold invoices contains a provision demonstrating the action is not properly brought in California. Specifically, the provision at issue reads:
In addition, TFMI contended Schmidt's
On September 30, 2021, Schmidt filed his opposition to TFMI's motion to quash arguing, among other things, that "[c]ourts have refused to uphold venue selection clauses which are contrary to the express intent of the legislature and the statutory scheme" – a scheme which he contended includes section 395 et seq., and specifically, section 395.5 which provides in part "[a] corporation ... may be sued ... in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial as in other cases." Schmidt cited several cases he contended stand for the proposition that an agreement to set venue in a location other than that provided by the venue statutes is impermissible and void as against public policy. Schmidt contended the subject provision violated California's venue statutes.
Schmidt further argued the choice of law clause in the subject provision should not be enforced, and California law should apply, because (1) TFMI has its principal executive office in California; (2) both Schmidt and TFMI's principals reside in California; (3) Summit Gold maintained its executive offices in California; (4) the Summit Gold contract was entered into in California and its products were distributed to TFMI's (or its principal's) California properties; (5) "[a]ll facts occurred in California, and all witnesses are located in California"; and (6) the only relationship the case has to Illinois is that Summit Gold was incorporated there.
Finally, Schmidt argued TFMI did not dispute in its motion that Schmidt provided the consulting and management services to TFMI or TFMI affiliated parties; in negotiations for those services, TFMI's principal identified himself as TFMI's President; Trinut Farms Arizona, LLC, was not even formed at the time negotiations were occurring; and there was no discussion between the parties as to services being rendered on behalf of the Arizona based LLC. Schmidt accused TFMI of shifting its assets to other affiliated entities to avoid Schmidt from successfully levying against TFMI property. Schmidt argued that, in light of TFMI's allegations that the wrong party was sued, Schmidt should be allowed to amend its complaint to name the Arizona based LLC and other TFMI affiliated companies as defendants.
On October 6, 2021, TFMI filed its reply in support of its motion to quash. In it, TFMI alleged impropriety on Schmidt's behalf with regard to an application for a writ of attachment brought by Schmidt.2 TFMI argued Schmidt had "attempted to use a frozen asset as security for his undertaking" in connection with the writ application. TFMI reasserts this allegation in its respondent's brief but does not explain its relevance to the issues on appeal. Moreover, we are unable to discern any such relevance.3
TFMI further contended that Schmidt, in addressing the subject provision, failed to distinguish the difference between a venue clause and a forum selection clause and that Schmidt's arguments concerning the circumstances under which venue clauses should or should not be enforced was inapposite. TFMI argued the subject provision, as it relates to TFMI's motion to quash, operates as a forum selection clause, is not severable from TFMI's contracts with Summit Gold (i.e., the assigned Summit Gold invoices), and should be enforced because it is not unfair or unreasonable.
TFMI also argued Schmidt's contention that TFMI "never once dispute[d] that ... Schmidt rendered the services he did, nor does he dispute the terms of the agreement as set forth in Mr. Schmidt's declaration" is a "mistruth." In his declaration in support of TFMI's motion to quash, TFMI's principal, Nav Athwal, stated, in relevant part: "Schmidt never executed the [in-state services contract Athwal had proposed to Schmidt] nor had he verbally accepted the terms[;]" "Schmidt's involvement with [TFMI] was limited to acting as an independent Pest Control Advisor;" TFMI "is not authorized to do business in Arizona and does not do business in that state" whereas the Trinut Farms Arizona LLC is authorized to do business in Arizona; and "[a]s of May 20, 2018, ... Schmidt had not executed any agreement with Trinut Farms Arizona, LLC nor had he verbally accepted the terms set forth in [Athwal's proposal to him]."
On November 15, 2021, the trial court issued a ruling on TFMI's motion to quash in which it declined to exercise jurisdiction over the matter. The court wrote, in part:
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On December 3, 2021, the trial court entered judgment in favor of TFMI and against Schmidt. The judgment reads, in part:
On December 6, 2021, TFMI served Schmidt with notice of entry of the judgment.
On December 10, 2021, Schmidt filed a complaint as part of a new action pending in Stanislaus County superior court against TFMI, Trinut Farms Arizona, LLC, and Nav...
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