In consolidated writ petitions, petitioners, a parent company and its officer, sought writs of mandate to challenge orders from the Superior Court of Orange County (California), which denied petitioners’ motions to quash the service of summons of complaints filed against them by respondents, a debtor and its owner, finding that petitioners had the minimum contacts necessary to create personal jurisdiction in California.
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Overview
The parent, a foreign corporation, was the parent of defendant creditor, which did business in California. The officer a resident of New York, was a consultant for the parent. The debtor and the creditor entered into a loan and security agreement. The debtor subsequently sued the creditor for breach of the agreement, among other claims. An amended complaint named the parent, the officer, and others as defendants for tortiously inducing the creditor to breach the agreement. The creditor cross-complained against respondents, and the owner cross-complained against the parent. The trial court denied petitioners’ motions to quash service of summons of the complaints against them based on lack of personal jurisdiction. The court granted petitioners’ writ petitions. Respondents failed to establish that petitioners’ contacts with California were substantial, continuous, and systematic, and their allegations did not have a nexus with petitioners’ contacts with California sufficient to create specific jurisdiction. The mere fact that the parent owned the creditor, without more, such as an alter ego relationship or an extreme exercise of control, was insufficient for general jurisdiction.
Outcome
The court granted the petitions for writ of mandamus filed by petitioners. The court ordered that a writ of mandate issue directing the superior court to vacate its orders denying petitioners’ motions to quash service of summons.