Eric Powers v. Kennen Palm, Pilgram Consulting Group, Inc.

Case Number

24CV00986

Case Type

Hearing Date / Time

Wed, 06/12/2024 - 10:00

Nature of Proceedings

Motion To Quash Service Of Summons

Tentative Ruling

For Plaintiff Eric Powers: Self Represented

For Defendants Kennen Palm and Pilgrim Consulting Group, Inc.: Shaunt Oozoonian, Oozoonian Law Corporation.

RULING

For all reasons discussed herein, the motion of Defendants to quash service of summons is granted. The complaint filed on February 22, 2024, by Plaintiff Eric Powers is dismissed without prejudice as to Defendants Kennen Palm and Pilgrim Consulting Group, Inc. The CMC set for 6/26/24 is confirmed.

Background

On February 22, 2024, Plaintiff Eric Powers (Plaintiff) filed a Judicial Council form complaint against Defendant Kennen Palm (Palm) and Pilgrim Consulting Group, Inc. (PCG) (collectively, Defendants.) In the complaint, Plaintiff alleges two causes of action for breach of contract and fraud. The complaint arises from a purported breach of a contract between Plaintiff, Palm, and PCG. (Compl., ¶¶ BC-1-BC-4 & Exh. A.) Plaintiff alleges that Defendants failed to timely develop, complete, and deliver a useable software application pursuant to the purported contract. (Ibid.) Plaintiff further alleges that Defendants did not possess the requisite skill or knowledge to perform the contract scope of work and “purposely” set a low bid for the contract with the intent to seek additional funds without delivery of the agreed-upon product. (Id. at ¶¶ FR-2(a) & (b).)

On April 10, 2024, Plaintiff filed proofs of service of the summons, complaint, and other supporting documents on Palm and PCG (individually and respectively the Palm POS and the PCG POS, collectively the POS). On April 26, 2024, Defendants filed a motion to quash service of the summons on each of them. The motion is opposed by Plaintiff.

Analysis

In the motion, Defendants contend that service of process by Plaintiff was improper, never performed, or otherwise defective. Defendants further assert that the Court lacks personal jurisdiction over them because Defendants did not consent to jurisdiction in, were not personally served while present in, are not domiciled in, and do not have requisite minimum contacts with, the State of California.

Service of the summons on Defendants:

In support of the motion, Palm submits his declaration stating that he is not certain which documents were mailed to him or PCG and that he never received any mailing. (Palm Decl., ¶ 20.) In their opening memorandum, Defendants assert that the POS do not identify the serving individual or whether that individual is registered and if so, whether the process server has a registration number or active registration. (Motion at p. 6, l. 27 – p. 7, l. 2.) For these reasons, Defendants argue, service of process in this action was improper and defective.

“In the absence of a voluntary submission to the authority of the Court, compliance with the statutes governing service of process is essential to establish that Court’s personal jurisdiction over a Defendant.” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1439; see also Sternbeck v. Buck (1957) 148 Cal.App.2d 829, 832 [statutorily compliant service of summons “is deemed jurisdictional”].) “When a Defendant challenges the Court’s personal jurisdiction on the ground of improper service of process ‘the burden is on the Plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.’ ” (Summers v. McClanahan (2006) 140 Cal.App.4th 403, 413, fn. omitted.) “The filing of a proof of service creates a rebuttable presumption that the service was proper. However, the presumption arises only if the proof of service complies with the applicable statutory requirements.” (Floveyor Internat., Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 795.)

Information appearing in the POS filed by Plaintiff in this action suggests that Palm is an out of state resident and that PCG is located out of state. In his declaration, Palm states that he is the Chief Executive Officer (CEO) of PCG, and that he PCG are, respectively, residents of or domiciled in Tennessee. (Palm Decl., ¶¶ 3, 9 & 10.) “A summons may be served on a person outside this state in any manner provided by this article or by sending a copy of the summons and of the complaint to the person to be served by first-class mail, postage prepaid, requiring a return receipt.” (Code Civ. Proc., § 415.40.)

The POS show that copies of the summons and complaint were mailed to Palm and PCG at: 12000 Ancient Crest Circle, Apartment 12107, Franklin, Tennessee. There is no information in the POS which shows or indicates that either mailing included a return receipt as required by Code of Civil Procedure section 415.40. (See POS, ¶ 8 [entry dated Mar. 15, 2024].) Moreover, in the opposition to the motion, Plaintiff offers no information or evidence to demonstrate that Palm, or another person authorized to accept mail on Palm or PCG’s behalf, signed a return receipt in connection with the mailing of the summons and complaint to the address identified in the POS. (See Code Civ. Proc., § 417.20, subd. (a); Neadeau v. Foster (1982) 129 Cal.App.3d 234, 236-237 [return receipt signed by office manager authorized to sign for and accept mail addressed to Defendant was sufficient to demonstrate completion of service of summons by mail on out of state resident].)

The Palm POS also shows that copies of the summons and complaint were delivered to Olga Palm, who is identified as the wife of Palm, at the same address to which copies of the summons and complaint were mailed as further discussed above. Under Code of Civil Procedure section 415.20, “[i]f a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, as specified in Section 416.60, 416.70, 416.80, or 416.90, a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.” (Code Civ. Proc., § 415.20, subd. (b).)

Information appearing in the PCG POS also demonstrates that copies of the summons and complaint were left with Olga Palm at the same address identified in the Palm POS and that copies were thereafter mailed to PCG at that address. Under Code of Civil Procedure section 415.20, “a summons may be served by leaving a copy of the summons and complaint during usual office hours in [Defendant’s] office or, if no physical address is known, at his or her usual mailing address, other than a United States Postal Service post office box, with the person who is apparently in charge thereof, and by thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. When service is effected by leaving a copy of the summons and complaint at a mailing address, it shall be left with a person at least 18 years of age, who shall be informed of the contents thereof.” (Code Civ. Proc., § 415.20, subd. (a).)

Plaintiff submits copies of a “Business Entity Detail” ostensibly obtained by Plaintiff from the website of the Tennessee Secretary of State purporting to show that PCG’s principal office and mailing address are: “Kenn Palm, 12000 Ancient Crest Cir Apt 12107, Franklin, TN 37067.” (Powers Decl., ¶ 2, 8 & Exh. G.) This exhibit suggests that the address reflected in the Palm POS is the residence or dwelling of Palm as well as the office or usual mailing address of PCG to which, as further detailed above, copies of the summons and complaint filed in this matter were mailed.

The PCG POS also shows that the summons and complaint were left with Palm’s wife at 2:16 p.m. There is nothing to suggest that the summons and complaint were left outside typical business office hours. The Palm POS also includes information regarding Plaintiff’s attempts to personally serve the summons on Palm at the address identified therein on three separate occasions. On their face, the three attempts to personally serve Palm described in the Palm POS appear to demonstrate “reasonable diligence” under Code of Civil Procedure section 415.20, subdivision (b). (American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 389.)

Code of Civil Procedure section 417.10 provides that if a summons is served under section 415.20, the proof of service of the summons must be made “by the affidavit of the person making the service showing the time, place, and manner of service and facts showing that the service was made in accordance with this chapter. The affidavit shall recite or in other manner show the name of the person to whom a copy of the summons and of the complaint were delivered, and, if appropriate, his or her title or the capacity in which he or she is served, and that the notice required by Section 412.30 appeared on the copy of the summons served, if in fact it did appear.” (Code Civ. Proc., § 417.10, subd. (a).)

The POS are each signed by process server Courtney Squirewell (Squirewell) of Kentucky Process Service Inc., under penalty of perjury. (POS, ¶¶ 10 & 11.) Squirewell is not a party to this action and there is no information to suggest that Squirewell is not at least 18 years of age. (See Code Civ. Proc., §§ 414.10.) The POS also each identify the time, place, and manner of service of the summons, show the name of the persons to whom copies of the summons and complaint were delivered and their capacity, and describe the documents that were purportedly served on Palm and PCG. (POS, ¶¶ 3-5.) The Court further notes that the summons filed in this action does not include the notice described in Code of Civil Procedure section 412.30. Therefore, the proof of service need not recite that this notice appeared on the copy of the summonses served.

For all reasons discussed above, the POS on their face each appear to comply with applicable statutory requirements further discussed above and are therefore sufficient to give rise to a rebuttable presumption of valid personal service of the summons and complaint on Palm and PCG.

In support of the motion, Palm submits a declaration stating that he was never “served” with or mailed a copy of the summons and complaint. (Palm Decl., ¶¶ 18-19.) Apart from this general conclusion, Palm offers no information, evidence, or reasoned argument to show that the address reflected in the POS is not Palm’s dwelling, PCG’s physical address, or either Palm or PCG’s usual mailing address, or demonstrating that the mailing was otherwise defective. Therefore, it is unclear on what basis Defendants contend that the mailing of the summons to each of them was never performed or defective solely because Palm never received the copies.

In addition, wholly absent from the memorandum in support of the motion is any reasoned argument to demonstrate that the attempts to serve Palm personally as stated in the Palm POS were not reasonable, that the address reflected in the POS is not Palm’s dwelling or PCG’s office location, that the summons and complaint were left outside of PCG’s usual office hours, that Palm’s wife is not a competent member of or not apparently or actually in charge of the address stated in the POS, or any other facts to demonstrate the manner in which service of the summons and complaint as stated in the POS was defective. Defendants also do not cite any statutory or other legal authority to support their contention that Squirewell must be a registered process server. For these and all reasons discussed above, Defendants have failed to effectively rebut the presumption of effective service of the summons and complaint on each of them.

Because Plaintiff has proven the facts requisite to an effective service of the summons and complaint on Palm and PCG which Defendants have failed to effectively rebut, Plaintiff has established effective and valid service of the summons and complaint on Palm and PCG.

The Court’s jurisdiction over Defendants:

Palm further asserts that he and PCG are, respectively, residents of or domiciled in Tennessee and that PCG is not authorized to and does not conduct business in California. (Palm Decl., ¶¶ 2, 7-14.) Palm also states that he has not recently visited California. (Id. at ¶ 4.) Palm further contends that the contract underlying the present action was performed in Tennessee and was not in any manner performed in California. (Id. at ¶¶ 16-17.) Palm states that neither he nor PCG have consented to jurisdiction in California and were not served while physically present in California. (Id. at ¶ 5.) For these reasons, Defendants argue, there exists no basis upon which the Court may exercise personal jurisdiction over them.

“California’s long-arm statute authorizes California Courts to exercise jurisdiction on any basis not inconsistent with the Constitution of the United States or the Constitution of California. [Citation.] A state Court’s assertion of personal jurisdiction over a nonresident Defendant who has not been served with process within the state comports with the requirements of the due process clause of the federal Constitution if the Defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate ‘ “traditional notions of fair play and substantial justice.” ’ [Citations.]” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444-445 (Vons).) “When a Defendant moves to quash service of process on jurisdictional grounds, the Plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction.” (Id. at p. 449.)

“Personal jurisdiction may be either general or specific.” (Vons, supra, 14 Cal.4th at p. 445.) In support of his opposition to the motion, Plaintiff submits his declaration stating that he resides in Santa Barbara, California; that Palm is the only person located in the United States that Plaintiff communicated with regarding the contract and software application which are the subject of this lawsuit; that Wayne Norris (Norris) who is the husband of Plaintiff’s mother and a resident of Santa Barbara, California, is a contact of Palm who brought Palm the contract that is the subject of this action; that Norris has provided business opportunities to Defendants in the past; that Plaintiff first met Palm in Santa Barbara, California where Plaintiff was referred and connected to Palm for the underlying project; that Palm referred Plaintiff to persons in California for the purpose of creating a patent for the software application and assisting with its marketing; that Plaintiff formed an “LLC”  for the software application whose principal office was located in Santa Barbara, California; that the software application would be tested and marketed in Santa Barbara, California; that Plaintiff communicated with and provided many hours of assistance and direction to Defendants regarding the development of the software application from Santa Barbara, California; and that all payments under the subject contract for the software application came from Santa Barbara, California including payments made by Plaintiff in connection with the creation of a patent. (Powers Decl., ¶¶ 1-3, 5, 7, 10-13.)

Absent specific information regarding the “business opportunities” provided by Norris to Defendants, the contacts and conduct described by Plaintiff, including what appears to be a single meeting between Plaintiff and Palm as further detailed above, are attenuated and, at best, fortuitous, and do not necessarily demonstrate that Defendants have established meaningful ties with California. (See Vons, supra, 14 Cal.4th at p. 445 [it would be unfair to exercise jurisdiction over a Defendant solely as the result of “fortuitous” or “attenuated” contacts with the forum state].) Because the nature of Defendants’ contacts with California as described by Plaintiff do not appear to be substantial, of a “continuous and systematic” nature, or “so wide-ranging that they take the place of a physical presence in the state”, Plaintiff has failed to demonstrate facts justifying the Court’s exercise of general jurisdiction over Defendants. (Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215, 222 (Strasner) [general jurisdiction may be asserted when the contacts are “so continuous and systematic” that the Defendant could be considered “at home” in the forum state]; Vons, supra, 14 Cal.4th at p. 449.)

“If the nonresident Defendant does not have substantial and systematic contacts in the forum sufficient to establish general jurisdiction, he or she still may be subject to the specific jurisdiction of the forum, if the Defendant has purposefully availed himself or herself of forum benefits [citation], and the ‘controversy is related to or “arises out of” a Defendant's contacts with the forum.’ [Citations.]” (Vons, supra, 14 Cal.4th at p. 446, original italics.) Based on the information and arguments offered by Plaintiff and the nature of the allegations of the complaint, it is the Court’s understanding that Plaintiff seeks to establish in the present action specific personal jurisdiction over Defendants.

Specific jurisdiction “hinges on the ‘ “relationship among the Defendant, the forum, and the litigation.” ’ [Citations.] It requires ‘ “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.” [Citation.] Consistent with the constraints of due process, ‘the Defendant’s suit-related conduct must create a substantial connection with the forum State.’ [Citation.]” (Rivelli v. Hemm (2021) 67 Cal.App.5th 380, 392 [also noting that the analysis of specific jurisdiction “is intensely fact-specific].) To establish specific jurisdiction, a Plaintiff must show that the nonresident Defendant has purposefully availed itself of the benefits of the forum state, that the claim or controversy relates to, arises from, or “bears a substantial connection to” the Defendant’s forum contacts, and that the exercise of jurisdiction is fair, reasonable, and does not “offend notions of fair play and substantial justice.” (Vons, supra, 14 Cal.4th  at pp. 446-447, 452; Strasner, supra, 5 Cal.App.5th at p. 226.)

Relevant here based on the information and evidence offered by Plaintiff in opposition to the present motion, “[a] contract with an out-of-state party does not automatically establish purposeful availment in the other party’s home forum.” (Goehring v. Superior Court (Bernier) (1998) 62 Cal.App.4th 894, 907 (Goehring).) In addition, “no mechanical test exists to determine whether a Defendant purposefully has availed himself or herself of forum benefits by entering into a contract in the forum.” (Vons, supra, 14 Cal.4th at p. 450.) “Rather, a Court must evaluate the contract terms and the surrounding circumstances to determine whether the Defendant purposefully established minimum contacts within the forum. Relevant factors include prior negotiations, contemplated future consequences, the parties’ course of dealings, and the contract’s choice-of-law provision.” (Goehring, supra, 62 Cal.App.4th at p. 907.)

The information and evidence offered by Plaintiff shows that, on one occasion, the parties entered into a contract resulting from Plaintiff’s efforts to locate someone to create the software application at issue. (See, e.g., Powers Decl., ¶ 13 [declaring that Wayne Norris “referred and connected” Plaintiff to Palm after Plaintiff asked him “if he knew anyone who could be hired to create a digital app”].) Plaintiff also presents information showing that Palm has two contacts in California which include a patent attorney and marketing assistant. (Id. at ¶¶ 3 & 5.) The contract which is identified as exhibit A to Plaintiff’s complaint does not appear to include a choice-of-law provision nor does Plaintiff cite to any such provision. (See Compl., ¶ BC-1 & Exh. A.)

Assuming without deciding that Plaintiff and Defendants entered into a contract for the development of a software application and that Palm referred Plaintiff to two persons who are located in California to assist Plaintiff with marketing and obtaining a patent for the software application, these facts alone are insufficient to demonstrate that Defendants purposefully directed their activities to Plaintiff or other California residents, availed themselves of the privilege of contracting within California, deliberately engaged in significant activity within California, or created continuing obligations between themselves and Plaintiff or other California residents such that Defendants should be required to submit to litigation in California. (Shisler v. Sanfer Sports Cars, Inc. (2006) 146 Cal.App.4th 1254, 1260-1261 (Shisler) [isolated transaction initiated by resident of forum state in the absence of an ongoing business relationship or efforts by seller to “target” California was insufficient to establish specific jurisdiction]; see also Vons, supra, 14 Cal.4th at p. 446 [describing contacts necessary to establish specific jurisdiction over a nonresident Defendant].)

Though Plaintiff offers no evidence or information to show the location where the purported contract between the parties was signed, even if Plaintiff could establish that he or Defendants signed the contract in California, “the place where a contract is executed is of far less importance than where the consequences of performing that contract come to be felt.” (Dunne v. State of Florida (1992) 6 Cal.App.4th 1340, 1345.)

Further, Plaintiff offers no evidence or information to demonstrate the location where any contract negotiations occurred, to the extent the parties entered into negotiations. Though Plaintiff has established that he met Palm on one occasion while Palm was in Santa Barbara, California, Plaintiff’s own evidence shows or suggests that this meeting occurred after the parties had entered into the contract at issue in the present action. (See Powers Decl., ¶ 13 [stating that Plaintiff met Palm “after the project had already commenced].) In addition, though evidence offered by Plaintiff suggests that communications between the parties occurred primarily through electronic means (see Compl., Exhs. D-H), there is no information reflecting that any contract or other negotiations occurred while Palm was physically in California such as during the meeting between Plaintiff and Palm, or that Palm traveled to California for the express purpose of negotiating or signing the contract at issue.

There is also no evidence or information to suggest that Defendants frequently sold other software applications or similar products to Plaintiff sufficient to show the existence of an ongoing business relationship or that Defendants directed any marketing activities to Plaintiff or other California residents. (See, e.g., West Corp. v. Superior Court (2004) 116 Cal.App.4th 1167, 1174 [conduct supporting the exercise of jurisdiction includes “marketing directed at residents of the forum state”].)

Further, though Plaintiff presents evidence that the software application would be tested and marketed by Plaintiff in California, Plaintiff fails to explain whether the contract included testing and marketing of the application by Defendants. For example, there is no evidence or information to suggest that Defendants agreed to or did participate in any such testing or marketing such that Defendants purposefully established contacts with California.

Available information and evidence also suggests that the work performed by Defendants to develop the software application at issue in this litigation was wholly performed outside of California. (See, e.g., Powers Decl., ¶¶ 1 [stating that the “entire team assigned to” the contract and with whom Plaintiff was in contact with “are all located in Africa” and that Palm “did not conduct the majority of the work” on the application]; 2 [the majority of PCG’s workers “live in Africa”].) “Merely knowing the product will enter California, without having some control over its ultimate destination, does not satisfy the due process clause of the United States Constitution.” (As You Sow v. Crawford Laboratories, Inc. (1996) 50 Cal.App.4th 1859, 1869.) Furthermore, whether Defendants knew that the application would be tested or used in California, this fact is not, by itself, sufficient to establish jurisdiction over Defendants. (World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 295 [foreseeability by itself is insufficient to confer personal jurisdiction].) The same analysis applies with respect to Plaintiff’s claim that he made payments to Defendants which were initiated in California. (See, e.g., Helicopteros Nacionales de Colombia, S.A. v. Hall (1984) 466 U.S. 408, 416-417 [party’s unilateral activity “is not an appropriate consideration when determining whether a Defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction”].)

At best, Plaintiff has shown that the claims alleged in the complaint arise from a one-time contract between the parties relating to the development of a software application for Plaintiff. (See Shisler, supra, 146 Cal.App.4th at pp. 1261-1262 [noting that “[a]lthough there were an unknown number of communications between the parties”, there existed no evidence that “Defendant ever expressly reached out to California in search of this or any other business opportunity”].) Therefore, and for all reasons discussed above, Plaintiff has not met his burden to demonstrate that there exist sufficient minimum contacts between Defendants and the State of California to justify the imposition of personal jurisdiction in this action. Accordingly, the Court will grant the motion of Defendants to quash service of the summons and order the complaint as to Defendants dismissed without prejudice. (Code Civ. Proc., § 581, subd. (h).)

Defendants’ objections to Plaintiff’s exhibits:

In their reply papers, Defendants assert general and conclusory objections to exhibits A through G of Plaintiff’s opposing declaration. Defendants’ objections are not calibrated to any specific exhibit, nor do Defendants cite any specific material objected to within each exhibit, forcing the Court to effectively guess which objections apply to which exhibit or matters contained in the exhibits and why. For these reasons, the Court will disregard Defendants’ objections to the exhibits attached to the Powers declaration.

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