AppFolio Inc vs Tides Equities LLC et al

Case Number

24CV03410

Case Type

Hearing Date / Time

Mon, 10/21/2024 - 10:00

Nature of Proceedings

Motion to Quash; Case Management Conference

Tentative Ruling

AppFolio, Inc v. Tides Equities, LLC, et al.

Case No.  24CV03410

Hearing Date:         10/21/2024                                                     

HEARING:    Motion by defendant Jarrod Robinson to quash service of summons for lack of California jurisdiction

           

ATTORNEYS:          Jared M. Katz / Andrew M. Cox of Mullen & Henzell LLP for plaintiff AppFolio, Inc.

                                    Tyler R. Dowdall / Renata A. Guidry of Tarter Krinsky & Drogin LLP for defendants PMG Property Management, LLC and Jarrod Robinson

                       

TENTATIVE RULING:  For reasons more fully articulated below, the Court will deny the motion to quash. Pursuant to Code of Civil Procedure section 418.10(b), defendant Robinson’s time to file a responsive pleading is extended to a date no more than 15 days after service upon him of a written notice of entry of order denying the motion to quash.

Background: Plaintiff AppFolio, Inc. (AppFolio) filed its complaint on June 18, 2024, naming as defendants Tides Equities, LLC (Tides), PMG Property Management, LLC (PMG), and individual defendants affiliated with those entities, including Jarrod Robinson (Robinson). It alleges that PMG is an Arizona limited liability company whose principal place of business is Scottsdale, Arizona, and which has filed papers with the Arizona Secretary of State indicating that it has dissolved. Robinson is alleged to be a manager, member, and/or officer of PMG.

As against Robinson, the complaint alleges causes of action for (1) intentional misrepresentation (5th c/a), (2) negligent misrepresentation (6th c/a), (3) concealment (7th c/a), (4) civil conspiracy to commit tort (10th c/a), and (5) alter ego liability (11th c/a), alleging a unity of interest and ownership between PMG, Tides, and Robinson.

Causes of action alleged only against defendants other than Robinson include: (1) breach of written contract (1st c/a), (2) breach of oral contract (2nd c/a), (3) breach of implied contract (3rd c/a), (4) breach of the implied covenant of good faith and fair dealing (4th c/a), (5) intentional interference with contract (8th c/a), (6) negligent interference with prospective economic advantage (9th c/a), and (7) declaratory judgment (12th c/a).

Because the course of events leading up to claims of personal liability by Robinson are important to an understanding of his current motion, the events are summarized herein in some detail.

The complaint alleges that on September 14, 2022, an agent for Robinson Family Group, LLC dba The Robinson Group executed a written Order Form for the use of AppFolio’s services for a 24-month term beginning November 1, 2022, and ending November 1, 2024 (the Order Form is attached to and incorporated into the Complaint). The Order Form provided for monthly service fees of $45,540.00, in exchange for use of the AppFolio Property Manager Plus, Residential proprietary software. The Order Form provides that in the event AppFolio is unable to collect sums due, the user agrees to pay such sums, including costs incurred in collecting them, including attorneys’ fees, and interest at the lower of 1.5% per month or the highest rate permitted by law.

The Order Form incorporates AppFolio’s Terms of Service (TOS), which provide, among other things, that (1) subscribing to or using the services creates a legally binding agreement; (2) use of the services after any revision to the TOS constitutes an acceptance of any revisions; (3) upon termination for convenience, the user agrees to pay an early termination fee equal to 50% of the service fees payable for the remaining period of the subscription, and the user acknowledges that AppFolio has the right to charge the Early Termination Fee to the payment methods associated with the account; (4) AppFolio may collect late fees and charges, as well as court and related costs, attorneys’ or collection agencies fees plus interest in an amount equal to the lesser of 1% per month or the maximum rate permitted by law; (5) the user agrees to defend, indemnity, and hold AppFolio harmless from any claims, judgments, awards, demands, suits, proceedings, investigations, damages, costs, expenses, losses, and any other liabilities, including attorneys’ fees, court costs, and expenses, arising out of or relating to use of the service in violation of the TOS an excluded claim, any breach of any representation, warranty, covenant or obligation under the TOS, or user’s gross negligence or willful misconduct; (6) the TOS will bind the parties’ respective successors and assigns; and (7) that the TOS and any dispute arising out of or related to the services or the TOS will be interpreted in accordance with the laws of the State of California, and that all disputes out of or related to the TOS are subject to the exclusive jurisdiction and venue of the California state courts located in Santa Barbara, California, and federal courts of the Central District of California, unless the parties agreed to some other location, and that the user expressly consented to the personal and exclusive jurisdiction of these courts. [Underlining used solely to assist the reader in identifying the topic of the provision discussed.]

On September 27, 2022, the Robinson Family Group, LLC changed its name to PMG in filings with the Arizona Secretary of State, also filing a Member Structure Attachment for PMG that listed Tides Equities, LLC as the sole member of the PMG Member-Managed LLC.

On May 24, 2023, PMG initially gave notice that it intended to terminate the agreement and dissolve as a result of a merger. At that time, PMG was acting as property manager and agent for Tides in connection with various residential properties that were owned by Tides. After receiving the notice, AppFolio on May 30, 2023 advised PMG that its merger would not relieve it of its legal duties, and that card services would be disabled as a result of PMG having exceeded Visa’s Early Warning chargeback threshold for multiple months. PMG directed Tides’ Managing Director of Operations, defendant Melissa Bartolucci Delgado (Delgado) to communicate with AppFolio on a resolution, and Delgado then asked AppFolio what they could do to prevent card processing from being disabled on June 2. On June 1, 2023, AppFolio informed Tides that because PMG and Tides both had stated that neither would pay the remainder of the contract term, there was no way to prevent card services from being disabled.

On June 7, 2023, Robinson, the CEO of PMG, sent a letter to Janice Akins at AppFolio that PMG would be dissolving, and intended to cancel its services effective June 30, 2023. Robinson asked AppFolio to cease all ongoing services as of that date, and finalize all outstanding invoices or payments due, including any prorated amounts or fees related to the cancellation. Had that notice remained in place, AppFolio would have treated it as notice of termination, and billed PMG for the Early Termination Fee, which it could have collected from the not-yet-dissolved PMG and ceased providing software access as of June 30, 2023. Instead, PMG, Tides, and their officers and representatives are alleged to have “manipulated” AppFolio into maintaining services so that Tides would have access to data it needed for its operations, leading AppFolio to believe contractual obligations would be paid. Without such conduct, AppFolio would not have maintained services for Tides.

On June 13, 2023, there was a phone call between PMG and AppFolio, following which PMG’s President, defendant Jessica Fern-Kirkland (Fern-Kirkland) wrote to AppFolio stating that PMG was rescinding its notice to terminate services, anticipated needing a few more months, and that AppFolio would be formally notified at a later date when termination of services would occur by Tides or Robinson. She provided a list of Tides properties for which access to the software was still needed for the orderly transition of the management of the properties. Since PMG served as property management company solely for Tides and had no other clients, the maintenance of access to AppFolio’s software was solely for Tides’ benefit.

After being informed of the imminent suspension of card services, PMG confirmed on June 16, 2023, that it was prepared to pay all fees owed under the Agreement in connection with the cancellation. At Tides’ request, PMG revoked its notice so that Tides would continue to have access to the AppFolio software. AppFolio alleges that it made clear it would continue to provide services for Tides only on the condition that it was paid all amounts owed under the agreement, and the parties agreed and proceeded based upon this understanding. But for the understanding and agreement, AppFolio would not have continued to provide services, and would have offered PMG the ability to pay an early termination fee rather than to pay all service fees for the remainder of the agreement, or would have pursued collection of all amounts owed for the contract term.

On June 16, 2023, AppFolio wrote to Robinson and others to confirm that PMG rescinded its request to termination, and stated that AppFolio needed to confirm that PMG would continue to pay subscription services on a monthly basis during that time, and to confirm that ultimate termination would fall under the provision of the TOS that would provide the option to terminate for convenience and pay only 1/2 of the remaining service fees, which it would then calculate. The communication requested confirmation that they would be responsible for all such amounts when due. Also on that date, Fern-Kirkland responded confirming agreement to the terms, copying Delgado of Tides, Robinson, and other of PMG on the email.

On June 26, 2023, a call took place between AppFolio and Tides, to which Robinson was invited but declined to participate, during which the parties expressed the need for Tides to maintain access to the AppFolio system to access information critical to its operations, notwithstanding that PMG was dissolving, and asked to extend the termination date to July 31, 2024. On June 27, 2023, Akins forwarded the June 16 email thread to Robinson, copying Tides’ officers, requesting confirmation of PMG’s understanding it would be responsible for all amounts due. Robinson responded on June 29, 2023, stating that they were going to pay as normal, and “if we decide to cancel the service I will reach out at that time to discuss.”

AppFolio was advised on August 23, 2023, that PMG had dissolved. Tides continued to access the software and services and paid service fees owed to AppFolio from July 2023, into early 2024. AppFolio consented because of Tides’ agreement to pay, and Tides continued its access long beyond the initially agreed July 31, 2023 termination date. AppFolio alleges that this, expressly or implied, constituted an assignment of the contract from PMG to Tides.

On January 22, 2024, Robinson emailed AppFolio to advise that PMG had shut its doors in June 2023 since it was no longer going to be managing the Tides portfolio, had kept the AppFolio operational after the transition so that they could ensure all data was saved considering the large number of properties transitioning, and that since that process was fully completed and they no longer needed access to AppFolio, they needed to shut down access and end the agreement.

On January 25, 2024, a representative of Tides, defendant Sean Kia (Kia), wrote to Akins and advised that Tides was confirming that effective February 1, it would no longer be paying for AppFolio. These were intentionally not notices of termination for convenience, as defined in the TOS, but were repudiations of the contract and its payment obligations.

On January 26, 2024, Akins responded via email to Robinson, Kia and Delgado, copying others at Tides, confirming PMG’s request to terminate its AppFolio subscription prior to the end of its term. It noted that the early termination fee for the subscription would total $182,160 (50% of the total of the monthly fees for the remainder of the contract term, the effective date of which would be 30 days following the notification). Akin requested that the parties confirm the January 22 email as 30-day notice for early termination, and acknowledge the early termination fee which was due under the contract. Defendant Brien Kelley, Tides’ Managing Director and General Counsel, responded via email that Tides was not a party to the contract and would not pay the early termination fee, since it no longer needed access to AppFolio. Also on January 26, Robinson responded via email stating that he had no intention of paying, and did not want to exercise the contractual right of termination for convenience, saying that PMG was out of business, had dissolved, had no assets, and there was nothing more to do since the contract was not personally guaranteed.

It was based upon these allegations that AppFolio stated the causes of action against Robinson, individually, for intentional and negligent misrepresentation, concealment, civil conspiracy to commit tort, and alter ego liability.

Motion to quash: Defendant Robinson has moved to quash service of summons and complaint upon him, based upon his contention that California does not have personal jurisdiction over him. The motion briefly discusses the procedure for establishing personal jurisdiction in California, and the requirement that minimum contacts be shown, before the California court may exercise personal jurisdiction over Robinson as a nonresident defendant.

The motion is supported by Robinson’s declaration, in which he declares that he is a resident of South Carolina, and previously resided and worked in Arizona. While in Arizona, he was CEO of PMG, which managed properties in Arizona, Nevada, and Texas, and none of PMG’s services were provided in California. He does not, and has never, owned or rented any offices, land, or home in California, or has ever maintained any office or residence in California. He is not licensed to do business in California, does not have any bank accounts, in California, does not have a mailing address, fax number, or telephone number in California. He declares further that he did not personally contract with AppFolio, but that PMG contracted with AppFolio for property management software to be used in management of the properties in Arizona, Nevada and Texas. PMG provided management services to properties owned by Tide Equities, all located in Arizona, Nevada, and Texas. He declares that he never communicated with AppFolio in an individual capacity, but only as CEO of PMG, which was dissolved and terminated on August 30, 2023. At the time of is termination and dissolution, PMG had no assets to distribute to any members, and no distributions were made. The motion is also supported by a request for judicial notice of AppFolio’s complaint, and of the Arizona Secretary of State Entity Information which shows that its Articles of Termination were filed on August 30, 2023.

Based upon this information, Robinson contends that he had no contacts with California, had not purposefully availed himself of the privilege of conducting activities within California, and his contacts with California were insufficient to justify the imposition of personal California jurisdiction on him.

Opposition: AppFolio has opposed Robinson’s motion. It first reiterates many of the facts underlying the claims, as alleged in the complaint (and as summarized above), particularly with respect to the communications between the parties following PMG’s initial notice, provided in May, 2023, that it intended to cancel its AppFolio services by June 30, 2023.

The opposition recites the principles regarding a state’s exercise of personal jurisdiction over an out-of-state defendant, including the principles of specific personal jurisdiction. It asserts that the commission of an intentional tort in a state is a purposeful act that will satisfy the first two requirements of the minimum contacts test, and can satisfy all three if the act is aimed at a resident of the state or has effects in the state, citing Paccar International, Inc. v. Commercial Bank of Kuwait, S.A.K. (1985) 757 F.2d 1058, 1064, and Zehia v. Superior Court (2020) 45 Cal.App.5th 543, 556.)

The opposition then asserts that the court should exercise jurisdiction over Robinson based upon his conduct injuring AppFolio in California, giving rise to claims of individual tortious liability against him. It asserts that plaintiff has alleged that Robinson engaged in tortious conduct directed at deceiving plaintiff and causing it to suffer financial harm. Plaintiff is in Santa Barbara, and suffered the financial harm here. Robinson was an active participant in the scheme alleged in the complaint that caused financial harm to plaintiff.

The opposition argues that analogous cases have found that there is California jurisdiction over cases in which a defendant has engaged in tortious communications and conduct aimed at parties within California. In Calder v. Jones (1984) 465 U.S. 783, found California jurisdiction over a Florida journalist who expressly aimed tortious conduct at California, where the brunt of the harm was suffered, and held that an individual injured in California need not go to Florida to seek redress form persons who, though remaining in Florida, knowingly cause the injury in California. (Id., at p. 790.) The opposition notes that the court in Casey v. Hill (2022) 79 Cal.App.5th 937, 966, summed up numerous prior decisions which plaintiff contend support the exercise of personal jurisdiction over Robinson, particularly including Moncrief v. Clark (2015) 238 Cal.App.4th 1000 [Moncrief].

In Moncrief, a California attorney as hired to perform due diligence in connection with his California client’s purchase of farm equipment from an Arizona company. While in California, he called the Arizona seller’s Arizona attorney, Clark, to discuss ownership of the equipment. In telephone and email communications, Clark represented that his client was sole owner of the property. When that proved untrue, the California client sued its attorney, Moncrief, in California state court for legal malpractice, and Moncrief cross-complained against Clark for indemnity, negligence, and fraud-based claims. The Court of Appeal reversed the trial court’s grant of Clark’s motion to quash for lack of jurisdiction, finding that the requirements of due process were met and that the interactions among the parties demonstrated personal availment. Clark had purposefully availed himself of the benefits of California when he communicated via telephone and email with Moncrief for the specific purpose of inducing the completion of the equipment sale, and his communications were sufficient even though it involved only a single transaction. The court found that since his communications were purposely and voluntarily directed toward California, Clark should expect, by virtue of the benefit he received, to be subject to the California court’s jurisdiction based upon his contacts with the forum.

AppFolio contends that, like in Moncrief, Robinson, as the CEO and alleged sole member of PMG, engaged in intentional conduct including phone calls and emails with the California plaintiff’s representatives, and in conspiracy with Tides and its representatives, who are all California residents. He directed PMG to contract with AppFolio, whose TOS provided that California law governed, and the venue for resolving disputes was in Santa Barbara. The complaint alleges theories under which Robinson is personally liable for intentional torts, including fraud. AppFolio contends that Robinson’s argument that he transacted with AppFolio in California only in his business capacity is of no moment since entity principles may be held accountable for personal participation in tortious conduct, even when performing duties as manager, citing People v. Pacific Landmark (2005) 129 Cal.App.4th 1203, 1213, and Wyatt v. Union Mortgage Company (1979) 24 Cal.3d 773, 785. Robinson engaged in conduct that constitutes purposeful availment under California law.

Finally, AppFolio request that, if there is any doubt about the existence of California jurisdiction over Robinson, that it be permitted to conduct jurisdictional discovery, and that the hearing on this motion be continued to permit it an adequate opportunity to do so.

The opposition is supported by the declaration of Janice Akins, the Senior Strategic Customer Success Manager with AppFolio. The declaration authenticates (1) the Order Form through which Robinson Family Group, LLC dba The Robinson Group sought use of the AppFolio Property Manager Plus, Residential propriety software, in exchange for payment of a monthly Service Fee of $45,540.00 (Exhibit A); (2) AppFolio’s Terms of Service, incorporated into the Order Form and published at www.appfolio.com/terms (Exhibit B); (3) PMG’s May 24, 2023 notice of intent to terminate the agreement (Exhibit C); (4) AppFolio’s May 30, 2023, communication to PMG that its merger would not relieve it of its duties under the contract (Exhibit D); (5) AppFolio’s May 31, 2023 notice to PMG that card services would be disabled (Exhibit E); (6) Robinson’s June 7, 2023 letter to Akins providing intent to cancel services effective June 30, 2023, and to finalize all outstanding invoices and payments due (Exhibit F); (7) Fern-Kirkland’s June 13, 2023 email to Akins, copied to Robinson, regarding rescission of the notice to terminate and necessity for several more months’ access to AppFolio’s services, noting that Tides or Robinson would later formally notify AppFolio of when termination of services should occur; AppFolio’s responsive email on that same date, which was copied to Akins; Fern-Kirkland’s June 16 response; Akins’ June 27, 2023 forward of the email thread to Robinson and request for confirmation of his understanding of PMG’s obligations (Exhibit G); (8) Robinson’s June 29, 2023 responsive email, stating PMG would continue to pay as normal and that he would reach out to discuss it when they decided to cancel (Exhibit H); (9) Robinson’s January 22, 2024 email to Akins stating that they no longer needed access to AppFolio and needed to shut down access and end the agreement since PMG had been fully dissolved, which includes the January 25, 2024, email by Sean Kia of Tides confirming that effective February 1st Tides would no longer be paying for AppFolio; Akins’ January 26, 2024 email response to Robinson, Kia, and Delgado, that service fees remained due under the agreement, and articulating her calculation of the date of termination and the fees due; and Robinson’s response from that same date saying that PMG was out of business, and the company had been dissolved, and wouldn’t be paying any fee (Exhibit I); and (10) the January 26, 2024 response from Brian Kelly of Tides stating that Tides no longer needed access to AppFolio (Exhibit J).

The Akins declaration further sets forth the communications and events not reflected in the written documents which were authenticated, including that if the June 7 notice had remained in place AppFolio would have treated it as a notice of termination and billed PMG the early termination fee and terminated software access as of June 30, 2023; AppFolio’s continued provision of access to its software and services to Tides and Tides’ payment of the service fees for such services, including with its own credit card.

The opposition is also supported by a request for judicial notice of (1) AppFolio, Inc’s Statement of Information filed with the California Secretary of State on August 7, 2024, showing that it is a Delaware corporation with its principal, mailing, and street addresses at 70 Castilian Drive in Santa Barbara; (2) PMG’s Articles of Amendment filed with the Arizona Secretary of State on December 30, 2022, signed by Jarrod Robinson, and showing that he is the sole member of PMG Property Management, LLC; (3) the Tides Equities, LLC Statement of Information filed with the California Secretary of State on April 16, 2024, showing that Tides is a Delaware limited liability company with its principal address in Los Angeles; (4) PMG’s Articles of Amendment filed with the Arizona Secretary of State on September 27, 2022, showing the name change from The Robinson Family Group LLC to PMG Property Management, LLC.

Reply: Robinson contends that specific jurisdiction exists only when (1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy, (2) the controversy is related to or arises out of the defendant’s contacts with the forum, and (3) the exercise of jurisdiction would comport with fair play and substantial justice, citing Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269. The reply argues that the plaintiff has the burden of establishing the first two exist, yet plaintiff has not submitted any evidence to meet that burden, and plaintiff’s opposition ignores the third prong.

First, Robinson contends that plaintiff has not shown he purposefully availed himself of forum benefits with respect to the matter in controversy. Robinson asserts that plaintiff must show that he purposefully directed activities at forum residents, or purposefully availed himself of the privilege of conducting activities within the forum state, and this is only satisfied when he purposefully and voluntarily has directed his activities toward the forum sufficient to expect by virtue of the benefits he received to be subject to the court’s jurisdiction based upon his contacts with the forum. He asserts that plaintiff has failed to submit any evidence to establish this element, and that his own declaration refutes it. The declaration which plaintiff submitted shows performance under a contract that was terminated pursuant to its provisions, and there are no facts showing Robinson engaged in intentionally tortious conduct directed at California, or purposefully availed himself of forum benefits with respect to the matter in controversy, and plaintiff has therefore not met its burden, requiring that the motion be denied.

Second, Robinson contends that plaintiff has not shown that the controversy is related to or arises out of his contacts with the forum. Plaintiff must show that there is a direct relationship between his forum-related activities and plaintiff’s claim, and that relationship must arise out of contacts he creates with California, and not by contacts between the plaintiff and third parties in the forum state, and the unilateral activity of another party or a third person is not an appropriate consideration when determining whether he has sufficient contacts to justify an assertion of jurisdiction. Robinson contends he had no contact with plaintiff outside of notifying it that PMG was exercising its contractual right to terminate, and plaintiff asserts no information to the contrary. He contends that plaintiff has admitted that this is a standard breach of contract case, and all communications he had related to contract termination and PMG’s dissolution. His four email contacts were made in his capacity as CEO of PMG, and he did not sign the underlying contract, nor did he participate in any telephone conferences.

The reply argues that plaintiff attempts to convert PMG’s exercise of its contractual right of termination into something tortious, but no facts support any of the causes of action, proceeding to discuss the causes alleged against him as follows:

(A) The complaint does not allege fraud against Robinson. Robinson contends plaintiff has improperly attempted to convert non-performance of a contract with fraud, without alleging the “who, what, when” as to how fraudulent statements were made. He contends the complaint does not contain sufficient facts to support a claim that defendants made fraudulent statements at the time the contract was entered into. Instead, the complaint admits that PMG gave notice of cancellation, then Tides and PMG advised performance would continue, and then terminated the contract in line with the parties’ discussions about how long the service contract would be required. It isn’t fraud, but is an admission of ongoing contractual performance until termination under the right of termination. Robinson contends that any misrepresentation must be pre-contract, and cannot become part of the contract to allege fraud, citing A.A. Baxter Corp. v. Colt Industries (1970) 10 Cal.App.3d 144, 144-145.

Robinson also argues that the plaintiff did not sufficiently allege negligent misrepresentation, contending that the misrepresentation must pertain to past or existing material facts, citing Casino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469. The statements of Tides and PMG relate to future promises, not past or existing facts. Robinson contends that plaintiff admitted it was told PMG had dissolved as of August 23, 2023, and that Robinson did not participate in conversations about Tides continuing to use the software, and that plaintiff thereby admitted that he did not make any false statements.

(B) The complaint does not allege interference with contractual relations. No facts are alleged to maintain the claim against Robinson, and none of the facts alleged giver rise to a claim for interference with contractual relations as a matter of law.

(C) The complaint does not allege a civil conspiracy. Robinson asserts that conspiracy is not a cause of action, but a doctrine imposing liability on persons who, although not actually committing a tort themselves, share with the tortfeasors a common plan or design in its perpetration. It does not give rise to a cause of action unless an independent civil wrong has been committed. The complaint does not allege that Robinson engaged in any conspiracy, that a conspiracy was ever formed, or that Robinson engaged in any tortious conduct. Plaintiff admits that there was a contractual termination of a contract, and that notice of termination was given, something that is not tortious. The complaint admits the contract was assigned to tides, and that Tides terminated the contract and refused to pay the termination fee. 

(D) The complaint does not allege any facts that Robinson is the alter ego of PMG. Robinson asserts that he is not a guarantor of the contract, and is not liable under it. Since there is no basis for personal liability, naming him as a defendant is improper. Plaintiff is not entitled to disregard the corporate form simply because he signed corporate documents for PMG. The complaint doesn’t make any factual allegations regarding conduct specific to Robinson, and the alter ego allegations are boilerplate and include no specific facts showing Robinson’s wrongful behavior or why the corporate form should be disregarded. An alter ego claim must contain allegations that the individual exercises control over the company such that there is a unity of interest and ownership which causes the individuality of the corporation to cease, and the denial of individual liability would promote fraud or injustice, and no such facts are alleged.

(E) Declaratory judgment is duplicative of plaintiff’s other defective claims, and is not available to redress past wrongs. Robinson argues that declaratory relief operates prospectively to declare future rights, rather than to redress past wrongs, citing Babb v. Superior Court (1971) 3 Cal.3d 841, 848. When there has been a breach of contract, declaratory relief is improper because monetary damages will suffice. Here, the declaratory relief claim duplicates the prior breach of contract claims, for which monetary damages will compensate plaintiff, and the claim cannot be used to create jurisdiction over him.

No further evidence was submitted with the reply papers.

ANALYSIS: For the reasons more fully articulated below, the motion to quash will be denied. Pursuant to Code of Civil Procedure section 418.10(b), defendant Robinson’s time to file a responsive pleading is extended to a date no more than 15 days after service upon him of a written notice of entry of order denying the motion to quash.

1.         Requests for judicial notice.

As noted above, Robinson’s moving papers requested judicial notice of AppFolio’s complaint, and of one of PMG’s filings with the Arizona Secretary of State. AppFolio’s opposition sought judicial notice of various filings with the California Secretary of State and with the Arizona Secretary of State.

All matters of which judicial notice are requested are appropriate for discretionary judicial notice (Evid. Code, § 452, subds. (d) and (h)). Certainly, judicial notice of the truth of the matters set forth within any of the documents of which such notice is requested is not appropriate. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063; Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-1469.)

Pursuant to Evidence Code section 452, the court must take judicial notice of any matter specified in Section 452 if a party requests it and (a) give each adverse party sufficient notice of the request to enable the adverse party to meet the request, and (b) furnishes the court with sufficient information to enable it to take judicial notice of the matter. Here, sufficient notice was given by each party with respect to the documents for which judicial notice was requested, and neither party has objected to this Court taking judicial notice of the documents for which the opposing party has requested such notice. Consequently, the requests for judicial notice will be granted.

2.         California’s exercise of specific personal jurisdiction over non-resident defendants.

While the general law regarding circumstances under which a court can permissibly exercise jurisdiction over a nonresident defendant has been in existence since the United States Supreme Court issued its decision in International Shoe Co. v. Washington back in 1945, the manner in which the standards are applied has continued to evolve over the ensuing years, including substantial modifications, clarifications, and refinements in the standards by the United States Supreme Court up to the present time.

Under those evolving principles, California courts may exercise personal jurisdiction on any basis consistent with the Constitutions of California and the United States. (Code Civ. Proc., § 410.10; Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 [Pavlovich].). The exercise of jurisdiction over a nonresident defendant comports with these Constitutions 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. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444 [Vons], quoting International Shoe Co. v. Washington (1945) 326 U.S. 310, 316.)

Under the minimum contacts test, an essential criterion in all cases is whether the quality an nature of the defendant’s activity is such that it is reasonable and fair to require him to conduct his defense in that state. (Kulko v. California Superior Court (1978) 436 U.S. 84, 92 [Kulko],

Personal jurisdiction may be either general or specific. (Vons, supra, 15 Cal.4th at p. 445.) General jurisdiction permits a court to assert jurisdiction over a defendant based upon a forum connection unrelated to the underlying suit (Walden v. Fiore (2014) 571 U.S. 277, 283, fn. 6 [Walden]), and requires that the defendant’s forum contacts to be so continuous and systematic as to render the defendant essentially at home in the forum state. (Daimler AG v. Bauman (2014) 571 U.S. 117, 139.)

A nonresident defendants lacking sufficient contacts for general jurisdiction may still be subject to the specific jurisdiction of the forum. (Vons, supra, 15 Cal.4th at p. 446.) Specific jurisdiction exists when, though the defendant lacks such pervasive forum contact that he may be treated as present for all purposes, it is nonetheless proper to subject him to the forum state’s jurisdiction in connection with a particular controversy. (Epic Communications, Inc. v. Richwave Technology (2009) 179 Cal.App.4th 314, 327.) When determining whether specific jurisdiction exists, courts consider the relationship among the defendant, the forum, and the litigation. (Keeton v. Hustler Magazine, Inc. (1984) 465 U.S. 770, 775.) A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits or purposefully directed his activities at the forum state; (2) the controversy is related to or arises out of the defendant’s contacts with the forum, and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice. (Casey v. Hill (2022) 78 Cal.App.5th 937 [Casey], citing Pavlovich, supra, 29 Cal.4th at p. 269, Vons, supra, 14 Cal.4th at pp. 446-447; and Picot v. Weston (9th Cir. 2015) 780 F.3d 1206, 1211.)  

“These elements are not susceptible of mechanical application, and the jurisdictional rules are not clear-cut. Rather, a court must weigh the facts in each case to determine whether the defendant’s contacts with the forum state are sufficient.” (Bridgestone Corp. v. Superior Court (2002) 99 Cal.App.4th 767, 774, citing Burger King, supra, at pp. 478-479, 466, fn. 29; Kulko, supra, at p. 89, 92; and Vons, supra, at p. 450.) 

            A.        Purposeful availment element.

With respect to the purposeful availment prong, the exact form of jurisdictional inquiry depends on the nature of the claim at issue. (Casey, supra, 78 Cal.App.5th at p. 965.)

For claims sounding in contract, courts generally apply a purposeful availment analysis where the focus is on the defendant’s intentionality. (Pavlovich, supra, 29 Cal.4th at p. 269.)  The prong is only satisfied when the defendant purposefully and voluntarily directs his activities toward the forum so that he should expect, by virtue of the benefit he receives, to be subject to the court’s jurisdiction based on his contacts with the forum. (Ibid.) The ‘purposeful availment’ requirement therefore ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person. (Pavlovich, supra, citing Burger King, supra, 471 U.S. at p. 475.) When a defendant purposefully avails itself of the privilege of conducting activities within the forum state, it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the state. (Ibid, citing World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297.)

For claims sounding in tort, courts generally apply a “purposeful direction” test or “effects test,” under which the defendant has directed his actions at the forum state, even if those actions took place elsewhere. Recognized by the United States Supreme Court in Calder v. Jones (1984) 465 U.S. 783 [Calder], under the “effects test,” a defendant whose “intentional, and allegedly tortious” actions were purposefully directed at the forum is subject to the personal jurisdiction of its courts. (Calder, supra, 465 U.S. at 789-790.) In Calder, actress Shirley Jones sued a Florida journalist and editor for libel based upon an article in the National Enquirer. The court noted that the magazine had its largest circulation in California, and that the story concerned the California activities of a California resident, impugning the professionalism of an entertainer whose television career was centered in California, was drawn from California sources, and both plaintiff’s emotional distress and the harm to her career were suffered in California. As such, California was the focal point of both the story and the harm suffered, and jurisdiction was therefore proper in California based upon the effects of defendants’ Florida conduct in California. (Calder, supra, at pp. 788-789.) “An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California.” (Calder, supra, at p. 790.)

A forum state’s exercise of jurisdiction over an out-of-state intentional tortfeasor must be based upon intentional conduct by the defendant that creates the necessary contacts with the forum. (Walden, supra, 571 U.S. at p. 286.) In discussing the Calder decision, the court in Walden noted that the crux of Calder was that the reputation-based “effects” of the alleged libel connected the defendants to California, not just to the plaintiff. (Walden, supra, 571 U.S. at p. 287.)  It noted further that because publication to third persons is a necessary element of libel, the intentional tort actually occurred in California. (Id. at p. 288.)

Walden involved a Georgia police officer who seized a large amount of cash from plaintiff Nevada residents at a Georgia airport, and was allegedly involved in drafting a false probable cause affidavit in support of the funds’ forfeiture. While no forfeiture complaint was ever filed and the funds were returned, the plaintiffs filed a tort suit against the Georgia officer in Nevada, claiming they suffered injury in Nevada from the delayed return of their funds. However, given that no part of the officer’s conduct occurred in Nevada, and he had no jurisdictionally relevant contacts with Nevada, the Walden court found that injury to a forum resident is not sufficient connection to the forum. The seized funds had no meaningful connection to Nevada, since the plaintiffs’ lack of access to their seized funds would have occurred regardless of where they traveled and wanted more money than they had. Because the plaintiff’s injury was not tethered to Nevada in any meaningful way, it did not create jurisdictionally sufficient contact; mere injury to a forum resident is not a sufficient connection to the forum. (Id. at p. 290.)

In making that determination, the Walden court emphasized that under Calder, the proper focus of the “minimum contacts” inquiry in intentional tort cases is the relationship among the defendant, the forum, and the litigation, and that it is the defendant, not the plaintiff or third parties, who must create contacts with the forum state. (Id. at p. 291.) Indeed, Walden teaches that the correct jurisdictional analysis focuses on (1) the defendant’s contacts with the forum, and not with the plaintiff, and (2) whether those contacts create the relationship among the defendant, the forum, and the litigation necessary to satisfy due process; the proper question is not where the plaintiff experienced a particular injury or effect, but whether the defendant’s conduct connects him to the forum in a meaningful way. (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 23-24 [Burdick].) A mere assertion that a defendant knew or should have known that his intentional acts would cause harm in the forum state is not sufficient to establish jurisdiction under the effects test. (Pavlovich, supra, 29 Cal.4th at pp. 270-271.)

In determining personal jurisdiction, each defendant’s contacts with the forum state must be assessed individually (Calder, supra, 465 U.S. at p. 790), and where conspiracy is alleged, an exercise of personal jurisdiction must be based on forum-related acts that were personally committed by each nonresident defendant. (Burdick, supra, 233 Cal.App.4th at p. 24, citing CenterPoint Energy, Inc. v. Superior Court (2007) 157 Cal.App.4th 1101, 1118.) The purposes and acts of one party—even an alleged coconspirator—cannot be imputed to a third party to establish jurisdiction over the third-party defendant. (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 113.)

A discussion of various cases which followed Calder, Pavlovich, and Walden, helps to illustrate the manner in which the “effects test” principles they established are properly applied:

As noted by the court in Casey v. Hill, supra, 78 Cal.App.5th at p. 966, when applying the principles set forth in Calder and Walden, numerous courts have found the purposeful direction requirement met where the nonresident defendant purposefully sent tortious communications into a forum and thereby injured its resident. In Casey, prospective adoptive parents Missouri sued a California adoption agency and its owner in Missouri courts, based upon allegedly deceptive and fraudulent representations the owner made to them in the course of providing them with adoption facilitation services, intended to induce them to purchase the services from the agency.  The representations related to such things as that the agency had vetted the birth mother, that the birth mother was willing to place her child for adoption, that they would provide the birth mother’s medical records and drug and alcohol screenings, that the agency had an attorney who would finalize the adoption, and that it was customary to pay the birth mother’s expenses prior the third trimester. They obtained a default judgment in Missouri, and applied for entry of the sister state judgment in California, after which the agency and its owner moved to vacate the Missouri judgment on the ground that the Missouri courts did not have jurisdiction over them.

Defendants presented the Missouri plaintiffs with a proposed agreement to provide adoption facilitation services in exchange for a fee, the Caseys then entered into the agreement from Missouri, and paid the required fee with Missouri funds. In performing the agreement, defendants set dozens of emails and text messages to the Caseys, and had numerous phone calls with them, while the Caseys were in Missouri, the subject of which were the matters which the Caseys’ contended were misrepresented to them. The communications in performance of the agreement contained the misrepresentations at issue in the Missouri action, and the court found them sufficient to support the existence of Missouri jurisdiction over the defendants. The Casey court clarified, however, that it did not read Calder to require in purposeful direction cases that all, or even any, of the jurisdictionally relevant effects have been caused by wrongful acts, because under those circumstances a mere finding that an act was not wrongful would deprive the court of jurisdiction. Rather, it need not determine whether defendants committed intentional wrongdoing, but only whether the communications that formed the basis of the alleged fraud were themselves purposefully directed at the forum state. (Casey, supra, 78 Cal.App.5th at p. 967-968.)

In Moncrief v. Clark (2015) 238 Cal.App.4th 1000 [Moncrief], discussed by the court in Casey, supra, a California attorney (Moncrief) was hired by a client who wished to purchase farm equipment from an Arizona company who was represented by an Arizona attorney (Clark). In the course of performing due diligence, Moncrief called Clark in Arizona to discuss ownership of the equipment. Clark represented that the Arizona company was the sole owner of the farm equipment that was the subject of the sale, as well as a follow-up email that stated that the equipment was “free and clear” and was owned by the Arizona company. Based on the representation, Moncrief advised his client to go forward with the purchase. After the representation proved to be false and the sale fell through, the California client sued Moncrief for professional negligence. He cross-complained against Clark for indemnity, negligence, intentional and negligent misrepresentation, and concealment. Clark filed a motion to quash service, contending California lacked jurisdiction over him.

While the trial court granted the motion, that order was reversed on appeal. The Court of Appeal found that while Moncrief and Clark engaged in a single transaction, and their contacts consisted solely of one telephone call and one email, Clark’s contacts with Moncrief were for the specific purpose of inducing Moncrief’s client to finalize the purchase of the farm equipment, and were purposefully and voluntarily directed toward California. As such, Clark could properly be found to have purposefully availed himself of the benefits of California and should expect to be subject to the court’s jurisdiction based upon those contacts. (Moncrief, supra, 238 Cal.App.4th at p. 1107.)

In Zehia v. Superior Court (2020) 45 Cal.App.5th 543, the defendant, a Michigan resident, made defamatory statements about the California plaintiff to California residents, through private online social media messages, with the intent of interfering with the residents’ personal relationships. Defendant was alleged to have sent harassing messages directly to plaintiff, and fabricating text message and direct message conversations involving plaintiff and sending them to another California resident. Plaintiff filed suit against defendant alleging claims for defamation, violation of the online impersonation law, appropriation of name and likeness, and intentional infliction of emotional distress. Defendant moved to quash service, and the trial court denied the motion on grounds that the exercise of special jurisdiction over defendant was proper.

In denying defendant’s petition for writ of mandate, the Court of Appeal found that defendant’s suit-related conduct created a substantial connection between him and California sufficient to support the exercise of specific personal jurisdiction over him. While defendant contended that he did not intentionally aim any conduct at California, the court found that defendant’s conduct formed the necessary connection between defendant and California to warrant the exercise of specific personal jurisdiction. He transmitted the harassing statements directly to a California resident (plaintiff), and the fabricated conversations to another California resident. The court noted that the court in Moncrief and in other cases had found that engaging in such targeted communications with forum residents had been recognized as one type of conduct that can establish a purposeful availment of the forum’s benefits. In being aimed exclusively at a California audience, the court found that the contacts were not random, fortuitous, or attenuated, or the product of unilateral activities of the plaintiff or third parties, but were the foreseeable results of defendant’s intentional conduct. Further the “reputational effects” of the defamatory statements would not have occurred but for the fact that they were transmitted to and received by a California audience, and the injury connected the conduct to California, and not just to a plaintiff who lived there. Finally, because the defamatory content had a California-related focus, the connection between the defendant’s conduct and the forum was strengthened. Based on all this, the court concluded that by sending California-focused messages and conversations directly to California residents for the purpose of interfering with a relationship between California residents and causing reputational injury in California, the defendant had purposefully reached out and beyond his state and into California, and must reasonably anticipate being haled into court there fore his conduct.

In Burdick v. Superior Court, supra, California plaintiffs sued an Illinois resident for defamation or other torts, arising from an allegedly defamatory post which defendant made on his personal Facebook page while he was in Illinois. The plaintiffs had questioned the science behind a skin care product which was marketed in all 50 states, and published blog entries questioning its safety and efficacy, and criticizing the multilevel marketing organization which developed and marketed the product. In response, the CEO of defendants published on the defendants’ website a video defaming the plaintiffs, and defendant Burdick, another high level representative of the company, posted on Facebook comments which suggested that plaintiffs had a lot to hide, had lost his medical license, had used multiple social security numbers, and had been charged multiple times with domestic violence. Burdick later removed the post while he was in Illinois, had no direct contacts with California, and the only conduct which might connect him with California was the allegedly defamatory posting on his Facebook page, from which it could be inferred that he was aware that the plaintiffs resided in California and would suffer injury in California.

After discussing the “effects test” of Calder, Pavlovich and Walden, the Burdick court noted that those cases required, in addition to intentional conduct causing harm to a forum resident, evidence that the nonresident defendant expressly aimed or intentionally targeted his or her intentional conduct at the forum state. Plaintiffs had produced no evidence to show the posting was expressly aimed or intentionally targeted at California, that the page or posting had a California audience, that any significant number of Facebook “friends” who might see the page lived in California, or that the page had advertisements targeting Californians. Facts showing a California focus or that the conduct was expressly aimed at California, such as were present in Calder, were not present in Burdick. Because there was no evidence that Burdick had expressly aimed or intentionally targeted his intentional conduct at California, rather than personally at the plaintiffs, the plaintiffs failed to meet their burden of demonstrating facts justifying the exercise of personal jurisdiction over Burdick. (Burdick, supra, 233 Cal.App.4th at pp. 25-26.)

Finally, there is no “fiduciary shield” or jurisdiction immunity for nonresident corporate officers and directors who act on behalf of a corporation if their acts otherwise would subject them to personal jurisdiction. (Keeton v. Hustler Magazine, Inc. (1984) 465 U.S. 770, 781, fn. 13; Taylor-Rush v. Multitech Corp. (1990) 217 Cal.App.3d 103, 116-117.) Similarly, a nonresident general partner who commits tortious acts on behalf of his or her partnership is not immune from local personal jurisdiction because he or she acted on behalf of a partnership. (See Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 906.) Nonresident employees are generally not suable for mere untargeted negligence performed outside the state. However, intentional tortfeasors must be prepared to defendant themselves wherever their acts cause injury, and corporate agents or employees who are primary participants in intentional wrongdoing causing injury locally are suable in California along with their employer. (Calder, supra, 465 U.S. at pp. 789-790)

B.        Relatedness element

The relatedness element of the specific jurisdiction inquiry looks at whether the plaintiff’s claims arise out of or relate to the defendant’s contacts with the forum. (Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 592 U.S. 351, 359, 362.) There must be an affiliation between the forum and the underlying controversy, principally an activity or an occurrence that takes place is the forum state and is therefore subject to the state’s regulation. (Id at p. 359-360.) The most common formulation of the rule demands that the suite “arise out of or relate to the defendant’s contacts with the forum.” While the first half of that standard (“arise out of”) asks about causation, the second half (“or relate to”) contemplates that some relationships will support jurisdiction without a causal showing. (Id. at p. 361.) Under Ford Motor, while the place of a plaintiff’s injury and residence cannot create a defendant’s contact with the forum state, as that court had previously held in Walden, supra, those places are still relevant in assessing the link between the defendant’s forum contacts and the plaintiff’s suit, including its assertions of who was injured where. (Id. at p. 371.)

C.        Reasonableness of the assertion of jurisdiction over the nonresident defendant.

The third element of the specific jurisdiction is whether the assertion of personal jurisdiction would comport with fair play and substantial justice. Once it has been decided that a defendant purposefully established minimum contacts within the forum state, those contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice. Courts may evaluate the burden on the defendant of appearing in the forum, the forum state’s interest in adjudicating the claim, the plaintiff’s interest in convenient and effective relief within the forum, judicial economy, and the shared interest of the several states in furthering fundamental substantive social policies. (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1364 [Buchanan], quoting Vons, supra, 14 Cal.4th at pp. 447-448.)

“These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. [Citations.] On the other hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” (Burger King, supra, 471 U.S. at p. 477.) The intensity of the defendant's contacts with the state and the reasonableness of the exercise of jurisdiction are inversely related: the stronger the contacts, the more reasonable an exercise of jurisdiction becomes; the stronger the showing of reasonableness, the smaller the degree of contacts that need be shown to establish purposeful availment. (Buchanan, supra, 241 Cal.App.4th at p. 365, citing Burger King, supra, 471 U.S. at pp. 477–478.)

2.         Procedure to challenge a court’s exercise of personal jurisdiction.

A nonresident defendant can challenge the court’s exercise of jurisdiction over him through the filing of a motion to quash service of summons for lack of personal jurisdiction, pursuant to Code of Civil Procedure section 418.10(a)(1). Although the nonresident defendant is the moving party on such a motion, the burden of proof is on the plaintiff to establish, by a preponderance of the evidence, that minimum contacts exist between defendant and the forum state to justify imposition of personal jurisdiction. (Epic Communications, Inc. v. Richwave Technology (2009) 179 Cal.App.4th 314, 326; Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710 [Mihlon].) Jurisdictional facts must be proved by admissible evidence. (Rivelli v. Hemm (2021) 67 Cal.App.5th 380,402.) “A trial court has the discretion to continue the hearing on a motion to quash service of summons for lack of personal jurisdiction to allow the plaintiff to conduct discovery on jurisdictional issues.” (HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1173.)

An unverified complaint has no evidentiary value in determination of personal jurisdiction, but the pleading has limited cognizable significance as a material fact, in that it defines the cause of action, the nature of which has some bearing upon the decision whether it is fair and reasonable to require the nonresident parties to appear and defend in the state. However, the pleader has no burden of proving the truth of the allegations constituting the cause of action in order to justify the exercise of jurisdiction over nonresident parties. (Mihlon, supra, quoting Lundgren v. Superior Court (1980) 111 Cal.App.3d 477, 485.) The trial court is not concerned with whether the complaint states a cause of action, or whether the ultimate substantive issues should be resolved in plaintiff’s favor, but whether the plaintiff establishes by a preponderance of the evidence that minimum contacts exist to support the exercise of personal jurisdiction over the defendant (Inselberg v. Inselberg (1976) 56 Cal.App.3d 484, 489), i.e., whether the claims can be adjudicated in this state. (Sacramento Suncreek Apartments, LLC v. Cambridge Advantaged Properties II, L.P. (2010) 187 Cal.App.4th 1, 10.)

The plaintiff need only present facts demonstrating that the conduct of defendants related to the pleaded causes is such as to constitute constitutionally cognizable minimum contacts. (Mihlon, supra.) When the claim alleged is fraud, the court does not determine whether defendant committed intentional wrongdoing, but only whether the communications that formed the basis of the alleged fraud were themselves purposefully directed at the forum state. (See Casey v. Hill, supra, 78 Cal.App.5th at p. 968, fn. 13, citing Yahoo! Inc. v. La Ligue Contre Le Racisme (9th Cir. 2006) 433 F.3d 1199, 1207-1208.)

If the plaintiff meets this burden, through establishing that the defendant has purposefully availed himself or herself of forum benefits, and that the controversy is related to or arises out of the defendant’s contacts with the forum, the burden then shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable. (Pavlovich, supra, 29 Cal.4th at p. 273, quoting Vons, supra, 14 Cal.4th at p. 449; Buchanan v. Soto, supra, 241 Cal.App.4th at p. 1362.)

3.         Application/analysis.

The Court is quite cognizant that only the facts related to defendant Robinson’s contacts with California are relevant to its determination whether there exist sufficient minimum contacts for California to exercise jurisdiction over him with respect to the current dispute. Even so, his contacts cannot be evaluated in a vacuum, and substantial additional facts are necessary to provide context to those contacts, so that their nature and impact can fully be appreciated. Many of the facts alleged in the complaint were supported by the Akins declaration submitted in support of AppFolio’s opposition to the motion to quash. In discussing the context in which Robinson’s contacts were made, the Court’s analysis will necessarily duplicate many of the facts alleged in the complaint and set forth in the “Background” section of this memorandum, located above.

The entity which entered into the contractual agreement with AppFolio (Robinson Family Group, LLC dba The Robinson Group) by executing the on-line Order Form, for use of AppFolio’s proprietary software, in exchange for a monthly payment of $45,540.00, subject to AppFolio’s TOS, was renamed as PMG shortly after the Order Form was submitted. At the time the entity was renamed, defendant Tides was identified as the sole member of the member-managed LLC. Robinson was at all times CEO of that entity (both as Robinson Family Group, LLC, and as PMG).

The agreement was for a term of two years, extending from November 1, 2022, to November 1, 2024. As reflected in the TOS which were incorporated into and made part of the agreement, the agreement provided for payment of an early termination fee if services were terminated prior to the expiration of that term. That early termination fee was for 50% of the fees payable for the remaining term of the agreement following the effective date of the termination, and the agreement permitted AppFolio to charge that Early Termination Fee to the payment method associated with the account.

The Order Form clearly identified AppFolio’s physical location as 70 Castilian Drive, in Goleta, CA. AppFolio’s TOS also provided that disputes arising out of services or the TOS would be interpreted in accordance with the laws of the State of California, and that all disputes would be subject to exclusive jurisdiction and venue in state courts located in Santa Barbara, California, and federal courts of the Central District of California.

Certainly, Robinson was not a party to the agreement, and did not execute it on behalf of the original Robinson entity. Further, the TOS provisions regarding choice of law and venue for resolution of disputes is relevant only to show knowledge of AppFolio’s presence in California, and is not otherwise relevant to any issue regarding California’s assertion of jurisdiction over individual defendant Robinson.

The agreement commenced, and apparently the parties operated pursuant to its terms from November 1, 2022, through late May, 2023. On May 24, 2023, PMG (not through Robinson) gave notice to AppFolio it intended to terminate the agreement and dissolve through a merger. At that time, PMG was managing properties for PMG’s sole member, Tides. On May 30, 2023, AppFolio advised that merger would not relieve PMG of its duties under the agreement, and that its card services would be disabled (for other reasons). PMG directed Tides to try to come to a resolution with AppFolio, and Delgado (from Tides) inquired how to prevent card processing from being disabled. AppFolio responded that because both PMG and Tides had stated neither would pay the remainder of the contract term, the disabling of card services could not be prevented.

Robinson’s first direct contact with AppFolio came on June 7, 2023, on which date he sent a letter to AppFolio advising that PMG would be dissolving, and intended to cancel its services effective June 30, 2023. He asked AppFolio to cease all services as of that date, and to finalize all outstanding invoices or payments due, including any prorated amounts or fees related to the cancellation. In choosing to send a letter, Robinson necessarily addressed the letter to be received at AppFolio’s Goleta, California mailing address, again reflecting knowledge and appreciation of AppFolio’s presence in California.

A week later, however, and prior to the “effective date” of the termination requested by Robinson, PMG (not through Robinson) on June 13, 2023 telephoned AppFolio, and its President (Fern-Kirkland) thereafter wrote to AppFolio stating that PMG was rescinding its notice to terminate services, and anticipated needing a few more months. She advised that either Tides or Robinson would formally notify AppFolio at a later date with respect to when termination would occur. After being informed of the imminent suspension of card services, PMG further confirmed on June 16, 2023, that it was prepared to pay all fees owed under the Agreement in connection with the cancellation. It revoked its notice so that Tides would continue to have access to the software.

AppFolio then made clear that it would continue to provide services for Tides only on condition that it was paid all amounts under the agreement, and the parties agreed and proceeded based upon this understanding. On June 16, AppFolio wrote to Robinson and others to confirm the rescission of its request to terminate, that it needed to confirm that PMG would continue to pay subscription services on a monthly basis, and to confirm that the ultimate termination would fall under the TOS provision related to the early termination fee, and that they would be responsible for all amounts when due. Fern-Kirkland (of PMG) confirmed agreement to those terms.

On June 26, 2023, Robinson was invited to participate in a call between AppFolio and Tides, but declined. During the call, Tides expressed its need to maintain access to the AppFolio system to access information critical to its operations, notwithstanding that PMG was dissolving, and asked to extend the termination date to July 31, 2024.

On June 27, 2023, Akins from AppFolio forwarded the June 16, 2023, email thread to Robinson (requiring confirmation that PMG would continue to pay for subscription services on a monthly basis, that ultimate termination would fall under the TOS provision related to the early termination fee, and that they would be responsible for all amounts when due), and requested confirmation that PMG understood it would be responsible for all amounts due.

In Robinson’s second direct contact with AppFolio, Robinson responded to that email chain on June 29, 2023, stating that they were going to pay as normal, and “if we decide to cancel the service I will reach out at that time to discuss.” [Emphasis added.]

AppFolio was advised on August 23, 2023, that PMG had dissolved, and Tides continued to access the software and services and paid the service fees from July 2023 into early January 2024.

On January 22, 2024, Robinson made his third direct contact with AppFolio, sending an email to advise that since PMG had shut its doors, and the transition to Tides has been completed, they no longer needed access to the AppFolio software, and needed to shut down access and end the agreement. A Tides representative followed in contacting AppFolio on January 25, 2024, advising that effective February 1, it would no longer be paying for AppFolio.

AppFolio responded to both via January 26, 2024, email from Akins, confirming the request to terminate the subscription prior to the end of the term, that the effective date of termination would be 30 days following the notification, and that the early termination fee for the subscription totaled $182,160. Akins’ email requested confirmation that January 22 was the 30-day notice for early termination, and for the parties to confirm the early termination fee which was due under the contract. Tides responded immediately that it was not a party to the contract and would not pay any early termination fee. In his final direct contact with AppFolio, Robinson also responded to Akins that same day via email, advising that he had no intention of paying, did not want to exercise the contractual right of termination for convenience, and stating that PMG was out of business, had dissolved, had no assets, and there was nothing more to do since the contract was not personally guaranteed.

            A.        Purposeful direction element.

The Court has not evaluated AppFolio’s fraud-based claims, nor are the validity or viability of its fraud-based claims relevant to the court’s jurisdictional analysis. However, it appears that the crux of the fraud-based claims against Robinson and others is that, following PMG’s notice of termination of the contract—made on the basis that it would be dissolving—and its subsequent rescission of the termination, Robinson and others falsely represented to AppFolio that if AppFolio continued to provide access to its proprietary software not just to contracting party PMG, but also to Tides, which was not a party to the contract, that they would continue to pay all fees due under the contract, including the early termination fee, once services were terminated, even though PMG no longer existed. Had those representations not bee made, AppFolio would have deemed the agreement terminated, ceased all services and access to its software on the effective date of the termination, and would have been able to collect all fees due from PMG—including collection of the early termination fee by charging it to the payment method associated with the account as permitted by the TOS—at a time while PMG was still in existence and had assets. However, those representations were false, and were made in order to induce AppFolio to continue to provide services and not to collect the early termination fee for as long PMG (of which Tides was sole member) and Tides needed AppFolio’s continued services, without any intention of ever paying the termination fee due under the contract, or any other fees due under the contract (e.g., the monthly fee for the 30-day period following provision of notice of termination). AppFolio was damaged by its reliance upon the fraudulent representations made by Robinson and others.

Robinson’s reply papers challenges the adequacy of AppFolio’s allegations against it, spending approximately five pages individually challenging the causes of action against him—as well as the causes of action for interference with contractual relations and declaratory relief, which are not alleged against him. As noted above, however, in evaluating whether California may properly exercise jurisdiction over Robinson, this Court is not concerned with the adequacy of the allegations, their viability, or whether AppFolio will prevail on any of the fraud claims it alleges against Robinson. Rather, all that is relevant to this Court’s resolution of the motion to quash is whether Robinson’s contacts with AppFolio show that his intentional, and allegedly tortious actions were purposefully directed at the forum, within the meaning of Calder, Pavlovich and Walden, and their progeny, and whether AppFolio’s claims arise out of or relate to the defendant’s contacts with the forum. AppFolio’s complaint is relevant only to the extent that they provide a means for the court to determine whether Robinson’s contacts are related to the claims asserted against him. Issues regarding the sufficiency of the pleading will be addressed either in the action in the forum state, if the motion to quash is denied, or in subsequent litigation in another appropriate forum.

With respect to his case-relevant contacts, Robinson emphasizes in his reply papers that he sent only 4 emails to AppFolio in California, and that all were sent in his capacity as CEO of PMG. As Moncrief, supra, teaches us, however, the communications themselves do not need to be numerous in order for specific jurisdiction to be appropriate, and in that case, one phone call and one email were found sufficient to support California’s exercise of jurisdiction over the nonresident defendant, given that they were purposefully and voluntarily directed at California for the specific purpose of inducing the transaction which gave rise to the dispute among the parties.

Further, the fact that he contends he was at all times acting as CEO of PMG, an LLC, does not in any way impact the jurisdictional analysis. Rather, as noted above, a nonresident general partner who commits tortious acts on behalf of his or her partnership is not immune from local personal jurisdiction because he or she acted on behalf of a partnership. (See Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 906.) What is important is whether the non-resident defendant’s acts are sufficient to permit California to exercise jurisdiction over him, not the business capacity in which the non-resident contends that his or her acts were performed, or any claimed defense arising therefrom.

It is undisputed that none of Robinson’s emails were drafted or sent from within California. They were, however, directed toward a party which he knew was located in California, with which his company had a contractual relationship. Robinson first notified AppFolio that PMG was terminating the agreement and asking that AppFolio finalize the amounts due by PMG under the contract, including fees related to cancellation. Thereafter, apparently upon realizing that PMG and Tides would need access to AppFolio’s software for a greater length of time, other representatives of PMG and Tides had advised AppFolio that PMG was rescinding the termination request. When AppFolio requested that Robinson confirm its receipt of assurances from others (in the June 16 email thread) that PMG would continue to pay for subscription services on a monthly basis, that early termination would fall under the TOS provision related to the early termination fee, and that they would be responsible for all amounts when due, Robinson directly responded that they were going to pay “as normal,” and would discuss cancellation in the future when that decision was made. There was nothing in that communication that would have caused AppFolio to understand that Robinson’s June 29 email was in any way inconsistent with the information set forth in his June 7 email, in which he acknowledged amounts that would be due by PMG arising from early termination of the agreement.

The facts that AppFolio is located in California and suffered damage in California are not, in and of themselves determinative of jurisdiction. However, neither are they irrelevant to jurisdiction. Looking at the nature of Robinson’s contacts, it is clear that Robinson’s June 29, 2023, allegedly tortious communication was purposefully and voluntarily directed toward California, in that his representations were allegedly made for the specific purpose of inducing AppFolio, in California, to continue to provide access to its proprietary software—to PMG and to non-contracting party Tides—under the assurance that if AppFolio did so, it would be paid everything to which it was entitled under its contract with PMG, including any ultimately applicable early termination fee, in spite of the fact that PMG would be dissolving. Robinson’s contacts were aimed at a specific California resident, and were therefore not random, fortuitous, or attenuated, nor were they the product of the unilateral activities of the plaintiff or third parties. (See Pavlovich, supra, 29 Cal.4th at p. 269.) Targeted communications with a forum resident is one type of conduct that can establish a purposeful availment of the forum’s benefits. (See Moncrief v. Clark, supra, 238 Cal.App.4th at p. 1107.)

While not all of Robinson’s communications relevant to AppFolio’s claims could conceivably be found to have been wrongful acts, not every contact needs to have been wrongful, in order for the contact to be jurisdictionally relevant. (See Casey, supra, 78 Cal.App.5th at p. 967-968.)

Further, unlike the circumstances which were present in Walden, wherein the plaintiffs’ injury in being deprived of their funds which had been by a Georgia officer through actions which occurred entirely in Georgia, was not in any way tethered to their resident State of Nevada, in this case, Robinson’s intentional and allegedly tortious conduct was directed toward AppFolio in California, with full recognition that the California plaintiff would suffer injury in California from the defendants’ ultimately failure to pay AppFolio all it was due under its contract.

Additionally, given that the alleged nature of the fraud was an attempt to induce AppFolio to provide services to a party (Tides) other than the contracting party (PMG), through false representations that AppFolio would receive all compensation to which it was entitled under the terms of the contract with PMG, even though PMG was dissolving, the Court does not currently view it as an attempt to convert contractual liability into tort liability, as Robinson argues in his reply.

Under the authorities discussed above, the Court finds that Robinson’s intentional and allegedly tortious conduct was directed to California, sufficient to satisfy the purposeful direction “effects test” applicable to claims sounding in tort.

            B.        Relatedness element.

Having found the “purposeful availment” / “purposeful direction” element of the jurisdictional inquiry to have been sufficiently established, the Court now looks toward the “relatedness” element of the inquiry. As noted above, the “relatedness element” of the minimum contacts test questions whether the plaintiff’s claims arise out of or relate to the defendant’s contacts with the forum. (Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 592 U.S. 351, 359, 362.) Here, they undoubtedly do. Robinson’s four email contacts with AppFolio were all a part of the events underlying AppFolio’s claims against the defendants, including Robinson. His first communication related to the initial purported termination of the contract with a request to finalize all amounts due by PMG, including with respect to early termination, and the second related to the reinstatement of the agreement and AppFolio’s agreement to continue to permit access to its proprietary software based upon representations made by Robinson and others that they would continue to pay AppFolio “as normal” and would discuss issues surrounding termination at such time as they would decide to cancel the agreement. The final two communications by Robinson confirmed termination of the need for AppFolio’s services (3rd communication) and a refusal to pay any amount of the early termination-related fees required under the contract (4th communication).

Because the “relatedness” element has been satisfied, the burden now shifts to Robinson to establish that the exercise of California jurisdiction over him would be unreasonable.

            C.        Reasonableness element.

While Robinson’s reply complains that plaintiff’s opposition ignores the third prong of the minimum contacts test, i.e., that exercise of jurisdiction over him would be reasonable and comport with fair play and substantial justice, it is the moving defendant, not the plaintiff, who has the burden on this factor. In fact, Robinson’s motion made no effort to establish any other considerations which would render California’s exercise of jurisdiction over him unreasonable. Indeed, his involvement in the events giving rise to this action arose, as he repeatedly asserts, because he was the CEO of PMG, and in his contacts made representations on its behalf. PMG has already appeared in this action, through the August 28, 2024 filing of its demurrer and motion to strike, which are set for hearing on November 4, 2024. As a result, not only has he failed to meet his burden of showing a compelling case that the exercise of personal California jurisdiction over him would be unreasonable, but it in fact also appears that there would be no undue burden upon Robinson to defend the claims against him in California alongside PMG.

4.         Conclusion.

For the reasons articulated above, the Court finds that the exercise of specific California jurisdiction over Robinson in this case is warranted and will therefore deny Robinson’s motion to quash. Pursuant to Code of Civil Procedure section 418.10(b), defendant Robinson’s time to file a responsive pleading is extended to a date no more than 15 days after service upon him of a written notice of entry of order denying the motion to quash.