Whispering Oaks RCF Management etc. v. Cincinnati Ins. Co. CA6

Filed 3/13/23 Whispering Oaks RCF Management etc. v. Cincinnati Ins. Co. CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
WHISPERING OAKS RCF H049906
MANAGEMENT CO. INC. et al., (Santa Clara County
Super. Ct. No. 20CV361234)
Plaintiffs and Appellants,
v.
CINCINNATI INSURANCE
COMPANY,
Defendant and Respondent.
This case arises from a dispute over insurance coverage for plaintiffs’ property in
Missouri. After plaintiffs filed suit in Santa Clara County Superior Court, defendant—an
Ohio-based insurance company—moved to quash service of summons on the ground that
it was not subject to the trial court’s personal jurisdiction.
The trial court agreed and granted the motion. Plaintiffs contend on appeal that
defendant was subject to the trial court’s jurisdiction because it conducts “a large amount
of business in California,” had “case-specific contacts” with the state, and consented to
jurisdiction by making various general appearances. Defendant disagrees and argues that
this case has “absolutely nothing to do with California.”
We find plaintiffs’ arguments have no merit and we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The parties and insurance policy
Defendant and respondent Cincinnati Insurance Company (Cincinnati) is an
Ohio-based insurance company incorporated in Fairfield, Ohio. In 2008, Cincinnati
issued a commercial business and property package policy (policy) to Whispering Oaks
Residential Care Facility LLC and Whispering Oaks RLF Management Company, Inc.
(Whispering Oaks).1 The policy covered Whispering Oaks’ business property in
Wildwood, Missouri from August 2008 through August 2011.
B. The Missouri lawsuit
In 2014, Whispering Oaks sued Cincinnati in the Circuit Court of Cole County,
Missouri, asserting claims for breach of contract and vexatious refusal to pay (Missouri
complaint). Whispering Oaks alleged that Cincinnati had refused to pay under the policy
following incidents and resulting losses to the property and business in January and
December 2010. The lawsuit was dismissed in October 2015 for failure to prosecute.
C. The California lawsuit2
In January 2020, Whispering Oaks filed the instant lawsuit in Santa Clara County
Superior Court. The trial court held an initial case management conference in October
2020, but Whispering Oaks failed to appear. The court then issued an order to show
cause for Whispering Oaks’ failure to appear and its failure to serve Cincinnati, and set
the matter for hearing on March 25, 2021.
1
The named plaintiffs and appellants in this action include Naren Chaganti, who
was not a named insured under the policy. Chaganti is also counsel for Whispering Oaks
in this action, and claims to be the principal and sole officer of the Whispering Oaks
entities. In this opinion, we refer to plaintiffs and appellants collectively as “Whispering
Oaks,” unless otherwise indicated.
2
We summarize the procedural history of this case in some detail because it is
relevant to the arguments Whispering Oaks raises on appeal.
2
Prior to that hearing date, Whispering Oaks filed a first amended complaint in
January 2021. The first amended complaint asserted causes of action against Cincinnati
for breach of contract, vexatious refusal to pay, and bad faith breach of the covenant of
good faith and fair dealing. The complaint alleged, as the Missouri complaint had, that
Cincinnati had refused to pay under the policy following incidents and resulting losses to
the property and business in January and December 2010.
D. Motion to quash and demurrer
On February 5, 2021, Cincinnati filed a motion to quash service of the summons
and complaint, appearing specially pursuant to Code of Civil Procedure section 418.10,
to object to the court’s jurisdiction. Cincinnati argued the court did not have personal
jurisdiction over it because Cincinnati did not have the requisite “minimum contacts”
with California. Instead, it argued, “everything concerning this action, including the
events giving rise to it and all parties involved, relates to Missouri.” Specifically,
Cincinnati argued that “[t]he named insureds on the policy . . . were Missouri companies
who owned property and operated a business in Missouri; the insurance policy at issue in
this action was negotiated and contracted between Plaintiffs and [Cincinnati] in Missouri;
the underlying incident about which this action is based occurred in Missouri; Plaintiffs
filed a lawsuit arising from that incident in a court in Missouri; and perhaps most
significant, a Missouri court dismissed that lawsuit with prejudice in Missouri.”
In support of its motion, Cincinnati requested judicial notice of the Missouri
complaint, the dismissal from that case, Cincinnati’s corporate records on file with the
Ohio Secretary of State, and relevant Missouri statutes.
At the same time it filed the motion to quash, Cincinnati also filed a demurrer to
the first amended complaint, pursuant to Code of Civil Procedure section 418.10,
subdivision (e), which allows a defendant filing a motion to quash to simultaneously
demur to a complaint without it constituting a general appearance. (Code Civ. Proc.,
§ 418.10, subd. (e).) In the demurrer, Cincinnati argued that the complaint failed to state
3
a claim because it had been “ruled on and dismissed” in the Missouri action, and because
it was barred by the statute of limitations.
On February 18, 2021, prior to opposing the motion to quash and the demurrer,
Whispering Oaks filed a request to vacate the trial court’s pending order to show cause,
on the ground that its attorney had been “overseas and was unable to travel or otherwise
appear due to pandemic-related lockdown.” On the same day, Whispering Oaks filed a
motion to strike Cincinnati’s motion to quash. Whispering Oaks then filed its opposition
to Cincinnati’s demurrer on March 22, 2021.
E. Dismissal and set aside
On March 25, 2021, the trial court held the hearing on the order to show cause.
Whispering Oaks did not appear, and the court dismissed the action without prejudice via
minute order on April 1, 2021. Nevertheless, Whispering Oaks subsequently filed an
opposition to Cincinnati’s motion to quash on May 20, 2021 “[o]ut of an abundance of
caution . . . in case the court denies the motion to strike.” The next day, Cincinnati
served a proposed order of dismissal on Whispering Oaks. The court entered the order
and judgment dismissing the case on May 26, 2021.
On May 28, 2021, Whispering Oaks filed a motion to set aside and vacate the
order dismissing the case. After hearing that motion on August 24, 2021, the trial court
granted it and set aside the dismissal, and directed Whispering Oaks to prepare and file a
proposed order. No such order was filed, though. Cincinnati then re-filed its motion to
quash and demurrer “[i]n an abundance of caution” on December 1, 2021.
F. Oppositions to motion to quash and demurrer
Whispering Oaks filed new oppositions to the motion and demurrer on February 1,
2022. In its opposition to the motion to quash, it argued that Cincinnati had made general
appearances in the case because it had sought relief from the court “that can only be
granted by a court exercising personal jurisdiction.” It further argued that Cincinnati had
not timely scheduled a hearing on its motion to quash, and that Whispering Oaks had a
4
pending motion for leave to file a second amended complaint which the trial court should
grant.
G. Hearing and order
The motions were heard on March 1, 2022. The trial court granted Cincinnati’s
request for judicial notice and granted the motion to quash, ruling that Whispering Oaks
had “failed to meet their initial burden to prove, by a preponderance of the evidence, the
factual bases justifying the exercise of jurisdiction, general or specific, over
[Cincinnati].”
Specifically, the trial court ruled that “[t]he allegation in the unverified FAC [first
amended complaint] at ¶ 3 that Defendant ‘has offices or agents and conducts [sic]
throughout the State of California,’ is clearly insufficient as it is not evidence. The only
evidence offered by Plaintiffs in opposition to the motion to quash is a declaration from
Plaintiff Naren Chaganti (included as part of the opposition rather than separately filed)
that simply serves to authenticate three attached exhibits offered in support of Plaintiffs’
unsuccessful argument that Defendant made a general appearance in this matter that
waived its ability to move to quash. It does not provide any specific evidentiary facts
sufficient for the Court to conclude that exercising jurisdiction over Defendant would be
appropriate.”
In short, the court explained, “none of the actions taken by specially appearing
Defendant in this action can be reasonably construed as a general appearance or a waiver
of any challenge to jurisdiction.”
In addition, “[e]ven if Plaintiffs had met their initial burden (and they clearly have
not) Defendant has shown, primarily through the material offered for judicial notice, that
the adjudicated and dismissed Missouri lawsuit between the parties upon which this
action is based (and largely duplicates) does not provide any basis for concluding that
Defendant (a business incorporated in Ohio) is subject to general or personal jurisdiction
in California.”
5
The court also rejected Whispering Oaks’ other arguments, explaining that the
reason Cincinnati’s initial motion to quash had not been heard was that the case had been
dismissed, and that Whispering Oaks had no pending motion for leave to file a second
amended complaint because it had never filed such a motion. Because the court granted
the motion to quash, it did not reach Cincinnati’s other motions. The order granting the
motion to quash was entered on March 7, 2022.
Whispering Oaks timely appealed.
II. DISCUSSION
A. Applicable law and standard of review
California’s long-arm statute authorizes courts to exercise personal jurisdiction
“on any basis not inconsistent with the Constitution of this state or of the United States.”
(Code Civ. Proc., § 410.10; Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268
(Pavlovich); Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444
(Vons).) The statute “ ‘manifests an intent to exercise the broadest possible jurisdiction,’
limited only by constitutional considerations of due process.” (Integral Development
Corp. v. Weissenbach (2002) 99 Cal.App.4th 576, 583, quoting Sibley v. Superior Court
(1976) 16 Cal.3d 442, 445.) A state court’s assertion of jurisdiction comports with due
process requirements “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, supra, at p. 444, quoting International Shoe Co. v. Washington (1945)
326 U.S. 310, 316.) The primary focus of that inquiry is “the defendant’s relationship to
the forum State.” (Bristol-Myers Squibb Co. v. Superior Court (2017) __ U.S. __ [2017
U.S. Lexis 3873] [137 S.Ct. 1773, 1779] (Bristol-Myers).)
Courts have recognized two types of personal jurisdiction: general and specific.
(Bristol-Myers, supra, __ U.S. at p. __ [2017 U.S. Lexis 3873] [137 S.Ct. at
pp. 1779-1780].) “A nonresident defendant may be subject to the general jurisdiction of
the forum if his or her contacts in the forum state are ‘substantial . . . continuous and
6
systematic.’ ” (Vons, supra, 14 Cal.4th at p. 445, quoting Perkins v. Benguet Mining Co.
(1952) 342 U.S. 437, 445.) “In such a case, ‘it is not necessary that the specific cause of
action alleged be connected with the defendant’s business relationship to the forum.’ ”
(Vons, supra, at p. 445, quoting Cornelison v. Chaney (1976) 16 Cal.3d 143, 147.) “A
state court may exercise general jurisdiction only when a defendant is ‘essentially at
home’ in the State.” (Ford Motor Co. v. Mont. Eighth Judicial Dist. Court (2021) __
U.S. __ [2021 U.S. Lexis 1610] [141 S.Ct. 1017, 1024] (Ford Motor Company).)
A defendant without such continuous contacts nevertheless may be subject to a
court’s specific jurisdiction if it “has purposefully availed [itself] of forum benefits
[citation], the ‘controversy is related to or “arises out of” a defendant’s contacts with the
forum’ ” (Vons, supra, 14 Cal.4th at p. 446, quoting Helicopteros Nacionales de
Colombia v. Hall (1984) 466 U.S. 408, 414), and “ ‘the assertion of personal jurisdiction
would comport with “fair play and substantial justice.” ’ ” (Vons, supra, at p. 447.)
Specific jurisdiction is thus contingent on the “ ‘relationship among the defendant, the
forum, and the litigation.’ ” (Helicopteros, supra, at p. 414.)
“ ‘The purposeful availment inquiry . . . focuses on the defendant’s intentionality.
[Citation.] This 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.”
(Pavlovich, supra, 29 Cal.4th at p. 269, quoting United States v. Swiss American Bank,
Ltd. (1st Cir. 2001) 274 F.3d 610, 623.) “Thus, the ‘ “purposeful availment” requirement
ensures that a defendant will not be haled into a jurisdiction solely as a result of
“random,” “fortuitous,” or “attenuated” contacts [citations], or of the “unilateral activity
of another party or a third person.” ’ ” (Pavlovich, supra, at p. 269, quoting Burger King
Corp. v. Rudzewicz (1985) 471 U.S. 462, 475 (Burger King).)
The second prong of the specific jurisdiction analysis inquires whether a plaintiff
has established that its claims “ ‘arise out of or relate to defendant’s contacts with the
7
forum.’ ” (Ford Motor Company, supra, __ U.S. at p. __ [2021 U.S. Lexis 1610] [141
S.Ct. at p. 1026], italics omitted.) “The first half of that standard asks about causation;
but the back half, after the ‘or,’ contemplates that some relationships will support
jurisdiction without a causal showing. That does not mean anything goes. In the sphere
of specific jurisdiction, the phrase ‘relate to’ incorporates real limits, as it must to
adequately protect defendants foreign to a forum.” (Ibid.)
Even where such minimum contacts do not exist, a defendant may nevertheless
consent to personal jurisdiction or otherwise waive objections to it by making a general
appearance. “A general appearance by a party is equivalent to personal service of
summons on such party.” (Code Civ. Proc., § 410.50, subd. (a).) “ ‘ “A general
appearance occurs when the defendant takes part in the action or in some manner
recognizes the authority of the court to proceed.” [Citation.] Such participation operates
as consent to the court’s exercise of jurisdiction in the proceeding. “Unlike jurisdiction
of the subject-matter . . . jurisdiction of the person may be conferred by consent of the
person, manifested in various ways” including a “general appearance.” [Citations.] By
generally appearing, a defendant relinquishes all objections based on lack of personal
jurisdiction or defective process or service of process.’ ” (ViaView, Inc. v. Retzlaff (2016)
1 Cal.App.5th 198, 210 (ViaView), quoting In re Marriage of Obrecht (2016) 245
Cal.App.4th 1, 7-8.)
When a defendant moves to quash service of process based on lack of personal
jurisdiction, “ ‘[t]he plaintiff has the initial burden of demonstrating facts justifying the
exercise of jurisdiction.’ ” (Pavlovich, supra, 29 Cal.4th at p. 273; Vons, supra, 14
Cal.4th at p. 449.) To satisfy that burden, the plaintiff must provide support with
“competent evidence of jurisdictional facts. Allegations in an unverified complaint are
insufficient to satisfy this burden of proof.” (In re Automobile Antitrust Cases I & II
(2005) 135 Cal.App.4th 100, 110 (Automobile Antitrust Cases).) “The plaintiff must
come forward with affidavits and other competent evidence to carry this burden . . . .”
8
(Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1362.) Only when a plaintiff carries
that burden does it then shift to the defendant to demonstrate that the court’s exercise of
personal jurisdiction over it would be unfair or unreasonable. (Burger King, supra, 471
U.S. at p. 472; Vons, supra, at pp. 447-448.)
If there is conflicting evidence, “the trial court’s factual determinations are not
disturbed on appeal if supported by substantial evidence.” (Vons, supra, 14 Cal.4th at
p. 449.) Where there is no conflict, “the question of jurisdiction is purely one of law and
the reviewing court engages in an independent review of the record.” (Ibid.) Here, the
parties do not identify any factual disputes the trial court was required to resolve.
Accordingly, we conduct an independent review.
B. Analysis
Whispering Oaks argues that the trial court had personal jurisdiction over
Cincinnati in multiple ways. First, it argues Cincinnati is subject to the court’s general
jurisdiction because it is “at home” in the state by virtue of conducting “a large amount of
business in California.” Second, it contends Cincinnati is subject to the court’s specific
jurisdiction through “case-specific contacts with California,” consisting chiefly of
communications with Chaganti—who was physically in California—regarding the
insurance coverage. And third, Whispering Oaks argues Cincinnati has consented or
waived objections to jurisdiction by making general appearances or arguing the merits
throughout the litigation, and by failing to schedule the hearing on its motion to quash
within 30 days of filing it. Whispering Oaks also argues that the trial court erred by not
granting leave to file a second amended complaint and not permitting jurisdictional
discovery.
Cincinnati argues that it did not consent or waive objections to jurisdiction and did
not have the requisite minimum contacts to establish general or specific jurisdiction.
9
As we explain below, Whispering Oaks’ arguments lack merit. Cincinnati was not
subject to the trial court’s personal jurisdiction and the motion to quash was properly
granted.
1. General jurisdiction
Whispering Oaks claims Cincinnati is subject to the trial court’s general
jurisdiction by virtue of being “at home” in California. According to Whispering Oaks,
“Cincinnati conducts a large amount of business in California and is essentially at home
in California. The extent of its contacts with the forum state are to be further developed,
and the trial court erred in not granting leave to conduct jurisdictional discovery.”
Elsewhere, it asserts that “Cincinnati is licensed for multiple lines of insurance
business in California. It also maintains an agent for service of process. It conducts
many millions of dollars worth of business in California. Attached to Plaintiffs’ request
for judicial notice was a set of documents showing Cincinnati’s contacts and range of
businesses in California. [¶] Cincinnati’s wide-ranging business activities in California
‘take the place of physical presence in [California].’ ”
These assertions are entirely unsupported by any citations to the record and we
deem them forfeited. (Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th
657, 684 (Meridian) [appellant must provide citations to record directing court to
evidence supporting each factual assertion].)
Even if we were to consider these arguments, they would fail. There does not
appear to be any evidence in the record showing that Cincinnati’s contacts with
California are “ ‘substantial . . . continuous and systematic,’ ” or even showing that
Cincinnati regularly conducts business in California. (Vons, supra, 14 Cal.4th at p. 445.)
The first amended complaint includes an allegation that Cincinnati “has offices or agents
and conducts throughout the state of California [sic].” That vague allegation by itself is
insufficient to establish that Cincinnati has been carrying on continuous and systematic
contacts with California. A plaintiff “must do more than merely allege jurisdictional
10
facts.” (Automobile Antitrust Cases, supra, 135 Cal.App.4th at p. 110.) A plaintiff must
also present evidence in the form of affidavits and other authenticated documents, and
“[a]llegations in an unverified complaint are insufficient to satisfy this burden of proof.”
(Ibid., citing Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 540;
Automobile Antitrust Cases, supra, at p. 110 [“Declarations cannot be mere vague
assertions of ultimate facts, but must offer specific evidentiary facts permitting a court to
form an independent conclusion on the issue of jurisdiction.”].)
Having identified no evidence in support of its argument that Cincinnati is subject
to the general jurisdiction of the trial court, Whispering Oaks has failed to carry its
burden. (Pavlovich, supra, 29 Cal.4th at p. 273; Vons, supra, 14 Cal.4th at p. 449.)
2. Specific jurisdiction
Whispering Oaks argues that Cincinnati had the following “case-specific contacts”
in California sufficient to establish personal jurisdiction: (1) shortly after the January
2010 incident at Whispering Oaks’ property in Missouri, Cincinnati’s insurance adjuster
contacted Chaganti, who was in California at the time, to ask permission to inspect the
property; (2) in February 2010, the adjuster once again contacted Chaganti, who was still
in California, regarding the insurance policy; and (3) in 2018, Cincinnati sent
policy-related documents to California, and communicated with individuals in California,
in response to a subpoena issued by a third party in a different lawsuit.
According to Whispering Oaks, these communications “were aimed at a distinct
California focus, about a California subpoena, about California residents (Plaintiffs) and
the subject insurance policy,” and therefore established personal jurisdiction over
Cincinnati.
We disagree. As set forth above, a defendant has the requisite minimum contacts
where it has purposefully availed itself of forum benefits and the controversy is related
to, or arises out of, the defendant’s contacts with the forum state. (Vons, supra, 14
Cal.4th at p. 446.)
11
We begin with the second of those requirements, which, by itself, defeats
Whispering Oaks’ contentions. As a threshold matter, Whispering Oaks does not even
argue that the controversy is related to, or arose from, Cincinnati’s contacts with
California. Instead, it argues only that Cincinnati’s communications were “aimed at,” or
“about” California, California residents and the policy. Even if that were true, though, it
has nothing to do with whether the controversy at issue here arose from or relates to
Cincinnati’s contacts with California. Whispering Oaks has therefore forfeited any such
argument. (Meridian, supra, 67 Cal.App.5th at p. 684.) We are not required to develop a
party’s arguments or scour the record for supporting evidence and we may treat
undeveloped arguments as forfeited. (Ibid., citing ComputerXpress, Inc. v. Jackson
(2001) 93 Cal.App.4th 993, 1011.)
Even if we were to construe Whispering Oaks’ brief as having made the argument,
it would have no merit. The controversy at issue here consists of the incidents that
occurred at Whispering Oaks’ property in Missouri; the coverage of the policy, which
was negotiated and signed in Missouri, and issued by an Ohio-based company; and
Cincinnati’s decision to deny coverage. Whatever contacts or communications
Cincinnati may have had with California, there is no evidence in the record that the
controversy between the parties arose from, or relates to, such contacts. The mere fact
that Chaganti was present in California when Cincinnati communicated with him
regarding the incidents and policy coverage does not mean the controversy arose from
those contacts.
We need not address Whispering Oaks’ arguments that Cincinnati purposefully
availed itself of the benefits of the forum state because the test is conjunctive—that is, a
plaintiff must establish both purposeful availment and that the controversy arose from or
relates to the defendant’s contacts with the forum. (Vons, supra, 14 Cal.4th at p. 446;
Burger King, supra, 471 U.S. at pp. 472-473.)
12
Cincinnati did not have the requisite minimum contacts to be subject to the
specific jurisdiction of the trial court.
C. Consent or waiver
Whispering Oaks argues that Cincinnati consented or waived objections to
personal jurisdiction in numerous ways, mainly by making general appearances in the
litigation, or otherwise “arguing the merits.” We address these arguments in turn and
explain why they fail.
1. Code of Civil Procedure section 1014
Whispering Oaks claims Cincinnati generally appeared in the case when its
attorney e-mailed Whispering Oaks’ attorney on January 28, 2021, stating “that they
appeared on behalf of their client,” and threatening sanctions. According to Whispering
Oaks, the e-mail was a “written notice of appearance” that constituted a general
appearance pursuant to Code of Civil Procedure section 1014.
Whispering Oaks mischaracterizes the facts and the law. In the e-mail,
Cincinnati’s attorney did not state that she “appeared on behalf of their client.” Instead,
she explained that Cincinnati intended to file a motion to quash based on lack of personal
jurisdiction, as well as a demurrer on various grounds and a motion to dismiss for forum
nonconveniens, and she requested that Whispering Oaks dismiss the suit and pursue any
relief to which it believes it is entitled in Missouri. The e-mail says nothing about
making an appearance of any kind.
Nor does the e-mail constitute a general appearance pursuant to Code of Civil
Procedure section 1014. That section sets forth a list of acts constituting an
“appearance,” and provides: “A defendant appears in an action when the defendant
answers, demurs, files a notice of motion to strike, files a notice of motion to transfer
pursuant to Section 396b, moves for reclassification pursuant to Section 403.040, gives
the plaintiff written notice of appearance, or when an attorney gives notice of appearance
for the defendant.” (Code Civ. Proc., § 1014.) That list is not exclusive, but “ ‘rather the
13
term may apply to various acts which, under all of the circumstances, are deemed to
confer jurisdiction of the person.’ ” (Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127,
1147.) The determinative factor is “whether defendant takes a part in the particular
action which in some manner recognizes the authority of the court to proceed.” (Sanchez
v. Superior Court (1988) 203 Cal.App.3d 1391, 1397; see also ViaView, supra, 1
Cal.App.5th at p. 210 [“ ‘ “[a] general appearance occurs when the defendant takes part
in the action or in some manner recognizes the authority of the court to proceed” ’ ”].)
Cincinnati’s attorney’s letter did not recognize the authority of the court to
proceed; in fact, it did precisely the opposite by communicating her intent to file a motion
to quash based on “lack of jurisdiction,” in which “[w]e will argue that the court should
quash the service of summons and dismiss the case in its entirety based on the underlying
facts and location of the loss, the lack of contacts the insured business plaintiffs had, or
have, to the state of California, the plaintiff’s domicile at the time of negotiating the
contract and the time of loss, and the location of all critical witnesses.”
Whispering Oaks does not cite any authority for the proposition that reference to
sanctions pursuant to Code of Civil Procedure sections 128.5 and 128.7 constitutes a
general appearance. It argues that the threat of sanctions constitutes a general appearance
because it “gave Plaintiffs a reasonable expectation that Cincinnati would defend the suit
to the end on the merits and then seek sanctions.” That mischaracterizes the facts again.
In the e-mail, Cincinnati’s attorney stated: “We will also request that the court award
attorneys’ fees to Cincinnati Insurance Company for being compelled to defend this
action in California. (C.C.P. §§ 128.5 and 128.7.) We will argue that any claim that this
action should be tried in a California court is completely without merit . . . .” The e-mail
thus expressly based the possibility of sanctions on the court’s lack of personal
jurisdiction over it, not on Cincinnati’s intent to “defend the suit to the end on the
merits.”
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The letter did not constitute a written notice of appearance for purposes of
consenting to the trial court’s personal jurisdiction.
2. Re-filing the motion to quash
Whispering Oaks next argues that, by filing a “second motion to quash” on
December 1, 2021, roughly 10 months after having filed the initial demurrer on
February 5, 2021, Cincinnati waived its right to challenge personal jurisdiction because
Code of Civil Procedure section 418.10, subdivision (e), requires that a motion to quash
be filed simultaneously with a demurrer to preserve the right to challenge jurisdiction.
As summarized above in the factual and procedural background, the trial court
initially dismissed the action on April 1, 2021, but later set aside and vacated the
dismissal on August 24, 2021. On December 1, 2021, Cincinnati re-filed its motion to
quash and demurrer. As Cincinnati explained at the time, it re-filed the motions “[i]n an
abundance of caution,” because: “[Cincinnati] filed a motion to quash in this action on
February 5, 2021, but that motion was taken off calendar when the action was dismissed
in May. Plaintiffs were successful in their motion to vacate that dismissal, but have yet to
successfully file a Proposed Order pursuant to the Court’s instructions in its August
minute order, and the tentative ruling on the motion to vacate indicated that a Case
Management Conference would be set. In an abundance of caution, Cincinnati Insurance
Company refiles this motion to quash.”
Whispering Oaks’ argument is essentially that the trial court’s April 1, 2021 order
dismissing the action, and its subsequent August 24, 2021 order setting aside the
dismissal, had the combined effect of voiding Cincinnati’s initial motion to quash, but not
its initial demurrer. Accordingly, the initial demurrer remained on calendar and was
converted retroactively into a general appearance, even though Cincinnati had filed its
initial motion to quash simultaneously. There is no basis for construing the trial court
proceedings in that manner and Whispering Oaks has not cited any authority for it.
15
Whispering Oaks cites Factor Health Management v. Superior Court (2005) 132
Cal.App.4th 246 (Factor Health), for the proposition that Code of Civil Procedure
section 418.10, subdivision (e)(1) “does not mean that a defendant may take action which
constitutes a general appearance and then negate the effect of that action by a subsequent
motion to quash.” That general proposition is true. However, in Factor Health, the
defendants had sought discovery in opposition to a preliminary injunction, prior to filing
a motion to quash. (Factor Health, supra, 132 Cal.App.4th 246.) The court held that the
discovery constituted a general appearance; for that reason, the motion to quash was late
under Code of Civil Procedure section 418.10, subdivision (e). (Factor Health, supra, at
pp. 251-252.) By contrast here, Cincinnati did not make a general appearance prior to
filing its motion to quash.
The record amply demonstrates that Cincinnati re-filed its motion to quash in
December 2021 “[i]n an abundance of caution” because Whispering Oaks had not
submitted a proposed order following the trial court’s setting aside the dismissal.
Whispering Oaks’ attempt to treat that precautionary step as a waiver of personal
jurisdiction is unavailing.3
3. Failure to schedule a hearing within 30 days
Whispering Oaks argues that Cincinnati waived any challenge to personal
jurisdiction by failing to schedule a hearing on its motion to quash within 30 days
of filing it. It relies on the language in Code of Civil Procedure section 418.10,
subdivision (b), which provides that “[t]he notice shall designate, as the time for making
the motion, a date not more than 30 days after filing of the notice.” (Code Civ. Proc.,
§ 418.10, subd. (b).) According to Whispering Oaks, the “ ‘shall’ in the statute means
3
Whispering Oaks also argues that the “second motion to quash” was “void”
because the Code of Civil Procedure does not authorize the filing of a second motion.
The argument fails for the same reason. Cincinnati’s re-filing of its motion to quash
cannot be construed as filing a “second motion to quash.”
16
that a defendant that files a Section 418.10(a) motion to quash cannot sit on his hands; he
must schedule a hearing in 30 days or the challenge to personal jurisdiction is waived.”
That is not the law. Despite the statute’s use of the word “shall,” courts have not
construed Code of Civil Procedure section 418.10, subdivision (b), to impose a
mandatory requirement that a hearing be noticed or held within 30 days. In Olinick v.
BMG Entertainment (2006) 138 Cal.App.4th 1286 (Olinick), for instance, the defendant
filed the notice of its motion to stay or dismiss based on inconvenient forum, pursuant to
Code of Civil Procedure section 418.10, subdivision (a), on May 4, 2004. (Olinick,
supra, at p. 1295.) It then designated a hearing date of July 1, and the parties later
stipulated to move the date to July 21, which the trial court approved. (Ibid.) The Court
of Appeal rejected the plaintiff’s arguments that a mandatory 30-day timeline governs the
motion and that “by failing to designate a hearing date within the 30-day period,
[defendant] waived its right to bring the motion under [Code of Civil Procedure] section
418.10.” (Id. at p. 1296.)
The Court of Appeal noted that subdivision (a) of the statute provides that “ ‘[a]
defendant, on or before the last day of his or her time to plead or within any further time
that the court may for good cause allow, may serve and file a notice of motion . . . .’ ”
(Olinick, supra, 138 Cal.App.4th at p. 1296, quoting Code Civ. Proc., § 418.10,
subd. (a).) It explained that, “the statute reflects the trial court is authorized to extend the
time for filing such a motion” (Olinick, supra, at p. 1296), and cited with approval
treatise language stating that “ ‘[s]cheduling a hearing date beyond 30 days should not
invalidate a motion to quash. Nothing in [Code of Civil Procedure section] 418.10
suggests the court must overlook the lack of personal jurisdiction or proper service
because of a defendant’s failure to schedule a hearing date within 30 days.’ ” (Ibid.,
quoting Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group
2005) ¶ 3:381.) The court therefore rejected the argument that a “tardy hearing date on a
17
motion to stay or dismiss under section 418.10 deprives the trial court of jurisdiction to
consider the merits of the motion.” (Olinick, supra, at p. 1296.)
Similarly, in Preciado v. Freightliner Custom Chassis Corp. (2023) 87
Cal.App.5th 964, the Court of Appeal rejected the same argument in the context of a
motion to quash that was noticed for hearing 99 days after filing because that was the first
available court date. (Id. at p. 972.) Citing Olinick, the court held that “ ‘a tardy hearing
date on a motion . . . under [Code of Civil Procedure] section 418.10’ does not ‘deprive[]
the trial court of jurisdiction to consider the merits of the motion.’ ” (Id. at p. 969, fn. 4,
quoting Olinick, supra, 138 Cal.App.4th at p. 1296; Edmon & Karnow, Cal. Practice
Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 3:381 [“scheduling a
hearing date beyond 30 days does not invalidate the motion”].)
Whispering Oaks argues that the language in Olinick is dicta. We disagree.
“ ‘Dicta consists of observations and statements unnecessary to the appellate court’s
resolution of the case.’ ” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109,
1158, quoting Garfield Medical Center v. Belshé (1998) 68 Cal.App.4th 798, 806.) By
contrast, “[s]tatements by appellate courts ‘responsive to the issues raised on appeal
and . . . intended to guide the parties and the trial court in resolving the matter
following . . . remand’ are not dicta.” (Sonic-Calabasas, supra, at p. 1158.) In Olinick,
the plaintiff expressly argued on appeal that the defendant had waived its right to bring
the motion under Code of Civil Procedure section 418.10 because it had not designated
the hearing within 30 days of filing. (Olinick, supra, 138 Cal.App.4th at p. 1296.) The
Court of Appeal’s statements regarding the statute were directly responsive to the issue
raised on appeal by the plaintiff.
Whispering Oaks also relies on Sabato v. Brooks (2015) 242 Cal.App.4th 715 in
support of its position. In that case, the court stated that the defendant’s “papers failed to
designate a date as the time for making the motion as required by Code of Civil
Procedure section 418.10, subdivision (b). Thus, defendant failed to move to quash in
18
compliance with Code of Civil Procedure section 418.10, and, as a result, he waived,
among other things, the issue of lack of personal jurisdiction.” (Id. at p. 723.) However,
while the court held that the defendant’s failure to designate a hearing date in that
particular case constituted waiver, it did not hold that the language in the statute is
mandatory in all cases such that the trial court has no jurisdiction to hear the motion after
30 days.
4. Arguing the merits
Whispering Oaks argues that Cincinnati waived its objections to personal
jurisdiction by “arguing the merits” while its motion to quash was pending. Whispering
Oaks identifies roughly seven different acts by Cincinnati which it contends constituted a
general appearance, thereby waiving any objections to personal jurisdiction,
notwithstanding its pending motion to quash.
We reject the contention. It is well settled that “under [Code of Civil Procedure]
section 418.10, subdivision (e), a party who moves to quash may—concurrently with or
after filing a motion to quash—participate in the litigation and ‘no act’ by the party
constitutes an appearance unless and until the proceedings on the motion to quash are
finally decided adversely to that party.” (ViaView, supra, 1 Cal.App.5th at p. 204, citing
Code Civ. Proc., § 418.10, subd. (e); Air Machine Com SRL v. Superior Court (2010) 186
Cal.App.4th 414, 425-427.)
In ViaView, the defendant filed a motion to quash in addition to other motions
concurrently with, or after, he filed the motion to quash. (ViaView, supra, 1 Cal.App.5th
198.) After the trial court concluded the defendant had made a general appearance by
participating in the litigation “beyond filing the motion to quash,” the Court of Appeal
reversed the denial of the motion. (ViaView, supra, 1 Cal.App.5th at p. 204.) It
explained that, although Code of Civil Procedure section 418.10, subdivision (e), “ ‘does
not change the essential rule that “[a] defendant submits to the court’s jurisdiction by
making a general appearance in an action” by “participat[ing] in the action in a manner
19
which recognizes the court’s jurisdiction” ’ ” (ViaView, supra, at p. 211, quoting Factor
Health, supra, 132 Cal.App.4th at p. 250), it does delay “ ‘the effect of such actions until
the motion to quash is denied . . . .’ ” (ViaView, supra, at p. 211, quoting State Farm
General Ins. Co. v. JT’s Frames, Inc. (2010) 181 Cal.App.4th 429, 441.)
Whispering Oaks ignores this law. Its discussion of instances where Cincinnati
allegedly “argued the merits” is immaterial because the motion to quash was already
pending. For the same reason, the case law Whispering Oaks relies on is inapposite, as it
either dealt with general appearances made before a motion to quash had been filed, or
pre-dated the Legislature’s enactment of Code of Civil Procedure section 418.10,
subdivision (e), in 2002. (Stats. 2002, ch. 69, § 1.)
In its reply brief, Whispering Oaks claims that the relevant portion of ViaView is
no longer good law following the California Supreme Court’s decision in Stancil v.
Superior Court (2021) 11 Cal.5th 381. We do not read Stancil that way. Instead, that
case considered whether a defendant may use a motion to quash service of summons to
challenge a complaint on the ground that it fails to state a cause of action for unlawful
detainer. (Ibid.) The court held that a “defendant may contest personal jurisdiction
where the five-day summons specific to unlawful detainer actions is not supported by a
complaint for unlawful detainer.” (Id. at p. 390.) It added that such unusual instances
will “arise only where the summons is served alongside a complaint for a completely
different cause of action (e.g., breach of contract) or a complaint that fails to allege the
allegations necessary to assert the defendant is guilty of unlawful detainer . . . .” (Ibid.)
While a defendant may use a motion to quash in such limited circumstances, “no
defendant may use a motion to quash service of summons as a means of disputing the
merits of the unlawful detainer complaint’s allegations or to argue the plaintiff failed to
comply with the pleading requirements specific to unlawful detainer actions.” (Id. at
p. 391.) The case did not address ViaView, which remains good law on the point
discussed above.
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5. Insurance Code section 1602
Whispering Oaks argues that the trial court has personal jurisdiction over
Cincinnati pursuant to Insurance Code section 1602. That section states that “[a]ny
notice provided by law or by a policy, and any proof of loss, summons or other process
may be served on such agent in any action or other legal proceeding against the insurer,
and such service gives jurisdiction over the person of such insurer.” (Ins. Code, § 1602.)
According to Whispering Oaks, because Cincinnati operates in, and has an agent for
service of process in California, service of the summons to that agent operated as consent
to personal jurisdiction in this case.
Cincinnati argues that courts “have consistently limited the exercise of jurisdiction
over a foreign insurer in connection with construing the scope of the statute.” They
contend that the designation of an agent for service of process is insufficient to establish
jurisdiction, “except for lawsuits arising out of the foreign corporation’s business
conducted in the state,” citing DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080,
1095, and Gray Line Tours v. Reynolds Electrical & Engineering Co. (1987) 193
Cal.App.3d 190. In DVI, the court held that “a parent company’s ownership or control of
a subsidiary corporation does not, without more, subject the parent corporation to the
jurisdiction of the state where the subsidiary does business.” (DVI, supra, at p. 1087.) In
reaching that holding, the court rejected the plaintiff’s argument that the defendant was
subject to jurisdiction in California simply because it maintained an agent for service of
process. (Id. at p. 1095.) It then cited Gray Line with approval, noting its holding that
“designation of an agent for service of process and qualification to do business in
California alone are insufficient to permit general jurisdiction except for lawsuits arising
out of the foreign corporation’s business conducted in the state.” (Ibid.)
In its reply brief, Whispering Oaks seeks to distinguish DVI and Gray Line on the
grounds that the businesses involved were not insurance companies, so Insurance Code
section 1602 was not at issue.
21
We do not read Insurance Code section 1602 as conferring personal jurisdiction
over insurance companies merely through service on their registered agents, independent
of whether the companies otherwise have the requisite minimum contacts with California.
Whispering Oaks has not identified any authority supporting its interpretation of
Insurance Code section 1602, and we are not aware of any. That construction of the
statute would also be at odds with the well-established rule that “a corporation typically is
subject to general personal jurisdiction only in a forum where it is incorporated or where
it maintains its principal place of business.” (Pitt v. Metro. Tower Life Ins. Co. (N.D.
Cal. 2020) 2020 U.S. Dist. Lexis 58352, at p. *22, citing Daimler AG v. Bauman (2014)
571 U.S. 117, 136.)
The trial court did not have personal jurisdiction over Cincinnati by virtue of
Insurance Code section 1602.
D. Whispering Oaks’ other arguments are without merit
1. Leave to file a second amended complaint
Whispering Oaks argues that the trial court erred in not granting leave to file a
second amended complaint because “the amended complaint cures any defects in
overcoming Plaintiff’s burden to prove personal jurisdiction.”
However, Whispering Oaks never actually filed a motion for leave to file a second
amended complaint. It initially attempted to file a second amended complaint on
February 10, 2021, but the clerk rejected it because Whispering Oaks did not have leave
of court. Later, when Whispering Oaks filed its opposition to Cincinnati’s demurrer on
March 22, 2021, it included a paragraph in the opposition labeled “Request for leave to
file a second amended complaint,” and also included a proposed second amended
complaint as an exhibit to Chaganti’s declaration.
As the trial court explained in its order granting the motion to quash, “[t]o the
extent Plaintiffs may be referring to a ‘request’ for leave to amend inserted into their
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March 22, 2021 opposition to Defendant’s prior demurrer . . . this in no way constituted a
noticed motion for leave to file a second amended complaint and Plaintiffs’ counsel could
not reasonably believe otherwise. Again, at no point following the filing of the FAC
[first amended complaint] have Plaintiffs filed a noticed motion for leave to file a second
amended complaint.”
We agree with the trial court. Whispering Oaks did not file a noticed motion for
leave to file a second amended complaint—it is immaterial whether the trial court should
have granted such a hypothetical motion.
Whispering Oaks also argues that the trial court erred in not treating the proposed
second amended complaint as an affidavit “for the purpose of establishing personal
jurisdiction.” It notes that “a properly verified complaint may be treated as a declaration”
setting forth jurisdictional facts “permitting a court to form an independent conclusion on
the issue of jurisdiction.” (Automobile Antitrust Cases, supra, 135 Cal.App.4th at
pp. 110-111.) The same problem remains, though—the proposed second amended
complaint was not a properly verified complaint because it was never filed.
2. Jurisdictional discovery
Whispering Oaks argues that the trial court erred by not permitting jurisdictional
discovery. It claims the trial court ignored its request for leave to conduct such
discovery, and the court should have continued the hearing to allow it.
However, as Cincinnati points out, there is no evidence the trial court ever
precluded Whispering Oaks from conducting discovery. Whispering Oaks therefore
cannot contend that the trial court erred by not permitting such discovery.
Its arguments that the trial court erred by “ignoring” its requests for leave to
conduct discovery and to continue the hearing are equally unavailing. First, jurisdictional
discovery is permitted in the context of a motion to quash. (Roy v. Superior Court (2005)
127 Cal.App.4th 337, 345, fn. 9.) Whispering Oaks did not need leave of court to
conduct it. Second, the hearing Whispering Oaks sought to continue was canceled when
23
the court ordered the case dismissed at which point there was no longer a hearing to
continue. And third, Whispering Oaks essentially received a continuance. The hearing it
sought to continue was initially scheduled for June 15, 2021, but did not take place until
March 22, 2022, following the trial court’s orders dismissing the action and later setting
aside the dismissal. Whispering Oaks argues that “[n]ot giving a chance to conduct
jurisdictional discovery and continue is reversible error.” But it fails to demonstrate that
it did not have that chance and could not have conducted its discovery during that time
period.
III. DISPOSITION
The order granting the motion to quash is affirmed. Cincinnati Insurance
Company may recover its costs on appeal.
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___________________________________
Wilson, J.
WE CONCUR:
__________________________________________
Danner, Acting P.J.
______________________________________
Lie, J.
Whispering Oaks RCF Management Co. Inc. et al. v. Cincinnati Insurance Company
H049906