Alexandria Real Estate etc. v. Bugsby Property, LLC CA2/2

Filed 3/4/21 Alexandria Real Estate etc. v. Bugsby Property, LLC CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
ALEXANDRIA REAL ESTATE B304839
EQUITIES, INC. et al.,
(Los Angeles County
Plaintiffs and Appellants, Super. Ct. No.
19STCV05246)
v.
BUGSBY PROPERTY, LLC,
Defendant and
Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Richard J. Burdge, Jr., Judge. Affirmed.
Gibson, Dunn & Crutcher, James P. Fogelman and William
F. Cole for Plaintiffs and Appellants.
RJM Litigation Group and Richard J. Mooney for
Defendant and Respondent.
******
The trial court dismissed an out-of-state limited liability
company (LLC) as a defendant after finding it had insufficient
contacts with the State of California to be subject to personal
jurisdiction. The plaintiff challenges this ruling. Although the
record does not compel this ruling, it certainly supports the
ruling. Accordingly, we affirm.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. The parties
Joel Marcus (Joel) is the founder and Executive Chairman
of Alexandria Real Estate Equities, Inc. (Alexandria).1
Alexandria is in the business of developing and managing real
estate for use by the “life sciences and technology sectors.”
Alexandria is a corporation; it was formed in Maryland and its
principal place of business is in Pasadena, California.
Steven Marcus (Steven) is the founder and sole manager of
Bugsby Property, LLC (Bugsby). Bugsby is in the business of
“private investment.” Bugsby has an operating agreement that
lists Steven and his wife as its sole “members.” However, Bugsby
has no officers, no directors, and no managing board; its two
members only meet “informal[ly]” and have never passed a
resolution or kept minutes; it has no employees, although it once
contracted with an individual for less than a year but never
compensated him; it does not prepare or maintain financial
statements and has no payroll records; it maintains a bank
account but Steven cannot recall the last time any money went
into or out of that account; and Steven is its only manager and
the only person to receive its services. From the time of its
1 Because this case involves family members with the same
last name, we use first names for clarity. We mean no disrespect.
2
creation in October 2012 to June 2017, Bugsby was owned 97
percent by Steven and 3 percent by his wife; in June 2017, Steven
transferred his ownership to his wife as a gift. Bugsby is an LLC
incorporated in Delaware, with its principal office in New York,
and its principal place of business in London, UK.
Steven is Joel’s son.
B. “Project Affirmed”
While Steven was visiting Joel’s home in California over
the Thanksgiving weekend in 2013, Joel asked Steven if he would
be willing to provide “strategic advice” “to Alexandria with
respect to certain potential programmatic joint ventures.” Steven
agreed to do this project, which the parties have subsequently
called “Project Affirmed.” Although Steven agreed that his sole
remuneration for doing the project would be his father’s
“appreciation” as well as “the exposure” and “credit” the project
would “bring[],” the parties did not contemporaneously discuss
whether Steven was undertaking the project on behalf of Bugsby
or how, if at all, Bugsby would be compensated.
Within a few weeks, Steven transmitted to Joel a
PowerPoint presentation that set forth Steven’s investment
strategy for Alexandria and that was to be shared with potential
Alexandria investors. Steven did research for the project by
speaking with potential investors at a New York conference, and
prepared the PowerPoint presentation itself from his home in
London.
Consistent with Steven’s belief that he had undertaken the
project for Bugsby (rather than purely in his individual capacity),
the cover slide of the PowerPoint presentation listed its author as
“Bugsby Property LLC – Steven Marcus.”
3
About a week later, Joel e-mailed Steven and asked him
not to “use [B]ugsby on stuff with [him].”
C. Post-project contractual negotiations
After Steven had completed Project Affirmed, one of
Alexandria’s lawyers sent Steven two written agreements—one
for Steven individually and one for Bugsby.
The agreements purported to “supersede[]” the prior oral
agreements regarding Project Affirmed, and further specified
that (1) the signatory would be “paid” “no compensation,” (2) the
signatory agreed not to disclose any of Alexandria’s confidential
information acquired at any time for the project, and (3) the
signatory “consent[ed] to” “personal jurisdiction” in the federal
and state courts in Los Angeles County and agreed to have “[a]ny
disputes” resolved under California law (the “Superseding
Agreement”). Joel told Steven that the express no-compensation
provision was necessary to comply with Alexandria’s anti-
nepotism policy.
Steven and Alexandria’s lawyer later had a conversation,
and Alexandria’s lawyer came away from that conversation
believing that Steven had performed Project Affirmed in his
“individual capacity.” Accordingly, the lawyer withdrew the
proposed Superseding Agreement for Bugsby and clarified that
the proposed Superseding Agreement for Steven applied to him
as “an individual.”
Steven signed a Superseding Agreement; Bugsby did not.
D. Demands in 2019
In January 2019, Steven and Bugsby demanded that
Alexandria pay them $12 million as compensation for Project
Affirmed.
4
On February 7, 2019, Steven and Bugsby followed up on
their demand by suing Alexandria and Joel in New York state
court, although this lawsuit was dismissed in August 2019 on
forum non conveniens grounds.
II. Procedural Background
A. Filing of complaint
On February 13, 2019, Alexandria and Joel (collectively,
plaintiffs) filed the underlying lawsuit in California against
Steven and Bugsby and seeking declaratory relief that (1) Bugsby
was Steven’s alter ego, and (2) “no monetary compensation is or
was owed to Steven or Bugsby.”
B. Motion to quash
1. The motion
On March 25, 2019, Steven and Bugsby filed a motion to
quash on the ground that the California courts lacked personal
jurisdiction over them.2
2. Initial ruling
Following a full round of briefing, the trial court issued a
tentative ruling finding personal jurisdiction over Steven but not
Bugsby. In its tentative ruling, the court reasoned that Steven
was subject to personal jurisdiction in California because (1) he
consented to jurisdiction in California in the Superseding
Agreement, and (2) he “purposefully availed himself of the
benefits of doing business in California” by orally agreeing to
undertake Project Affirmed while in California, by “provid[ing]”
his “advisory services” to California-based Alexandria, and by
negotiating and signing the Superseding Agreement in
2 They also moved to dismiss the entire lawsuit on forum non
conveniens grounds. However, the trial court denied that motion
and that denial is not before us in this appeal.
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California. The court reasoned that Bugsby was not subject to
personal jurisdiction in California because (1) it had not signed a
Superseding Agreement, and (2) the contacts Steven had to
California did “not necessarily” subject Bugsby to personal
jurisdiction.
Following a hearing, the trial court deferred making a final
ruling to allow the parties to conduct discovery on the issue of
personal jurisdiction.
3. Further ruling
After the parties conducted discovery and submitted
supplemental briefs, the trial court issued a further tentative
ruling that it ultimately adopted as its final ruling.3
In addition to sticking with its prior ruling that Steven was
subject to personal jurisdiction in California, the court also stuck
with its prior ruling that it lacked personal jurisdiction over
Bugsby and rejected both of plaintiffs’ arguments to the contrary.
First, plaintiffs had asserted that Steven’s contacts should be
imputed to Bugsby on the ground that Bugsby was Steven’s “alter
ego.” The court found that Steven and Bugsby had a “unity of
interest” because “[t]he entire evidentiary record shows that
Bugsby is really a vehicle created and controlled by Steven and
only operates through his services,” but went on to rule that
“recognizing Bugsby’s separateness as an entity does not work an
injustice on [p]laintiffs” or otherwise lead to an “inequitable
result” because plaintiffs knew Steven did work for Bugsby in
December 2013, accepted the PowerPoint presentation
purportedly prepared by Bugsby, and knew that Bugsby never
signed the Superseding Agreement plaintiffs subsequently
3 The court simultaneously denied Steven’s and Bugsby’s
motion to disqualify plaintiffs’ counsel.
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proposed for its signature. Second, plaintiffs had asserted that
Bugsby itself had minimum contacts with the State of California.
The court rejected this argument at the hearing, finding that
Bugsby itself had not “do[ne] anything here.”
C. Appeal
After the trial court entered its order dismissing Bugsby as
a defendant, plaintiffs filed this timely appeal.
DISCUSSION
Plaintiffs argue that the trial court erred in granting
Bugsby’s motion to quash due to lack of personal jurisdiction.
California grants to its courts the power to assert personal
jurisdiction as far as the United States Constitution allows.
(Code Civ. Proc., § 410.10; Integral Development Corp. v.
Weissenbach (2002) 99 Cal. App. 4th 576, 583 (Integral
Development) [California’s “long-arm statute ‘manifests an intent
to exercise the broadest possible jurisdiction,’ limited only by
constitutional considerations of due process”].) The federal
Constitution upholds the exercise of personal jurisdiction over an
out-of-state defendant as long as “the defendant has ‘certain
minimum contacts with [the State] such that the maintenance of
the suit does not offend “traditional notions of fair play and
substantial justice.”’” (Goodyear Dunlop Tires Operations, S.A. v.
Brown (2011) 564 U.S. 915, 923, quoting Int’l Shoe Co. v. Wash.
(1945) 326 U.S. 310, 316.) “Minimum contacts exist where the
defendant’s conduct in, or in connection with, the forum state is
such that the defendant should reasonably anticipate being
subject to suit in that state.” (BBA Aviation PLC v. Superior
Court (2010) 190 Cal. App. 4th 421, 429 (BBA Aviation).) There
are two types of personal jurisdiction: (1) “general or all-purpose
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jurisdiction,” and (2) “specific or conduct-linked jurisdiction.”
(Daimler AG v. Bauman (2014) 571 U.S. 117, 122 (Daimler).)
Plaintiffs assert that the California courts may exert
specific jurisdiction over Bugsby, despite its being an out-of-state
LLC, because (1) those courts may exert specific jurisdiction over
Steven regarding Project Affirmed,4 and Bugsby is Steven’s “alter
4 Bugsby challenges this premise, arguing that the trial
court erred in finding that Steven was subject to personal
jurisdiction in California because (1) Steven’s consent to
jurisdiction in the Superseding Agreement was coerced, (2) the
Superseding Agreement operates only prospectively, and thus did
not cover Steven’s work on Project Affirmed prior to signing that
agreement, and (3) the Superseding Agreement is between
Steven and Alexandria, and thus cannot enable Joel to sue
Steven. These arguments are not well taken. Bugsby did not
raise—and did not supply evidence to support—the first
argument until its supplemental brief before the trial court, and
did not raise the third argument to the trial court at all; Bugsby
has consequently forfeited those two arguments. (Jay v.
Mahaffey (2013) 218 Cal. App. 4th 1522, 1537-1538 [argument
supported by evidence presented for the first time in reply papers
before the trial court is forfeited]; Bogacki v. Board of Supervisors
(1971) 5 Cal. 3d 771, 780 [arguments generally not to be
considered for first time on appeal, particularly “when the new
theory depends on controverted factual questions”].) Even if we
overlooked this forfeiture, Bugsby’s first and third arguments at
most knock out specific jurisdiction over Steven based on his
consent, but the trial court also independently found jurisdiction
proper based on Steven’s purposeful availment. Bugsby’s second
argument is flatly contradicted by the plain terms of the
Superseding Agreement, which expressly deals with Project
Affirmed and supersedes the prior oral agreement; because all
work on Project Affirmed was completed before the Superseding
Agreement was executed, accepting Bugsby’s argument would
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ego,”5 and (2) Bugsby’s own conduct renders it subject to specific
jurisdiction regarding Project Affirmed.
In reviewing a trial court’s dismissal for lack of personal
jurisdiction, we independently review the court’s legal rulings
and its application of the law to its factual findings (Integral
Development, supra, 99 Cal.App.4th at p. 585; Jayone Foods, Inc.
v. Aekyung Industrial Co. Ltd. (2019) 31 Cal. App. 5th 543, 553),
but review those factual findings only for substantial evidence
(Burdick v. Superior Court (2015) 233 Cal. App. 4th 8, 17;
Claremont Press Publishing Co. v. Barksdale (1960) 187
Cal. App. 2d 813, 817; see also Hasso v. Hapke (2014) 227
Cal. App. 4th 107, 155 (Hasso) [alter ego findings reviewed for
substantial evidence]). In assessing whether factual findings are
supported by substantial evidence, we ask only whether there is
render the Superseding Agreement a complete nullity, and courts
may not construe contracts in a way that render them wholly
ineffective (Boghos v. Certain Underwriters at Lloyd’s of London
(2005) 36 Cal. 4th 495, 503; Civ. Code, § 1641).
5 Plaintiffs have elected to rely upon an alter ego theory.
Thus, plaintiffs have waived any argument based on the theories
of agency or representative services because those theories are
both grounded in the law of agency and because agency is
analytically distinct from alter ego. (Sonora Diamond Corp. v.
Superior Court (2000) 83 Cal. App. 4th 523, 540-543 & fn. 11
(Sonora) [describing agency and representative services theories];
BBA Aviation, supra, 190 Cal.App.4th at p. 430 [describing
representative services theory]; Paneno v. Centres for Academic
Programmes Abroad Ltd. (2004) 118 Cal. App. 4th 1447, 1456
[same]; F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130
Cal. App. 4th 782, 797 [noting “distinct” “analysis” of agency and
alter ego theories].)
9
“‘evidence that a rational trier of fact could find to be reasonable,
credible, and of solid value . . . to support the finding’” and do so
while “view[ing] the evidence in the light most favorable to the
[finding].” (San Diegans for Open Government v. City of San
Diego (2016) 245 Cal. App. 4th 736, 740.)
As the plaintiffs below, plaintiffs bore the burden of
producing evidence sufficient to establish a factual basis for the
trial court’s exertion of personal jurisdiction over Bugsby (BBA
Aviation, supra, 190 Cal.App.4th at pp. 428-429; Sonora, supra,
83 Cal.App.4th at p. 540); as the appellants here, plaintiffs bear
the burden of showing that the trial court’s refusal to exert
jurisdiction was error (Vaughn v. Jonas (1948) 31 Cal. 2d 586,
601).
I. Alter Ego
In its most typical iteration, the alter ego doctrine
empowers courts to treat a collective entity (such as a corporation
or LLC) as the “alter ego” of an individual for purposes of holding
the individual responsible for the collective entity’s conduct; in
this regard, the alter ego doctrine allows a court to “pierce[]” “the
‘corporate veil.’” (Sonora, supra, 83 Cal.App.4th at p. 538.) On
the basis of this doctrine, courts have found that their personal
jurisdiction over a collective entity—including specific
jurisdiction—can justify exertion of personal jurisdiction over the
individual who was using the corporation as his or her alter ego.
(Id. at pp. 537-543; see Daimler, supra, 571 U.S. at p. 135, fn. 13
[noting that “[a]gency relationship[] . . . may be relevant to the
existence of specific jurisdiction”].) Plaintiffs here are seeking to
apply the alter ego doctrine in the reverse situation—that is, to
hold the collective entity responsible for the individual’s conduct
10
by treating specific jurisdiction over Steven as tantamount to
specific jurisdiction over Bugsby.
In the reverse veil piercing situation at issue here, a court
may treat an LLC (or a corporation) as the “alter ego” of its
members (or shareholders) only if (1) there is “‘such unity of
interest and ownership that the separate personalities of the
[LLC] and the individual no longer exist’”; and (2) “‘an
inequitable result will follow’” “‘if the acts [of the individual] are
treated as those of the [individual] alone.’” (Mesler v. Bragg
Management Co. (1985) 39 Cal. 3d 290, 300; Sonora, supra, 83
Cal.App.4th at p. 538; see also Curci Investments, LLC v.
Baldwin (2017) 14 Cal. App. 5th 214, 221-222 (Curci Investments)
[employing this test in the reverse veil piercing situation].)
Application of the alter ego doctrine “‘“var[ies] according to the
circumstances of each case.”’ [Citation.]” (Las Palmas Associates
v. Las Palmas Center Associates (1991) 235 Cal. App. 3d 1220,
1248.) Because the alter ego doctrine marks a departure from
the presumption that collective entities are legally distinct from
their members and shareholders, piercing the veil is “‘an extreme
remedy, [to be] sparingly used’” (Hasso, supra, 227 Cal.App.4th at
p. 155), and the party seeking to invoke it generally bears a
“heavy burden” (Santa Clarita Organization for Planning &
Environment v. Castaic Lake Water Agency (2016) 1 Cal. App. 5th
1084, 1105). In the reverse veil piercing context, that burden is
even more onerous and its use should be “‘extremely rare.’”
(Postal Instant Press, Inc. v. Kaswa Corp. (2008) 162 Cal. App. 4th
1510, 1518; Curci Investments, at pp. 221-222.)
A. Unity of interest and ownership
In assessing whether there is a “unity of interest and
ownership” between the collective entity and the individual,
11
courts look to the totality of the circumstances. (Sonora, supra,
83 Cal.App.4th at p. 539.) Included among those relevant
circumstances are (1) whether organizational formalities have
been observed and organizational records maintained, (2)
whether the collective entity has any employees, officers, or
operating funds, and (3) whether the collective entity was used as
a “mere shell or conduit” for the individual’s affairs.
(CADC/RADC Venture 2011-1 LLC v. Bradley (2015) 235
Cal. App. 4th 775, 789; Greenspan v. LADT LLC (2010) 191
Cal. App. 4th 486, 512-513; Sonora, at pp. 538-539.)
Substantial evidence supports the trial court’s finding that
Bugsby and Steven share a “unity of interest and ownership.”
Bugsby has not observed any organizational formalities and
maintains no organizational records; it has no employees or
officers; and its sole manager and the only person who receives
its services is Steven. Bugsby points to evidence that could
support a contrary conclusion, such as the facts that Bugsby has
a bank account and filed tax returns. Bugsby’s argument rests
on an invalid premise: “The fact that there was substantial
evidence in the record to support a contrary finding does not
compel the conclusion that there was no substantial evidence to
support the judgment.” (Rayii v. Gatica (2013) 218 Cal. App. 4th
1402, 1408.) Nor are we permitted to re-weigh the evidence
ourselves to come to a conclusion more to Bugsby’s liking.
(Gomez v. Smith (2020) 54 Cal. App. 5th 1016, 1043.)
B. Inequitable result
Even when the collective entity and the individual share a
“unity of interest and ownership,” courts will apply the alter ego
doctrine only when “adherence to the fiction of the[ir] separate
existence . . . would promote injustice [citation] or bring about
12
inequitable results [citation].” (Misik v. D’Arco (2011) 197
Cal. App. 4th 1065, 1074.) What matters is whether the result is
unjust or inequitable, not whether the individual acted with any
fraudulent or other nefarious intent. (Relentless Air Racing, LLC
v. Airborne Turbine Ltd. Partnership (2013) 222 Cal. App. 4th 811,
816.)
Substantial evidence supports the trial court’s finding that
treating Bugsby separately from Steven would not lead to an
unjust or inequitable result. Steven had created Bugsby more
than a year before Joel asked Steven to work on Project Affirmed.
Both Steven—and, significantly, Alexandria—believed that
Steven’s work was not solely in his individual capacity: The
cover page of the PowerPoint presentation stated that Steven was
acting for Bugsby, and Alexandria’s lawyer initially sent
Superseding Agreements to both Steven and Bugsby. Although
Steven clarified that he would not seek compensation for Project
Affirmed, Alexandria did not undertake its efforts to eliminate—
or even to clarify—Bugsby’s role until after the project was
completed. Given the potential uncertainty regarding whether
Bugsby and Steven had separate roles at the outset of the project
as well as Alexandria’s (and Joel’s) failure to clarify those roles
until after the project was done, the trial court had a basis for
finding it would not be unjust or inequitable to allow Bugsby to
have a separate role from Steven in this lawsuit for purposes of
personal jurisdiction.6
6 By making this observation, we express no view on whether
Steven’s repeated concessions that he was doing the Project
Affirmed for accolades rather than compensation ultimately
preclude Bugsby, for whom Steven was an agent, from collecting
any compensation itself.
13
Plaintiffs offer two arguments in response.
First, plaintiffs argue that a result is inequitable if the
collective entity is used as “a cloak or disguise for the evasion of
contracts or other obligations” (Wilson v. Stearns (1954) 123
Cal. App. 2d 472, 486), and that Steven is now using Bugsby’s
existence as a separate entity to evade Steven’s promise not to
seek compensation; what is more, plaintiffs continue, Steven’s
failure to reveal his plan to seek compensation on Bugsby’s behalf
also constitutes a fraud on Alexandria. This argument ignores
our standard of review, which requires us to view the record in
the light most favorable to the trial court’s ruling. In that light,
the record shows that the original oral agreement may have
involved Steven, Bugsby, or both; that Steven and Alexandria
acknowledged the potential that Steven may have been working
on behalf of Bugsby; and that neither Alexandria nor Joel took
action to eliminate Bugsby as a potential party to the contract
until that contract had been fully performed. On these facts,
Steven’s promise not to seek compensation expressed no more
than his intent not to seek compensation as an individual, such
that his current desire to collect for Bugsby is not an evasion of
that promise. And on these facts, Steven’s failure to point out
ambiguity in the parties’ contractual arrangement of which
Alexandria and Joel were already aware is not fraud. (E.g.,
Hagge v. Drew (1945) 27 Cal. 2d 368, 382 [party is liable for
nondisclosure when entering into contract only if, among other
things, “he is aware” of facts and “the other is ignorant of th[ose]
facts”].)
Second, plaintiffs argue that the trial court’s “unity of
interest” finding means that Bugsby is Steven, and thus should
be treated as such. To accept this argument, however, is to treat
14
the “unity” element as dispositive and to ignore the second
prerequisite to applying the alter ego doctrine.
II. Purposeful Availment
A California court may exercise specific jurisdiction over an
out-of-state defendant only if the defendant (1) “‘“‘purposefully
availed [itself] of forum benefits’”’” (Bombardier Recreational
Products, Inc. v. Dow Chemical Canada ULC (2013) 216
Cal. App. 4th 591, 598 (Bombardier), quoting Vons Companies,
Inc. v. Seabest Foods, Inc. (1996) 14 Cal. 4th 434, 446), (2) “‘“‘“the
“controversy is related to or ‘arises out of’ [the] defendant’s
contacts with the forum” [citation]”’”’” (Bombardier, at p. 598),
and (3) the exercise of jurisdiction would be reasonable because
“‘“‘the assertion of personal jurisdiction would comport with “fair
play and substantial justice”’” [citations].’ [Citation.]” (Ibid.;
Szynalski v. Superior Court (2009) 172 Cal. App. 4th 1, 7.)
Substantial evidence supports the trial court’s finding that
Bugsby did not purposefully avail itself of the benefits of
California as a forum. To be sure, Bugsby—through Steven as its
manager and agent—claims that it entered into the oral contract
with Alexandria, and acknowledges that this contract was formed
in California and that “courts consistently exercise personal
jurisdiction over corporations based upon their agents’ activities
within the forum state” (Magnecomp Corp. v. Athene Co. (1989)
209 Cal. App. 3d 526, 535 (Magnecomp)). But it is well settled
that Bugsby’s conduct in forming “‘[a] contract with an out-of-
state party [(that is, with Alexandria in California)] does not
automatically [by itself] establish purposeful availment in the
other party’s home forum.’ [Citations.]” (Goehring v. Superior
Court (1998) 62 Cal. App. 4th 894, 907; Stone v. Tex. (1999) 76
Cal. App. 4th 1043, 1048.) Something more is required, and the
15
record supports the trial court’s finding that this “something
more” was absent here. As Bugsby’s agent, Steven did the work
on Project Affirmed in New York and London—not in California.
And, unlike Steven, Bugsby never signed a Superseding
Agreement containing forum selection and choice-of-law clauses
that adopted a California forum and California law, respectively.
What is more, the Superseding Agreement Steven signed was
expressly limited to him “as an individual.” (Cf. Aluma Systems
Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2
Cal. App. 5th 620, 628 [principal may be liable for contracts signed
by their agents].) Thus, the record supports the trial court’s
finding that, beyond entering into the oral contract, Bugsby has
not “do[ne] anything” in California and hence did not
purposefully avail itself of this forum.
Plaintiffs make two arguments in response. First, they
repeat their argument that Bugsby is Steven, so they must be
treated identically for purposes of personal jurisdiction. Because
this is an argument based on Bugsby’s purposeful availment,
what Steven did in his individual capacity—that is, what he did
above and beyond his capacity as Bugsby’s agent—is irrelevant.
And, as noted above, Bugsby’s refusal to sign the Superseding
Agreement puts it on different footing than Steven. Second,
plaintiffs urge that a defendant’s commission of a tort constitutes
purposeful availment, and Bugsby committed fraud. Plaintiffs
are correct that “the commission of an intentional tort
. . . directed at a California resident may provide sufficient
minimum contacts to support the exercise” of specific jurisdiction
(Integral Development, supra, 99 Cal.App.4th at p. 586;
Magnecomp, supra, 209 Cal.App.3d at p. 535). However, and as
explained above, Steven—as Bugsby’s agent—did not commit
16
fraud by failing to tell Alexandria and Joel that their oral
contract left open the possibility of liability to Bugsby when both
Alexandria and Joel were already aware of that possibility.
DISPOSITION
The judgment of dismissal of the case against Bugsby is
affirmed. Bugsby is entitled to its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________, J.
HOFFSTADT
We concur:
_________________________, P. J.
LUI
_________________________, J.
ASHMANN-GERST
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