Petition — Carlsberg Mobile Home Properties, Ltd.-'72 v. Sibley

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 197 _

no. €5-1714

HARPER SIBLEY, JR.

vs.

THE SUPERIOR COURT OF

LOS ANGELES COUNTY

CARLSBERG MOBILE HOME

PROPERTIES, LTD. -'72,

(real party in

interest), Petitioner

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA

DONALD L. STONE

JOSEPH BESNAH

Suite 900

1801 Century Park West

Los Angeles, CA 90067

Telephone: (213) 277-4658

Counsel for Petitioner

IN THE TOPICAL INDEX

SUPREME COURT OF THE UNITED STATES Page

October Term 197 _

an Table of Authorities i-ii

OPINION BELOW 2

JURISDICTION 2

HARPER SIBLEY, JR.

QUESTION PRESENTED 2-3

vs.

STATEMENT OF FACTS 3-5

THE SUPERIOR COURT OF

REASONS FOR GRANTING THE WRIT 5-11

LOS ANGELES COUNTY

OF CERTIORARI

CARLSBERG MOBILE HOME

PROPERTIES, LTD. -'72, CONCLUSION 11

(real party in APPENDIX A, B, § C

interest), Petitioner

rTABLE OF AUTHORITIES

Constitution

United States Constitution

PETITION FOR WRIT OF CERTIORARI Fourteenth Amendment 3

TO THE SUPREME COURT Article IV, Section l

OF THE STATE OF CALIFORNIA

Cases

Hansen v. Denckla 7

357 U.S. 255, 78 S.Ct.

1228, 2 L.ed.2d 1283 (1958)

DONALD L. STONE International Shoe Co. v. 6,7

JOSEPH BESNAH Washington

326 U.S. 310, 66 S.Ct.

Suite 900 154, 90 L.ed. 95 (1945)

1801 Century Park West

Los Angeles, CA 90067

Telephone: (213) 277-4658

Counsel for Petitioner

TABLE OF AUTHORITIES(Continued)

Cases cont.

McGee v. International Life

Insurance Co.

355 U.S. 220, 78 S.Ct. 199

2 L.ed.2d 223 (1957)

Milliken v. Meyer

311 U.S. 457, 61 S.Ct. 339

85 L.ed. 278 (1940)

Pennoyer v. Neff

95 U.S. 714, 24 L.ed. 565

(1877)

Sibley v. Superior Court

16 Cal.3d 442 (1976)

Statutes

California Code of Civil Procedure,

§410.10

United States Code

28 U.S.C. §1257(3)

Text

Restatement of Conflict of Laws 2d,

§37

-jii-

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 197_

No.

HARPER SIBLEY, JR.

vs.

THE SUPERIOR COURT

OF LOS ANGELES COUNTY

CARLSBERG MOBILE HOME

PROPERTIES, LTD. -'72,

(real party in

interest), Petitioner

Name ee ae ta a a

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA

The Petitioner, Carlsberg Mobile Home

Properties, Ltd. -'72, prays that a Writ

of Certiorari issue to review the opinion

and judgment of the Supreme Court of the

State of California rendered (by a 5 to 2

majority) on March 8, 1976.

The issue is: "can a non-resident of

California, who signs an agreement out of

the state which causes the formation of a

California Limited Partnership, constitu-

tionally with impunity avoid the

-l]-

_.Califoermia was entered on March 8, 1976 (See

jurisdiction of the California courts?"

OPINION BELOW

The Opinion of the Supreme Court of

California is reported at 16 Cal.3d 442,

and is attached hereto as Appendix A.

JURISDICTION

The Judgment of the Supreme Court of

Appendix A, page 1 infra). A petition for

rehearing was denied on April 7, 1976 (See

Appendix B infra). This Petition for

Certiorari was filed less thaft 90 days from

the date of the judgment aforesaid. The

jurisdiction of this court is invoked under

28 U.S.C. §1257(3).

QUESTION PRESENTED

Real party in interest, Petitioner

herein, brought suit against Harper Sibley,

Jr. (hereinafter "Sibley") on his personal

guarantee of certain obligations of a

California Limited Partnership. Sibley

brought a Motion to Quash Service of Summons

and Complaint upon him on the basis that the

courts of the State of California lacked

jurisdiction over him. This contention was

overruled by the trial court and by the

California District Court of Appeal; however,

-2-

their rulings were overturned by the Supreme

Court of the State of California (the Court

dividing S Justices to 2). The question

presented is:

Whether California courts may constitu-

tionally assert jurisdiction over a non-

resident individual solely by reason of his

execution and alleged breach of a guaranty

agreement of the obligations of a California

Limited Partnership, which guaranty was a

condition precedent to the formation of such

partnership, and whether the non-resident

guarantor, by executing such guaranty and

causing it to be delivered to the real party

in interest in California, thereby had

sufficient contacts with the State of

California so that the rendition of a

judgment against him would not violate the

due process clause of the 14th Amendment

to the U.S. Conetitution, Article IV,

Section l.

STATEMENT OF FACTS

The real party in interest, Petitioner,

Carlsberg Mobile Home Properties, Ltd. -'72,

(hereinafter "Carlsberg") is a Limited

Partnership having its principal place of

business in California. In December, 1973,

MTA-CMHPL, Ltd. (hereinafter "MTA"), a

California Limited Partnership, was formed

-3-

in California. The General Partner of MTA is

Sunrise Lakes, Inc. (hereinafter "Sunrise"),

a Georgia corporation, the limited partner

was Carlsberg. MTA was to operate two

mobile home parks in Georgia. Under the

MTA California Limited Partnership

Agreement, Sunrise promised to make certain

monthly payments to Carlsberg in California.

Sibley, a Florida resident, was one of three

guarantors of Sunrise's performance of the

California MTA's Limited Partnership

Agreement. It can be demonstrated that, but

for the execution of the Agreement by Sibley,

and the delivery of that guaranty to

Carlsberg in California, the California

Limited Partnership would never have been

formed. Sibley was not a party to the MTA

California Limited Partnership negotiations.

His only connection with the transaction

apparent from the record was that he was a

guarantor of the performance of the General

Partner to the California Limited Partner-

ship which would have not been formed but

for his guaranty. Petitioner signed the

Guaranty Agreement in Florida and delivered

it to another Defendant, Peter Thun, to

take it to California to deliver to

Carlsberg so that the transaction would

close. The MTA Agreement was negotiated

oGe

and executed in California. Sibley is not

a resident of California, does not own any

real or personal property in California,

and does not have any business interests

in California.

REASONS FOR GRANTING THE WRIT OF CERTIORARI

This case raises questions important not

only to California, but to all other states

which have similar laws regarding jurisdiction

(so-called "long arm statutes"). The true

question is, are there sufficient contacts

with California so it can constitutionally

exercise jurisdiction over a non-resident

who has caused an effect in this state by an

act done elsewhere. The sufficiency of such

contacts is a matter of Constitutional Law on

which the Supreme Court of the United States

has the final voice.

California Code of Civil Procedure

Section 410.10 provides: "A court of the

state may exercise jurisdiction on any basis

non inconsistent with the Constitution of

this state or of the United States." One of

the bases of jurisdiction under this statute

is that an individual may subject himself to

jurisdiction of the State of California by

causing an effect in the state by an act or

omission done elsewhere (See Appendix C

infra). It is submitted that, but for the

-5-

act of Sibley signing the guaranty and

causing it to be delivered to Carlsberg

in California, the California Limited

Partnership would never have been formed.

Judicial jurisdiction in its broadest

sense is the power of a state through any

of its courts or, on occasion, through its

legislative, executive or administrative

bodies, to create legal interests which

will be recognized and enforced in all the

states. Within a state's boundaries, this

power is plenary, except as may be delegated

to the Federal Government by the Constitution

of the United States. Pennoyer v. Nef;,

(1877) 95 U.S. 714, 722, 24 L.ed. 565. Out-

side the state, such power is limited to

instances in which a Defendant has sufficient

minimum contacts with the state that the

maintenance of the suit does not offend trad-

itional notions of fair play and substantial

justice. International Shoe Co. v.

Washington (1945) 326 U.S. 310, 316, 66

S.Ct. 154, 90 L.ed. 95. Each state has its

own requirements in this regard. These re-

quirements are usually set forth in each

state's service of process statutes, and

are often more stringent than those imposed

by the due process clause of the United

States Constitution. Milliken v. Mever,

(1940) 311 U.S. 457, 61 S.Ct. 339, 85 L.ed.

-6-

278. In Internattonal Shoe Co. v.

Washington, supra, the Court decided that

due process requires only that, in order

to subject a Defendant to a Judgment In

Personam if he be not present within the

territory of the forum, he has had

sufficient minimum contacts with the forum

state so that the maintenance of the suit

does not offend traditional notions of fair

play and substantial justice. Jc. at 316.

A state has power to exercise judicial

jurisdiction over an individual who causes

effects in the state by an omission or an

act done elsewhere, with respect to causes

of actions arising from these effects, un-

less the nature of the effects and of the

individual's relationship to the state make

the exercise of such jurisdiction unreason-

able. Hansen v. Denckla, (1958) 357 U.S.

235, 78 S.Ct. 1228, 2 L.ed.2d 1283° “eGee rv.

International Life Insurance Co.,(1957) 335

U.S. 220, 78 S.Ct. 199, 2 L.ed.2d 223. When

jurisdiction over an individual is based

solely upon such act or omission, only a

claim for relief arising from such act or

omission may be asserted against the

individual. bid. As stated in Restatement

of Conflict of Laws 2d, Section 37 Comment

a:

"A state has a natural

interest in the effects of an

act within its territory even

though the act itself was done

elsewhere. The state may

exercise judicial jurisdiction

on the basis of such effects

over the individual who did

the act, or who caused the act

to be done, provided that the

nature of these effects and of

the individual's relationship

to the state are such as to

make the exercise of jurisdic-

tion fair to the individual

and reasonable from the stand-

point of the international and

interstate systems

"There are three possible

situations: (1) the act was

done with the intention of

causing effects in the state;

(2) the act, although not done

with the intention of causing

effects in the state, could

reasonably have been expected

to do so; and (3) the act was

not done with the intention of

causing effects in the state

and could not reasonably have

been expected to do so. These

three situations will be dis-

cussed in the order stated.

"The act may have been done

with the intention of causing

effects in the state. If so,

the state may exercise the same

judicial jurisdiction over the

actor, or over the one who

caused the act to be done, as

to causes of action arising

from these effects as it could

have exercised if these effects

-§-

had resulted from an act done

within its territory. ..."

Here the act in question is the

Signing by Sibley of the guaranty of the

performance of the Gener. 1 Partner to a

California Limited Partnership and the

transportation of that guaranty to

California. But for the signing of the

guaranty, and the delivery thereof to

Carlsberg in California, the California

Limited Partnership would not have been

formed. It is conceded that Sibley has

never been to California, and, other than

some isolated instances which have no re-

lation to the facts in the case at bar,

Sibley has no other contacts with

California.

The question then arises, is the fact

of Sibley's signing of the guaranty in

Florida and sending it to California --

which act caused the formation of the

California Limited Partnership to operate

two mobile home parks in Georgia -- suf-

ficient to give the California court

jurisdiction over Sibley. A trend is

Clearly discernable toward expanding

the permissible scope of state jurisdiction

Over non-residents. In part, this is

attributable to the fundamental

-9-

transformation of our national economy over

the years. Today, many commercial trans-

actions touch two or more states and may

involve parties separated by the full

continent. With this increasing nationali-

zation of commerce has come a great increase

in the amount of business conducted across

state lines. At the same time, modern

transportation and communication have made

it much less burdensome for a party sued

to defend himself in the state where he

either engages in economic activity or

affects the conduct of others. Although

Sibley has never been to California, this

is a classic case of an act which was done

outside the state of California with the

express purpose of causing an act within

the state and, therefore, comes within the

provisions of McGee v. Internationac Life

Insurance Company, supra. The California

Supreme Court erred when it substituted

economic activity and doing business tests

as the basis for jurisdiction, as the

nature of Sibley's action was merely as a

guarantor of the obligations of the

California Limited Partnership, MTA, and a

guarantor's relationship to a transaction

is essentially passive. Therefore, if the

principals are subject to the jurisdiction

-10-

of the California courts, as they are here,

and the only party to the transaction who

is not subject to California jurisdiction

is Sibley, a multiplicity of suits will

necessarily be incurred. This is so be-

Cause the principals are not amendable to

the jurisdiction of the Florida courts,

where Sibley must be sued if the California

courts do not have jurisdiction over him.

CONCLUSION

For these reasons, a Writ of Certiorari

should issue so that the judgment of the

California Supreme Court may be reviewed and

determined by this court.

Respectfully submitted,

DONALD L. STONE

JOSEPH BESNAH

Counsel for Petitioner

SUPREME COURT

FILED

MARS 1976

G. E, BISHEL, Clor!-

GORY

Cspry

IN THE SUPREME COURT OF THE STATE OF CALIFORNIA

HARPER SIBLEY, JR.,

Petitioner, —

v. L.A. 30496

THE SUPERIOR COURT OF LOS ANGELES COUNTY, (Super. Ct. No.

WEC 36291)

Respondent ;

CARLSBERG MOBILE HOME PROPERTIES

LTD. - ‘72,

Real Party in Interest.

ee le ea

This case presents the question whether

APPENDIX A California courts may constitutionally assert juris-

' diction over a nonresident individual solely by reason

of his execution and alleged breach of a guaranty agrce-

ment regarding payment of monies owing to a California

corporation. We have concluded that, under the circum-

stances in the present case, the guaranty transaction

was not a sufficient basis on which to sustain personal

jurisdiction over the nonresident guarantor, and that

accordingly his motion to quash service of summons

should have been granted.

"SEE DISSENTING OPINION"

The real party in interest herein, Carlsberg

Mohile Home Properties, Ltd. - '72 (hereafter Carlsberg)

is » iimited partnership having its principal place of

business in California. In December 1973, Carlsberg

formed MTA-CMHPL, LTD. (hereafter MTA), a limited

partnership, in California. The general partner of

MTA is Sunrise Lakes, Inc. (hereafter Sunrise), a

Georgia corporation. The purpose of MTA was to

Operate two mobile home parks in Georgia. Under the

MTA partnership agreement, Sunrise promised

‘to make certain monthly payments to Carlsberg. Peti-

tioner Harper Sibley, a Florida resident, was one of

three guarantors of Sunrise's performance of the MTA

partnership agreement.

In December 1974, Carlsberg brought an action

in California against petitioner and others alleging breach

of the partnership agreement by Sunrise and breach of the

guaranty by petitioner ond others. Petitioner was served by

certified mail in Florida, made a special appearance in

California, and pursuant to Code of Civil Procedure section

418.10, subdivision (a)(1), moved for an order to quash

service of summons for lack of personal jurisdiction. The

trial court denied the motion and petitioner seeks

mandate to revicw and set aside the trial court's order.

(See Code Civ. Proc., § 418.10, subd. (c).)

Petitioner contends that Carlsberg has failed

to meet its initial burden of shoving that petitioner

has the requisite minimum contacts with the State

of California to justify California's assertion of

jurisdiction over him. (See Buckeye Boiler Co. v.

Superior Court (1969) 71 Cal.2d 893, 905, fn. 9;

Arneson v. Raymond Lee Organization, Inc. (1973) 31

Cal.App.3d 991, 995.) We agree.

Petitioner was not a party to the MTA part-

. nership agreement and took no part in its negotiation.

His only connection with the transaction apparent from

the record was as guarantor of the performance of a

Georgia corporation. Petitioner signed the guaranty

agreement in Florida and delivered it to another defend-

ant, Peter Thun, who then tock it to California. As indicated,

petitioner is a resident of Florida; he has never been

a resident of California, does not owm any real or

personal property in this state, and does not have any

business interests or relations with California except

as trustee of a testamentary trust owning property in Cambria,

California. Sibley has not been physically present in this

state since January 1973, when he was here in connection

with a matter unrelated to the transactions before us.

Under Code of Civil Procedure section 410.10,

a California court may exercise jurisdiction over non-

residents on any basis not inconsistent with the United

States or California Constitutions. This section mani-

fests an intent to exercise the broadest possible

jurisdiction, limited only by constitutional consider-

ations. (Buckeye Boiler Co. v. Superior Court, supra,

71 Cal.2d 893 at p. 898; Quattrone v. Superior Court

(1975) 44 Cal.App.3d 296, 302.) As a general consti-

tutional principle, a court may exercise personal

jurisdiction over a nonresident individual so long as

he has such minimal contacts with the state that .

". , . the maintenance of the suit does not offend

‘traditional notions of fair play and substantial justice.

(International Shoe Co. v. Washington (1945) 326 U.S.

310, 316-317, citations omitted; Cornelison v. Chaney,

ante, p. 143.)

One of the recognized bases for jurisdiction

in California arises when the defendant has caused an

“effect" in the state by an act or omission which occurs

elsewhere. (Quattrone v. Superior Court, supra, 44 Cal.

App.3d 296 at p. 303; see also McGee v. International Life

Ins. Co. (1957) 355 U.S. 220.) This ground for assertion

of jurisdiction is discussed by the Judicial Council in

its comment to section 410.10 of the Code of Civil

tt

Procedure reprinted in West's Annotated California Codes,

page 472, in the following language: “A state has power

‘to exercise judicial jurisdiction over an individual

who causes effects in the state by an omission or act

done elsewhere with respect to causes of action arising

from these effects, unless the nature of the effects and

of the individual's relationship to the state make the

exercise of such jurisdiction unreasonable. (Citations. ]

When jurisdiction over an individual is dased solely

upon such act or omission, only a claim for relief arisinr

from such act or omission may be asserted against the

individual, [Citation.]" (Italics added.)

; Evidence was presented at the hearing on peti-

tioner's motion to quash that the Guaranty which petitioner

executed induced Carlsberg, a California corporation, to

enter into MTA, a new California limited partnership, and

that Carlsberg would not have’ performed the MTA agreement

without petitioner's guaranty. On this basis, despite

petitioner's contrary assertions, the trial court could

reasonably infer that the Signing of the @uaranty in Flecrida

both was intended to cause and did cause an effect in

California. In addition, it appears that the performance

guaranteed by petitioner was the payment of certain moneys

to a partnership located in California; thus, petitioner

could have anticipated that the failure of this performance

would have a further effect in Califoria.

The mere causing of an "effect" in California,

however, as ackrtowledged in the Judicial Council comment

quoted above, is not necessarily sufficient to afford a con-

stitutional basis for jurisdiction; notwithstanding this

“effect,” the imposition of jurisdiction may be "unreasonable."

As was held in International Shoe Co. v. Washington, supra,

326 U.S. 310, a suit may not be maintained where jurisdiction

offends "'traditional notions of fair play and substantial

justice. '" (Id., at pp. 316-317, citations omitted.)

Subsequent to International Shoe, the federal Suprene

Court has amplified the standard by which to determine whethe>

imposition of jurisdiction is constitutionally “unreasonable."’

In Hanson v. Denckla (1958) 357 U.S. 235, for example, the hi; h

court held that in those cases in which jurisdiction is soughr

on the basis of defendant's occasional activities, ". ——

is essential in each case that there be some act by which the

defendant purposefully avails itself of the privilege of con-

ducting activities within the forum State, thus invoking the

benefits and protections of its laws." (Id., at p. 253.) In

Buckeye Boiler, supra, we reaffirmed the necessity for such an

inquiry and asked the additional guestion whether, considering

defendant's activity, extension of jurisdiction over him would

be "fair."

In the present case, the record fails to dis-

close that petitioner purposefully availed himself

of the privilege of conducting business in California

or of the benefits and protections of California laws.

Likewise, the record does not indicate that petitioner

anticipated that he would derive any economic benefit

as a result of his guaranty. Although petitioner may

have reasonably foreseen that his execution or breach

of the guaranty agreement would have some impact in

this state, it does not appear that plaintiff Carlsberg

assumed any obligations to petitioner which he might

have sought to enforce in California. In this regard,

petitioner's contacts with California seem even more

minimal than those present in Belmont Industries, Inc. v.

Superior Court (1973) 31 Cal.App.3d 281 (hg. den.), in

which jurisdiction was found to be unreasonable; unlike

the present case, in Belmont, the nonresident defendant,

which had negotiated and contracted with a California

corporation for the purchase of certain drafting services,

could have sought to enforce its contract in the California

courts.

The present case is distinguishable from

those recent California cases upholding jurisdiction

over nonresident defendants who seek or obtain signifi-

cant benefits from this activity in California. For

example, in Buckeye Boiler Co. v. Superior Court,

Supra, substantial business was generated in this

state which benefited the party over which jurisdiction

was sought; in Michigan Nat. Bank v. Superior Court

* (1972) 23 Cal. App. 3d 1, goods purchased in California

were financed by the nonresident defendant; in

National Life of Florida Corp. v. Superior Court

(1971) 21 Cal.App.3d 281, contract negotiatons by the

parties occurred in California concerning the sale of

shares of stock to California residents by the non-

resident defendants; and in Quattrone v. Superior Court, supra

44 Cal.App.3d 296, it was alleged that the nonresident defend-

ant was involved in a conspiracy to defraud a California

corporation for his own profit by submitting falsified

financial records to this corporation. By contrast, in the

present case, while other Parties involved in this action

had considerable contacts with California, there is no indi-

cation that petitioner intended to conduct business or in any

other way directly or indirectly gain from dealings in this

State; the purpose of other parties cannot be imputed to peti-

tioner for the purpose of assuming personal jurisdiction

Over him.

The United States Supreme Court has given

further guidance in this area by indicating in McGee vy.

International Life Ins. Co., supra, 355 U.S. 220, that

whether or not a state has passed special legislation

relating to the subject matter of the action is signifi-

cant in determining the reasonableness of jurisdiction

Over an out-of-state defendant. In McGee, the court

BEST COPY AVAILABLE |

_ upheld the jurisdiction of a California court over an

out-of-state insurance company, justifying its ruling in

part on the fact that California had enacted special

legislation manifesting an exceptional interest in

_Tegulating activities by foreign insurance companies.

(Id. » at pp. 221-223.) Similarly in Quattrone v. Superior

Court, supra, 44 Cal.App.3d 296, _ jurisdiction over a non-

resident defendant was upheld by a Court of Appeal of this

State largely because the end result of defendant's alleged

conspiratorial conduct was the issuance of shares of stock, a

Subject of special California regulation. (Id., at pp. 306-307.)

In the matter before us a California limited

partnership, in reliance upon the personal guaranty by

& Florida resident, contributed its holdings of Georgia’

land to a new limited partnership for the purpose of

acquiring and operating mobile home parks in Georgia.

There are no aspects of this arms-iength transaction

which are subject to special regulation in California

or in which California has otherwise manifested

exceptional interest.

Thus, we conclude that petitioner's relation-

hte to California, and the effects thereby caused

in California, make the exercise of jurisdiction

unreasonable in the present case.

Because petitioner's contacts with California

are insufficient to justify jurisdiction, it is not

‘

necessary to undertake the additional process of

balancing the inconvenience of defending the action in

7) ao

this state against the interests of plaintiff in suing ousnas SUPERIOR COURT OF 108 annnuzs

B v.

locally and of the state in assuming jurisdiction.

‘pend L.A. 30496

(See Cornelison v. Chaney, Supra, pp. 150-151; Buckeye |

Boiler Co. v. Superior Court, upra, 71 Cal.2d 893 at .DISSENTING OPINION BY MOSK, J.

p. 899.) . :

I dissent.

We note, however, that the present litigation

The issue is whether petitioner has the requisite

involves the performance of a limited partnersh

4 — minimum contacts with the State of California to justify Cali-

agreement in Georgia, and of petitioner*s own agreement

fornia courts exercising jurisdiction over him. (Buckeye Boiler

tO guarantee the performance of a Georgia corporation.

- ve 1 Cal.2d 8 05, fn. 9.

Thus, Georgia would appear to have jurisdiction over oo. v. Superier Court (2909) 71 Ca 93, 905, 9.)

, In denying petitioner's motion to quash, the trial

the entire controversy; at the least, the action against

; court relied upon the following facts to justify retaining the

petitioner can be conveniently litigated there or in

. —— case in California, rather than to compel the litigants to

Florida where petitioner resides.

: travel across the continent to the eastern seaboard for an

Let a peremptory writ of mandate issue.

adjudication of their rights. (Tiffany Records, Inc. v. HM. 8.

Krupp Distributors, Inc. (1969) 276 Cal.App.2d 619, 615.)

RICHARDSON, J.

Carlsberg Mobile Home Properties, Ltd.-'72 is a

limited partnership formed in California pursuant to the pro-

WE. CONCUR:

visions of the California Corporations Code,

WRIGHT, C.J.

McCOMB, J. The general partner of the limited partnership is

SULLIVAN, J.

CLARK, J. Carlsberg Resources Corporation, a California corporation.

Both the limited partnership and the corporate

general partner maintain their business and principal office

10.

in the County of Los Angeles, State of California. Neither

entity maintains an office in any other state.

carisbers, pursuant. to an agreement, formed a

limited partnership with Sunrise Lakes, Inc., a Georgia

corporation as the general partner, to acquire and operate

two mobile home parks in Georgia. This entity, known in short

as MTA, was created in California, in accordance with pro-

visions of the California Corporations Code. .

The agreement upon which the lawsuit is based was

negotiated and executed in California.

The deeds transferring to MTA title to the Georgia

mobile home parks were executed in California.

The agreement contemplated that payments thereunder

were to be made in California.

The guarantee of petitioner was an essential con-

sideration without which the MTA agreement would not have been

executed in California.

Petitioner had knowledge that he was guaranteeinr an

obligation executed in California and payable in California,

for the written guarantee of petitioner was obtained by, an«

given to, codefendant Peter hun for delivery to plaintiffs

in California.

The guarantee was in fact delivered to plaintiffs in

California.

The transaction became effective only upon delivery

of the guarantee in California. This is precisely the type

of act, originally performed elsewhere but ceusing a specific

effect in California, contemplated by Quaterenn v. Superior

Court (1975) 44 Cal.App.3d 296, 303.

This litigation results from the claim that the

general partner, and consequently its guarantor, has breached

the terms of the MTA limited partnership agreement executed

in California.

The foregoing facts--singly perhaps but in com-

bination certainly--constitute substantially more than the

minimum contacts required for jurisdiction over the enettte

by California courts. The trial court so found. A unanimous

Court of Appeal approved. I agree with their assessment of

the facts.

I would deny the writ.

MOSK, J.

I CONCUR:

TOBRINER, J.

APPENDIX 8B

CLERK'S OFFICE, SUPREME COURT

4250 STATE BUILDING

SAN FRANCISCO, CALIFORNIA 94102

APR 7 197

] have this day filed Order

In re: __N BOYP6

Ye

Respectfully, .

G. E. BISHEL

Clerk

98925.677 11-75 s™@ OSPF

APPENDIX C

EXCERPTS FROM

1969 REPORT OF THE CALIFORNIA

JUDICIAL COUNCIL TO THE GOVERNOR

AND THE LEGISLATURE

Code of Civil‘Procedure $410.10 provides:

A court of this state may exercise jurisdiction on any basis

not inconsistent with the Constitution of this state or of the

United States.

APPROVED JUDICIAL COUNCIL COMMENT

Superseded CCP Scctions: §§ 411-413, 417.

Section 410.10 permits California courts to exercise judicial juris.

diction on any basis not inconsistent with the state or federal Consti-

tutions. This authorization continues the California law on jurisdiction

over foreign corporations and reestablishes the prior law that once

governed nonresident individuals.

All the recognized bases of judicial jurisdiction are include’. In the

ease of natural persons, such bases currently include presence, domicil.

residence, citizenship, consent. appearance, doing business in a State,

doing an act in a state, causing an effect in a state by an act or omission

elsewhere, ownership. use or possession of a thing in a State, as well

as other relationships to a state.

In the case of corporations and unincorporated associations (inelud-

ing partnerships), such bases currently include incorporation or or-

ganization in a state. consent. appointment of an ageut, appearance,

doing business in a state. doine an act in a State, cuusing an effect in a

State by an act or omission elsewhere. ownership, use or possession of

a thing in a state. and other relationships to a state. Each of these

bases is discussed in detail below.

Other recognized bases inelude: (1) Judicial jurisdiction over the

interests of persons in things in this state, such as land, chattels, doeu-

ments, intangibles, shares in a corporation, and titles. (2) Judicial

jurisdiction to apply to the satisfaction of a claim interests in a thing

that is subject to the court’s judicial jurisdiction. (3) Judicial juris-

diction for divoree of persons one or both of whom are domiciled in

this state or have such other relationship to this state as would make

it reasonable for the state to dissolve their marriage. (4) Judicial juris-

diction over other proceedings relating to status, such as judicial sepa-

ration, annulment, support, adoption, or custody, of persons who are

domiciled or present in this state, or have such other relationship to

this state as would make it reasonable for the state to hear and deter.

mine such action, ...

BASES OF JUDICIAL JURISDICTION OVER INDIVIDUALS

A state has power to exercise Judicial jurisdiction over an individual

on one or more of the following bases: (1) Presence; (2) Domieil;

(3) Residence; (4) Nationality or citizenship; (9) Consent; (6) Ap-

pearance im an action; (7) Doing business in the state; (3) An act

done in the state; (9) Causing an effect in the state by an act done

elsewhere; (10) Ownership, use or POSSessTon of a thing in the state;

(11) Other relationships to the state which make the exercise of judicial

jurisdiction reasonable. (RESTATEMENT (SECOND), § 27; sve

UNIFORM INTERSTATE AND INTERNATIONAL PROCEDURE

ACT $$ 1.02, 1.03 Chereinafter cited as UNIFORM ACT); 44 Cal.b.

Rey. 737; 48 Cal. LRey. 295; Von Mehren and Trautman, Jurisdiction

to cldyudicate: A Suggested Analysis (1966) 79 Harv dtev. 1121;

Developments in the Law—Ntate-Court Jurisdiction (1900) 72 lary.

LRev. GOO: is) LTastines i 191; 27 So.Cal. Levy. dition: l U.C.).A.

lhRev. 113.)...

(9) CAUSING EFFECT IN STATE BY ACT OR OMISSION ELSEWHERE

A state has power to exercise judicial jurisdiction over an individual

who causes effects in the state by an omission or act done elsewhere

with respect to causes of action arising from these effects. uniess the

nature of the effects and of the individual's relationship to the state

make the exercise of such jurisdiction unreasonable. (JZanson v. Denekin

(1958) 357 U.S. 235; MeGee v. International Life Ins. Co. (1957) 399

US. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Dahlberg Co. v. Western Hear-

ing Aid Center, Lid. (1961) 259 Minn. 330, 107 N.W.2d 331, cert. den.

866 U.S. 961; Stcphensen v. Duriron Co. (Alaska 1965) 401 P.2d 423,

cert. den. 382 U.S. 956; ef. Trarclers Health Assn. v. Virginia (1950)

339 U.S. 643, 705 S.Ct. 927; Jeter v. Austin Trailer Equip. Co. (1953)

122 Cal.App.2d 376. 381, 265 P.2d 130; sce RESTATEMENT (SEC-

OND), § 37; UNIFORM ACT § 1.63(4) (‘‘causinz tortious injury in

this state by an act or omission ontside this state if he regularly does

or solicits business. or engages in any other persistent course of conduct,

or derives substantial revenue from goods used or consumed or services

rendered, in this state’’), (6) (‘‘contracting to insure any person,

property, or risk located within this state at the time of contracting );

Jurisdiction: Current Problems and Legislative Trends (1959) 44 lows

L.Rev. 247; Diverse Systems and Principles of Jurisdiction (1959) 53

Am.Soec.Int. L.Proc. 170; Transient Jurisdiction—Remnant of Pen-

noyer v. Neff (1960) 9 J.Pub.Law 281; Scott, Hanson v. Denckla (1959)

72 Harv.L.Rev. 695.) When jurisdiction over en individual is based

solely upon such act or omission. only a claim for relief arising from

such act or omission may be asserted against the individual. (Tbid.)

BEST COPY AVAILABLE |

As stated in RESTATEMENT (SECOND), § 37. Comment a:

A state has a-natural interest in the effects of on act

within its territory even though the act itself wrs done

elsewhere. The state may’ exercise judicial jurisdiction

on the basis of such effects over the individual who did the

act, or who caused the act to be done. provided that the

nature of these effects and of the individual's re'sticn-

ship to the state are such as to make the exercise of

jurisdiction fair te the individual and reasonable from

the standpoint of the international and interstate svs-

tems. ... ' :

There are three possible situations: (1) the act was

done with the intention of causing effects in the state;

(2) the act, although not dune with the intention of eaus-

ing effects in the state, could reasuenably have been

expected to do so; and (3) the act was not done with the

intention of ciusing effects in the state and could not

reasonably have been expected to dv so. These three situe-

tions will be discussed in the order stated.

The act may have been done with the intention of eaus-

ing effects in the state. If se, the state may exercise the

same judicial jurisdiction over the actor, or over the one

who caused the act to be done. as to eauses of action

arising from these effects as it could have exercised if

these effects had resulted from an act done within its

territory. . . . So one who intentionally shoots a bullet

into a state is as subject to the judicial jurisdiction of

the state as to causes of action arising from the effects of

the shot as if he had actually fired the bullet in the state,

Similarly, en insurance company which solicits through

the mails the purchase of an insurance policy and there-

after mails jie insured premium notices and the like is

as subject to the judicial jurisdiction of the state as to

causes of action arising from the policy as if it had sent

an agent into the state to solicit the policy and to present

the premium notices to the insured. [WeGee v. Interna-

tional Life Insurance Co., supra; cf. Travelers Health

Association v. Virginia, supra.}

The act may not have been done with the intention

of causing: effects in the state but could reasonably have

been expected to do so. Whether the state may exercise

judicial jurisdiction in such a situation depends upon a

varicty of factors. including the extent of the relationship

of the state to the defendant and to the plaintiff, the

‘nature and quality of the effects resulting from the act,

and the degree of inconvenience which would result to

the defendant from being foreed to stand suit in the state

on the particular cause of action. The greater the de-

fendant’s relationship to the state, the greater is the

likelihood that the state may exercise judicial juris-

diction over him as to causes of action arising from the

effects of the act in. the state. . . . So if the defendant

does business in the state, or solicits business extensively

in the state. or if a substantial quantity of goods manu-

factured by him are sold in the state, there is a greater

likelihood that the state may exercise judicial jurisdiction

over him as to causes of action arising from the effects

in the state of an act done by him outside the state than

if the defendant did not have this relationship to the

state. This is so even though the defendant's relationship

to the state is not related in any way to the act or to such

of its effects i. the state as are involved in the suit. The

plaintiff’s relationship to the state is also material. The

greater is the extent of this relationship, the greater is

the interest of the state in the plaintiff and consequently

the more appropriate it will be that the state should be in

the position to try the case in its courts. On the other

hand, if the plaintiff has little or no relationship to the

state, the defendant's relationship to the state must be

correspondingly greater to give the state a sufficient in-

terest to justify trial of the case in its courts. Another

factor of significance is the nature und quality of the

effects which occur in the state. The state may exercise

judicial jurisdiction over the defendant if- the effects

which could have been anticipated end which actually

occurred are of a sort highly dangerous to persons or

things. ...

Finally, there will be situations where the act was not

done with the intention of causing effects in the state and

where the defendant had no reason to suppose that his act

outside the state would result in effects within the state.

In these circumstances the state is unlikely to have ju-

dicial jurisdiction over the defendant unless both the

plaintiff and the defendant have an extensive relationship

to the state. [Citations supplied; cf. Hanson v. Denckla,

supra. ]}

Some actions, such as defamation. affect interests of a defendant

that are protected by the First .umendment of the United States

Constitution. For a state to have judicial jurisdiction over such actions,

it may be that the defendant must have a closer relationship to the

state, or have caused effects of a more substantial nature in the state,

than would otherwise be required....

£!

LEGAL TYPING AND BRIEF PRINTING

4147 Lankershim Blvd. ¢ North Hollywood, CA 91602 e (213) 763-5647