Opinion
B298483
06-29-2020
MAHNAZ RASHTI, Plaintiff and Appellant, v. ORAL AESTHETIC ADVOCACY GROUP, INC., Defendant and Respondent.
Matthew J. Kita for Plaintiff and Appellant. Nathanson Hall, Lawyers and Ken Nathanson for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC707413) APPEAL from an order of the Superior Court of Los Angeles County. Terry A. Green, Judge. Affirmed. Matthew J. Kita for Plaintiff and Appellant. Nathanson Hall, Lawyers and Ken Nathanson for Defendant and Respondent.
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Appellant Mahnaz Rashti appeals the trial court's order granting respondent Oral Aesthetic Advocacy Group, Inc.'s (Oral Aesthetic) motion to quash service of summons for lack of personal jurisdiction. Oral Aesthetic, a Canadian corporation, filed its motion to quash in response to the underlying complaint in which Rashti alleged, among other things, Oral Aesthetic breached a written contract and committed fraud.
As discussed below, we have conducted an independent review of the record and conclude Rashti failed to carry her burden to demonstrate by a preponderance of the evidence that jurisdiction over Oral Aesthetic was justified. Accordingly, we affirm.
BACKGROUND
1. The Parties and Their 2016 Agreement
According to the underlying complaint, appellant Rashti is a dentist practicing in the Los Angeles area. Respondent Oral Aesthetic is a Canadian corporation with its headquarters in Toronto, Ontario, Canada. Oral Aesthetic refers patients to dentists who contract with and pay Oral Aesthetic for such referrals.
In July 2016, Rashti executed a written agreement with Oral Aesthetic (2016 agreement), under which Rashti agreed to pay Oral Aesthetic a monthly fee in exchange for patient referrals to Rashti's dental practice in Los Angeles. Oral Aesthetic agreed to refer patients to Rashti "on an exclusive basis for 30 days."
2. Rashti's Complaint
In 2018, Rashti filed an unverified complaint against Oral Aesthetic and Michael Homayun, another dentist practicing in the Los Angeles area. Rashti's complaint alleged six causes of action, including breach of contract, fraud, and unfair business practices. In addition to the written terms of their agreement, Rashti alleged Oral Aesthetic also represented it would refer only "qualified and informed" patients to her practice and "would not send patients to any competing dental offices within a thirty (30) mile radius." Rashti claimed Oral Aesthetic breached the 2016 agreement by overcharging her and committed fraud by purposely referring unqualified and uninformed patients to her dental practice as well as intentionally referring patients to Dr. Homayun, whose competing dental practice allegedly was within 30 miles of Rashti's practice. Rashti alleged she suffered an unknown amount of damages as a result of Oral Aesthetic's actions and she sought an accounting to determine the exact amount of damages suffered. Among other relief, she sought compensatory and punitive damages.
Homayun is not a party to this appeal.
3. Oral Aesthetic's Motion to Quash Service of Summons
In response to Rashti's complaint, Oral Aesthetic filed a motion to quash service of summons on the ground the trial court lacked personal jurisdiction over Oral Aesthetic. Oral Aesthetic's president, Lola Snidman, filed a declaration in support of the motion to quash. In her declaration, Snidman stated Oral Aesthetic was a Canadian corporation headquartered in Toronto. Snidman stated the company had a mailing address in New Jersey but was not licensed to conduct business there and did not maintain an office in the United States. She said Oral Aesthetic had 16 clients in California. Snidman stated Oral Aesthetic solicits clients like Rashti "only over the internet" and the patients Oral Aesthetic refers to dentists come to "Oral Aesthetic . . . [p]rincipally via our Google advertising account number . . . contracted through our Toronto office." Snidman stated Oral Aesthetic sent the 2016 agreement to Rashti by facsimile or e-mail and Rashti sent the document to Snidman by facsimile. Snidman attached to her declaration a copy of the 2016 agreement signed by Rashti as well as a copy of a 2018 agreement between Oral Aesthetic and Rashti also signed by Rashti.
The parties do not discuss the 2018 agreement, and it does not appear to be at issue here.
Rashti opposed the motion to quash, arguing the trial court properly could exercise personal jurisdiction over Oral Aesthetic. In particular, Rashti pointed to a "Cosmetic Dentistry Grants Program" website, which she claimed was owned by Oral Aesthetic (website). According to Rashti, the website "provides evidence of extensive contacts and purposeful availment of business activities with dental practitioners in California." Rashti attached printed pages from the website to her opposition brief, claiming the attached printouts showed "at least forty California area dental provider locations . . . with the vast majority in the Greater Los Angeles area." According to Rashti, Oral Aesthetic "clearly provides advertising, referral, and consulting services related thereto to dentists and dental services providers like [Rashti] in the State of California, and has continuously purposefully availed itself of business opportunities within the State of California given the extensive list of partners listed on its website." Rashti did not authenticate—either by declaration or other method—the printed website pages attached to her opposition brief.
Oral Aesthetic filed a short reply in support of its motion to quash, in which it stated it was "a Canadian company with only one US office—a virtual office—in New Jersey." Oral Aesthetic urged the trial court to grant its motion to quash and stated Rashti should file her case in New Jersey or Canada.
4. Hearings
The trial court held two hearings on Oral Aesthetic's motion to quash. The appellate record does not include a reporter's transcript for either hearing.
According to the trial court's final order on the motion to quash, the first hearing was held on March 26, 2019. The court's final order also states that, at the first hearing, the court noted the deficiencies in Rashti's proffered evidence, observing "if [Rashti's] Exhibit A [i.e., the printed website pages] were authenticated and the facts therein proved true, [Rashti] would have made a good case that [Oral Aesthetic] has the necessary minimum contacts for a showing of jurisdiction." According to the court's final order, counsel for Oral Aesthetic stated at the first hearing "she had evidence which would show that the exercise of jurisdiction by this court would be unreasonable." The trial court continued the hearing on the motion to quash to allow the parties "to exchange their evidence and to present it in admissible form." Neither party submitted further evidence or additional briefing.
The second and final hearing was held more than one month later, on April 29, 2019. Neither Rashti nor her counsel appeared at the continued hearing. Oral Aesthetic appeared specially through its counsel.
5. Trial Court's Order
On May 2, 2019, the trial court granted Oral Aesthetic's motion to quash. In its order, the trial court explained that because no additional briefing had been submitted, the court was "bound by the state of the evidence at the initial hearing." The trial court found Rashti failed to produce admissible evidence and failed to carry her burden. The court found Oral Aesthetic had no offices in the United States other than in New Jersey and solicited clients like Rashti over the Internet. In its conclusion, the trial court noted: "In the age of the internet, businesses doing business on that forum have a presence everywhere the internet is. Here [Oral Aesthetic] solicits clients like [Rashti] over the internet. [Oral Aesthetic] otherwise has no office in California, or anywhere else in the USA, other than New Jersey. [¶] Whether a general internet presence constitutes 'existence or wide ranging' or a 'substantial and continuous and systematic" presence in California is doubtful, unless it is deemed to have such a presence everywhere the internet is. [¶] This is not yet the law." The court concluded the "proper place to sue [Oral Aesthetic] is in New Jersey or Canada."
6. Rashti's Appeal
Rashti appealed the May 2, 2019 order granting Oral Aesthetic's motion to quash.
DISCUSSION
1. Relevant Legal Principles
" 'California courts may exercise personal jurisdiction on any basis consistent with the Constitutions of California and the United States. (Code Civ. Proc., § 410.10.) The exercise of jurisdiction over a nonresident defendant comports with these Constitutions "if the defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate ' "traditional notions of fair play and substantial justice." ' " [Citation.]' [Citation.] '[T]he minimum contacts test asks "whether the 'quality and nature' of the defendant's activity is such that it is 'reasonable' and 'fair' to require him to conduct his defense in that State." [Citation.] The test "is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite 'affiliating circumstances' are present." ' " (Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, 552-553 (Jayone Foods).)
Although personal jurisdiction may be general or specific, we are concerned only with specific jurisdiction here. " 'When determining whether specific jurisdiction exists, courts consider the " 'relationship among the defendant, the forum, and the litigation.' " [Citation.] A court may exercise specific jurisdiction over a nonresident defendant only if: (1) "the defendant has purposefully availed himself or herself of forum benefits" [citation]; (2) "the 'controversy is related to or "arises out of" [the] defendant's contacts with the forum' " [citation]; and (3) " 'the assertion of personal jurisdiction would comport with "fair play and substantial justice." ' " ' " (Jayone Foods, supra, 31 Cal.App.5th at p. 553.) In addition, "[a]ssuming personal jurisdiction over a nonresident defendant from another nation calls for increased caution, because a 'high barrier of sovereignty tends to undermine the reasonableness of exercising personal jurisdiction in this state.' " (Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th 209, 221; In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 109-110 (Automobile Antitrust Cases).)
In her opening brief on appeal, Rashti argues Oral Aesthetic was subject to the trial court's specific jurisdiction and, although the issue was argued below, appears to concede general jurisdiction is not at issue. --------
The procedural rules on a motion to quash for lack of jurisdiction are well settled. "Although the defendant is the moving party, the plaintiff must carry the initial burden of demonstrating facts by a preponderance of evidence justifying the exercise of jurisdiction in California." (Automobile Antitrust Cases, supra, 135 Cal.App.4th at p. 110; Jayone Foods, supra, 31 Cal.App.5th at p. 553.) "The plaintiff must do more than merely allege jurisdictional facts. It must present evidence sufficient to justify a finding that California may properly exercise jurisdiction over the defendant. [Citation.] The plaintiff must provide affidavits and other authenticated documents in order to demonstrate competent evidence of jurisdictional facts. Allegations in an unverified complaint are insufficient to satisfy this burden of proof." (Automobile Antitrust Cases, at p. 110.) "The plaintiff has the right to conduct discovery with regard to the issue of jurisdiction to develop the facts necessary to sustain this burden." (Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710 (Mihlon).) Although "an unverified complaint has no evidentiary value in determination of personal jurisdiction [citation], . . . such pleading has limited cognizable significance as 'a material fact, in that it defines the cause of action, the nature of which has some bearing upon the decision whether it is fair and reasonable to require the nonresident parties to appear and defend in this state.' " (Ibid.) If the plaintiff satisfies that initial burden, the burden then shifts to the defendant to demonstrate the exercise of jurisdiction would be unreasonable. (Jayone Foods, at p. 553.)
" 'When there is conflicting evidence, the trial court's factual determinations are not disturbed on appeal if supported by substantial evidence. [Citation.] When no conflict in the evidence exists, however, the question of jurisdiction is purely one of law and the reviewing court engages in an independent review of the record.' " (Jayone Foods, supra, 31 Cal.App.5th at p. 553.)
2. No Error
As an initial matter, we address the applicable standard of review. In support of its motion to quash, Oral Aesthetic submitted admissible evidence—in the form of Snidman's declaration. In contrast and despite the trial court granting the parties additional time to present their evidence, Rashti proffered only unauthenticated and, therefore, inadmissible evidence (i.e., the printed website pages). Similarly, the allegations in Rashti's unverified complaint do not constitute admissible evidence. (Mihlon, supra, 169 Cal.App.3d at p. 710.) Thus, the admissible evidence in the record is uncontradicted. Accordingly, the jurisdictional question is purely legal, and we conduct an independent review to determine whether the admissible evidence supports the exercise of personal jurisdiction over Oral Aesthetic. (Jayone Foods, supra, 31 Cal.App.5th at p. 553.)
Given the state of the record, Rashti must rely solely on the uncontradicted evidence submitted by Oral Aesthetic. That evidence is: Oral Aesthetic is a Canadian corporation headquartered in Toronto; Oral Aesthetic has no offices in the United States; Oral Aesthetic maintains a mailing address in New Jersey; Oral Aesthetic is not licensed to conduct business in New Jersey; Oral Aesthetic has 16 clients in California; Oral Aesthetic solicits clients like Rashti "only over the internet" and the patients Oral Aesthetic refers to dentists come to "Oral Aesthetic . . . [p]rincipally via our Google advertising account number . . . contracted through our Toronto office"; Oral Aesthetic sent the 2016 agreement to Rashti by facsimile or e-mail; and Rashti returned the executed agreement to Oral Aesthetic by facsimile.
We conclude Rashti failed to carry her burden to demonstrate by a preponderance of the evidence that the exercise of jurisdiction over Oral Aesthetic is justified. (Automobile Antitrust Cases, supra, 135 Cal.App.4th at p. 110; Jayone Foods, supra, 31 Cal.App.5th at p. 553.) First, as noted, Rashti presented no admissible evidence of her own. Second, the admissible evidence in the record fails to establish the propriety of exercising personal jurisdiction over Oral Aesthetic, a nonresident defendant from another nation. Although the record includes agreements between Rashti and Oral Aesthetic, the evidence also reveals those agreements were transmitted by e-mail or facsimile, Oral Aesthetic has no physical presence in California, and Oral Aesthetic solicits clients and patients through the Internet. Although Snidman stated Oral Aesthetic had 16 clients in California, that fact alone is insufficient to exercise jurisdiction over Oral Aesthetic in this case. As Oral Aesthetic correctly states, we are not required to make inferences from the evidence to support the exercise of jurisdiction. Requiring a court "to draw an inference in favor of jurisdiction in the circumstances before us would lighten [Rashti's] burden of proof of jurisdictional facts. [Citations.] That burden of proof is grounded in constitutional guarantees of due process. We cannot set aside principles of fairness and reasonableness, but must show proper regard for them. [Citations.] This would be particularly troubling in a case—such as the one before us—involving [a defendant] from [a foreign nation]. We are charged to apply a higher degree of care when considering jurisdictional issues in such circumstances." (Automobile Antitrust Cases, supra, 135 Cal.App.4th at p. 113.)
Finally, although the trial court briefly noted the issue of Internet presence vis-a-vis jurisdiction, we do not reach that issue because it was not briefed by the parties other than Oral Aesthetic stating it was unnecessary to analyze the point.
DISPOSITION
The May 2, 2019 order is affirmed. Oral Aesthetic Advocacy Group, Inc., is awarded its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3), (5).)
NOT TO BE PUBLISHED.
LUI, P. J. We concur:
ASHMANN-GERST, J.
CHAVEZ, J.