Opinion
G044819 Super. Ct. No. 30-2009-00315726
11-23-2011
GEORGE A. SHARP, Plaintiff and Respondent, v. GREGORY GEDDA, Defendant and Appellant.
Law Office of Albert L. Sassoe, Jr. and Albert L. Sassoe, Jr. for Defendant and Appellant. Law Offices of David J. Harter, David J. Harter; The Ressler Firm and Kurt A. Ressler for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeal from an order of the Superior Court of Orange County, David T. McEachen, Judge. Affirmed.
Law Office of Albert L. Sassoe, Jr. and Albert L. Sassoe, Jr. for Defendant and Appellant.
Law Offices of David J. Harter, David J. Harter; The Ressler Firm and Kurt A. Ressler for Plaintiff and Respondent.
Gregory Gedda, resident of Michigan, signed a contract with George Sharp, resident of California. Gedda promised to pay Sharp about half of an outstanding judgment Sharp had against Michael Osborn, an Orange County, California-based investment advisor Sharp considers to be a con artist. Gedda had been an investor in Osborn's operations. He had also loaned money to him. By promising to retire a discounted judgment, Gedda obtained the benefit of taking financial pressure off Osborn, thus increasing the odds that Gedda would eventually benefit from his own investments in, and loans to, Osborn. The contract specifically provided for enforcement by a California court.
Gedda did not make the payments called for by the contract. Sharp sued Gedda. Sharp obtained a default, then a default judgment, against Gedda. Gedda specially appeared to quash the summons and set aside the judgment, asserting a lack of California personal jurisdiction. Gedda now appeals from the order denying the motion. We affirm. Gedda contractually consented to California jurisdiction. Furthermore, exercise of jurisdiction over him is fundamentally fair.
FACTS
The facts brought out by Gedda's motion are mostly undisputed. However, to the degree there might be any conflicts in the evidence, we must resolve those conflicts in favor of the trial court's judgment. (See Von's Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 (Vons's)[conflicts in evidence on motion to quash service are drawn in favor of the trial's court's decision applying a substantial evidence standard]; In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598 [drawing all legitimate and reasonable inferences to uphold the judgment in review of set aside motion].) Here are those facts:
Gedda, based in Michigan, is a financial backer of Michael Osborn. Osborn ran an investment company in Fullerton, California known as Principal Capital Group. Principal Capital Group used a Beverly Hills mailing address. Sharp contends that Osborn is a con man. Gedda, however, has invested about $1 million with Osborn. Records of Principal Capital Group's bank account with a Bank of America branch in Beverly Hills show that Gedda's Detroit-based company, known as the Union Street Saloon, has wired some $991,000 to Osborn's company over the course of 2008 and 2009.
Sharp is a crusader against Osborn. He has "publicized" Osborn's schemes over the Internet. Since 2002 he has been in contact with "dozens of victims of Osborn's schemes." After Sharp made contact with Gedda in 2009, Sharp "repeatedly warned Gedda about Osborn's propensity to conduct confidence schemes." Gedda admitted to Sharp that he had loaned Osborn in excess of $80,000. However, in these conversations Gedda still "expressed confidence" in his business investments with Osborn.
In 2005 Sharp sued Osborn and other related entities (including Harold Gregg). In 2006 Sharp obtained a judgment for $405,000 against Osborn. After crediting amounts obtained by levy and offsetting accrued interest, by October 2010 the judgment totaled almost half a million dollars.
In 2009 and 2010 Sharp pursued Osborn in the California criminal courts based on charges of check fraud and failure to appear at Sharp's judgment debtor exams. Osborn ended up being convicted of "multiple felony counts." Sharp was present when he was sentenced. As of early 2010 Osborn was serving time at a California prison in Susanville. On at least one occasion during this period (in October 2009), Gedda bailed Osborn out of jail. The record contains a document entitled "Consent of Jurisdiction of Bail Bond Agreement" (original underlining omitted) signed by Gedda on January 14, 2010. We quote in full: "I/We, hereby consent and agrees [sic] that any litigation arising out of payments due to Steven Mehr & Scott Mehr Bail Bonds, or as a result of bail bonds issued under any agreement with Steven Mehr & Scott Mehr Bail Bonds be conducted in the State of California."
Sharp believed that Gedda had "expressed" the thought that Osborn's incarceration would adversely affect Gedda by preventing Osborn from overseeing his monetary empire. Sharp suggested to Gedda that Gedda purchase Sharp's judgment against Osborn at a discount. The idea was to leave Gedda and Osborn "free to conduct their business." Osborn relayed a counter-proposal from Gedda whereby Osborn would pay a discounted judgment himself under a payment plan underwritten by Gedda.
The outcome of the discussions was a written agreement, signed by Sharp, Osborn, Shanney Osborn, Harold Gregg and Gedda, dated October 19, 2009. The agreement was titled, "Payoff/Compromise Agreement on Judgment."
The first paragraph was a mere recitation of the fact an agreement was being signed. But it is worth noting that it recites that the agreement was made in Santa Ana, California: "This settlement agreement . . . is made . . . by and between George A. Sharp ('Sharp' or 'Judgment Creditor') on the one hand, and Michael Osborn . . . Shanney Osborn . . . and Harold Gregg (collectively the 'Judgment Debtors') on the other hand, and third party Greg Gedda of Detroit Michigan ('Gedda') as of October 19, 2009, in Santa Ana, California."
The agreement next recites the fact of Sharp's judgment against Osborn and Gregg "in the Superior Court of the State of California, County of Orange, Central Justice Center" as case number "05CC10976." It gives the current value of the judgment as $496,330. It recites that the parties have found it "advantageous" to enter into a "structured" settlement to "avoid any further collection activity by Sharp against the Judgment Debtors."
The agreement then provides for payments from Gedda to Sharp's attorney. Each payment was to delivered by a certain date "by wire transfer" to the offices of Sharp's attorney in Tustin, California. The payments consisted of two payments. One had to be made by October 19, 2009 for $50,000. The second, for $198,165, had to be made less than by five days later, i.e., by October 23, 2009. For his part Sharp agreed to "file an acknowledgement of satisfaction of judgment with respect to the Judgment Debtors upon the full performance of the terms and obligations set forth in this agreement by Gedda, which specifically relate to the timely payment of $248,165." And, if "the parties" fully complied with the agreement, Sharp also agreed to "remove all websites and blogs" which he had "generated" which "refer to the Judgment Debtors."
On the final page was an enforcement paragraph (paragraph 12), providing for enforcement "pursuant to" section 664.6 of the California Code of Civil Procedure, the laws of California, and retention of jurisdiction by "the court" to enforce the terms of the agreement. In context, "the court" obviously refers to the Superior Court of Orange County, already referenced in the contract, which entered the judgment against Osborn that Gedda was undertaking to satisfy.
The enforcement paragraph provided: "The Parties and each of them understand and agree that this agreement shall be construed under, and interpreted in accordance with, the laws of the State of California, and that this Agreement may be enforced pursuant to Section 664.6 of the California Code of Civil Procedure. The parties specifically agree that the court shall retain jurisdiction to enforce the terms of this settlement agreement." (Underlining in original.)
Gedda made neither of the contemplated payments. Sharp sued. Exhibit A to the complaint was the written agreement of October 19, 2009. Page 5 of that agreement was a photocopy of a fax of Greg Gedda's signature, also dated October 19. 2009.
Sharp's attorney sent at least three letters warning Gedda about the need to file an answer. After a fourth "warning," Sharp took Gedda's default in late January 2010. In mid-March Sharp obtained a judgment for about $262,000, including about $7,500 in prejudgment interest and $5,500 in attorney fees. Gedda specially appeared to request the judgment be set aside for lack of jurisdiction. His moving declaration was short -- two pages. Most of the declaration is a list of what Gedda has not done in California. (For example, Gedda has never resided or voted in California.) It contains no statements specifically disputing any of the facts stated above, though it does contain these conclusory assertions: "I have no contacts with the state of California. . . . I do not and have not done business in the state of California. . . . I have had no business dealings with George Sharp."
Nowhere, in either Gedda's declaration or in the points and authorities supporting his motion does he confront or acknowledge the agreement of October 19, 2009. Nowhere does he assert that his signature on the October 19, 2009 agreement was a forgery. In fact, at oral argument on Gedda's motion, his counsel recognized he had signed the agreement, albeit Gedda did not "understand" what he was signing: "Mr. Sassoe: Thank you your honor. Your honor, this is a very unfortunate situation. My client is a Michigan resident, signed a piece of paper that was put in front of him and did not understand the -- what he was signing."
DISCUSSION
Gedda contractually consented to jurisdiction. He signed a contract that admits no other reasonable interpretation. That is enough. (Weil & Brown, et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2011) ¶ 3:170, p. 3-46.6 ["California courts may exercise personal jurisdiction over a nonresident who has contractually consented in advance to such jurisdiction (e.g., provision that "'in event of dispute, parties regardless of their residence will be subject to the jurisdiction of the courts of the State of California'"]; e.g., National Equipment Rental Ltd. v. Szukhent (1964) 375 U.S. 311, 315-316 ["And it is settled, as the courts below recognized, that parties to a contract may agree in advance to submit to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether."].)
But if anything more is needed, there is no question that specific jurisdiction to enforce this contract is also present over Gedda. (See Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062, 1067, 1070 [special jurisdiction is tested on three factors: (1) Purposeful availment of the privilege of doing business in California; (2) relatedness of the claim to the defendant's contacts with California; and (3) overall fundamental fairness].)
First, contrary to his current protestations, Gedda purposefully availed himself of the benefits of California personal jurisdiction. There is no dispute that Gedda did indeed sign a contract which provided that a California court was to "retain jurisdiction" to enforce the payments he obligated himself to make. He received a benefit from the jurisdiction. As a monetary backer of Osborn, the contract reduced, by about half (from half a million dollars to about $250,000) an outstanding judgment against Osborn. Further, it provided that Sharp, a California resident, would desist from his Internet campaign against Osborn, thus materially increasing the possibility that Osborn would meet success in ongoing and future ventures, thus increasing the possibility that Gedda's own investments would not be lost.
Second, the exercise of jurisdiction is directly related to the very agreement Gedda signed "in Santa Ana."
Third, exercise of jurisdiction is fair. Gedda has sent considerable money -- at least $991,000 -- directly to Osborn in California. A reasonable inference from the record is that Osborn has used at least some of those funds to keep his operations afloat. Funding Osborn's operations allows him to continue to enlist California investors, which indirectly benefits one of his principal investors, Gedda. Gedda also specifically agreed to California jurisdiction in connection with Gedda's efforts to keep Osborn out of jail, and thus at large to continue to enlist California investors.
Gedda's argument that he did not "understand" the contract is untenable. Both Michigan and California law assume people read the contracts they sign. (See Allen v. Auto Club Ins. Ass'n (1989) 175 Mich.App. 206, 209 ["The rule of reasonable expectation relied on by the trial court is one which presumes that the policyholder read the contract language."]; Transamerica Ins. Corp. v. Buckley (1988) 169 Mich.App. 540, 548 ["the court must presume that the insured actually read the language of the insurance contract in issue"]; Workroom v. Auto Owners Ins. Co. (Mich.App. 2002) 2002 WL 1747884 at p. 5 [insured did not read insurance contract, ergo his expectation of coverage was unreasonable]; Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163 [quoting Corbin that even a blind person or one who is illiterate is still bound by the contracts he or she signs, in case where injured plaintiff did not read release].)
DISPOSITION
The order denying Gedda's motion to quash service and set aside the judgment is affirmed. Respondent Sharp shall recover his costs on appeal.
RYLAARSDAM, ACTING P. J. WE CONCUR: BEDSWORTH, J. ARONSON, J.