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This case was last updated from Los Angeles County Superior Courts on 06/11/2019 at 00:42:08 (UTC).

DANIEL W. HOPP VS 33428 CALVEST MALIBU, LLC, ET AL.,

Case Summary

On 12/19/2016 DANIEL W HOPP filed a Property - Other Property Fraud lawsuit against 33428 CALVEST MALIBU, LLC, . This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are NANCY L. NEWMAN and MITCHELL L. BECKLOFF. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6840

  • Filing Date:

    12/19/2016

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Property Fraud

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

NANCY L. NEWMAN

MITCHELL L. BECKLOFF

 

Party Details

Plaintiff

HOPP DANIEL W.

Defendants

33428 CALVEST MALIBU LLC

RIECK KAY

INFINITY II LIMITED A GUERNSEY NON-CELLULAR COMPANY

DEUTSCHE OEL & GAS AG A GERMAN AKTIENGESELLSCHAFT

Attorney/Law Firm Details

Plaintiff Attorneys

SMITH KARINA

SHAPIRO JONATHAN

BAKER BOTTS

SHAPIRO JONATHAN ACKER

BENNETT MICHAEL

ASHBY JOSEPH R.

Defendant Attorneys

DUCKERS EDWARD CHARLES

STRUHAR MATTHEW THOMAS

DUCKERS EDWARD C.

 

Court Documents

Summons

12/19/2016: Summons

Minute Order

12/21/2016: Minute Order

Unknown

1/25/2017: Unknown

Request for Judicial Notice

1/31/2017: Request for Judicial Notice

Brief

3/2/2017: Brief

Unknown

3/7/2017: Unknown

Minute Order

3/14/2017: Minute Order

Unknown

3/24/2017: Unknown

Proof of Service (not Summons and Complaint)

3/24/2017: Proof of Service (not Summons and Complaint)

Unknown

5/18/2017: Unknown

Unknown

5/18/2017: Unknown

Affidavit

5/23/2017: Affidavit

Minute Order

5/25/2017: Minute Order

Unknown

10/2/2018: Unknown

Motion for Leave to Amend

5/1/2019: Motion for Leave to Amend

Opposition

5/8/2019: Opposition

Opposition

5/8/2019: Opposition

Reply

5/14/2019: Reply

95 More Documents Available

 

Docket Entries

  • 05/29/2019
  • Summons (on Complaint); Filed by DANIEL W. HOPP (Plaintiff)

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  • 05/23/2019
  • at 08:30 AM in Department M; Hearing on Motion for Leave to Amend (Motion for Leave to Amend Complaint) - Held - Motion Granted

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  • 05/23/2019
  • First Amended Complaint for Fraudulent Transfer (Civil Code 3439 et. Seq.); Filed by DANIEL W. HOPP (Plaintiff)

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  • 05/23/2019
  • Order Appointing Court Approved Reporter as Official Reporter Pro Tempore; Filed by DANIEL W. HOPP (Plaintiff)

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  • 05/23/2019
  • Minute Order ( (Hearing on Motion for Leave to Amend Motion for Leave to Amen...)); Filed by Clerk

    Read MoreRead Less
  • 05/21/2019
  • at 08:30 AM in Department M; Hearing on Motion to Compel Discovery (not "Further Discovery") - Held - Motion Granted

    Read MoreRead Less
  • 05/21/2019
  • at 08:30 AM in Department M; Hearing on Motion to Compel Discovery (not "Further Discovery") - Held - Motion Granted

    Read MoreRead Less
  • 05/21/2019
  • Minute Order ( (Hearing on Motion to Compel Discovery (not "Further Discovery...)); Filed by Clerk

    Read MoreRead Less
  • 05/21/2019
  • Order Appointing Court Approved Reporter as Official Reporter Pro Tempore; Filed by DANIEL W. HOPP (Plaintiff)

    Read MoreRead Less
  • 05/21/2019
  • Order (Proposed Protective Order - Confidential Designation Only); Filed by DANIEL W. HOPP (Plaintiff)

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212 More Docket Entries
  • 12/21/2016
  • Ex-Parte Application (FOR MICHAEL B. BENNETT TO APPEAR AS COUNSEL PRO HAC VICE ); Filed by Attorney for Plaintiff

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  • 12/21/2016
  • Order; Filed by DANIEL W. HOPP (Plaintiff)

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  • 12/21/2016
  • Minute Order; Filed by Clerk

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  • 12/21/2016
  • Notice; Filed by DANIEL W. HOPP (Plaintiff)

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  • 12/21/2016
  • Ex-Parte Application; Filed by DANIEL W. HOPP (Plaintiff)

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  • 12/19/2016
  • Civil Case Cover Sheet; Filed by DANIEL W. HOPP (Plaintiff)

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  • 12/19/2016
  • Summons; Filed by Plaintiff

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  • 12/19/2016
  • Complaint; Filed by DANIEL W. HOPP (Plaintiff); 33428 CALVEST MALIBU, LLC (Defendant)

    Read MoreRead Less
  • 12/19/2016
  • Complaint Filed

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  • 12/19/2016
  • Summons Filed; Filed by Attorney for Plaintiff

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Tentative Rulings

Case Number: SC126840    Hearing Date: September 08, 2020    Dept: M

CASE NAME: Daniel W. Hopp v. 33438 Calvest Malibu LLC, et al.

CASE NO.: SC126840

MOTION: Plaintiff’s Motion for a Protective Order

HEARING DATE: 9/8/2020

DISCOVERY DISPUTE

On June 28, 2019, 33428 Calvest Malibu, LLC (“Defendant” or “Calvest Malibu”) served 90 special interrogatories on Plaintiff Daniel Hopp, along with a declaration of necessity. (Bennett Decl., Ex. 1 [special interrogatories]; Ex. 2 [declaration of necessity].) Plaintiff Hopp responded to the first 35 interrogatories. Plaintiff seeks a protective order to relieve him of the obligation to respond to the remaining 55 interrogatories, which Hopp contends are oppressive, burdensome, and premature.

While there is a second amended complaint in this case, the discovery relates to the allegations made in the first amended complaint (“FAC”), filed on May 23, 2019, specifically, paragraphs 39, 40, 48, 54, 55, 66. In paragraph 39, Plaintiff alleges, “Because there is no indication in the Los Angeles County real property records that the Credit Suisse Deed of Trust has been released, the DOGAG Deed of Trust effectively operates as a second lien on the Malibu Home that purports to encumber the property in an amount that could be significantly greater than Rieck’s purchase price of the property. As noted above, Rieck purchased the Malibu Home for approximately $10,500,000, but the Credit Suisse Deed of Trust combined with the DOGAG Deed of Trust purportedly encumber the property in an amount that may be in excess of $13,000,000 at today’s exchange rates. Because Rieck controls DOGAG, this was an insider transaction designed to conceal potential equity possessed by Rieck in the Malibu Property in furtherance of defrauding Rieck’s creditors, particularly Hopp, whom Rieck knew at the time of executing the DOGAG Deed of Trust was in pursuit of the Malibu Home to collect, in part, his money judgment.” (FAC ¶ 39.) Plaintiff also alleges “Rieck used a nearly identical tactic in Switzerland in an attempt to conceal equity in his Swiss property and prevent Hopp from foreclosing on a luxury condominium there. These actions are particularly egregious given the timing of the sham DOGAG encumbrance after the German Judgment issued and during the pendency of this fraudulent transfer action and the judgment recognition action described below.” (Id. ¶ 40.) “Debtors [Rieck and Furie Petroleum Company] have still neither paid Hopp for the Remaining Contribution Payment nor paid the German Judgment. Hopp has a claim against Rieck for €17,627,740.25 plus interest, fees, and costs (the ‘Claim’).” (Id. ¶¶ 48, 12.) Finally, “Because Rieck and Furie have not yet paid the Remaining Contribution Repayment, or the German Judgment, or the California Judgment, Hopp was harmed by Rieck’s fraudulent transfer of the Malibu Home to the LLC.” (Id. ¶ 66.) Paragraphs 54 and 55 contain alter ego allegations. Plaintiff alleges that Rieck is the alter ego of “the LLC, Infinity II, and DOGAG” (FAC ¶ 54) and that the “corporate Defendants—namely the LLC, Infinity II, and DOGAG—are liable as Rieck’s alter ego.” (Id. ¶ 55.)

LEGAL STANDARD

Subject to the right of the responding party to seek a protective order under Code of Civil Procedure Section 2030.090, any party who attaches a supporting declaration as described in Section 2030.050 may propound a greater number of specially prepared interrogatories to another party if this greater number is warranted because of any of the following:

(1) The complexity or the quantity of the existing and potential issues in the particular case.

(2) The financial burden on a party entailed in conducting the discovery by oral deposition.

(3) The expedience of using this method of discovery to provide to the responding party the opportunity to conduct an inquiry, investigation, or search of files or records to supply the information sought.

(Code Civ. Proc., § 2030.040(a); see also Code Civ. Proc.,§ 2030.050 [describing requirement’s for declaration for additional discovery].)

“When interrogatories have been propounded, the responding party, and any other party or affected natural person or organization may promptly move for a protective order. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., § 2030.090(a) [emphasis added].) “If the responding party seeks a protective order on the ground that the number of specially prepared interrogatories is unwarranted, the propounding party shall have the burden of justifying the number of these interrogatories.” (Code Civ. Proc., § 2030.040(b).) “The court, for good cause shown, may make any order that justice requires to protect any party or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Code Civ. Proc., § 2030.090(b).)

“The court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order under this section, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc., § 2030.090(d).)

ANALYSIS

Meet and confer

Plaintiff filed a meet and confer declaration along with this motion. (See generally Bennett Decl., see also Ex. 3.) “A meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.” (Code Civ. Proc., § 2016.040.) Plaintiff’s main contention against the interrogatories were that the interrogatories exceed the maximum amount. (See Ex. 3 (p. 34/39).) As is evident from the back-and-forth between counsel, Plaintiff did not point to any particular interrogatories that Plaintiff found objectionable. (See generally Ex. 3.) Therefore, the Court finds that Plaintiff did not meet and confer in good faith prior to filing this motion. The Court proceeds with the merits of motion below.

Merits

Plaintiff generally argues that number of special interrogatories propounded are unwarranted. Plaintiff also attacks the declaration of necessity as being facially insufficient under Code of Civil Procedure section 2030.050. Plaintiff point to paragraph 8 in the statutory form declaration. Paragraph 8 states, “This number of questions is warranted under Section 2030.040 of the Code of Civil Procedure because __________. (Here state each factor described in Section 2030.040 that is relied on, as well as the reasons why any factor relied on is applicable to the instant lawsuit.)” (Code Civ. Proc., § 2030.050, ¶ 8.) Propounding party’s declaration reads:

This number of specially prepared interrogatories is warranted under Section 2030.040 of the Code of Civil Procedure because of the expedience of using this method of discovery. The vast majority of these special interrogatives are being served to obtain all (1) facts; (2) witnesses; and (3) documents which support the material factual and legal assertions made by Plaintiff in his First Amended Complaint. This necessarily required breaking up each factual assertion into separate special interrogatories so as to avoid being compound. Further, the number of interrogatories is warranted due to the substantial amount in controversy, as well as the extensive allegations involving fraud and alter ego liability.

(Vu Additional Discovery Decl. ¶ 9 [double emphasis added].) Since Plaintiff challenges Calvest Malibu’s counsel’s declaration, the burden in shifted to Calvest Malibu to “justify[] the number of these interrogatories.” (Code Civ. Proc., § 2030.040(b).)

Calvest Malibu argues that the declaration is adequate and that the interrogatories are appropriate because they seek relevant and discoverable information regarding Plaintiff’s alter ego allegations in the FAC. As a preliminary matter, the Court must determine whether Calvest Malibu’s counsel’s declaration was sufficient. As set forth above, portions of the declaration are merely conclusory. Counsel, however, also articulates two specific reasons, namely “quantity of the existing issues” as to fraud and alter ego and “the expedience of using this method of discovery.” The “expedience of using this method” is not supported by Calvest Malibu. First, the Court notes that the method is supposed to be expedient to the responding party and not to the propounding party. Defendant’s counsel has not explained how this method of discovery is expedient to Plaintiff. However, the declaration is facially sufficient with respect to the “quantity of the existing issues” of fraud and alter ego. Counsel explains that the interrogatories had to be broken up to avoid compound interrogatories. The Court determines that this explanation is sufficient on its face.

The Court next determines whether Calvest Malibu has adequately justified the additional interrogatories. Defendant Calvest Malibu argues that all of the interrogatories are contention interrogatories and are permitted. Indeed, “[a]n interrogatory may relate to whether another party is making a certain contention, or to the facts, witnesses, and writings on which a contention is based.” (Code Civ. Proc., § 2030.010(b).) Calvest Malibu also argues that the interrogatories are appropriate given the 29 pages of fraudulent transfer allegations in the FAC.

Plaintiff’s position is that the interrogatories relate to all of the contentions of the FAC and, as a result, are oppressive and unduly burdensome. Plaintiff further argues that the discovery requests are oppressive because Defendant served them shortly after the Court granted Plaintiff leave to amend the complaint. The second argument is without merit. In general, discovery by a plaintiff can commence as early as 10 days after the service on the defendant but a defendant can serve discovery as soon as it served with the complaint. (See Code Civ. Proc., § 2030.020(a) & (b).) Furthermore, the declaration is signed under penalty of perjury that the discovery sought is not propounded for an improper purpose. (Vu Decl. for Additional Discovery ¶ 10.)

Plaintiff also argues that Calvest Malibu seeks information from Plaintiff about the Defendants’ conduct, which demonstrates that the interrogatories are meant to annoy and harass Plaintiff because they seek information that is in their exclusive custody and control. In opposition, Calvest Malibu argues that this argument is irrelevant to whether a protective order is proper since Defendant is entitled to discovery that Plaintiff does have. Furthermore, Calvest Malibu points out that there is requirement that makes Plaintiff’s obligation to respond to discovery contingent upon Calvest Malibu complying with its discovery obligations. The Court agrees with Calvest Malibu as to this point. Overall, the discovery at issue does not ask Plaintiff to identify facts or witnesses based on discovery obtained by any or all of the Defendants, and therefore, Plaintiff cannot withhold discovery.

Plaintiff also argues that 19 of the 55 additional interrogatory requests relate to the identification of documents­--specifically numbers 36, 39, 42, 45, 48, 51, 54, 57, 60, 63, 66, 69, 72, 75, 78, 81, 84, 87, 90. “‘Oppression’ means the ultimate effect of the burden of responding to the discovery is ‘incommensurate with the result sought.’” (People ex rel. Harris v. Sarpas (2014) 225 Cal.App.4th 1539, 1552 [quoting West Pico Furniture Co. v. Superior Court (1961) 56 Cal.2d 407, 417].) When considering whether unduly burdensome or expensive, the court takes into account “the needs of the case, the amount in controversy, and the importance of the issues at stake in the litigation.” (Code Civ. Proc., § 2019.030(a)(2).) In addition, a court may limit discovery if “[t]he discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive.” (Code Civ. Proc., § 2019.030(a)(1).)

The special interrogatories relate to various contentions made in the FAC, specifically as to facts, witnesses, or the existence of documents. Special interrogatories numbers 36 – 39 relate to the allegations in paragraph 39; interrogatories 40 – 42 relate to allegations in paragraph 40; interrogatories 43 – 45 relate to allegations in paragraph 48; interrogatories 46 – 72 relate to allegations in paragraph 54; interrogatories 73 – 75 relate to allegations in paragraph 55; interrogatories 76 – 78 relate to paragraph 66 but also relate to damages as result of the alleged fraudulent transfers; and finally interrogatories 79 – 90 relate to damages generally. As noted above, 19 of these special interrogatories pertain to the identification of documents. Calvest Malibu can obtain information as to these 19 specially propounded interrogatories (36, 39, 42, 45, 48, 51, 54, 57, 60, 63, 66, 69, 72, 75, 78, 81, 84, 87, 90) through an inspection demand. Since Calvest Malibu can obtain this discovery through a different method, Plaintiff is not required to respond to interrogatories 36, 39, 42, 45, 48, 51, 54, 57, 60, 63, 66, 69, 72, 75, 78, 81, 84, 87, and 90.

As to the remaining interrogatories, they relate to facts or witnesses. Special interrogatories 36 - 45 relate to allegations of fraudulent transfers at issue in this case and other such transfers used to defraud creditors. Special interrogatories 46 - 75 relate to alter ego allegations, and as already noted, 76 – 90 relate to damages. Plaintiff alleges that Rieck is the alter ego of the Calvest Malibu and that Calvest Malibu is the alter ego of Rieck. Furthermore, Plaintiff alleges that all of the corporate defendants are alter egos of Rieck. Here, Defendant is entitled to discover information related to the facts and witnesses underlying Plaintiff’s claims and damages.

For these reasons, the motion is granted in part and denied in part. Plaintiff is not required to respond to interrogatories 36, 39, 42, 45, 48, 51, 54, 57, 60, 63, 66, 69, 72, 75, 78, 81, 84, 87, 90 and DENIED as to the rest. Plaintiff is ordered to respond to the remaining special interrogatories within 15 days of this order. The Court will not impose sanctions.

Case Number: SC126840    Hearing Date: August 11, 2020    Dept: M

Case Name: Daniel W. Hopp v. 33428 Calvest Malibu, LLC et al.

Case No.: SC126840

Motion: Defendant Credit Suisse Trust Limited’s Motion to Quash Service of Second Amended Complaint

LEGAL STANDARD

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: To quash service of summons on the ground of lack of jurisdiction of the court over him or her.” (Code Civ. Proc., § 418.10 (a)(1).)

Personal jurisdiction takes two forms—general and specific. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) General jurisdiction exists when a nonresident defendant has “substantial . . . continuous and systematic” contacts in the forum state. (Id.) General jurisdiction only exists when a defendant’s contacts with the forum state “are so constant and pervasive as to render it essentially at home” there. (Daimler AG v. Bauman (2014) 571 U.S. 117, 122.) “A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits [citations.]; (2) the controversy is related to or arises out of [the] defendant's contacts with the forum [citations.]; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice [citations.].” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269 (internal quotations omitted).)

“Although the defendant is the moving party and must present some admissible evidence (declarations or affidavits) to place the issue before the court (by showing the absence of minimum contacts with the state), the burden of proof is on the plaintiff to establish, by a preponderance of the evidence, a basis for jurisdiction (minimum contacts between the defendant and the forum state) . . . .” (School Dist. of Okaloosa County v. Superior Court (1997) 58 Cal.App.4th 1126, 1131.) “The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint. (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1362 (citing In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 110.)) If the plaintiff meets this burden, “it becomes the defendant's burden to demonstrate that the exercise of jurisdiction would be unreasonable.” (Ibid.)

Analysis

  1. Specific Jurisdiction

Credit Suisse Trust Limited argues that it did not purposefully avail itself of the benefits of California law and that the Court does not have specific jurisdiction over it because CST Bahamas does not currently own Infinity Malibu's shares, Calvest Malibu's membership interests, or the Malibu Property. In opposition, Plaintiff argues that Credit Suisse purposefully availed itself of the benefits of California law when it contracted to receive a transfer of the member interests of Calvest Malibu from Rieck via the Trust in an agreement governed by California law.

“A trust is a fiduciary relationship with respect to property in which the person holding legal title to the property—the trustee—has an equitable obligation to manage the property for the benefit of another—the beneficiary.” (Higgins v. Higgins (2017) 11 Cal.App.5th 648, 661 (quoting Moeller v. Superior Court

Here, Plaintiff provides evidence in the form of Exhibit 8 to the declaration of Michael Bennett that on August 17, 2015, individuals for and on behalf of Credit Suisse Trust Limited as Trustee of the Oil Hunter Trust signed an agreement for the transfer of control of 33428 Calvest Malibu LLC. In that agreement, Credit Suisse Trust Limited was the sole trustee of the Oil Hunter Trust (“Trust”), of which Kay Rieck is the sole settlor and beneficiary. The Trust owns 100% of the shares of Infinity Malibu Ltd. Before this transfer, Kay owned 100% of 33428 Calvest Malibu LLC, a California limited liability company. As a result of this transfer, Kay transferred his 100% interest in 33428 Calvest to Infinity Malibu Limited, a Guernsey company, held by the Trust. The agreement treated Kay’s transfer as a transfer to the Oil Hunter Trust, of which Credit Suite was the trustee.

“[A]mong the ordinary powers and duties of a trustee of a private trust are those of doing all acts necessary and expedient to collect, conserve and protect the property of the trust, to maintain and defend the integrity of the trust for the benefit of the beneficiaries and to employ such assistants as may be necessary for said purposes.” (Terry v. Conlan (1939) 14 Cal.2d 563, 574.)) Plaintiff also presented evidence that Infinity Malibu filed a statement of Change in Control and Ownership of Legal Entities with the California Board of Equalization and that a representative of Credit Suisse, Alec Bain, signed the statement on behalf of Infinity Malibu on December 20, 2016. (Ex. 7 to Bennett Decl. at RIECK_000313.) “[I]t is the trustee or trustees who hold title to the assets that make up the trust estate and who enter into contracts necessary to the management of the estate, subject to fiduciary obligations to manage and use the assets for the benefit of the trust beneficiary.” (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 521 (quoting another source).) As trustee of Infinity Malibu, Defendant Credit Suisse had to execute the forms necessary to inform the State of California of the change in control and ownership of a legal entity. From these facts, the Court concludes that Defendant Credit Suisse purposefully availed itself of the benefits of California law when it was acting in its capacity as a trustee under the trust.

As to the second prong, the three causes of action alleged against Credit Suisse arise out of Defendant's contacts with the forum. Plaintiff seeks to void the transfer of Rieck’s member interests in Calvest Malibu to the Trust, and then to Infinity Malibu, where Credit Suisse was the trustee of the trust at the time of the transfer, and Rieck was the settlor and sole beneficiary of the trust. In addition to the declaratory relief action against Credit Suisse, Plaintiff also filed a common law fraudulent transfer action as well as a statutory California Uniform Voidable Transactions Act cause of action related to the above-mentioned transfers.

Since Plaintiff met his burden as to the first two prongs, the burden shifts to Defendant to show that exercising jurisdiction does not comport with fair play and substantial justice. Defendant argues that since Plaintiff sued Defendant in its capacity as a trustee, and that since it no longer is a trustee of the trust, Plaintiff sued the wrong party because the responsibility of representing the Trust has passed to the successor trustee. The court agrees that the “powers of a trustee are not personal to any particular trustee but, rather, are inherent in the office of trustee. It has been the law in California for over a century that a new trustee ‘succeed[s] to all the rights, duties, and responsibilities of his predecessors.’” (Fiduciary Trust Internat. of California v. Klein Defendant is not a necessary party to this lawsuit, and even without their appearance in this action, Plaintiff can achieve the sought-after relief. Since Defendant provides evidence that it is no longer the trustee of the Trust, it would be unfair to require it to be a party to a lawsuit when it no longer manages trust assets.

Since jurisdiction over Defendant would not comport with fair play or substantial justice, Defendant’s motion to quash is tentatively granted. For these same reasons, Plaintiff’s request for jurisdictional discovery is denied.

Case Number: SC126840    Hearing Date: March 17, 2020    Dept: M

LEGAL STANDARD

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: To quash service of summons on the ground of lack of jurisdiction of the court over him or her.” (Code Civ. Proc., § 418.10 (a)(1).)

Personal jurisdiction takes two forms—general and specific. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) General jurisdiction exists when a nonresident defendant has “substantial . . . continuous and systematic” contacts in the forum state. (Id.) General jurisdiction only exists when a defendant’s contacts with the forum state “are so constant and pervasive as to render it essentially at home” there. (Daimler AG v. Bauman (2014) 571 U.S. 117, 122.) “A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits [citations.]; (2) the controversy is related to or arises out of [the] defendant's contacts with the forum [citations.]; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice [citations.].” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269 (internal quotations omitted).)

“Although the defendant is the moving party and must present some admissible evidence (declarations or affidavits) to place the issue before the court (by showing the absence of minimum contacts with the state), the burden of proof is on the plaintiff to establish, by a preponderance of the evidence, a basis for jurisdiction (minimum contacts between the defendant and the forum state) . . . .” (School Dist. of Okaloosa County v. Superior Court (1997) 58 Cal.App.4th 1126, 1131.) “The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint. (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1362 (citing In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 110.)) If the plaintiff meets this burden, “it becomes the defendant's burden to demonstrate that the exercise of jurisdiction would be unreasonable.” (Ibid.)

Analysis

  1. Specific Jurisdiction

Credit Suisse Trust Limited argues that it did not purposefully avail itself of the benefits of California law and that the Court does not have specific jurisdiction over it because CST Bahamas does not currently own Infinity Malibu's shares, Calvest Malibu's membership interests, or the Malibu Property. In opposition, Plaintiff argues that Credit Suisse purposefully availed itself of the benefits of California law when it contracted to receive a transfer of the member interests of Calvest Malibu from Rieck via the Trust in an agreement governed by California law.

“A trust is a fiduciary relationship with respect to property in which the person holding legal title to the property—the trustee—has an equitable obligation to manage the property for the benefit of another—the beneficiary.” (Higgins v. Higgins (2017) 11 Cal.App.5th 648, 661 (quoting Moeller v. Superior Court

“[A]mong the ordinary powers and duties of a trustee of a private trust are those of doing all acts necessary and expedient to collect, conserve and protect the property of the trust, to maintain and defend the integrity of the trust for the benefit of the beneficiaries and to employ such assistants as may be necessary for said purposes.” (Terry v. Conlan (1939) 14 Cal.2d 563, 574.)) Plaintiff also presented evidence that Infinity Malibu filed a statement of Change in Control and Ownership of Legal Entities with the California Board of Equalization and that a representative of Credit Suisse, Alec Bain, signed the statement on behalf of Infinity Malibu on December 20, 2016. (Ex. 7 to Bennett Decl. at RIECK_000313.) “[I]t is the trustee or trustees who hold title to the assets that make up the trust estate and who enter into contracts necessary to the management of the estate, subject to fiduciary obligations to manage and use the assets for the benefit of the trust beneficiary.” (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 521 (quoting another source).) As trustee of Infinity Malibu, Defendant Credit Suisse had to execute the forms necessary to inform the State of California of the change in control and ownership of a legal entity. From these facts, the Court concludes that Defendant Credit Suisse purposefully availed itself of the benefits of California law when it was acting in its capacity as a trustee under the trust.

As to the second prong, Plaintiff seeks to void the transfer of Rieck’s member interests in Calvest Malibu to the Trust, and then to Infinity Malibu, where Credit Suisse was the trustee of the Trust at the time of the transfer, and Rieck was the settlor and sole beneficiary of the Trust. In addition to the declaratory relief action against Credit Suisse, Plaintiff also filed a common law fraudulent transfer action as well as a statutory California Uniform Voidable Transactions Act cause of action related to the above-mentioned transfers. As such, the controversy is related to or arises out of Credit Suisse’s contacts with California.

For these same reasons, Plaintiff’s request for jurisdictional discovery is denied.

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