KYTSA ENTERPRISE CO., LTD. DBA OZARK VS MJD INDUSTRIES, LLC, DBA ARES TOOL, A WASHINGTON LIMITED LIABILITY COMPANY

Tentative Rulings

Case Number: *******0677 Hearing Date: December 17, 2021 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: December 17, 2021 TRIAL DATE: February 28, 2022

CASE: Kytsa Enterprise Co. Ltd., dba Ozark v. MJD Industries, LLC, dba Ares Tool, et al.

CASE NO.: *******0677

MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, REQUESTS FOR PRODUCTION, AND DEPOSITIONS; REQUEST FOR MONETARY SANCTIONS

MOVING PARTY: Defendant MJD Industries, LLC, dba Ares Tool

RESPONDING PARTY(S): Plaintiff Kytsa Enterprise Co., Ltd.

PROOF OF SERVICE:

• Correct Address: Yes.
• 16/21 (CCP ; 1005(b)): OK. Served by email on November 18, 2021.

CASE HISTORY:

• 08/29/19: Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a breach of contract case. Plaintiff, a seller of tools on Amazon, alleges that Defendants owe it $360,267.11 for tools that it shipped and delivered to a third party in accordance with Defendants’ purchase orders and instructions.

Defendant MJD Industries, LLC, dba Ares Tool, moves to compel further responses to three sets of discovery.

TENTATIVE RULING:

Defendant MJD Industries, LLC, dba Ares Tool’s motion to compel further responses to special interrogatories, requests for production, and depositions is DENIED as to the special interrogatories. As to the requests for production, the motion is CONTINUED to January 21, 2022 at 1:30 p.m. If the parties have not resolved their disputes as to the requests for production by January 7, 2022, they are to file a joint statement that day explaining the remaining issues. Any ruling on that motion will be contingent on Defendant paying the additional filing fee for what should have been an additional motion.

As to the depositions, the motion is DENIED without prejudice.

DISCUSSION:

Four Motions in One

Defendant MJD Industries, LLC moves to compel further responses to two separate sets of discovery and moves to compel two depositions in a single motion.

Defendant should have reserved four separate hearings for four separate motions. Combining multiple motions under the guise of one motion with one hearing reservation manipulates the Court Reservation System and unfairly jumps ahead of other litigants. Moreover, combining motions to avoid payment of separate filing fees deprives the Court of filing fees it is otherwise entitled to collect.

Accordingly, the Court has only considered the first of the four motions – the motion to compel further responses to special interrogatories – below. The parties are ordered to meet and confer as to the motion to compel further responses to requests for production in light of the Court’s ruling as to the special interrogatories. The motion to compel further responses to requests for production is CONTINUED to January 21, 2022 at 1:30 p.m. If the parties have not resolved their disputes as to the requests for production by January 7, 2022, they are to file a joint statement that day explaining the remaining issues. Any ruling on that motion will be contingent on Defendant paying the additional filing fee for what should have been an additional motion.

As to the depositions, the motion is DENIED without prejudice to Defendant’s ability to bring separate motions to compel the two depositions if it so chooses.

Motion to Compel Further Responses: Special Interrogatories

Legal Standard

Under Code of Civil Procedure section 2030.300, subdivision (a), a court may order a party to serve a further response to an interrogatory when the court finds that: “(1) An answer to a particular interrogatory is evasive or incomplete[;] (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate[; or] (3) An objection to an interrogatory is without merit or too general.”

The burden is on the responding party to justify any objection or failure to fully answer the interrogatories. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.)

Meet and Confer

A party making a motion to compel further responses must also include a declaration stating facts showing a “reasonable and good faith attempt” to resolve informally the issues presented by the motion before filing the motion. (Code Civ. Proc., ;; 2016.040, 2030.310(b).)

The Declaration of Attorney Hamilton Gardiner reflects that the parties’ meet-and-confer efforts were sufficient.

Timeliness

A motion to compel further responses to interrogatories must be served “within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the propounding party and the responding party have agreed in writing.” (CCP ; 2030.310(c).)

Here, Plaintiff served its responses to the special interrogatories on August 28, 2020. (Gardiner Decl. ¶ 3 & Exh. A.) This motion was not filed until November 18, 2021, and Defendant’s has not stated in his declaration that the parties agreed in writing to any extension of the deadline. Nevertheless, given that Plaintiff does not raise an untimeliness issue as to the motion to compel further responses to special interrogatories but does so as to other discovery, the Court will assume that Defendant could produce such a written agreement if asked to do so. Therefore, the Court will consider the motion on the merits as to the special interrogatories.

Discussion

Special Interrogatories 38, 50, 52, and 53

As to the challenged responses to special interrogatories 38, 50, 52, and 53, the motion is DENIED AS MOOT. Plaintiff has agreed to withdraw its claims for lost profits and revenue (Opp., at p. 2.), and therefore the special interrogatories related to these topics are moot.

Both parties’ requests for sanctions are DENIED.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: December 17, 2021 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Case Number: *******0677    Hearing Date: April 7, 2021    Dept: 47

Case Number: *******0677    Hearing Date: December 09, 2019    Dept: 47

Kytsa Enterprise Co. Ltd., dba Ozark v. MJD Industries, LLC, dba Ares Tool, et al.

MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF PERSONAL JURISDICTION

MOVING PARTY: Defendant MJD Industries, LLC, dba Ares Tool

RESPONDING PARTY(S): Plaintiff Kytsa Enterprise Co., Ltd.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a breach of contract case. Plaintiff, a seller of tools on Amazon, alleges that Defendants owe them $360,267.11 for tools that it shipped and delivered to a third party in accordance with Defendants’ purchase orders and instructions.

Defendant MJD Industries, LLC, dba Ares Tool, moves to quash the service of the summons for lack of personal jurisdiction.

TENTATIVE RULING:

Defendant MJD Industries, LLC, dba Ares Tool’s motion to quash service of the summons is DENIED.

Defendant is to respond to the complaint within 30 days of the date of this Order.

DISCUSSION:

Special Appearance

No motion under CCP ; 418.10 “shall be deemed a general appearance by the defendant.” (CCP ; 418.10(d).) Here, Defendant brought this motion under CCP ; 418.10. Thus, although Defendant did not refer to itself as “Specially Appearing Defendant,” filing this motion does not constitute a general appearance.

Motion To Quash

Defendant MJD Industries, LLC, dba Ares Tool (“Ares”) argues that the service of the summons and complaint should be quashed because the Court lacks personal jurisdiction over it.

On a motion to quash for lack of personal jurisdiction, the plaintiff has the initial burden of proof:

Where a nonresident defendant challenges jurisdiction by way of a motion to quash, the plaintiff bears the burden of establishing by a preponderance of the evidence that minimum contacts exist between the defendant and the forum state to justify imposition of personal jurisdiction. (Citations omitted.) The plaintiff must present facts “‘demonstrating that the conduct of defendants related to the pleaded causes [of action] is such as to constitute constitutionally cognizable “minimum contacts.” [Citation.]’” (Citation omitted.) Evidence of the jurisdictional facts or their absence may be in the form of declarations. (Citation omitted.) Where there is a conflict in the declarations, resolution of the conflict by the trial court will not be disturbed on appeal if the determination is supported by substantial evidence. (Citations omitted.) However, where the evidence of jurisdictional facts is not conflicting, the question of whether a defendant is subject to personal jurisdiction is one of law. (Citation omitted.)

(Elkman v. National States Ins. Co. (2009) 173 Cal.App.4th 1305, 1312-1313 (bold emphasis added).)

If the plaintiff “meets this initial burden, then the defendant has the burden of demonstrating that the exercise of jurisdiction would be unreasonable.” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 273.)

General Jurisdiction

The assertion of personal jurisdiction by a California court is proper if it “comports with the limits imposed by federal due process.” (Young v. Daimler AG (2014) 228 Cal.App.4th 855, 865.)

Under federal law, the concept of general jurisdiction has largely become obsolete. (Daimler AG v. Bauman (2014) 571 U.S. 117, 130.) For a corporation, the “paradigm forum for the exercise of general jurisdiction” is an “equivalent place” to an “individual’s domicile” – “one in which the corporation is fairly regarded as at home.” (Id. at 137.) The corporation’s place of incorporation and principal place of business meet this standard. (Ibid.) Places where the corporation “engages in a substantial, continuous, and systematic course of business,” however, do not. (Id. at 138.) Rather, the corporation’s “affiliations with the State” must be “so ‘continuous and systematic’ as to render [it] essentially at home in the forum state.” (Id. at 139 (citations omitted).)

Here, Ares is not incorporated in California and does not have its principal place of business here. (Declaration of Mark Desimone ¶¶ 2.) Nor does it have any “affiliations” with California that are so “continuous and systematic” they render it essentially “at home” in California. For example, Ares has no representatives or employees in California, is not registered to do business here, and does not lease or own any facilities in California. (Desimone Decl. ¶¶ 2-3, 10.) Under these circumstances, the exercise of general jurisdiction over Ares would be improper.

Specific Jurisdiction

“Specific jurisdiction may be asserted where the defendant has purposefully availed himself of forum benefits and the controversy is related to or arises out of the defendant’s contacts with the forum.” (Hall v. Laronde (1997) 56 Cal.App.4th 1342, 1346.) (Citation omitted.) Sufficient minimum contacts for specific jurisdiction exist when a nonresident “‘deliberately’ has engaged in significant activities within a [s]tate . . . or has created ‘continuing obligations’ between himself and residents of the forum.” (Ibid.) The exercise of specific jurisdiction must also be fair and reasonable. (Anglo Irish Bank Corp., PLC v. Superior Court (2008) 165 Cal.App.4th 969, 980.)

When determining whether specific jurisdiction exists, courts consider the “relationship among the defendant, the forum, and the litigation.” . . . A court may exercise specific jurisdiction over a nonresident defendant only if: (1) “the defendant has purposefully availed himself or herself of forum benefits” . . . ; (2) the “controversy is related to or ‘arises out of’ [the] defendant's contacts with the forum” . . . ; and (3) “the assertion of personal jurisdiction would comport with ‘fair play and substantial justice’” . . . .

(Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062.)

The “‘purposeful availment’ requirement ensures that a defendant will not be hailed into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.” (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 474.)

Once it has been determined that a defendant purposefully established minimum contacts, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with “fair play and substantial justice.” (Burger King, supra, 471 U.S. at 476.) Factors to consider are “the burden on the defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief.” (Asahi Metal Industry Co., Ltd., v. Superior Court of California, Solano County (1987) 480 U.S. 102, 113.) A court must “also weigh in its determination ‘the interstate judicial system’s interest in obtaining the most efficient resolution of the controversies; and the shared interest of the several States in furthering fundamental substantive social policies.’” (Ibid. (citing World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 292).)

Plaintiff alleges the following regarding the parties’ activities: Ares ordered tools from Plaintiff, directing Plaintiff (in Taiwan) to ship them to third party Flexport (in California). Flexport would then deliver the tools to Amazon facilities in California and elsewhere, at Amazon’s direction, where they would be stored until Amazon customers ordered them or shipped to a fulfillment center. Once orders were placed, Amazon would fulfill the orders, sending the tools to customers in California and elsewhere, and sending the sales proceeds to Ares, less the fulfillment fee. (Complaint ¶¶ 8-11.) Plaintiff alleges that Ares has not paid it for the tools. (¶ 16.)

The evidence submitted by Plaintiff indicates that Ares has purposefully availed itself of the benefits of doing business in California. In its verified discovery responses, Ares has admitted that it sells products to California customers through its website. (Declaration of Raymond H. Hua, Exh. A, RFA No. 2.) It has also admitted that products it purchased from Plaintiff were shipped across the United States, including to California. (Id., No. 7.) In other discovery, Ares stated that it had approximately $1.8 million in gross sales in California over the past three years or so (Hua Decl., Exh. B, SRog No. 1.) It markets to all states, including California, through Amazon. (Id., No. 3.) Plaintiff has also provided commercial invoices for the tools purchased by Ares showing that their destinations were Long Beach and Los Angeles, California. (Id., Exh. E.) Ares also indicates that it has sent approximately 80 shipments to Amazon’s fulfillment center since it began doing business with Amazon less than four years ago. (Desimone Decl. ¶ 8.) This evidence shows that Ares has “deliberately . . . engaged in significant activities within” California and has created a “substantial connection with it.” (Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1063.)

Ares argues that it does not purposefully direct its activities to California, but rather it “simply oblig[es] Amazon’s requests.” (Reply, at p. 4.) However, a nonresident seller may be subject to personal jurisdiction based on its sales within a particular state even if the sales are conducted through a nonaffiliated entity – such as, in the pre-internet days – an independent direct mail or telemarketing company. (West Corp. v. Superior Ct., 116 Cal.App.4th 1167, 1176 [noting that courts have found personal jurisdiction based on a national direct mail campaign “even when the number of promotional mailings to residents of a forum were relatively small in number”].)

Although Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, on which Plaintiff relies, is a product liability case and not a contract case like this one, it is analogous in terms of the defendant’s contacts with California. In that wrongful death suit, the plaintiffs sued a California importer and distributor of Korean consumer products that sold a defective humidifier cleaning agent to a Los Angeles retail store where it was purchased by the decedent. (Id. at 548.) The distributor filed a cross-complaint for equitable indemnity, contribution, and declaratory relief against the Korean manufacturer and distributor who sold the cleaning agent to the California importer. (Ibid.) The court held that the Korean manufacturer had purposefully availed itself of the benefits of doing business in California by engaging in a number of direct sales transactions with multiple California distributors between 2005 and 2012; having an ongoing business relationship with the California distributor between 2006 and 2010, during which time, thousands of products were sold, including 3,600 bottles of the subject humidifier cleaning agent; shipping all products sold in California through Los Angeles or Long Beach ports; and having knowledge that the final destination for the products was Los Angeles. (Id. at p. 556-557.) Further, the Korean manufacturer sold products to five other distributors located in California, which generated $1.78 million in revenue, even if it was unaware of the intended final destination. (Id. at p. 557.) Therefore, the manufacturer “did not merely place its products into the stream of commerce with an awareness they might end up in California. Rather, [it] purposefully directed its activities toward California businesses when it repeatedly sold its products to various California distributors over a seven-year period . . . derived benefits from its activities in California when it generated almost $2 million in revenue from these California sales . . . [and] purposefully availed itself of the benefits of doing business in California and reasonably could expect to be subject to the jurisdiction of California courts.” (Id. at p. 559.)

Similarly, through its use of Amazon’s fulfillment program, Ares has directed its activities toward California by directing that the goods it purchased from Plaintiff be shipped to Los Angeles or Long Beach for further distribution in California and elsewhere.

This controversy is also related to Ares’s activities in California. “A claim need not arise directly from the defendant's forum contacts in order to be sufficiently related to the contact to warrant the exercise of specific jurisdiction. Rather, as long as the claim bears a substantial connection to the nonresident's forum contacts, the exercise of specific jurisdiction is appropriate.” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 452.) Here, the alleged nonpayment for goods shipped to California and distributed in California and elsewhere bears a substantial connection to those activities.

Finally, it comports with fair play and substantial justice to exercise personal jurisdiction over Ares. In determining whether this standard is met, factors to consider are “the burden on the defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief.” (Asahi Metal Industry Co., Ltd., v. Superior Court of California, Solano County (1987) 480 U.S. 102, 113.) A court must “also weigh in its determination ‘the interstate judicial system’s interest in obtaining the most efficient resolution of the controversies; and the shared interest of the several States in furthering fundamental substantive social policies.’” (Ibid. (citing World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 292).)

Here, the Court finds that California’s interest in adjudicating controversies over goods delivered to California, distributed from facilities in California, and distributed to California consumers, among others, and the Plaintiff’s interest in obtaining relief outweigh the burden on Ares, a Washington company, to defend itself in California. (Cf. World-Wide Volkswagen Corp. v. Woodson

Because it is appropriate to exercise specific jurisdiction over Defendant Ares, the motion to quash service of the summons is DENIED. Defendant is to respond to the complaint within 30 days of the date of this Order.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: December 9, 2019 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org