This case was last updated from Los Angeles County Superior Courts on 10/07/2020 at 03:22:47 (UTC).

NATIONAL COMMERICIAL RECOVERY INC VS KRUSH NY INC ET AL

Case Summary

On 03/20/2018 NATIONAL COMMERICIAL RECOVERY INC filed a Contract - Debt Collection lawsuit against KRUSH NY INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are DALILA CORRAL LYONS and DAVID J. COWAN. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****8446

  • Filing Date:

    03/20/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Debt Collection

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

DALILA CORRAL LYONS

DAVID J. COWAN

 

Party Details

Plaintiffs and Petitioners

NATIONAL COMMERCIAL RECOVERY INC.

BLAIR SMITH AND ASSOCIATES

NATIONAL COMMERCIAL RECOVERY INC. DBA BLAIR SMITH AND ASSOCIATES

Defendants and Respondents

SWEET APPAREL INC.

KRUSH NY INC.

HAMRA YOSEF

LIA MICHELLE INC.

ABOHAMRA YOSEF

ABOUHAMRA YOSEF

128 BH INC.

DOES 1-10

ABOHAMRA JOSEPH

HAMRA JOSEPH

HAMRA SALIM

ABOUHAMRA JOSEPH

ABOHAMRA SALIM

ABOUHAMRA YOSEF AKA YOSEF ABOUHAMRA AKA YOSEF HAMRA AKA JOSEPH HAMRA

ABOHAMRA YOSEF AKA YOSEF ABOUHAMRA AKA YOSEF HAMRA AKA JOSEPH HAMRA AKA JOSEPH ABOHAMRA AKA JOSEPH ABOUHAMRA

ABOHAMRA SALIM AKA SALIM ABOUHAMRA AKA SALIM HAMRA

ABOHAMRA YOUSEF AKA YOSEF ABOUHAMRA AKA YOSEF HAMRA AKA JOSEPH HAMRA AKA JOSEPH ABOHAMRA AKA JOSEPH ABOUHAMRA

Attorney/Law Firm Details

Plaintiff and Petitioner Attorney

BESNYL GLENN A. ESQ.

Attorney at Glenn A. Besnyl, Attorney at Law

750 N Diamond Bar Boulevard Suite 220

Diamond Bar, CA 91765

Defendant and Respondent Attorneys

FERNALD LAW GROUP LLP

FERNALD BRANDON C.

Attorney at Fernald Law Group APC

510 W 6Th Street Suite 700

Los Angeles, CA 90014

FERNALD BRANDON CLAUS

WITKOW BRANDON JAY

 

Court Documents

Notice of Posting of Jury Fees

7/24/2020: Notice of Posting of Jury Fees

Case Management Statement

6/15/2020: Case Management Statement

Substitution of Attorney

12/6/2019: Substitution of Attorney

Declaration - DECLARATION OF BRANDON C FERNALD IN SUPPORT OF SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

10/15/2019: Declaration - DECLARATION OF BRANDON C FERNALD IN SUPPORT OF SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

Notice of Ruling - NOTICE OF RULING ON DEFENDANTS' MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

7/24/2019: Notice of Ruling - NOTICE OF RULING ON DEFENDANTS' MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

Reply - REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANTS' MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

7/12/2019: Reply - REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANTS' MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT

Request for Entry of Default / Judgment

6/17/2019: Request for Entry of Default / Judgment

Minute Order - MINUTE ORDER (COURT ORDER)

6/21/2019: Minute Order - MINUTE ORDER (COURT ORDER)

Opposition - OPPOSITION PLAINTIFF'S OPPOSITION TO MOTION TO QUASH SERVICE OF SUMMONS & COMPLAINT

6/25/2019: Opposition - OPPOSITION PLAINTIFF'S OPPOSITION TO MOTION TO QUASH SERVICE OF SUMMONS & COMPLAINT

Notice Re: Continuance of Hearing and Order

6/10/2019: Notice Re: Continuance of Hearing and Order

Proof of Service (not Summons and Complaint)

5/14/2019: Proof of Service (not Summons and Complaint)

Minute Order - MINUTE ORDER (COURT ORDER:)

5/2/2019: Minute Order - MINUTE ORDER (COURT ORDER:)

Opposition - Opposition to Motion to Quash Service of Summons & Complaint

10/25/2018: Opposition - Opposition to Motion to Quash Service of Summons & Complaint

AMENDED PROOF OF SERVICE OF SUMMONS

9/18/2018: AMENDED PROOF OF SERVICE OF SUMMONS

PROOF OF SERVICE OF SUMMONS

6/7/2018: PROOF OF SERVICE OF SUMMONS

PROOF OF SERVICE OF SUMMONS

6/7/2018: PROOF OF SERVICE OF SUMMONS

79 More Documents Available

 

Docket Entries

  • 06/14/2021
  • Hearing06/14/2021 at 09:30 AM in Department 20 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 06/04/2021
  • Hearing06/04/2021 at 08:30 AM in Department 20 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 08/07/2020
  • Docketat 08:30 AM in Department 20, David J. Cowan, Presiding; Trial Readiness Conference (/ Case Management Conference) - Held

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  • 08/07/2020
  • DocketMinute Order ( (Trial Readiness Conference / Case Management Conference)); Filed by Clerk

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  • 07/31/2020
  • Docketat 3:00 PM in Department 20, David J. Cowan, Presiding; Non-Appearance Case Review (Status Report ReProceeding with Jury or Non-Jury Trial)

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  • 07/24/2020
  • DocketNotice of Posting of Jury Fees; Filed by Sweet Apparel, Inc. (Defendant); Yousef Abohamra (Defendant); Salim Abohamra (Defendant)

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  • 06/29/2020
  • Docketat 09:30 AM in Department 20, David J. Cowan, Presiding; Jury Trial - Not Held - Vacated by Court

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  • 06/29/2020
  • Docketat 08:30 AM in Department 20, David J. Cowan, Presiding; Case Management Conference - Held - Continued

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  • 06/29/2020
  • DocketMinute Order ((Case Management Conference)); Filed by Clerk

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  • 06/24/2020
  • Docketat 08:30 AM in Department 20, David J. Cowan, Presiding; Final Status Conference - Not Held - Vacated by Court

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114 More Docket Entries
  • 06/13/2018
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 06/07/2018
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 06/07/2018
  • DocketProof of Personal Service

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  • 06/07/2018
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 06/07/2018
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 06/07/2018
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 06/07/2018
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 03/20/2018
  • DocketComplaint; Filed by National Commercial Recovery, Inc. (Plaintiff)

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  • 03/20/2018
  • DocketSUMMONS

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  • 03/20/2018
  • DocketCOMPLAINT FOR MONEY; CONMON COUNTS

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Tentative Rulings

Case Number: BC698446    Hearing Date: November 15, 2019    Dept: 20

Ruling: Defendants Sweet Apparel and Joseph Hamra’s motion to quash service of summons based on lack of personal jurisdiction is DENIED.

Defendant Joseph Hamra must file a response to the Complaint within 20 days of this ruling.

Moving Party to give notice.


On March 20, 2018 Plaintiff National Commercial Recovery, Inc. d/b/a Blair Smith and Associates (“Plaintiff” or “NCR”) filed the Complaint against Defendants Krush NY, Inc. (“Krush”), Lia Michelle, Inc. (“Lia Michelle”), 128 BH, Inc. (“128 BH”), Sweet Apparel, Inc. (“Sweet Apparel”), Joseph Hamra (“Joseph”)[1], Salim Hamra (“Salim”)[2], and Does 1 through 10 for (1) common count—open book account; (2) common count—goods sold and delivered; and (3) common count—account stated.

Plaintiff alleges prior to the filing of the Complaint that its assignor, Tex Ellent, Inc. d/b/a Paramount Textiles (“Assignor” or “Tex Ellent” or “Paramount”), transferred and assigned to Plaintiff all of its right, title, and interest in and to the sum, claim, and indebtedness due from the defendants.

Plaintiff alleges on October 28, 2016 and through May 26, 2017, that the defendants purchased wholesale fabric from Assignor which Assignor delivered to the defendants at the defendants’ request and became indebted to Assignor in the amount of $353,541.10. Plaintiff alleges although demand has been mad that the defendants have failed and neglected to pay such sum, together with interest thereon at the invoice rate of 12% per annum from the date of the final demand of August 26, 2017.

On May 14, 2019, Defendants Sweet Apparel and Hamra filed a motion to quash service of summons, asserting two grounds. Hamra and Sweet Apparel argued the Court lacked personal jurisdiction over them. Sweet Apparel alone argued ineffective service of process.

On July 19, 2019, the Court granted Sweet Apparel’s motion to quash service of summons on the grounds of ineffective service of process. However, the Court continued the motion on the second ground–lack of personal jurisdiction–to allow limited discovery and supplemental briefing on whether California could assert personal jurisdiction over Sweet Apparel and Joseph.

Today’s hearing deals only with the personal jurisdiction grounds for the motion to quash service of summons; the Court already ruled on the other ground for this motion.

SWEET APPAREL AND JOSEPH HAMRA’S SUPPLEMENTAL BRIEFING

Sweet Apparel and Joseph argue that California cannot assert personal jurisdiction over them because they have no contacts with California. Sweet Apparel is not the successor in interest to Krush because Krush was owned and operated by Salim, while Sweet Apparel was owned and operated by Joseph. Krush is also not the alter ego of Joseph because Joseph did not own or operate Krush.

PLAINTIFF’S SUPPLEMENTAL BRIEFING

Plaintiff submits the declaration of Jacob Zackary (“Zackary”), CEO of non-party Standard Fabrics International, Inc. (“Standard”) and a “controlling party” of Tex-Ellent, Inc. d/b/a Paramount Textiles,[3] who sold fabric to Krush and later to Sweet Apparel. Zackary swears that Joseph called himself President of Krush even after Sweet Apparel was founded and Joseph agreed that 10 cents per yard of fabric paid by Sweet Apparel would be applied to the debt of Krush. Zackary believes that Sweet Apparel paid for some fabric ordered by Krush and Sweet Apparel sold, under its brand name, fabric purchased by Krush.

ANALYSIS

 

I. Quash Service of Summons and Complaint

Code of Civil Procedure (“CCP”) Section 418.10(a)(1) provides that: “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 or file a motion…[t]o quash service of summon on the ground of lack of jurisdiction of the court over him or her.”

CCP Section 418.10 provides the exclusive procedure for challenging personal jurisdiction at the outset. Roy v. Superior Court (2005) 127 Cal.App.4th 337, 342. Although defendant is the moving party, the burden of proof is on plaintiff to defeat the motion by establishing that jurisdictional grounds exist. Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.

A summons may be served by personal delivery of a copy of the summons and of the complaint to the person to be served. Service of a summons in this manner is deemed complete at the time of such delivery.” CCP § 415.10. “Service of summons in conformance with the mode prescribed by statute is deemed jurisdictional. Absent such service, no jurisdiction is acquired by the court in the particular action.” Sternbeck v. Buck (1957) 148 Cal.App.2d 829, 832.

II. Lack of Personal Jurisdiction

A court of this state may exercise jurisdiction on any basis not inconsistent with the California or United States Constitutions. CCP § 410.10. When a nonresident defendant challenges personal jurisdiction the burden shifts to the plaintiff to demonstrate by a preponderance of the evidence that all necessary jurisdictional criteria are met. Jewish Defense Org. v. Superior Court (1999) 72 Cal.App.4th 1045, 1054-55. See also Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 568 (“When a motion to quash is properly brought, the burden of proof is placed upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence.”). This burden must be met by competent evidence in affidavits and authenticated documentary evidence. Jewish Defense Org., supra, 72 Cal.App.4th at 1055. “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 (internal citations and quotations omitted). A non-resident purposefully avails itself of the forum state when (1) the non-resident purposefully directs activities to the forum state, (2) the non-resident purposefully derives benefits from its activities in the forum state, (3) the non-resident creates a substantial connection with the forum, (4) the non-resident deliberately engages in significant activities with the forum state, or (5) the non-resident creates continuing obligations between itself and residents of the forum state. Id. at 1063. If the plaintiff satisfies their burden, the burden shifts to the defendant to show that the exercise of jurisdiction would be unreasonable. Id. at 1062.

A. Alter Ego

To establish alter-ego, a plaintiff must present facts to show a unity of interest and ownership such that injustice would result if one entity is treated as the sole actor. Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 749. Unity of interest factors include: “commingling of funds, failure to maintain minutes or adequate corporate records, identification of the equitable owners with the domination and control of the two entities, the use of the same office or business locations, the identical equitable ownership of the two entities, the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual, and the failure to adequately capitalize a corporation.” Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 838-840.

When the corporate form is used to perpetuate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation’s acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners. Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538. While the mere inclusion of alter ego allegations in a complaint does not automatically give the trial court jurisdiction over the defendants against whom such allegations are directed, jurisdiction may be imposed upon presentation of evidence sufficient to justify a finding of alter ego. Id. at 540.

But the Court should not solely look to tests of alter ego or agency “to determine the constitutional limits of specific personal jurisdiction” as such tests are imprecise to the appropriate jurisdictional question, which is not whether the defendant is liable for the acts of another under state substantive law, but is “whether the defendant has purposefully directed its activities at the forum state by causing a separate person or entity to engage in forum contacts.” HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1169. “The purposeful availment inquiry focuses on the defendant’s intentionality. This prong can only be satisfied when the defendant purposefully and voluntarily directs his activities toward the forum so that he should expect, by virtue of the benefit her received, to be subject to the court’s jurisdiction based on his contacts with the forum.” Id. at 1168.

Here, after supplemental briefing Plaintiff has presented sufficient evidence to meet Plaintiff’s initial burden to show California’s exercise of personal jurisdiction over both Joseph and Sweet Apparel is justified. Joseph and Sweet Apparel have failed to meet their burden to show the exercise of jurisdiction would be unreasonable.

1. Joseph

Joseph’s work as President or President of Sales for Krush justifies California’s assertion of personal jurisdiction over Joseph. Krush had contacts with California because Krush ordered fabric from Paramount, which is located in California. Joseph purposefully directed his activities at California by causing Krush to order fabric from a California company, as shown by Joseph arranging for payment and shipment to Paramount in the second email attached to the Zackary Declaration as Exhibit B.[4] Therefore, under the HealthMarkets test California can exercise personal jurisdiction over Joseph because, as President of Krush or even President of Sales at Krush, Joseph directed Krush to engage in forum contacts with California. As to Joseph, the exercise of personal jurisdiction by California is appropriate because (1) Joseph purposefully availed himself of forum benefits by directing Krush to purchase fabric from California; (2) the present controversy is related to Joseph directing Krush to purchase, but fail to pay for, fabric from California; and (3) the assertion of jurisdiction comports with fair play and substantial justice because Joseph must have known contracting with a California company and representing himself as the President of the contracting company could lead to a lawsuit in California by that California company. By contrast, Joseph has not meet his burden to show that the exercise of jurisdiction would be unreasonable because Joseph’s only argument is that he was not the owner of Krush. Joseph’s argument does not contradict the fact that he directed Krush’s activities toward California, that those activities were sustained over years, that Joseph was the one directing those activities even as an employee, or that this controversy arises from the contacts with California that Joseph created for Krush. Instead, Joseph’s argument focuses on an alter ego analysis aimed not at the question of personal jurisdiction but rather at whether Joseph can be personally liable for an obligation incurred by the corporation Krush. The issue of Joseph’s personal liability is not before the Court on this motion to quash service of summons. Therefore, Plaintiff has presented sufficient competent evidence that California is justified in exercising personal jurisdiction over Joseph because Joseph directed Krush’s activities contracting with a California company.

2. Sweet Apparel

Sweet Apparel’s assumption of Krush’s debt to Paramount justifies California’s assertion of personal jurisdiction over Sweet Apparel.[5][6] Plaintiff presents the Zackary Declaration, which states at paragraph 7 that Sweet Apparel agreed to pay 10 cents per yard of fabric purchased from Paramount toward Krush’s debt with Paramount. While this paragraph it is not evidence that Sweet Apparel is an alter ego or successor-in-interest for Krush, it is evidence that Sweet Apparel agreed to assume Krush’s debt. Sweet Apparel agreeing to buy fabric from Paramount constitutes Sweet Apparel purposefully availing itself of California forum benefits. Further, Sweet Apparel agreeing to assume Krush’s debt and pay that debt down with Sweet Apparel’s own purchases of fabric shows the present controversy is related to Sweet Apparel’s contacts with California. Lastly, California’s assertion of jurisdiction comports with fair play and substantial justice because Sweet Apparel voluntarily agreed to pay Krush’s debt with a portion of its own fabric purchases from Paramount. Under these circumstances, Sweet Apparel should have expected to be subject to California’s jurisdiction in light of the benefits it received transacting business with California companies.

Sweet Apparel fails to show that the exercise of jurisdiction would be unreasonable; Sweet Apparel’s only argument against jurisdiction is addressed to the insufficiency of the invoices attached to the Zachary Declaration as Exhibit A.[7] This argument is unconvincing because the Court finds other grounds justify the exercise of personal jurisdiction over Sweet Apparel.

Therefore, the Court finds sufficient grounds to justify the exercise of personal jurisdiction over Sweet Apparel.

Accordingly, the motion to quash service of summons based on lack of personal jurisdiction is DENIED.

Moving party is ordered to give notice.


[1] A/k/a Joseph Abohamra a/k/a Joseph Abouhamra a/k/a Yosef Abohamra a/k/a Yosef Abouhamra a/k/a Yosef Hamra a/k/a.

[2] A/k/a Salim Abohamra a/k/a Salim Abouhamra

[3] Joseph and Sweet Apparel admit Plaintiff is the assignee of Tex-Ellent, Inc. d/b/a Paramount Textiles rights against Krush, Joseph, and Sweet Apparel.

[4] The first email attached as Exhibit B is not from Paramount but from Standard. Standard is not a party to this suit, so evidence of Joseph’s contacts with Standard is irrelevant.

[5] Paragraph 8 and Exhibit D of the Zackary Declaration do not show contacts between Sweet Apparel and California that relate to the present controversy because both the email and the invoice comprising Exhibit D are from non-party Standard, not Paramount.

[6] The Zackary Declaration paragraph 9 is not competent evidence of any relationship between Sweet Apparel and Krush because Zackary merely “believes” the facts in that paragraph. Star Motor Imports, Inc. v. Superior Court (1979) 88 Cal.App.3d 201, 204 (“allegations on information and belief furnish no proof of the facts stated”).

[7] Plaintiff attaches evidence that Paramount invoiced Sweet Apparel for fabric purchased, which invoices are at issue in this case. However, the Zackary Declaration paragraph 4 states that the invoices attached as Exhibit A, although addressed to Sweet Apparel, were obligations incurred by Krush on between October 2016 and May 2017. Sweet Apparel was not incorporated until June 2017. Zackary Decl., Exh. C. An obligation that Krush incurred is not evidence that Sweet Apparel had contacts with California related to this controversy nor that Sweet Apparel is an alter ego or successor-in-interest for Krush.