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 Post subject: Minimum Contacts and Contempt
PostPosted: Wed Jan 26, 2011 10:01 am 
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Young v. Kingery, 2011 WL 208371 (Cal.App. 2 Dist., Unpublished, Jan. 25, 2011)

UNPUBLISHED -- California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.

Court of Appeal, Second District, Division 7, California.

Dennis YOUNG, Appellant,

v.

Theresa KINGERY, Respondent.

No. B223758.

(Los Angeles County Super. Ct. No. BS 103742).

Jan. 25, 2011.

APPEAL from an order of the Superior Court of Los Angeles County. Rolf M. Treu, Judge. Reversed and remanded.

Jennifer Kramer for Appellant.

No appearance for Respondent.

WOODS, J.

*1 Dennis Young sued Sound Track Channel (Sound Track), a California company. After Sound Track failed to make the payments agreed to in a settlement agreement, the court assigned payments due to the judgment debtor (Sound Track) to the judgment creditor (Young) and restrained any person acting in concert with Sound Track from encumbering, assigning or disposing of those payments. When Young sought to enforce that assignment through a civil contempt proceeding against Theresa Kingery (Sound Track's bookkeeper) and others, the court dismissed Kingery, who resides in Arizona, for lack of personal jurisdiction. Young appealed from the dismissal order contending Kingery had sufficient minimum contacts with California to confer limited personal jurisdiction. We reverse and remand.

FACTUAL AND PROCEDURAL SYNOPSIS

In November 2004, Young sued Sound Track and William Lee, a managing member and the chief executive officer of Sound Track, for various causes of action arising from the termination of Young's employment with Sound Track.

On March 20, 2006, Young and Sound Track entered into a settlement agreement. After Sound Track defaulted by failing to make payments, on July 10, 2006, the court entered a judgment in Young's favor for $490,000.FN1 After Sound Track again failed to make the agreed upon payments, Young and Sound Track entered into a second settlement agreement in April 2008. Sound Track again breached that settlement agreement by failing to make the payments due.

FN1. Young repeatedly describes the judgment as being for $495,000.

On March 23, 2009, Commissioner Murray Gross made the following order: "(1) judgment-debtor [Sound Track's] right to payments due or to become due from as many of its clients as necessary to pay the judgment creditor's judgment in full are assigned to the judgment creditor Dennis Young. [ΒΆ] (2) judgment-debtor [Sound Track] and any person in active concert and participating with the judgment-debtor [Sound Track] is restrained from encumbering, assigning, or disposing of the right to payments due or to become due from any clients subject to this Court's assignment order."

On June 6, Kingery was personally served with a copy of the assignment order along with a notice that failure to comply with the order could result in a finding that Kingery was in contempt of court.

On October 30, Young's counsel filed a charging affidavit for issuance of an order to show cause (OSC) as to why Kingery should not be held in contempt for failing to obey the assignment order. Young adduced evidence that:

Sound Track is a California limited liability company with offices located in Santa Monica, California. Kingery worked as Sound Track's bookkeeper in California until she moved to Arizona in 2005. Kingery continued working for Sound Track in the same capacity after she moved to Arizona. Kingery stated she communicated with Michael Miller (a manager of Sound Track) via e-mail and talked to him two or three times a month. It was at Kingery's request that the company's bank account was moved to Arizona for her convenience. Kingery had knowledge of the judgment, the settlement and the assignment order.

*2 Kingery had provided reports to Young showing: Sound Track received payments of $20,175.15 from April 17 through 24, 2009; $5,000 of those payments were assigned to Young. From April 24 through May 1, 2009, Sound Track received payments of $5,128.02; $5,087.58 of those payments were assigned to Young. From May 1 through 29, 2009, Sound Track received payments of $28,481.71; none of those payments were assigned to Young. From June 1 through 19, 2009, Sound Track received payments of $24,364.85; none of those payments were assigned to Young.

On December 7, the court, Judge Rolf M. Treu presiding, issued an OSC and set a hearing for January 15, 2010. Kingery filed no opposition. On January 15, the court scheduled Kingery's arraignment for March 9.

On February 24, Young's counsel filed a supplemental declaration attaching pages from the 2007 judgment debtor depositions of Lee and Miller, two of Sound Track's managers. Lee testified: Kingery had the authority as the company's "finance person" to set up an off-shore foreign entity on behalf of the company for tax purposes; was an employee of the company; handled the payroll for the company; handled the company's finances, including setting up bank accounts; had the company's business records; was the person who knew "all of the financial information" for the company; ran "everything in terms of funds"; had exclusive check signing authority; and best knew who the company's best performing clients were. Miller testified Kingery was employed by the company, handled payroll for the company, and handled the company's bank accounts.

On February 16, Kingery filed a response. At the arraignment, the court dismissed Kingery for lack of personal jurisdiction stating it was bound by the commissioner's prior finding there was no jurisdiction.

Young filed a timely notice of appeal from the dismissal order.

DISCUSSION

Young asserts that assuming the court treated Kingery's February 16 response as a motion to dismiss, it was not timely pursuant to Code of Civil Procedure section FN2 1005, subdivision (b) as that section requires motions to be filed 16 court days before a hearing date (March 9 in this case). That subdivision provides: "Unless otherwise ordered or specifically provided by law, all moving and supporting papers shall be served and filed at least 16 court days before the hearing." The notice from the January 15 OSC hearing stated the court ordered: "Briefing may be submitted to the Court if properly noticed and served in advance of the March 9, 2010 hearing date." Kingery complied with the court order by filing her response prior to the hearing date.

FN2. All statutory references are to the Code of Civil Procedure.

Appellant contends Kingery had sufficient minimum contacts with California to confer personal jurisdiction in this matter. The court dismissed Kingery for lack of personal jurisdiction stating it felt it was bound by the commissioner's prior finding to that effect. Thus, the court made no fact finding about jurisdiction. The commissioner's finding is not part of the record on appeal. This court wrote Jennifer Kramer, Young's counsel, a letter asking her to be prepared to address at oral argument whether the commissioner's ruling was law of the case regarding whether Kingery had sufficient minimum contacts with California. At oral argument below and before this court, Kramer stated the commissioner made no written finding, but rather made an oral statement discharging the order for the judgment debtor's examination.

*3 The two motions were different. The first, via personal notice, compelled Kingery to appear at a judgment debtor examination. As noted by Kingery in her reply below, she had previously appeared for such an examination by telephone and the order was quashed pursuant to Code of Civil Procedure section 1989. That section provides a witness is not obligated to attend court as a witness "unless the witness is a resident within the state at the time of service." The second motion sought to assert jurisdiction, via a civil contempt proceeding, over an individual who had failed to comply with a court order.

We conclude that given the different nature of the two motions, the law of the case doctrine was not applicable and Judge Treu was not bound by Commissioner Gross's ruling. (See e.g. Lennane v. Franchise Tax Bd. (1996) 51 Cal.App.4th 1180, 1185-1186; Provience v. Valley Clerks Trust Fund (1984) 163 Cal.App.3d 249, 256.)

"[W]hen jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that 'minimum contacts' exist between defendant and the forum state to justify imposition of personal jurisdiction." ( Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.) Section 410.10 authorizes California courts to exercise jurisdiction "to the fullest extent consistent with due process." ( Sanders v. CEG Corp . (1979) 95 Cal.App.3d 779, 783.)

As the court was not bound by the commissioner's ruling and, as agreed to by counsel Kramer, we will remand the matter to the court to rule on the merits of whether or not Kingery had sufficient minimum contacts with California to establish the requisite personal jurisdiction to order her to appear at a contempt proceeding.

DISPOSITION

The order is reversed and the matter is remanded to the superior court to determine if Kingery had the necessary minimum contacts with California and, if so, the court shall order Kingery to appear at a contempt proceeding. Young to recover costs on appeal.

We concur: PERLUSS, P.J., and ZELON, J.

= = = = = = = = = = = = = = =

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