Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CHI SHUN HUA STEEL CO. v. NOVELLY

March 11, 1991

CHI SHUN HUA STEEL CO. LTD., a corporation, Plaintiff,
v.
PAUL A. NOVELLY, an individual, Defendant



The opinion of the court was delivered by: WEIGEL

 STANLEY A. WEIGEL, UNITED STATES DISTRICT JUDGE

 This matter is related to Chi Shun Hua Steel Co. v. Crest Tankers, C-89-2905 SAW, which was tried to a jury in this Court. Paul Novelly, the defendant in this case, is the President of Crest Tankers and was not a party to the suit against Crest Tankers. Plaintiff charges Mr. Novelly with fraud and deceit for directing and authorizing the fraudulent breach of the agreement between plaintiff and Crest Tankers regarding the release of the M/V Pomerol, attached by plaintiff. In the suit against Crest Tankers, the jury found Crest Tankers guilty of fraud in connection with its breach of that very agreement.

 I. Background

 Plaintiff Chi Shun Hua Steel Co. is a Chinese corporation, with its principal place of business in Taiwan. Crest Tankers is a Missouri corporation, with its principal place of business in Missouri. Defendant is a citizen and resident of Missouri. Here it is useful to briefly rehash the circumstances surrounding the breach of the Pomerol agreement.

 In November 1987 the Pomerol was attached by a U.S. Marshal, at plaintiff's direction, to provide security after Crest Tankers breached a ship sales contract with plaintiff regarding the M/V Beaujolais. *fn1" Pursuant to a telex agreement between plaintiff and Crest Tankers, the Pomerol was released with the understanding that it would return to be re-attached or that Crest Tankers would furnish a letter of credit as a substitute. The Pomerol was accordingly released, yet the Pomerol did not return and no letter of credit was provided. The jury found in the action against Crest Tankers that it had fraudulently breached this agreement. Plaintiff asserts in this second action that defendant directed and authorized Crest Tankers's fraudulent breach.

 II. Personal Jurisdiction

 Defendant moves (1) to dismiss for lack of personal jurisdiction; (2) to dismiss or transfer for improper venue; and (3) to require a more definite statement in the complaint. Defendant's motion to dismiss for lack of personal jurisdiction is well-taken.

 The Court notes as an initial matter that plaintiff bears the burden of establishing a prima facie case that the exercise of personal jurisdiction over defendant is proper. Flynt Distributing Co. v. Harvey, 734 F.2d 1389, 1392 (9th Cir. 1984). In a case based on diversity jurisdiction, a federal court must apply the personal jurisdiction rules of the forum state. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). California's long-arm statute provides for the exercise of jurisdiction "on any basis not inconsistent with the Constitution of this state or of the United States." Cal. Civ. Proc. Code ยง 410.10. Since California's constitution imposes no greater restriction on jurisdiction that the federal Constitution, federal courts in California may exercise jurisdiction to the fullest extent sanctioned by due process. Scott, 792 F.2d at 927.

 The Court may exercise "general jurisdiction" over a defendant "if the nonresident defendant's activities within a state are 'substantial' or 'continuous and systematic,'" because then "there is a sufficient relationship between the defendant and the state to support jurisdiction even if the cause of action is unrelated to the defendant's forum activities." Data Disc, Inc. v. Systems Technology Assocs. Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). It is plain that the Court lacks general jurisdiction over Mr. Novelly because his uncontradicted affidavit states that he has had virtually no contact with the state of California. *fn2"

 This Court may nonetheless exercise "specific jurisdiction" over defendant if he has "minimum contacts" with the forum state, and if the exercise of jurisdiction does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945). Such jurisdiction must satisfy the following three-part test to comport with due process:

 
(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws.
 
(2) The claim must be one which arises out of or results from the defendant's ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.