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Pestmaster Franchise Network, Inc. v. Mata

United States District Court, N.D. California

May 11, 2017

JINNY LYNN MATA, et al., Defendants.


          EDWARD M. CHEN United States District Judge.


         Defendant AAAC Support Services, LLC (“AAAC”) moves for an order dismissing it from this case for lack of personal jurisdiction or, in the alternative, to dismiss this action for improper venue or transfer venue to the Southern District of Texas. Docket No. 19 (“Def. Mo.”). Plaintiff Pestmaster Franchise Network, Inc. (“Pestmaster”) opposes AAAC's motions and seeks leave of court to allow personal jurisdiction discovery. Docket No. 23 (“Pl. Op.”). The Court GRANTS Defendant AAAC's motion to dismiss for lack of personal jurisdiction and DENIES Plaintiff's motion for further jurisdictional discovery for the reasons set forth below.


         In its first amended complaint (“FAC”) and opposition to the motion to dismiss, Plaintiff Pestmaster alleges as follows.

         Pestmaster engages in the business of franchising pest control businesses. FAC ¶ 17. When Pestmaster enters into a franchise agreement with a franchisee, the franchisee is given the right to operate a pest control business using Pestmaster's trademarks, trade secrets, and proprietary business methods and techniques within a given geographic territory. FAC ¶ 19.

         In April 2007 and again in April 2008, Defendants Jinny and Gabe Mata (“the Matas”) entered into two franchise agreements with Pestmaster to operate two Pestmaster franchises in Texas. See FAC ¶ 34-35. The franchise agreements include both a forum selection and arbitration clause. See Pl. Op., Exhibit B at 29-30. The agreements also provided that, in the event the Matas proposed to sell their franchises, Pestmaster would have a right of first refusal. FAC ¶ 40.

         In October 2016, the Matas informed Pestmaster that they intended to sell the two franchises to a third party. FAC ¶ 39. In response, Pestmaster informed the Matas verbally and in writing that it was interested in exercising its Right of First Refusal. FAC ¶ 40. Pestmaster demanded that the Matas provide Pestmaster with a “bona fide, executed written offer to purchase” from the third-party buyer, but the Matas did not do so. FAC ¶¶ 47, 55.

         Instead, in December 2016, the Matas closed on the sale of the franchise businesses to Defendants Josie and Brian Moss (“the Mosses”) who formed a new entity called Moss Pest Control, LLC. See FAC ¶ 57. There is no allegation that the Mosses had any preexisting relationship with the Matas. Plaintiff alleges that the sale by the Matas violated several provisions of the two franchise agreements and Plaintiff's common law and statutory rights. FAC ¶ 61. Plaintiff further alleges that Defendant AAAC, a franchisor in the animal and pest control business that is also owned by the Mosses, aided the various Defendants in the conspiracy to terminate the two franchise agreements prematurely because AAAC knew about the two franchise agreements, but intentionally failed to follow the provisions governing the sale of the franchised business. See FAC ¶¶ 92-115; see also ¶¶ 135-147.

         Pestmaster asserts ten claims against the Defendants, including contract, conspiracy, and fraud claims, as well as claims for violations of federal and state trade secrets and unfair competition laws. Only Defendant AAAC brings this motion to dismiss for lack of personal jurisdiction.


         A. Personal Jurisdiction Legal Standard

         Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss for lack of personal jurisdiction. The plaintiff has the burden of establishing that jurisdiction is proper. See Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). Where a court does not conduct an evidentiary hearing, and only written materials are presented to the court, a plaintiff need only make a prima facie showing of jurisdictional facts to withstand a motion to dismiss. See Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010). In deciding whether a prima facie showing has been made, “the court resolves all disputed facts in favor of the plaintiff.” Id. (internal cites and quotations omitted).

         A court's exercise of personal jurisdiction over a non-resident defendant must comport with both the applicable state long arm statute and constitutional principles of due process. See Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.3d 1280, 1286 (9th Cir. 1977). As the California long-arm statute is coextensive with federal due process, “the jurisdictional analyses under state law and federal due process are the same.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004). Due process requires that a defendant have “minimum contacts” with the forum state “such that the exercise of jurisdiction 'does not offend traditional notions of fair play and substantial justice.'” Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Depending on how numerous or substantial these minimum contacts are, a court may have either general or specific jurisdiction ...

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