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Greystone Housing Foundation, Inc. v. Fantasy Holdings, LLC

United States District Court, S.D. California

May 16, 2017

GREYSTONE HOUSING FOUNDATION, INC., a California Non-Profit 501(c)(3) Corporation, Plaintiff,
FANTASY HOLDINGS, LLC, an Arizona Limited Liability Company; NARONGYOS SANTADSIN, an Individual; DOES 1 THROUGH 10, inclusive, Defendants.



         Presently before the Court is Defendants Fantasy Holdings, LLC's (“Fantasy”) and Narongyos Santadsin's (“Santadsin”) (collectively, “Defendants”) motion to dismiss the amended complaint for lack of personal jurisdiction, improper venue, and insufficient service of process and, alternatively, to transfer venue. (Doc. No. 28.) Plaintiff Greystone Housing Foundation, Inc. (“Greystone”) opposes the motion. (Doc. No. 46.) Having reviewed the parties' legal arguments in light of controlling legal authority, and pursuant to Local Civil Rule 7.1.d.1, the Court finds the matter suitable for decision on the papers, without oral argument. For the reasons set forth below, the Court GRANTS Defendants' motion and DISMISSES this case WITH PREJUDICE.


         This dispute arises from Defendants' alleged failure to repay monies borrowed pursuant to a promissory note (“note”) that named Greystone as the payee. Greystone is a California non-profit corporation with its principal place of business in San Diego, California. (Doc. No. 26 ¶ 1.)[1] Fantasy is an Arizona limited liability company with its principal place of business in Phoenix, Arizona. (Id. ¶ 2.) Santadsin is an individual domiciled in Arizona. (Id. ¶ 3.) He is Fantasy's manager and sole member. (Id. ¶ 4.)

         On July 30, 2009, Defendants signed the note, through which they borrowed $500, 000 from Greystone. (Id. ¶ 10; Doc. No. 26-1 at 2.) Fantasy signed the note (through Santadsin) as borrower; Santadsin signed the note as guarantor. (Doc. No. 26 ¶ 10; Doc. No. 26-1 at 2.) Fantasy agreed to make interest-only payments to non-party Kent Casady (“Casady”) for five years, after which the principal would become due and payable to Greystone. (Doc. No. 26 ¶ 11; Doc. No. 26-1 at 2.) Pursuant to the note, Greystone financed and disbursed the funds to Defendants. (Doc. No. 26 ¶ 10.)

         On July 30, 2014, the note matured, and the entire $500, 000 became due and payable. (Id. ¶ 12.) Defendants failed to make this payment. (Id.; Doc. No. 28-2 ¶ 14.) Because of this default, Greystone instituted this lawsuit by filing the original complaint on February 5, 2016, alleging contract-related claims. (Doc. No. 1.) Defendants successfully moved to dismiss the original complaint for lack of personal jurisdiction. (Doc. Nos. 5, 15.) On December 5, 2016, Greystone filed an amended complaint. (Doc. No. 26.) Defendants move to dismiss this complaint, again asserting lack of personal jurisdiction, as well as arguing improper venue and insufficient service of process. (Doc. No. 28.) The Court granted Greystone limited jurisdictional discovery to assess the existence of personal jurisdiction over Defendants in this case. (Doc. No. 32.) Following such discovery, Greystone filed an opposition, and Defendants replied. (Doc. Nos. 46, 47.) This order follows.

         Legal Standard

         “Personal jurisdiction over a nonresident defendant is tested by a two-part analysis.” Chan v. Soc'y Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir. 1994). The exercise of jurisdiction must satisfy the requirements of both the applicable state long-arm statute and federal due process. Id. at 1404-05. California's long-arm statute is coextensive with the limits of due process. Cal. Civ. Proc. § 410.10; Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001), abrogated on other grounds as recognized in Williams v. Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017). Accordingly, the Court need only consider the requirements of due process. Fed. Deposit Ins. Co. v. British-Am. Ins. Co., 828 F.2d 1439, 1441 (9th Cir. 1987).

         Due process requires that a nonresident defendant have certain minimum contacts with the forum state such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). This test may be satisfied in one of two ways. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 839 (9th Cir. 1986). If the defendant's contacts with the forum state are substantial or “continuous and systematic, ” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984), the court may properly exercise general jurisdiction over the defendant “even if the cause of action is unrelated to the defendant's forum activities, ” Data Disc, Inc. v. Sys. Tech. Assocs., Inc.,, 557 F.2d 1280, 1287 (9th Cir. 1977). Where the defendant's contacts with the forum state will not support the court's exercise of general jurisdiction, “jurisdiction may nonetheless be proper as an assertion of limited [i.e., specific] jurisdiction if there is a strong relationship between the quality of the defendant's forum contacts and the cause of action.” Decker Coal Co., 805 F.2d at 839 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)).

         The plaintiff bears the burden of establishing the court's personal jurisdiction over a defendant. Unocal Corp., 248 F.3d at 922. On a motion to dismiss, the Court may decide the issue of personal jurisdiction on the basis of affidavits and documentary evidence by the parties, or hold an evidentiary hearing regarding the matter. See Data Disc, Inc., 557 F.2d at 1285. If the motion is based on the former, the plaintiff need only make a prima facie showing of facts establishing personal jurisdiction. Id. Uncontroverted allegations in the complaint are accepted as true, and conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor. Unocal Corp., 248 F.3d at 922.


         Defendants seek dismissal pursuant to Rule 12(b)(2), (3), and (5) for lack of personal jurisdiction, improper venue, and insufficient service of process, respectively. (Doc. No. 28.) Alternatively, Defendants ask the Court to transfer this case to the District of Arizona under 28 U.S.C. § 1406(a) to cure venue or 28 U.S.C. § 1404(a) for the convenience of the parties. (Id.) As explained below, the Court finds it lacks personal jurisdiction over Defendants; accordingly, the Court does not reach Defendants' remaining arguments. Cf. Julio v. Wells Fargo Bank, No. 11-CV-00696-LHK, 2011 WL 11048327, at *2 (N.D. Cal. July 21, 2011) (declining to reach defendant's personal jurisdiction argument after dismissing action for improper venue).

         I. General Jurisdiction

         Defendants first argue that there is no general jurisdiction over them because they are both domiciled in Arizona and otherwise do not have the requisite contacts with California. (Doc. No. 28-1 at 8-9; Doc. No. 47 at 8-17.) Greystone responds that Defendants do significant business in California through Kodi Distributing, LLC (“Kodi”) and the operation of the website. (Doc. No. 46 at 11-16.)

         “A court may assert general jurisdiction over foreign (sister-state or foreign-country) [defendants] to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (citing Int'l Shoe Co., 326 U.S. at 317). “This is an exacting standard, as it should be, because a finding of general jurisdiction permits a defendant to be haled into court in the forum state to answer for any of its activities anywhere in the world.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004).

         General jurisdiction over an individual is permissible only where he has been served with process while voluntarily in the forum, is domiciled in the forum, or consents to the court's jurisdiction. J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880-81 (2011) (Kennedy, J., plurality); see Pennoyer v. Neff, 95 U.S. 714, 722 (1877). “With respect to a corporation, the place of incorporation and principal place of business are ‘paradig[m] . . . bases for general jurisdiction.'” Daimler AG v. Bauman, 134 S.Ct. 746, 760 (2014) (citation omitted). Outside of these paradigm bases, only “in an exceptional case” should a ...

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