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TEN v. TEN, B224331. (2011)

Court: Court of Appeals of California Number: incaco20111027034 Visitors: 9
Filed: Oct. 27, 2011
Latest Update: Oct. 27, 2011
Summary: NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS WOODS, J. Plaintiff Benita Tee Ten appeals from the judgment of dismissal in her action for breach of contract based on two promissory notes executed in her favor by defendant Nellie Tee Ten. 1 During the court trial, the court dismissed the action based on the lack of jurisdiction. Benita contends the notes were secured by property in Monterey Park, California (the Property), the parties had sufficient minimum contacts for the court to exercise in
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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WOODS, J.

Plaintiff Benita Tee Ten appeals from the judgment of dismissal in her action for breach of contract based on two promissory notes executed in her favor by defendant Nellie Tee Ten.1 During the court trial, the court dismissed the action based on the lack of jurisdiction. Benita contends the notes were secured by property in Monterey Park, California (the Property), the parties had sufficient minimum contacts for the court to exercise in personam and in rem jurisdiction, and the court abused its discretion in limiting the cross-examination of Nellie. We reverse and remand.

FACTUAL AND PROCEDURAL SYNOPSIS

Willy and Nellie were a married couple living in the Philippines with their three children. Benita is Willy's mother.

I. The Operative Pleadings

The first amended complaint (FAC) contained a single cause of action for "Breach of Contract Promissory Note" and alleged venue was proper because the "subject property" was located in Monterey Park, California. The FAC alleged Willy and Nellie borrowed certain sums from Benita to purchase a second home in the United Stated as a vacation home and signed two promissory notes and "defendants breached the contract by not paying the money borrowed as specified in the contract promissory notes."

The FAC further alleged that Willy signed a short form deed of trust and assignment of rents (Deed) for the Property naming Benita as beneficiary as an assurance for payment of the promissory notes. There was no allegation of any breach of the Deed.

The court denied Nellie's motion to quash service for lack of personal jurisdiction. Nellie filed a cross-complaint against Willy and Benita for civil conspiracy and conversion alleging they forged a promissory note and attempted to convert Nellie's interest in the Property by creating a deed of trust and assignment of rights transferring Nellie's interest to Benita.

II. The Trial

A. Material Facts

On December 17, 2002, Willy and Nellie signed an unsecured promissory note in the Philippines promising to pay Benita the sum of $200,000 (Note 1). On that same day, Willy and Nellie signed another unsecured note for 7,500,000 Philippine pesos payable to Benita (Note 2). Nellie testified she signed Note 1 under duress and her signature on Note 2 is a forgery. Neither Note contained any reference to any real property, or any other security, located in California or elsewhere.

It is undisputed that both Notes were signed in the Philippines, and that Willy, Nellie and Benita were residents of the Philippines. Although there was conflicting evidence as to the identity of the witnesses to the signing of the Notes, it was undisputed that any and all persons who witnessed the signing were residents of the Philippines.

On October 28, 2002, Willy executed another promissory note acknowledging a $200,000 loan from Benita to Willy to finance Willy's purchase of the Property; the note references the Property as collateral for the loan. The note granted Benita the right to assign, transfer and convey the Property. Benita did not sue on the October note or the Deed; neither this note nor the Deed were signed by Nellie or made any mention of Nellie.

Since October 2003, Willy and Nellie have been in the process of dissolving their marriage in the Philippines. The Notes at issue are part of the annulment proceedings. The cancellation of those Notes or the existence of a debt is expected to be litigated in the family law court in the Philippines.

Without citing to the record, Benita claims that Willy and Nellie told her the borrowed money would be used to finance the purchase of their house in Monterey Park. Nellie testified that neither Willy nor Benita told her the borrowed money in any way related to the Property and that she did not know about the Deed, or that Willy had signed it, until she was served with process in this case. Nellie testified she and Willy could afford to purchase the Property without assistance. Nellie believed Note 1 was for the purpose of buying "peace of mind" from Benita as Willy suggested.

B. Proceedings

On February 1, 2010, the trial of the FAC and the cross-complaint came on for a trial by the court without a jury.

Benita and Nellie presented and concluded their cases. At trial, Benita sought monetary damages, stating, "I need cash. I don't need a house." Benita's counsel stated she did not want the house. The court noted Benita made it clear she was looking for cash not real property.

On February 2, the court requested the parties prepare briefs on the issue of whether the court had jurisdiction. The court indicated that depending on its ruling on the issue of jurisdiction, the trial would proceed or the action would be dismissed. The court further indicated it would take up the issue of Benita's additional witness2 after the jurisdiction issue was resolved.

After considering the written briefs and hearing oral argument by all parties, the court found the Notes on which Benita had sued were unsecured and dismissed the FAC for lack of jurisdiction and dismissed the cross-complaint without prejudice. The court stated: "This is in personam jurisdiction. It's not in rem. These are unsecured notes. They were signed, drafted, and notarized in the Philippines. [¶] There is nothing whatsoever in these notes that reflect[s] anything about real property in Southern California, in particular this property on Hershey in Monterey Park. [¶] And as far as I'm concerned, this is something that the Philippine courts are going to have to take up, not this court."

In response to Willy's statement the monies were used to finance the purchase of the house, the court commented: "I'm not convinced that's the case. These are unsecured notes. They came in drips and drabs. You know, it appears to the court that the Tens are sophisticated people. They had the ability to hire lawyers. They could have secured this property with those notes. They elected not to, for whatever reason, you know, and the financing came in drips and drabs. [¶] I'm not so certain I can believe all of this information that's been provided to the court in light of what I've heard about mom and son, Willy, and Benita transferring assets back and forth. [¶] I mean, to be quite frank with you, it appears to me as if the Ten family has taken advantage of the laws of the Philippines by transferring property to their son and evading inheritance taxes and then transferring it back."

Benita filed a timely notice of appeal from the judgment of dismissal (not a post-judgment order as she states).

DISCUSSION

I. Introduction

California Rules of Court, rule 8.204(a)(1)(C) requires that all facts be supported by a citation to the record. "`The reviewing court is not required to make an independent, unassisted study of the record in search of error or grounds to support the judgment. It is entitled to the assistance of counsel.' `It is the duty of counsel to refer the reviewing court to the portion of the record which supports appellant's contentions on appeal. If no citation "is furnished on a particular point, the court may treat it as waived."'" (Citations omitted.) (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1372.) Many facts cited by Benita are not supported by the required record citation.

Furthermore, to the extent Benita argues the evidence shows the Notes were secured, she is challenging the court's factual finding, in essence a challenge to the sufficiency of the evidence. "A party who challenges the sufficiency of the evidence to support a finding must set forth, discuss, and analyze all the evidence on that point, both favorable and unfavorable." (Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th 209, 218.) When a party fails to do so, an issue may be deemed waived. (Ibid.) Contrary to fundamental principles of appellate review, Benita has failed to do so. Instead, her opening brief sets forth only her version of the evidence, omitting any reference to the conflicting evidence submitted by Nellie.

Lastly, Benita cites many federal district, circuit or bankruptcy court cases which are not binding on this court.

II. Jurisdiction

There appears to have been much confusion both in the trial court and on appeal about the trial court's ruling dismissing the action for lack of jurisdiction. Although the judgment repeatedly states the FAC was dismissed for lack of subject matter jurisdiction, it appears the trial court was actually reconsidering its earlier ruling denying Nellie's motion to quash service for lack of personal jurisdiction; the court expressly stated, "This is in personam jurisdiction. It's not in rem." Although the court signed a judgment dismissing the FAC for lack of subject matter jurisdiction, it is more likely the court was revisiting personal jurisdiction.

Even though Benita's counsel stated at the hearing below that the court did not have personal jurisdiction, on appeal, Benita argued Nellie had sufficient minimum contacts to establish both in personam and in rem jurisdiction. In her brief below addressing whether the trial court had jurisdiction, Benita asserted the court had "jurisdiction by subject matter." On appeal, Nellie argued the court did not have subject matter jurisdiction because the notes were signed in the Philippines by residents of the Philippines and did not refer to any real property or other security located in California.

This court asked the parties to file supplemental briefs on an unbriefed issue pertaining to in personam jurisdiction, i.e., the effect of continuing to litigate the matter on the merits after the court denied Nellie's motion to quash for lack of jurisdiction. In her response, Nellie conceded she had waived any challenge to personal jurisdiction by continuing to litigate the matter on its merits after the court had denied her motion to quash. (State Farm General Ins. Co. v. JT's Frames, Inc. (2010) 181 Cal.App.4th 429, 441; McCorkle v. City of Los Angeles (1969) 70 Cal.2d 252, 256-258.)

Thus, having a judgment stating the matter was dismissed for lack of subject matter jurisdiction and the parties having argued about whether the court had subject matter jurisdiction, the question of whether the trial court had subject matter jurisdiction is properly before this court. "[T]he question of jurisdiction is, in essence, one of law." (Dorel Industries, Inc. v. Superior Court (2005) 134 Cal.App.4th 1267, 1273.)

At oral argument, this court asked whether a trial court did not always have subject matter jurisdiction of a contract action. The parties agreed subject matter jurisdiction was the only issue. Citing Ophir Silver Mining Co. v. Superior Court (1905) 147 Cal. 467, 474, Nellie argued the court would only have subject matter jurisdiction if the action arose in California. However, the Ophir court recognized the difference between local and transitory actions, distinguishing between an action of trespass quare clausum fregit, which is local, and an action for the recovery of the value of personal property, trespass de bonis asportatis or trover, which is transitory. (Id. at p. 473.) When the latter is pled, "the jurisdiction belongs to any court whose process will reach the persons of the trespassers." (Ibid.) In Hammon v. American etc. Mining Co. (1962) 203 Cal.App.2d 306, 312, the court distinguished Ophir on the basis the action there involved the enforcement of a contract not trespass or the wrongful removal of mineral deposits.

Actions on a contract are generally transitory. (See e.g., Lebastchi v. Superior Court (1995) 33 Cal.App.4th 1465, 1469.) Thus, contract actions may be filed in California, subject only to rules of personal jurisdiction, venue and forum non conveniens. (See Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 751 ["Forum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere."].) Accordingly, the trial court had subject matter jurisdiction, and the judgment was in error. Nellie did not file a motion to dismiss based on venue or forum non conveniens and did not challenge the court's denial of her motion to quash for lack of personal jurisdiction.

We reverse and remand this matter for further proceedings not inconsistent with this opinion. If appropriate, the court may continue from the point it dismissed the action. For example, it can start by reviewing the reporter's transcript from the trial.

The court indicated it found the two Notes on which Benita sued were unsecured. We need not address Benita's claim the notes were secured because of the Deed and other note signed by Willy alone because there is no final judgment.

III. Evidentiary Rulings

Benita claims the court abused its discretion by terminating the case during the cross-examination of Nellie and not allowing Benita and Willy to recross-examine Nellie and because Benita was not afforded the opportunity to present her expert witness to testify that Nellie had signed Note 2. (See City of Ripon v. Sweetin (2002) 100 Cal.App.4th 887, 900.) Although the court took a brief recess during the direct examination of Nellie, the parties continued with redirect and recross examination until both Benita and Willy stated they had no further questions. Thus, the court did not limit the cross-examination. The court indicated it would take up the issue of Benita's expert witness after the jurisdictional issue was resolved; it may do so on remand.

DISPOSITION

The judgment is reversed. Each side to bear its own costs on appeal.

PERLUSS, P. J. JACKSON, J., concurs.

FootNotes


1. The parties are referred to by their first names because they have the same last name.
2. Benita claims she had a handwriting expert who would show Nellie's signature on Note 2 was not a forgery.
Source:  Leagle

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