NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COFFEE, J.

Midcoast Care, Inc., (Midcoast) appeals from an order quashing service of summons on respondents Scott Hilinski, Chisholm Partners, IV, LP; Fleet Equity Partners VI, LP; and Kennedy Plaza Partners II, LLC, for lack of personal jurisdiction. (Code Civ. Proc., § 418.10, subd. (a)(1).) Respondents are not residents of California. Midcoast contends that California has jurisdiction over them because respondent Hilinski engaged in wrongful conduct aimed at California residents, and did so on behalf of the other respondents. Alternatively, he contends that the court erred in denying his request to conduct jurisdictional discovery. We conclude that Midcoast has not presented competent evidence establishing that Hilinski was a primary participant in a wrongdoing that was intentionally directed at a California resident, and that the court did not err when it denied Midcoast's untimely and nonspecific request to conduct discovery. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Respondents are not residents of California. In 1999, respondents Chisholm Partners, IV, LP; Fleet Equity Partners VI, LP; and Kennedy Plaza Partners II, LLC (the Funds) invested in a California-based healthcare management company, Meridian Healthcare Management, Inc. (Meridian).1 Meridian was in the business of managing the finances and insurance contracts of medical providers. Meridian's customers included appellant Midcoast.2 Respondent Scott Hilinski is a managing director of the Funds' administrator, Nautic Partners, LLC (Nautic). Hilinski served on Meridian's board of directors as a designee of one of the Funds, and, at another time, served as a designated observer of Meridian's board.3 Hilinski declares he had no involvement in the day-to-day management of Meridian. Appellant disputes this.

In 2003, Meridian lost a major customer, Pacificare. Afterward, Meridian struggled financially. Its CFO, Brian Sato, later admitted that from 2004 to 2005 he transferred about $9 million in unauthorized and unearned "fees" from Meridian's customer accounts, including Midcoast's accounts, to cover Meridian's cash shortfalls (the advanced fees scheme). According to Midcoast, the misappropriated money included about $2 million from its account.

In 2005, a company named "e4e" bought all of Meridian's shares for about $6.2 million. The purchase price did not reflect the true financial condition of Meridian. Meridian's CFO, Sato, and its CEO, Michael Alper, had prepared false financial statements in connection with the sale.

Shortly after the e4e purchase, Sato's transfers were discovered. Meridian terminated Sato and Alper. In 2006, Meridian stopped doing business and filed for Chapter 11 reorganization in bankruptcy court. (United States Bankruptcy Court, Central District of California, San Fernando Valley Division, Case No. SV06-10733-GM.) The bankruptcy was later converted to liquidation under Chapter 7.

Midcoast now seeks to recover from Meridian's officers, directors, and investors, including the Funds and Hilinski, the money that Sato transferred from Midcoast's account. This action was preceded by actions in other courts by other Meridian customers and creditors in which there have been orders finding that California has no personal jurisdiction over the Funds or Hilinski and finding that evidence upon which Midcoast now relies was inadmissible. Midcoast was not a party to those proceedings, but we will summarize them briefly.

The e4e Action (Los Angeles BC345617)

Meridian's buyer, e4e, sued the Funds, Hilinski and others, in Los Angeles Superior Court, seeking to rescind its purchase, alleging fraud in the negotiations. (e4e, Inc. v. Meridian Health Care management, Inc. et al., Los Angeles Superior Court Case No. BC345617, "the e4e action.") The case was stayed pending resolution of Meridian's bankruptcy. In the e4e action, two declarations were filed upon which Midcoast now relies: the declaration of Sato, who is now deceased, and the declaration of e4e's forensic accountant, who interviewed CFO Alper.

In Sato's declaration, he acknowledged that he and Alper advanced unearned funds from customer accounts to cover Meridian's shortfalls. He declared that Hilinski "agreed" to this action in a telephone conversation with Sato and Alper in October 2003. As Sato described the telephone call, he and Alper asked Hilinski to have Nautic invest additional cash into Meridian. Hilinski refused, and then "agreed" to an "advance management fees proposal we discussed." Under this "advanced management fees proposal," declared Sato, "it was understood that Meridian would be taking money from the customer's accounts that it had not earned and to which it was not entitled." Sato declared that the practice "was intended to be a short term fix for a few months to cover the negative cash flows" until the company was sold or it obtained more customers."

The forensic accountant for e4e declared that he had interviewed Alper, and "Alper said that during the [October 2003] call someone suggested that Meridian could meet its cash needs by billing customers for management fees in advance. . . . Hilinski remained silent and did not object to this method of obtaining the needed cash."

The Northridge Action

Two Meridian customers, Northridge Medical Group, Inc., and Family/Seniors Medical Group, Inc., (collectively Northridge) sued the Funds, Hilinski, and others in Los Angeles Superior Court to recover misappropriated funds. (Northridge Medical Group, et al. v. Nautic Partners, LLC, et al., Los Angeles Superior Court Case No. BC347480; Family/Seniors Medical Group, Inc. v. Meridian Health Care Management, Inc., et al., Los Angeles Superior Court Case No. BC349952.) Hilinski and the Funds moved to quash service of summons for lack of personal jurisdiction. In response, Northridge offered the portion of Sato's declaration that is described above. The court excluded it as inadmissible hearsay, granted the motions to quash, and dismissed the Funds and Hilinski. Northridge later reasserted its claims in the bankruptcy court.

Meridian's Bankruptcy

Meridian's bankruptcy trustee initiated adversary proceedings against the Funds, Hilinski and others in the bankruptcy court. Separately, Northridge reasserted its claims against the same parties. Midcoast was initially a claimant in the bankruptcy, but stated it did not intend to pursue Meridian, and obtained leave to withdraw its claim in order to proceed in state court in this action. The bankruptcy court resolved the claims of the trustee and Northridge by granting summary judgment in favor of the Funds and Hilinski. It found no evidence of wrongdoing on the part of Hilinski or the Funds and found no evidence that Hilinski knew of, or agreed to, the advanced fee scheme. The court excluded the declarations of Sato and e4e's forensic accountant as self-serving hearsay not subject to any exception.

The Motions to Quash and Writ Proceedings in This Case

Hilinski and the Funds each responded to Midcoast's complaint in this case with motions to quash service of summons for lack of personal jurisdiction. Initially, the trial judge denied the motions to quash. Although it found that respondents did not have widespread or systematic contacts with California sufficient to support general jurisdiction, it found that specific jurisdiction was justified because Hilinski was a primary participant in a wrongdoing that was intentionally directed at a California resident (Calder v. Jones (1984) 465 U.S. 783, 790), and because he did so as an agent of the Funds. The court relied primarily on Sato's declaration to find that Hilinski "directly participated in launching the scheme to take unearned funds from the accounts."

Hilinski and the Funds each challenged the ruling by petition for writ of mandate in this court. They argued that the Sato declaration was inadmissible self-serving hearsay and that the court's decision was based on factual and legal errors. They pointed out favorable rulings in the related actions. We summarily denied both petitions. (Court of Appeal, 2nd Appellate Dist., Div. Six, Case Nos. B223866 & B223876.)

The Supreme Court granted review and transferred the matters back to this court, "with directions to vacate its order denying the petition for mandate and prohibition and to issue an alternative writ to be heard before that court when the proceeding is ordered on calendar." (July 28, 2010, California Supreme Court Case Nos. S182960 & S182962.)

We issued alternative writs, directing the trial court either to set aside its order denying respondents' motions to quash, and to make a new and different order granting the motions, or, in the alternative, to appear and show cause why we should not issue peremptory writs of mandate commanding it to do so. In response, the trial court set aside its prior order denying the motions to quash, and entered a new order granting both motions.4

The trial court's new order made no findings of fact or law. It stated in full, "The Court vacates its order of February 11, 2010 denying Scott Hilinski's and [the Funds'] motions to quash service of summons for lack of personal service. The motions to quash are granted, as mandated by order of the Supreme Court of California. SO ORDERED." Midcoast appeals from the new order granting the motions to quash.

DISCUSSION

Standard of Review

Respondents contend that the issue before us has already been resolved on the merits by the California Supreme Court in the prior writ proceedings, and that we must follow the decisions of the Los Angeles Superior Court, the United States Bankruptcy Court, and the United States District Court in the prior related actions. We disagree. We review the trial court's decision on the merits under the substantial evidence standard of review, considering the entire record. (Bridgestone/Firestone, Inc. v. Superior Court (1992) 7 Cal.App.4th 1384, 1389, fn 4.; Cerna v. City of Oakland (2008) 161 Cal.App.4th 1340, 1354; Pacific Lumber Co. v. State Water Resources Control Board (2006) 37 Cal.4th 921.)

Our review of the merits is not limited by the California Supreme Court's decision. A California Supreme Court order directing the Court of Appeal to issue an alternative writ is not a determination on the merits. (Bridgestone/Firestone, Inc. v. Superior Court, supra, 7 Cal.App.4th at p. 1389, fn 4.) It is a determination that extraordinary relief may be the only adequate avenue for review. (Ibid.) We are not bound on the merits by our alternative writ; that order simply set the procedural stage for our current review. An alternative writ, issued without a written opinion, is not the law of the case. (Cerna v. City of Oakland, supra, 161 Cal.App.4th at p. 1354; Ross v. San Francisco Bay Area Rapid Transit Dist. (2007) 146 Cal.App.4th 1507, 1513, fn. 6.)

It is evident from the trial court's response that it believed it was "mandated" to grant the motion to quash in response to our alternative writ without any further consideration or hearing. The resulting new order granting respondents' motions to quash is reviewable by direct appeal. (Code Civ. Proc., § 904.1, subd. (a)(3).) Because there is no conflict in the admissible evidence, as we discuss below, the question of jurisdiction is one of law and we engage in independent review. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449.)

In conducting our review, we are not bound by the determinations of the Los Angeles Superior Court, the United States Bankruptcy Court, and the United States District Court concerning its admissibility or concerning the exercise of personal jurisdiction over these respondents. The rulings of those courts have no preclusive effect because respondents have not established that Midcoast was a party, or privy to a party, in the actions. (Pacific Lumber Co. v. State Water Resources Control Board, supra, 37 Cal.4th 921.) In a bankruptcy hearing, Midcoast's counsel acknowledged that collateral estoppel "issues" might arise and that it could "live with" that "potential," but it did not agree to be bound by the outcome of the bankruptcy proceedings.5

Respondents urge us to disregard appellant's numerous supplemental trial court filings which were not authorized by the Code of Civil Procedure. Although they are numerous and were filed without prior leave, we will not disregard them. The trial court acted within the exercise of its discretion when it announced in open court that it would consider these late filings and when it offered respondents an opportunity to respond in writing with the "last word."

Personal Jurisdiction

Midcoast contends that California has specific jurisdiction over Hilinski because he engaged in tortious conduct directed at California residents by agreeing to the advanced fee scheme and by concealing it through audit delays and negotiated creditor forbearance. We conclude that Midcoast's evidence establishes only ordinary director conduct by a nonresident that is insufficient to justify the exercise of personal jurisdiction over him in this action. It is possible that Hilinski had more involvement than this record reveals. But appellant presented no admissible evidence from which that can be inferred.

California's exercise of personal jurisdiction over a nonresident defendant is justified where the nonresident has minimum contacts with the state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. (U.S. Const., 14th Amend.; International Shoe Co. v. State of Washington (1945) 326 U.S. 310, 316.) When a defendant moves to quash for lack of personal jurisdiction, the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction with competent evidence. (Vons Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at p. 449; In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 110.) If it does so, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable. (Vons Companies, Inc., supra, at p. 449.)

Personal jurisdiction over a nonresident defendant may be general or specific. The court may exercise general jurisdiction if the defendant's contacts with California are substantial, continuous and systematic. (Vons Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at pp. 445-446.) If the defendant's contacts are not sufficiently systematic to justify general jurisdiction, the court may nevertheless exercise specific jurisdiction (over a single controversy) if three conditions are met: (1) the defendant has purposefully availed himself of forum benefits, (2) the controversy is related to or arises out of the contacts with the forum, and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice. (Id. at pp. 446-447.)

Midcoast does not argue on appeal that the court has general jurisdiction over Hilinski or the Funds; it relies solely on specific jurisdiction.6 There is no admissible evidence in the record to support a finding that Hilinski or the Funds engaged in any contact that would give rise to specific jurisdiction.

Hilinski's role as a director of a California based corporation, Meridian, is not alone sufficient to confer jurisdiction. Personal jurisdiction over a corporation is not sufficient to establish personal jurisdiction over its nonresident directors. (Calder v. Jones, supra, 465 U.S. at p. 790.) Each defendant's contacts with California must be assessed individually. (Ibid.)

California may exercise specific jurisdiction over Hilinski only if there is competent evidence that he was a "primary participant in an alleged wrongdoing intentionally directed at a California resident." (Calder v. Jones, supra, 465 U.S. at p. 790.) For example, in Calder, California obtained specific jurisdiction over a nonresident magazine editor and a nonresident writer when they aimed a defamatory article at Shirley Jones, a California entertainer, knowing the article would have a potentially devastating impact upon her in California, although their mere status as employees of a magazine that had many contacts with California would not have been sufficient to confer jurisdiction. (Id. at pp. 789-790.) Similarly, in Seagate Technology v. A.J. Kogyo Company, Ltd. (1990) 219 Cal.App.3d 696, a corporate president's personal participation in a wrongdoing that was directed at a California company gave rise to personal jurisdiction, even though his mere status as president of a corporation with many ties to California would not have been sufficient.

In Seagate Technology, the court held that California may exercise specific jurisdiction over a nonresident corporate director if the director (1) commits an act for which he or she would be personally liable, and (2) the act creates contact between the officer and California. (Seagate Tech. v. A.J. Kogyo Co., supra, 219 Cal.App.3d at pp. 703-704.) Midcoast contends that Hilinski, as an agent of the Funds, committed an act for which he would be personally liable and which created contact with California because he agreed to Sato's plan to take funds from customer accounts and because he helped to hide the misappropriation by allowing audits to be delayed until the company could be sold to e4e, all to the benefit of the Funds who profited from the sale of shares to e4e. To establish these facts, Midcoast offered primarily documents and testimony generated in the related actions.

The portion of Sato's declaration upon which Midcoast relies is inadmissible hearsay subject to no exception. It was not an admission against interest (Evid. Code, § 1230) because when he executed it in the e4e action, he had already acknowledged that he advanced unearned funds from customer accounts. He stood to benefit by deflecting blame to Hilinski and others.7 The declaration was not competent, in any event, to establish that Hilinski agreed to the scheme. Sato declared that Hilinski "agreed" to an "advance management fees proposal we discussed," but Sato did not identify any words spoken by anyone to Hilinski, or any words or conduct by Hilinski, that would manifest that agreement. Sato declared that, "it was understood" that Meridian would be taking unearned money from customer accounts, but he did not identify who "understood" this or how he was able to personally perceive their understanding. Sato's statement that the practice "was intended" to be a short term fix suffers from the same deficiency. Respondents did not waive their objection to the Sato declaration. They argued at the hearing on the motion to quash that it was inadmissible hearsay.8

The declaration of e4e's forensic accountant, which we consider because we find no objection in the record, can establish only that Hilinski said nothing when "someone suggested that Meridian could meet its cash needs by billing customers for management fees in advance." This falls short of evidence that Hilinski was a primary participant in the advanced fees scheme. "Personal jurisdiction must be based on forum-related acts that were personally committed by each nonresident defendant. The purposes and acts of one party — even an alleged co-conspirator — cannot be imputed to a third party to establish jurisdiction over the third party defendant. [Citation.]" (In re Automobile Antitrust Cases I & II, supra, 135 Cal.App.4th at p. 113.)

Evidence that Hilinski permitted audit delays in 2003 and 2004 while he was aware of financial difficulty is not enough to establish wrongdoing. There is no competent evidence to contradict Hilinski's declaration that he relied on Sato and Alper's explanations for the audit delays when they told him that the auditing firm had a staffing shortage, and that he eventually lost patience and demanded that they use another auditing firm. Hilinski's efforts to negotiate a forbearance agreement with Meridian's bank in 2004 demonstrate ordinary director conduct, and knowledge of some financial stress, but not wrongdoing.9

Hilinski's primary participation in wrongdoing is not established by the declaration of an e4e representative who states that Hilinski said he was "confident of the figures in the financial statements," and that Meridian was "stable." There is no evidence that Hilinski helped prepare the false financial statements that Sato and Alper provided to him, to e4e, and to others, and there is no evidence that Hilinski knew they were not accurate.

The declaration of Meridian manager Dolores Ross is too vague and conclusive to establish Hilinski's participation. She offers her opinion that Hilinski was "in every sense, a very active participant in the management and control of Meridian, without whose approval no major operational business decisions could be made," but she offers no facts in support.

Midcoast's theory that concealment was possible because of a conflict between the terms of Meridian's shareholder's agreement and the terms of Meridian's contract with Midcoast is speculation and conjecture. In a 1999 shareholder agreement, the Funds promised not to disclose Meridian's proprietary information "except in the course of the proper performance of his duties hereunder . . . ." In the then-existing contract between Meridian and Midcoast, Meridian promised to "exercise the utmost good faith and due care in handling [Midcoast's] business affairs in general and financial matters, in particular." Neither the Funds nor Hilinski were a party to the contract between Meridian and Midcoast. To the extent they were required to disclose anything by virtue of their roles as shareholders (or shareholder's designee), the shareholder's agreement expressly permitted them to do so "in the course of the proper performance of [their] duties hereunder . . . ."

The admissible evidence in the record is without conflict and is insufficient as a matter of law to establish that Hilinski was a primary participant in any wrongdoing aimed at a California resident such that California's exercise of jurisdiction over him in this action could be justified.

Midcoast relies upon Hilinski's conduct, imputed to the Funds as principals, to support jurisdiction over the Funds. The effort cannot succeed because they have not established that Hilinski engaged in any wrongdoing directed at a California resident. The Funds' passive ownership of stock in Meridian, a California based company, is not sufficient to subject it to jurisdiction in California. (Shaffer v. Heitner (1977) 433 U.S. 186, 216-218.)

Request to Conduct Discovery

The trial court did not err when it denied Midcoast's request to conduct discovery on the question of jurisdiction. We review the trial court's discovery rulings for abuse of discretion. We will not disturb its decision unless it exceeds the bounds of reason and results in a miscarriage of justice. (Beckman v. Thompson (1992) 4 Cal.App.4th 481, 487.) Midcoast had access to well-developed records in the related actions, of which it made ample use in this case. Some records in the related actions were sealed, but Midcoast's request to conduct jurisdictional discovery did not propose any specific discovery that could lead to those records or that could otherwise lead to evidence that Hilinski, or the Funds, were primary participants in wrongdoing directed at a California resident. The trial court did not abuse its discretion when it concluded that further discovery was unlikely to lead to the production of evidence of facts establishing jurisdiction. (In re Automobile Antitrust Cases I & II, supra, 135 Cal.App.4th at p. 127.) Midcoast also argues that, if it is to be bound by the decisions in Northridge's action then it should be permitted to conduct discovery to prove it is not similarly situated. The argument is moot because we have concluded that Midcoast is not bound by the decisions in any of the related actions.

DISPOSITION

The order appealed from is affirmed. The parties shall bear their own costs on appeal.

GILBERT, P.J. and YEGAN, J., concurs.