KAPITUS SERVICING, INC. v. MISSION GROVE MEDICAL CORPORATION dba AFC-DRS EXPRESS RW, et al.

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and Foreign Money Judgments Act (SSFMJA) provides economical and expeditious registration procedures for the enforcement of sister-state judgments. (Ibid.) The Superior Court of the County where the Defendant resides will enter a Sister State Judgment on the amount stated in the judgment creditor’s application. (Code Civ. Proc., §§1710.15, 1710.20, 1710.25; Conseco, supra, 221 Cal.App.4th at p. 838.) The entry of the Sister State Judgment, with certain exceptions, will have the same effect as an original California money judgment and may be enforced or satisfied in the same manner. (Conseco, supra, 221 Cal.App.4th at p. 838.)

Upon the entry of the Sister State Judgment, the judgment creditor shall serve a Notice of Entry of Judgment on the judgment debtor in a manner provided for service of summons by Code of Civil Procedure section 415.10, et seq., and inform the judgment debtor he has 30-days in which to make a motion to vacate the Sister State Judgment. (Code Civ. Proc., §1710.30, subd. (a).) The judgment debtor may then move to vacate the Sister State Judgment on any ground that would be a defense to an action in this state. (Code Civ.

Proc., §1710.40, subd. (a).) Common defenses to the enforcement of a sister-state judgment include (a) the failure to serve or defective service of the notice of entry of judgment or the underlying sister-state action, (b) the judgment is not final and unconditional, (c) the judgment was obtained by extrinsic fraud, (d) the judgment was rendered in excess of jurisdiction, (e) the judgment is not enforceable in the state of rendition, (f) the judgment has already been paid, (g) the plaintiff is guilty of misconduct, and (h) the action on the judgment is barred by the statute of limitations in the state where enforcement is sought. (Conseco, supra, 221 Cal.App.4th at pp. 838-39, 841.)

Other than if the judgment is void for lack of jurisdiction due to lack of service of the underlying action, the challenge to vacate a sister-state judgment must demonstrate (a) a procedural ground in California to vacate the judgment, (b) the motion is not time-barred, and (c) a viable defense to the underlying action whereby a different result would follow if a new trial was granted in the sister state action. (Conseco, supra, 221 Cal.App.4th at p. 841; Liquidator of Integrity Ins. Co. v. Hendrix (1997) 54 Cal.App.4th 971, 978.)

The motion to vacate must be brought within 30 days of service of the Notice of Entry of Judgment. (Code Civ. Proc., §1710.40, subd. (b); Tsakos Shipping & Trading, S.A. v. Juniper Garden Town Homes, Ltd. (1993) 12 Cal.App.4th 74, 84.) Under a preponderance of the evidence, the judgment debtor bears the burden of proving the relief sought. (Conseco, supra, 221 Cal.App.4th at p. 841.) Whether to set aside a judgment rests in the sound discretion of the trial court. (Ibid.)

Analysis

Procedurally, the Court record does not include any filed Notice of Entry of Judgment. Per two separately filed Acknowledgment of Receipts (on March 11, 2026, and May 11, 2026), Judgment Debtors acknowledged receipt of the Sister-State Judgment and Notice of Entry of Judgment on the Sister-State Judgment on March 4, 2026. Judgment Debtors’ Motion to Set Aside was not filed until May 14, 2026, which is over 60 days from their acknowledgment of receipt by mail of the Notice of Entry. It is untimely. However, Judgment Creditor did not raise this argument, and addressed the motion on its merit. Judgment Debtors seek to vacate the entry of the Sister-State Judgment because Virginia lacked personal jurisdiction to enter any judgment. “The defense that the sister state judgment tis void for lack of fundamental jurisdiction constitutes another example [of a defense under Code

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of Civil Procedure section 1710.40].” (Conseco Marketing, LLC v. IFA & Ins. Services, Inc. (2013) 221 Cal.App.4th 831, 839.) Here, both sides agree that the agreement between Kapitus and Mission Grove and Johnson contains a forum-selection clause: Binding Effect: Governing Law, Venue, and Jurisdiction. Seller [i.e., Mission Grove] and Guarantor [i.e., Johnson] agree that any such action or proceeding to enforce or arising out of or relating to this Agreement shall be brought in any court in the Commonwealth of Virgina or in the United States District Court of the Eastern District of Virginia (“the Acceptable Forums”).... Seller and Guarantor agree that the Acceptable Forums are convenient to them, submit to the jurisdiction of the Acceptable Forums and waive any and all objections to jurisdiction or venue.”

(Exh. 1 [§4.5] to Johnson’s Decl.; Exh. A [§4.5] to Calrson’s Decl.) Contractual forum selection clauses are valid and may be given effect. (Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal.App.5th 206, 216; Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149.) A forum selection clause can be mandatory or discretionary. (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471 [“Animal Film”].) The use of “shall” imposes a mandatory forum selection clause. (See, e.g., Lu v.

Dryclean–U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1492; CQL Original Products, Inc. v. National Hockey League Players’ Assn (1995) 39 Cal.App.4th 1347, 1352; Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1672, fn. 4.) Under the contractual language here, the parties have a mandatory forum-selection agreement. A nonresident defendant may consent to personal jurisdiction. (Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd. (2020) 9 Cal.5th 125, 140 [Rockefeller].)

Such consent can be manifested through a contract provision. (Ibid.; S.E.C. v. Ross (9th Cir. 2007) 504 F.3d 1130, 1149 [“For example, the parties may consent to jurisdiction through a forum selection clause in a contract....”].) Nevertheless, in Global Packaging, Inc. v. Superior Court (Epicor Software Corporation) (2011) 196 Cal.App.4th 1623, 1632-33 [Global Packaging], the Court of Appeal held that forum and jurisdiction are distinct concepts, and agreeing to a particular forum to litigate does not imply a separate agreement to submit to the jurisdiction of that forum, where personal jurisdiction would otherwise not be available.

On the other hand, in Hunt v. Superior Court (Commercial Money Center) (2000) 81 Cal.App.4th 901, 908 [Hunt], the Court of Appeal found that when the forum selection clause gives adequate notice to the defendant that he was agreeing to the jurisdiction cited in the contract, then it can be enforced. (See also, Chan v. Society Expeditions, Inc. (9th Cir. 1994) 39 F.3d 1398, 1406-07 [agreeing that a forum selection clause alone could confer personal jurisdiction]; ExxonMobil Oil Corporation v. Black Stone Petroleum Inc. (E.D.VA 2016) 221 F.Supp.3d 755, 764 [holding an enforceable forum-selection clause alone can confer personal jurisdiction].)

By all appearances, Global Packaging and Hunt provide differing opinions. If the Court follows Global Packaging, then consent to Virginia jurisdiction does not exist. If the Court follows Hunt, then consent to Virginia jurisdiction exists because Mission Grove and Johnson signed the agreement that mandated actions be litigation in Virginia. Here, Defendants offer no argument or evidence that they lacked awareness of the forum-selection clause in the agreement.

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Considering the Supreme Court held after Global Packaging that a nonresident defendant can consent to jurisdiction through a forum-selection clause [Rockefeller, supra, 9 Cal.5th at 140], the Hunt reasoning should be followed. Furthermore, the U.S. Supreme Court has recognized that “parties to a contract may agree in advance to submit to the jurisdiction of a given court....” (National Equipment Rental, Limited v. Szukhent (1964) 375 U.S. 311, 316; Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472, fn. 14.)

Nonetheless, a mandatory forum-selection clause need not be enforced if unreasonable. (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471.) The plaintiff must demonstrate the clause is unreasonable under the circumstances of the case. (Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149.) The clause is unreasonable if it is the result of overreaching or the unfair use of unequal bargaining power, the forum selected would be unavailable or unable to accomplish substantial justice, and/or no rational basis for the forum in light of the facts in the underlying transaction. (Drulias v. 1st Century Banchshares, Inc. (2018) 30 Cal.App.5th 696, 707-08; CQL Original Products, Inc. v.

National Hockey League Players’ Assn (1995) 39 Cal.App.4th 1347, 1354 [CQL].) But, not considered in the unreasonable analysis is the inconvenience or additional expenses for litigating in the selected forum. (CQL, supra, 39 Cal.App.4th at p. 1354.) Judgment Debtors argue that it would be unfair for them to adjudicate in Virginia when they have no connection with Virginia, and it would be a burden for Johnson to leave the medical practice to defend in Virginia. Her absence would have a negative impact on Mission Grove. (Johnson Decl. at ¶¶8-9, 11.)

Under modern technology, it is not demonstrated that Johnson would need to be “inconvenient” by traveling to Virginia to defend herself and her company, Mission Grove, in Virginia. Local counsel could have been engaged to defend them. Any deposition could been held remotely so Johnson would not need to travel to Virginia. Although she may have had to travel to Virginia for the trial, the same inconvenience of being gone from the medical office during business hours would exist during any trial in California.

Furthermore, a contracted forum-selection clause is not defeated because of the mere inconvenience or additional expenses that may arise in defending in a different state. (Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493.) Similar to here, the Lu Court noted: [The] plaintiffs assert there is an insufficient connection between themselves and the chosen forum of Florida. In support of this argument, plaintiffs have submitted the declaration of one of the plaintiffs, which states: (1) both of the plaintiffs reside in California, (2) neither plaintiff has ever visited Florida in connection with business of the drycleaning franchise, and (3) the Agreement was negotiated at Dryclean California's offices in Emeryville, California.

Although plaintiffs' argument is not well-articulated, they are in essence arguing that enforcement of the forum selection clause would be unreasonable because it would be inconvenient for them to litigate in the chosen forum of Florida. This argument has been flatly rejected by the California Supreme Court, which has held “‘[m]ere inconvenience or additional expense is not the test of unreasonableness since it may be assumed that the plaintiff received under the contract consideration for these things.’” [Citation.]. (Ibid.)

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In construing the law, Judgment Debtors contractually agreed that Virginia would be the forum for any litigation over their contractual agreement with Kapitus, and Virginia would have jurisdiction over them to adjudicate any claims under the contractual agreement. The evidence is deficient in demonstrating that the contractual agreement is unreasonable. Thus, by consent, Virginia held personal jurisdiction over Judgment Debtors. Therefore, DENY their motion.

RULING

The Court denies Judgment Debtors Mission Grove and Johnsons’ Motion to Vacate the Sister-State Judgment filed on December 11, 2025. Judgment Creditor, Kapitus, as the prevailing party, is ordered to provide formal notice of the Court’s final ruling.

Dated: August 5, 2026

____________________________ Judge Nicole Quintana Winter

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