Newberry vs. Kadenwood, Inc.

LAW & MOTION CALENDAR TENTATIVE RULINGS

September 10, 2026

Judge R. Shawn Nelson Department C10

Department C10 hears law and motion on Thursdays at 10:00 a.m. and 1:30 p.m.

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NO. CASE MATTER NAME 1:30 p.m. 1 Newberry The motion by Defendant B&B AZ Holdings, LLC (“Defendant” or “Moving Defendant”) to vs. Kaden quash service of summons is CONTINUED to December 17, 2026 at 1:30 PM for wood, Inc. jurisdictional discovery as set forth below.

Legal Standard re Jurisdiction

The Moving Defendant argues that there are insufficient contacts with California to “purposefully avail itself” here and litigating these claims in California does not comport with fair play and substantial justice. The Moving Defendant is a Delaware limited liability company with a principal place of business in Arizona and lacks meaningful contacts with this state. The Moving Defendant argues that a mere contract with Kadenwood alone does not confer specific jurisdiction over an out-of-state defendant.

“In the absence of a voluntary submission to the authority of the court, compliance with the statutes governing service of process is essential to establish that court’s personal jurisdiction over a defendant.” (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1439 (Dill).) “When a defendant challenges that jurisdiction by bringing a motion to quash, the burden is on the plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.” (Ibid.)

When a nonresident defendant challenges personal jurisdiction the burden shifts to the plaintiff to demonstrate by a preponderance of the evidence that all necessary jurisdictional criteria are met. (Jewish Defense Org. v. Superior Court (1999) 72 Cal.App.4th 1045, 1055). “The plaintiff must do more than merely allege jurisdictional facts; plaintiff must provide affidavits and other authenticated documents demonstrating competent evidence of jurisdictional facts.” (BBA Aviation PLC v. Superior Court (2010) 190 Cal.App.4th 421, 428–429).

“Personal jurisdiction may be had on either a general (all-purpose) or specific (case-linked) basis.” (Halyard Health, Inc. v. Kimberly-Clark Corp. (2019) 43 Cal.App.5th 1062, 1070).

A. General Jurisdiction

General jurisdiction exists where the activities of a non-resident defendant are so “extensive or wide-ranging” or “substantial ... continuous and systematic” to establish a constitutionally sufficient relationship to warrant jurisdiction for all causes of action asserted against it. (Cornelison v. Chaney (1976) 16 Cal.3d 143, 147.) “A nonresident defendant is subject to the general jurisdiction of the forum if the defendant is ‘essentially at home in the forum State...’” (Halyard, supra, 43 Cal. App. 5th at 1070).

Under these standards, the record is insufficient to support general jurisdiction over the Moving Defendant, which is an out-of-state limited liability with no principal place of business in California. There is no evidence and Plaintiffs do not suggest that the Moving Defendant is “essentially at home” in California anis d/or their activities in California are so extensive or wide-ranging or substantial, continuous, and systematic to warrant general jurisdiction.

B. Specific Jurisdiction

“A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice.” (Snowey v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062).

A plaintiff opposing a defendant’s motion to quash service has the burden of establishing factor Nos. (1) (the defendant’s purposeful availment) and (2) (lawsuit relates to the defendant’s contacts with state).” (People ex rel. Harris v. Native Wholesale Supply Co. (2011) 196 Cal.App.4th 357, 362 [citing Bridgestone Corp. v. Superior Court (2002) 99 Cal.App.4th 767, 774].) This burden must be met by competent evidence in affidavits and authenticated documentary evidence. (Id.) “If the plaintiff does so, the burden then shifts to the defendant to show factor No. (3), that the exercise of jurisdiction would be unreasonable.” (People ex rel. Harris, supra, at 362). 2

“The purposeful availment inquiry...focuses on the defendant's intentionality. [Citation.] This prong is only satisfied when the defendant purposefully and voluntarily directs [its] activities toward the forum so that [it] should expect, by virtue of the benefit [it] receives, to be subject to the court's jurisdiction based on” [its] contacts with the forum.” (Swenberg v. Dmarcian, Inc. (2021) 68 Cal.App.5th 280, 294).

“Thus, purposeful availment occurs where a nonresident defendant ‘purposefully direct[s]” [its] activities at residents of the forum’ [Citation], ‘purposefully derive[s] benefit” from’ its activities in the forum’ [Citation], ‘create[s] a “substantial connection” with the forum’ [Citation] ‘deliberately has engaged in significant activities within’ the forum [Citation], or has created ‘continuing obligations’ between [itself] and residents of the forum.” (Id. at 294- 295). “A state may exercise specific jurisdiction over a nonresident who purposefully avails himself or herself of forum benefits, because the state has ‘a “manifest interest’ in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors.” (Id. at 298). “Moreover, where individuals ‘purposefully derive benefit’ from their interstate activities [citation] it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities.” (Ibid.)

Defendant argues that there is no specific jurisdiction because they did not purposefully avail itself to this state. Defendant argues that it is a foreign limited liability company with a foreign principal place of business. The court notes that in the moving papers, Defendant does not offer any evidence to establish these facts and/or other facts to establish that it has no contacts in California (e.g., a declaration stating that it has no bank accounts in California, has no employees in California, has no transactions with California, etc.)

Defendant relies on Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 478 for the proposition that a mere contract with California is insufficient to meet the minimum contacts test for personal jurisdiction. However, as Plaintiffs correctly argue, Plaintiffs are not alleging a breach of contract claim against Moving Defendant. Rather, Plaintiffs allege that Defendant, in conjunction with Defendant Kadenwood, were intentional transferees of fraudulent transfers.

The court finds the following case to be persuasive.

In Buchanan v. Soto (2015) 241 Cal.App.4th 1353, Plaintiff Diana Buchanan (‘Buchanan’) claims that defendant Maria Soto (‘Maria’) transferred certain real property to her husband Ramon Soto (‘Ramon’), who was a Mexican resident, as a fraudulent conveyance to prevent Buchanan from executing an anticipated judgment on the property.” (Id. at 1356-1357). “Buchanan filed her Complaint within the present action against Maria [and Ramon], alleging one cause of action for fraudulent transfer and seeking a court order setting aside the transfer of The Olive Properties by Maria to Ramon Soto.” (Id. at 1358).

The Buchanan court affirmed the trial court’s order denying a motion to quash over Ramon, concluding that the court had specific jurisdiction over Ramon, as the transferee of a fraudulent transfer of California assets. (Id. at 1358). As to the first prong for specific jurisdiction, the court concluded “ Ramon has purposefully availed himself of forum benefits by owning real property in this forum, the controversy is related to or arises out of Ramon's ownership of the property, and the assertion of personal jurisdiction would comport with fair play and substantial justice).” (Id. at 1360). The court ruled “when Ramon received Maria's 3

interest in the Olive Properties, he became liable for the obligations and expenses related to that interest, including, by way of example only: payment of real property taxes; taxes from rental income, if any; mortgage payments, if any; and repair and/or maintenance costs. As owner, Ramon also enjoyed the benefits and protections of California law. Clearly, once Ramon obtained—and kept—an interest in Maria's Olive Properties, his contacts with California became purposeful and not “ ‘random,’ ‘fortuitous,’ or ‘attenuated.’” (Id. at 1363– 1364).

As to the second prong, the court “independently concluded there was a substantial connection or nexus between Ramon's receipt of Maria's interests in the Olive Properties and the operative facts of Buchanan's fraudulent conveyance action against Ramon and Maria. Quite simply, without the transfer of that interest by Maria, there would have been no fraudulent conveyance action against Ramon.” (Id. at 1364).

Similarly, here, to the extent that any of the Kadenwood assets are California assets and/or assets arising from California businesses, if maintaining any of these assets require paying California taxes or expenses, and/or if continuing to maintain the Kadenwood assets relates to any contacts with California residents or businesses, the Moving Defendant would have sufficient minimum contacts with this state.

Plaintiffs have offered evidence of the purchase sale agreement between Kadenwood and the Moving Defendant, which did invoke California’s Uniform Commercial Code as the governing legal mechanism for the transaction. Plaintiffs do contend that “the assets acquired included the going-concern value of a business that had just launched California-distributed products through CVS, Walgreens, and Walmart.” To the extent that Plaintiffs can establish this fact, there would be sufficient minimum contacts. However, there is insufficient admissible evidence of these facts. The contracts, themselves, do not expressly delineate that the assets are being generated through California contacts.

While the record is insufficient at this time, Plaintiffs have requested the opportunity to conduct jurisdictional discovery. The court, in the interest of determining issues on the merits, will grant plaintiff the right to conduct discovery with regard to the issue of jurisdiction to develop the facts necessary to sustain this burden. (See Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.)

Discovery shall be limited as follows:

• The parties have three months to complete discovery.

• The parties are limited to propounding one set of special interrogatories, one set of requests for admission, and one set of production demands, not to exceed 35 questions each. The subject of that discovery must be limited to defendant’s contacts with California (including the use of any California residents as employees/agents), whether or not the assets procured are California assets and/or assets that arise from California businesses, whether or not maintaining any of these assets require paying California taxes or expenses, and/or whether or not continuing to maintain the assets relates to any contacts with California residents.

• Plaintiff is limited to one deposition of each PMK of Kadenwood and one PMK of the Moving Defendant, not to exceed seven hours each. 4

Plaintiffs shall file a supplemental brief that sets forth admissible evidence to establish specific jurisdiction over the Moving Defendant. Plaintiffs’ supplemental brief is due per code.

Moving Defendant shall file a supplemental opposition that responds to Plaintiffs’ evidence with admissible evidence. Defendant’s supplemental brief is due per code.

Any further legal authority cited in supplemental briefs should focus on specific jurisdiction over a foreign defendant who is alleged to be a transferee of a fraudulent transfer.

The hearing on the motion to quash is continued to December 17, 2026 at 01:30 PM.

Case Management Conference is continued to December 17, 2026 at 01:30 PM.

Moving Defendant to give notice.

2 McMillen The Motion for Summary Judgment or Summary Adjudication brought by Defendant Bank vs. Bank of of America, National Association, is DENIED, in whole. America, National Plaintiff’s Request for Judicial Notice is DENIED, as the request relates to an unpublished Association opinion which cannot be considered by this Court, pursuant to California Rules of Court rule 8.1115. Plaintiff attempts to avoid the above, by invocation of the exception articulated in California Rules of Court rule 8.1115(b), which permits consideration of unpublished opinions under the doctrine of collateral estoppel; however, Plaintiff has not demonstrated that collateral estoppel applies.

For collateral estoppel to apply, “the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding.” (Williams v. Doctors Medical Center of Modesto, Inc. (2024) 100 Cal.App.5th 1117, 1131.) “The ‘identical issue’ requirement addresses whether ‘identical factual allegations’ are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same.’” (Ibid.)

Plaintiff relies on Saribekyan v. Bank of America, N.A. (2020) 2020 WL 38676, to establish a Safe Deposit Box Rental Agreement is unconscionable. (See Opposition: 12:9-16 and 13:14- 15.) However, “unconscionability is a fact-specific defense....” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 124.)

The facts in Saribekyan, upon which the Court relied in finding substantive unconscionability, differ from those alleged herein, such that the actions do not involve “identical issues.” (See Saribekyan v. Bank of America, N.A. (2020) 2020 WL 38676, at p. 11 [cited only for purposes of evaluating collateral estoppel].)

Moreover, “[w]here there is doubt about the application of issue preclusion, it should not apply.” (Williams v. Doctors Medical Center of Modesto, Inc. (2024) 100 Cal.App.5th 1117, 1132.)

Defendant’s Request for Judicial Notice is DENIED as judicial notice of citable authority is unnecessary and, consequently, irrelevant. (See Randy’s Trucking, Inc. v. Superior Court (2023) 91 Cal.App.5th 818, 842, fn. 15 and Quelimane Co. v. Stewart Title Guaranty 5