Preview
8/22/2018
1 JEFFREY F. RYAN (SBN 129079)
LAW OFFICES OF JEFFREY F. RYAN
2 The Fitzpatrick Building
2000 Broadway Street
3 Redwood City, California 94063-1802
Phone: (650) 922-2341
4 Email: jeff@jeffreyryanlaw.com
5 Attorneys for FRED H. GEISLER, NORMAN C. FLEMING, and GENA ZISCHKE
6
7 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
8 FOR THE COUNTY OF SAN MATEO
9
COMPLEX CIVIL LITIGATION -ASSIGNED FOR ALL PURPOSES TO DEPT. 2
10
FRED H. GEISLER, M.D., Ph.D., an Case No.: 17-CIV-02888
11
individual, NORMAN C. FLEMING, an
12
individual, and GENA ZISCHKE, an PLAINTIFFS’ MEMORANDUM OF
individual, directly, and derivatively on behalf
of RHAUSLER, INC., and ROES 1 to 25, POINTS & AUTHORITIES IN SUPPORT
13 OF OPPOSITION TO DEFENDANT
inclusive,
14
DANIEL FISHMAN’S MOTION TO
QUASH SERVICE OF SUMMONS ON
Plaintiffs,
15 SECOND AMENDED VERIFIED
v. COMPLAINT
16
(C.C.P. §§ 410.10; 418.10; CRC, Rules
17
TERRY J. JOHNSTON, an individual; KATIE 3.1306, 3.1113.)
SIMS, CPA, an individual; ROBERT JOHN
18
GLYNN, JR., an individual; 3COR [SUPPORTING DECLARATIONS OF
MEDICAL, INC., a California Corporation;
TEDAN SURGICAL INNOVATIONS, LLC, FRED GEISLER, M.D., PHD., AND
19
a Texas Limited Liability Company, DANIEL JEFFREY F. RYAN, WITH EXHIBITS,
FISHMAN, an individual, DANIEL BASS, an FILED CONCURRENTLY]
20 individual, MAGNOLIA GROUP, LLP, &
DOES 1 to 25, inclusive,
21 Date: September 12, 2018
Defendants, Time: 9:00
22
Dept: 2
and RHAUSLER, INC., a California
23 Corporation,
Assigned for All Purposes to Hon. Marie S.
24 Nominal Defendant. Weiner
25
Complaint filed: June 28, 2017
26
27
28
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 TABLE OF CONTENTS
2 Page
TABLE OF CONTENTS i
3
4 TABLE OF AUTHORITIES ii
5 I. INTRODUCTION & SUMMARY OF ARGUMENT 1
6
II. OTHER FACTS TYING FISHMAN TO CALIFORNIA 8
7
III. DISCUSSION 10
8
9
IV. PLAINTIFFS SHOULD BE PERMITTED TO CONDUCT DISCOVERY
REGARDING ISSUES OF JURISDICTION PRIOR TO ANY ADVERSE
10 RULING 15
11 V. CONCLUSION 15
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
i
1 TABLE OF AUTHORITIES
2 Page
Am. Master Lease LLC v. Idanta Partners, Ltd. (2014)
3
225 Cal. App. 4th 1451, 1478……..………………………………………………………10
4
Burger King Corp. v. Rudzewicz (1985)
5 471 US 462, 474-475…..………………………………………………………………..passim
6
Cassiar Mining Corp. v. Superior Court (1998)
7 66 Cal.App.4th 550, 555-58……………………………………………………….………12
8 Common Wealth Insurance Systems, Inc. v. Kersten
9
40 Cal.App.3d 1014, 1026, 115 Cal.Rptr. 653…..…………………………………………5
10 Companies, Inc. v. Seabest Foods, Inc. (1996)
14 Cal.4th 434…..………………………………………………………………….………5
11
12
Cornelison v. Chaney (1976)
16 Cal. 3d 143, 148 .……………………………………………………………….………12
13
Doctors' Co. v. Superior Court (1989)
14
49 Cal.3d 39, 48…..…………………………………………………………………..……5
15
Edmunds v. Superior Court (1994)
16 24 Cal. App.4th 221, 29 Cal.Rptr.2d 281…………..………………………………….…..8
17
Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014)
18 223 Cal. App. 4th 1558, 572….………………..………………………………………5, 7, 11
19 Goehring v. Sup.Ct. (Bernier) (1998)
62 Cal.App.4th 894, 904………...………………………………………….……………..5
20
21 Hall v. Laronde (1997)
56 Cal.App.4th 1342, 1344…...………………………………………….………………13
22
Hansen v. Calif. Bank (1936)
23
17 Cal. App.2d 80, 102………...………………………………………….…………..…10
24
Hearn Pac. Corp. v. Second Generation Roofing Inc. (2016)
25 247 Cal. App. 4th 117, 131-32…..………………………………………….……………5
26
In re Automobile Antitrust Cases I & II (2005)
27 135 Cal. App. 4th 100, 127 .……………………………………………….…………….15
28 Keeton v. Hustler Magazine, Inc.
465 U.S., at 781, 104 S.Ct., at 1481………………………………….……………..14
ii
Kuchta v. Allied Builders Corp.
1
21 Cal.App.3d 541, 98 Cal.Rptr. 588) ………………………………….…………………5
2
Lundgren v. Superior Court (1980)
3 111 Cal.App.3d 477, 484.……………………………………………….…………………5
4
McGee v. International Life Ins. Co.
5 355 U.S. 220 (1957)………..…………………………………….…….……………5, 8, 13
6 Pavlovich v. Superior Court (2002)
7
29 Cal.4th 262, 268, 127 Cal.Rptr.2d 329, 58 P.3d 2 ……………….…………………6, 11
8 Rakestraw v. Rodrigues
8 Cal.3d 67, 104 Cal.Rptr. 57, 500 P.2d 1401….…………………………………………5
9
10
Sacramento Suncreek Apartments, LLC, v. Cambridge Advantaged Properties II, L.P. (2010)
187 Cal. App. 4th 1, 10.……………………………………………….……………….…13
11
Seagate Tech. v. A. J. Kogyo Co. (1990)
12
219 Cal. App. 3d 696 ………..…………………………………….…………………5, 6, 12
13
Spahn v. Guild Indus. Corp. (1979)
14 94 Cal. App. 3d 143, 157 588).………..………………………………….…………………5
15
Taylor–Rush v. Multitech Corp. (1990)
16 217 Cal.App.3d 103, 265 Cal.Rptr. 672..………………………………….…………………6
17 Vons Companies, Inc. v. Seabest Foods, Inc. (1996)
14 Cal.4th 434, 444, 58.……..………………………………….……………………….…5, 7
18
19 World Wide Volkswagen Corp. v. Woodson (1980)
444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490.) …………………….…………………11
20
Virtualmagic Asia, Inc. v. Fil-Cartoons, Inc. (2002)
21
99 Cal. App. 4th 228, 238 ………….…………………………………….…………………11
22
Wyatt v. Union Mortgage Co. (1979)
23 24 Cal.3d 773, 785.) .………………..…………………………………….…………………5
24 Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 F.3d 1199, 1207………………………….5, 8
25 STATUTES
California Corporations Code § 17703.01..………………………………………..……………2
26
Civil Code § 1790………………………...……………………………………………………..9
27 Code of Civil Procedure section 410.10….……………………………………………………..6
28
iii
1 I. INTRODUCTION & SUMMARY OF ARGUMENT
2 Having failed to convince Judge Greenberg to quash service of Summons on TeDan
3 Surgical Innovations, LLC (“TSI”), the Texas limited liability company of which he is a member-
4 manager and 1/3 owner, DANIEL FISHMAN (“FISHMAN”), now moves, in his individual
5 capacity, for quashal on the same grounds, i.e., that he “has insufficient contacts with the State of
6 California to permit this Court to exercise jurisdiction over him.” (FISHMAN MPA ISO Motion,
7 filed 7/31/2018, at 4:3.)1
8 Considering the cast of characters in this lawsuit, the extent of their ties to California, and
9 the breadth and depth of their relationships with one another---and FISHMAN---his present
10 claims are as incredible as his denial to Judge Greenberg, under oath, that TSI maintained an
11 office at San Carlos, San Mateo County. As to those characters, and in service to the old saw that
12 “You can’t tell the players without a program,” the Court should know that:
13 -TSI (Texas LLC), has 3 manager-members: FISHMAN (33.34%); Danny BASS
14 (33.33%) and Terry JOHNSTON (33.33%) (SAVC, ¶ 18.). On June 1, 2006, FISHMAN, as
15 manager of TSI, executed a promissory note for $309,217,000 in favor of “3COR Medical, Inc., a
16 California corporation.” (Declaration of Fred H. Geisler, M.D., Ph.D., and Exhibit “6.”);
17 - JOHNSTON sent an email, on December 8, 2009, subject “TeDan Welcome,” to ”Jill,”
18 email address jwisinoski@tedansurgical.com, that she was “welcome to our clan…[b]elow is all
19 my contact info for the TeDan San Carlos office…” The address of the TSI “San Carlos office”
20 was the same “837 Industrial Road, Unit E” address as that of Rhausler, Inc. FISHMAN and
21 BASS were cc’d. (Declaration of Fred H. Geisler, M.D., Ph.D., and Exhibit “7.”);
22 -FISHMAN sent an email on June 9, 2010, telling JOHNSTON to sign and date a TSI
23 “Training Record” certifying that JOHNSTON had been instructed by FISHMAN on a
24 multitude of TSI procedures. (Declaration of Fred H. Geisler, M.D., Ph.D., and Exhibit “8.”);
25
26
27
1 Attached as Exhibit A to the Declaration of TSI’S and FISHMAN’S counsel, Robert Bodzin,
28 Esq., ISO Motion to Quash, is an endorsed/conformed copy Judge Greenberg’s Order After
Hearing, filed March 26, 2018.
- 1-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 -FISHMAN sent an email on January 19, 2011 to JOHNSTON forwarding a letter that
2 FISHMAN had signed, in the presence of a Notary Public, on January 12, 2011, addressed to
3 AAOS Exhibit Manager, in which FISHMAN said he wrote “to clarify the common ownership
4 between [TSI] and Rhausler, Inc. Terry [JOHNSTON], is a founding partner in both TSI and
5 Rhausler and continues to act as President in both companies.” (Declaration of Fred H. Geisler,
6 M.D., Ph.D., and Exhibit “9.”);
7 -Axcess Surgical, LLC, is a California-formed limited liability company with two
8 manager-members: FISHMAN (50%) and BASS (50%). FISHMAN is “in charge of sales and
9 marketing.” BASS and FISHMAN share the managerial responsibilities. Less than 50% of
10 Axcess’ business is with TSI. Axcess’ principal place of business is shared with West Coast
11 Surgical, LLC. (Declaration of Jeffrey Ryan and Exhibit “1,” deposition testimony of BASS, Tr.
12 18 – 21; Request for Judicial Notice (“RJN”) and Declaration of Jeffrey F. Ryan, and Exhibits “2,
13 3”.). The business of Axcess Surgical Innovations, LLC, is to manufacture medical devices for
14 TSI and others which are sold by 3COR MEDICAL from its San Carlos office. (SAVC, ¶20.);
15 - FISHMAN generally appeared, e.g., filed an Answer and a Motion for Summary
16 Judgment, with his supporting declaration, in a 2012 action filed in this very court, case number
17 CIV513394, entitled Jennifer Moran v. West Coast Surgical, LLC, Axcess Surgical
18 Innovations, LLC, Axiom Precision, LLC, Rhausler, Inc., Daniel Bass, Daniel Fishman, aka
19 Danny Fishman, et al. (See, Request for Judicial Notice (“RJN”) and Declaration of Jeffrey F.
20 Ryan, and Exhibits “4, 5;” Declaration of Danny Fishman ISO Quashal Motion, filed 7/31/2018;
21 FISHMAN MPA ISO Motion, filed 7/31/2018, at pp. 12 – 13.);2
22
2 The distinction between a member-managed and manager-managed LLC is significant for both
23
liability and personal jurisdiction analyses, i.e., Corp. Code § 17703.01 provides, in part, that:
24
25 (a) Unless the articles of organization indicate the limited liability company
is a manager-managed limited liability company, every member is an
26
agent of the limited liability company for the purpose of its business
27 or affairs, and the act of any member, including, but not limited to, the
execution in the name of the limited liability company of any
28 instrument, for the apparent purpose of carrying on in the usual way
the business or affairs of the limited liability company of which that
- 2-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 -West Coast Surgical, LLC, is organized under the laws of California, with its
2 principal place of business at Half Moon Bay, California. BASS is the owner of West Coast
3 Surgical, which manufactures medical devices for TSI, which accounts for 50% or more of the
4 business of West Coast Surgical. (Declaration of Jeffrey Ryan and Exhibit “1,” deposition
5 testimony of BASS, Tr. 16 - 18.);
6 -3COR Medical, Inc., is incorporated under the laws of the State of California; its stock is
7 owned 100% by JOHNSTON. 3COR sells medical devices for TSI and RHAUSLER from its
8 principal office, which is the same as that of RHAUSLER. (SAVC, ¶17.). 3COR was the payee
9 under the aforesaid $309,217,000 promissory note executed by FISHMAN as manager of TSI.
10 (Declaration of Fred H. Geisler, M.D., Ph.D., and Exhibit “6;”
11 -RHAUSLER, Inc., is incorporated under the laws of California, and JOHNSTON owns
12 about 48% of its outstanding stock. Its principal offices are, and since its 2008 incorporation
13 have been, at San Carlos, California. (SAVC, ¶¶ 13; 16.);
14 -BASS is, and at all times relevant was, a resident of California (SAVC, ¶ 19);
15 -JOHNSTON was, until Spring, 2016, a resident of California. (SAVC, ¶13.)
16 -FISHMAN is a resident of Texas. (SAVC ¶20.)
17 Thus, FISHMAN, BASS and JOHNSTON are co-owners of TSI, which Judge
18 Greenberg found amenable to in personam jurisdiction in California. West Coast Surgical, a
19
California LLC, derives 50% of its business from TSI, and California corporation 3COR sells
20
TSI products, which are manufactured by California LLC West Coast Surgical and California
21
LLC Axcess Surgical, of which FISHMAN is half-owner and in charge of sales and marketing.
22
23
person is a member, binds the limited liability company in the
24 particular matter, unless the member so acting has, in fact, no authority
to act for the limited liability company in the particular matter and the
25 person with whom the member is dealing has actual knowledge of the
fact that the member has no such authority.
26
27 (Emphasis added; see, also, Lundgren v. Superior Court (1980) 111 Cal.App.3d 477, 484
[activities of corporate officer and employee are imputed to corporation and establish
28 a reasonable basis for jurisdiction.].
- 3-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 The principal place of business of West Coast Surgical and Axcess Surgical is Half Moon Bay,
2 California.
3 FISHMAN and California resident BASS are co-owners of California LLC Axcess
4 Surgical, which derives 50% of its business from TSI, and of which FISHMAN is a member-
5 manager. BASS and FISHMAN, together with Axcess Surgical, were named defendants, and
6 made general appearances, in San Mateo County Superior Court case number CIV513394,
7 FISHMAN, BASS, JOHNSTON, TSI, 3COR and RHAUSLER are named defendants in
8 this action; Axcess and West Coast Surgical are not.
9 This tangled weave of related, inter-connected entities and individuals, most California-
10 domiciled, bespeaks historical, continuous and systematic business and contractual relationships
11 that FISHMAN, in his capacity as member-manager of TSI, has expressly claimed/confirmed by
12 notarized writing: “The purpose of this letter is to clarify the common ownership between TeDan
13 Surgical Innovations, LLC and Rhausler, Inc. Terry Johnston, (sic) is a founding partner in both
14 TSI and Rhausler and continues to serve as President in both companies.” (Declaration of Fred H.
15 Geisler, MD, Ph.D., Exhibit “9”.)
16 While commendably, albeit grudgingly, acknowledging Judge Greenberg’s findings that
17 TSI has sufficient contacts with California based on the siting of a TSI office in San Carlos, and
18 the tortious conduct by FISHMAN’S fellow TSI member-manager, co-defendant JOHNSTON,
19 FISHMAN appears to confuse the discrete, but interrelated, issue of liability with that of personal
20 jurisdiction. (See, e.g., FISHMAN MPA ISO Motion at 4:23 – 5:4.)
21 Thus, FISHMAN seems to argue that because it was JOHNSTON who “operated an office
22 in California,” and it was JOHNSTON “who was allegedly acting on [TSI’S] behalf as member
23 and agent when he committed various acts,” FISHMAN’S contacts with the forum state are not
24 of the smoking-gun variety and are therefore too tenuous to confer either general, or limited/
25 specific jurisdiction on California courts.
26 In the first place, “ʻIn any personal jurisdiction case we must evaluate all of a
27 defendant's contacts with the forum state, whether or not those contacts involve wrongful
28
- 4-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 activity by the defendant.ʼ (Yahoo! Inc. v. La Ligue Contre Le Racisme (9th Cir.2006) 433 F.3d
2 1199, 1207.).” (Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal. App. 4th 1558,
3 1572, observing that, “Here, as in Vons [Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th
4 434], AsiaTrust has a contractual relationship with its codefendants, who are California residents.
5 Also as in Vons, AsiaTrust's contacts with its codefendants need not have been wrongful.”)
6 (Emphasis added.)
7 Here, FISHMAN had direct contractual relationships with co-defendants JOHNSTON,
8 DANIEL BASS and TSI, not all of which were wrongful, and, as a principal in TSI, indirect
9 contractual relations with 3COR and RHAUSLER, some of which, as alleged in the SAVC, were
10 wrongful.
11 Secondly, “[a] principal ratifies an agent's acts when he knows of the acts and accepts the
12 benefits which flow from them (Rakestraw v. Rodrigues, 8 Cal.3d 67, 104 Cal.Rptr. 57, 500 P.2d
13 1401; Common Wealth Insurance Systems, Inc. v. Kersten, 40 Cal.App.3d 1014, 1026, 115
14 Cal.Rptr. 653; Kuchta v. Allied Builders Corp., 21 Cal.App.3d 541, 98 Cal.Rptr. 588).” (Spahn v.
15 Guild Indus. Corp. (1979) 94 Cal. App. 3d 143, 157.) In Spahn, supra, 94 Cal.App.3d at page 157
16 and footnote 9, the Court of Appeal held officers and directors of a corporation were personally
17 liable for fraud committed by a managerial employee because they knew about and allowed the
18 tortious conduct to occur. In addition, corporate directors and officers may be held personally
19 liable, as conspirators, for violating their own duties towards persons injured by the corporation's
20 tort. (Doctors' Co. v. Superior Court (1989) 49 Cal.3d 39, 48; Wyatt v. Union Mortgage Co.
21 (1979) 24 Cal.3d 773, 785.)
22 Lest the Court surmise that Plaintiffs, too, have been flummoxed by the liability versus
23 personal jurisdiction interplay,3 clarity is found in Seagate Tech. v. A. J. Kogyo Co. (1990) 219
24 Cal. App. 3d 696, where the Court explained:
25
26
3 See, e.g., Goehring v. Sup.Ct. (Bernier) (1998) 62 Cal.App.4th 894, 904, explaining that
27
although general partners may be liable individually for partnership debts, jurisdiction over the
28 partnership entity does not automatically establish jurisdiction over each partner individually.
Each defendant's “contacts” with California must be evaluated individually.
- 5-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
The Restatement (2d) Conflict of Laws, quoted in the Judicial Council's
1
comments to Code of Civil Procedure section 410.10, recognizes that an
2 individual may have contact with the forum state where he causes another to
act whether or not the individual has himself contacted the state. Thus,
3 Comment a to section 37 of the Restatement (2d), Conflict of Laws states: “A
state has a natural interest in the effects of an act within its territory even
4
though the act itself was done elsewhere. The state may exercise judicial
5 jurisdiction on the basis of such effects over the individual who did the act,
or who caused the act to be done, provided that the nature of these effects
6 and of the individual's relationship to the state are such as to make the
7
exercise of jurisdiction fair to the individual and reasonable from the
standpoint of the international and interstate systems....”
8
It follows that if a corporate officer may be held personally responsible for
9 causing the corporation to act, that act may be imputed to the officer for
purposes of establishing personal jurisdiction over him.
10
Our conclusion that the fiduciary shield doctrine should not be applied to
11
defeat jurisdiction is supported by the recent decision in Taylor–Rush v.
12 Multitech Corp. (1990) 217 Cal.App.3d 103, 265 Cal.Rptr. 672. There the
court noted that the fiduciary shield doctrine is inconsistent with the
13 legislative intent behind California's long-arm statute which is designed to
provide personal jurisdiction to the fullest extent constitutionally permissible.
14
(Id. at p. 116, 265 Cal.Rptr. 672.)
15 (Seagate, supra, pp. 702–04; emphasis added.)
16 The Court will know, as Judge Greenberg reminded the parties in her Order After
17 Hearing, that a “verified” Complaint may serve as evidence in a contested proceeding. (Exhibit
18 A to Declaration of Robert Bodzin, Esq., ISO Quashal Motion at 4:4; see, also, Hearn Pac. Corp.
19 v. Second Generation Roofing Inc. (2016) 247 Cal. App. 4th 117, 131–32.)
20 Reduced to the comprehensible, divining jurisdiction here is not that complicated:
21 California has personal jurisdiction over a nonresident defendant who “has
such minimum contacts with the state that the assertion of jurisdiction does
22
not violate ‘ “traditional notions of fair play and substantial justice.” ’ ” (Vons
23 Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, 58
Cal.Rptr.2d 899, 926 P.2d 1085 (Vons ).) The defendant's minimum contacts
24 with the state must reasonably justify haling it into a California court to
25
conduct a defense. ( Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268,
127 Cal.Rptr.2d 329, 58 P.3d 2 (Pavlovich ).) Courts apply the minimum
26 contacts test on a case-by-case basis, focusing on the nature and quality of
the defendant's activities in the state or with state residents. (Burger King
27 Corp. v. Rudzewicz (1985) 471 U.S. 462, 474–475, 105 S.Ct. 2174, 85
28
L.Ed.2d 528 (Burger King ).)
- 6-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
Personal jurisdiction may be general or specific. If the defendant's contacts
1
are substantial, continuous, and systematic, the defendant may be
2 subject to California's general jurisdiction. (Vons, supra, 14 Cal.4th at p.
445, 58 Cal.Rptr.2d 899, 926 P.2d 1085.)
3 (Gilmore Bank v. AsiaTrust, supra, 223 Cal.App.4th 1558, 1567–68; emphasis added.)
4 Based on his ownership, jointly with a California resident (BASS), of Axcess Surgical, a
5 California formed and domiciled LLC, for which he has managed sales and marketing since 2011,
6 and which manufactures surgical instruments for the Texas LLC (TSI) he also owns in concert
7 with California resident BASS and JOHNSTON, until just recently also a California resident,
8 whose solely-owned California corporation (3COR) sells the instruments made by Axcess for TSI,
9 it defies reason for FISHMAN to seriously claim that his California contacts are not “substantial,
10 continuous, and systematic” so as to make him subject to California’s general jurisdiction. He
11 is, for purposes of forum jurisdiction, “at home” in California.
12 If, however, those California contacts are found wanting for general jurisdiction, notwith-
13 standing the aforesaid “legislative intent behind California's long-arm statute,” the Gilmore Court
14 reminds us that:
15
If general jurisdiction is not established, a nonresident defendant may still be
16 subject to California's specific jurisdiction if a three-prong test is met. (Vons,
supra, 14 Cal.4th at p. 446, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) First, the
17 defendant must have purposefully availed itself of the state's benefits.
Second, the controversy must be related to or arise out of the defendant's
18
contacts with the state. (Ibid.) Third, considering the defendant's contacts
19 with the state and other factors, California's exercise of jurisdiction over the
defendant must comport with fair play and substantial justice. (Id. at p. 447,
20 58 Cal.Rptr.2d 899, 926 P.2d 1085.)
21 (Ibid., 223 Cal. App. 4th at 1568; italics in original.)
22 Again, FISHMAN’S ownership interest and managerial activities in California-domiciled
23 LLC Axcess Surgical will figure prominently in the analysis, as will his appearance in San
24 Mateo Superior Court as a named defendant in CIV513394. The Court will perceive, from the
25 SAVC, that the litigation underlying FISHMAN’S quashal motion “arise out of [his] contacts
26 with the state.” A careful and objective reading of Gilmore will illuminate the fallacy of
27 FISHMAN’S argument, as will understanding that Plaintiffs need not prove the truth of their
28 allegations constituting causes of action in order to justify exercise of jurisdiction over non-
- 7-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
1 resident defendant FISHMAN; rather, plaintiffs must simply present pleaded causes so as to
2 constitute constitutionally cognizable “minimum contacts.” (Edmunds v. Superior Court (1994) 24
3 Cal. App.4th 221, 29 Cal.Rptr.2d 281, as modified.)
4 Finally, even a single act may support specific personal jurisdiction over a nonresident
5 defendant if the cause of action in question arises from or is related to that act. (McGee v.
6 International Life Ins. Co., 355 U.S. 220 (1957); Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'
7 Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006).)4
8 II. OTHER FACTS TYING FISHMAN TO CALIFORNIA.
9 In addition to the testimonial and documentary evidence set forth ante, the Court is asked
10 to consider the following:
11
Defendants, JOHNSTON and TSI have engaged in a systematic and
12 protracted scheme over the course of the last nine (9) years (2008 through
the present) to defraud the RHAUSLER shareholders of the value of their
13 investments, and in particular, to defraud Plaintiff, Fred Geisler, M.D.
(hereinafter “GEISLER”) of the value of his medical device patents, and to
14
loot Rhausler of corporate property and assets thereby denying the
15 shareholders any distributions, the fair value of the Rhausler stock, and
denying GEISLER an amount of over $1 million due to him for royalties.
16 Further, defendants Johnston and Glynn, aided and abetted by other
defendants, have intentionally made material misstatements and omissions,
17
and reports to, prospective and existing shareholders, abusing defendants’
18 control over Rhausler in order to benefit themselves or profit other businesses
owned by them to the financial detriment of Plaintiffs, various breaches of
19 fiduciary duties, and violations of California Corporations Code §§ 309, 310,
1507, 1601 and 1602, and engaging in Unfair Business Practices in violation
20
of Bus. & Prof. Code § 17200 et seq.
21
(SAVC ¶ 3; emphasis added.)
22
In the course and scope of implementing and engaging in a protracted scheme
23 to loot RHAUSLER for their own personal benefit and profit, and at the
expense of the Plaintiffs, the Defendants, and each of them except for Katie
24
Sims, engaged in deceitful conduct towards the Plaintiffs in violation of Civil
25
26 4 The Court will also know that because California's longarm jurisdictional statute is coextensive
27 with federal due-process requirements, the jurisdictional analyses under state and federal law are
the same. (Yahoo! Inc., v. La Ligue Contre Le Racisme Et L'Antisemitisme, supra, 433 F.3d 1199,
28 1205; see Cal.Civ.Proc.Code § 410.10.)
- 8-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
Code § 1709, breached various fiduciary duties owed to Plaintiffs and the
1
Company, commingled, misappropriated and converted the corporate assets of
2 RHAUSLER, breached various written and oral contracts with Plaintiffs, and
engaged in deceptive, unlawful, and unfair business acts and practices in
3 violation of Business & Professions Code § 17200.
4
(SAVC ¶ 4.)
5
… defendants, and each of them were the principals, agents, employees,
6 servants, alter egos, joint venturers, aiders-and-abettors and/or co-
7
conspirators of the other remaining defendants, and were acting in the
course and scope of such agency, employment, joint venture, and/or
8 conspiracy; that defendants, and each of them, were doing the things herein
alleged, were the actual and/or ostensible agents of the other remaining
9 defendants and were acting within the course and scope of said agency; and
10
that each and every defendant, as aforementioned, when acting as a principal,
was negligent in selecting, hiring, supervising and continuing the employment
11 of each and every defendant as an agent, employee or joint venturer; and/or
that said defendants approved, supported, participated in, authorized, and/or
12
ratified the acts and/or omissions of said employees, agents, servants,
13 conspirators, and/or joint venturers.
14 (SAVC ¶ 23; emphasis added..)
15
… each of the said defendants was acting in concert with the other defendants
16 and/or in their capacity as agents, employees, aiders and abetters for the other
defendants, within the course and scope of their agency and employment, and
17 with the express or implied consent and authority of each other. There further
is a unity of interest among the defendants, and each of them. Each defendant
18
had knowledge or and agreed to both the wrongful objective and course of
19 action taken herein alleged by defendants, and each of them, with the purpose
on injuring the Plaintiffs, resulting in damage to Plaintiffs as herein alleged.
20
(SAVC ¶ 24, emphasis added.)
21
22 …given that JOHNSTON, BASS and FISHMAN are the 100%
owners/members of TSI, and have been since its organization in Texas on
23 November 14, 2005, and they have treated TSI as their own personal business,
24
there exists currently and all times herein mentioned relevant to the subject
lawsuit a unity of interest and ownership between Defendants JOHNSTON,
25 BASS and FISHMAN and TSI, such that any individuality and separateness
between them has ceased, and that Defendants JOHNSTON, BASS and
26 FISHMAN are the alter ego of defendant corporation TSI.
27
28
(SAVC ¶ 24, emphasis added.)
- 9-
PLAINTIFFS’ POINTS & AUTHORITIES ISO OPPPOSTION TO DANIEL FISHMAN’S MOTION TO QUASH
SERVICE OF SUMMONS ON SECOND AMENDED COMPLAINT
GEISLER, ET AL. vs. JOHNSTON, ET AL. — SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17-CIV-02888
JOHNSTON wanted to acquire GEISLER’s medical device patents to
1
commercialize them for the benefit of TSI and himself. Together with the
2 other two owners of TSI (Fishman and Bass) JOHNSTON concocted a
scheme to persuade GEISLER to assign his patents to RHAUSLER for no
3 money down and a future royalty based on revenue generated by
RHAUSLER. Despite the fact that GEISLER fully performed assignment of
4
the patents to RHAUSLER, and that they have generated millions for both
5 RHAUSLER, GEISLER has never received only a pittance in royalty
payments in over nine (9) years. (GEISLER received two checks from
6 RHAUSLER as royalty payments for a total amount of $23,998.04).
7
(SAVC ¶ 79, emphasis added.)
8
9 Notably, and turning again to the interplay between liability and jurisdiction, settled