Tracy v. Global Offshore International

Filed 3/21/06 Tracy v. Global Offshore International CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Richard E. L. Strauss, Judge. Affirmed.

Joseph Tracy, Jr. appeals a judgment of dismissal entered after the trial court granted the motion of Global Offshore International, Ltd. (Offshore), Global Industries, Ltd. (Industries) and Global Industries International, LP (International; collectively Global) for an order quashing service of summons based upon the lack of personal jurisdiction. We hold that the evidence before the trial court of Global's contacts with California was insufficient to establish personal jurisdiction. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Offshore and International are Cayman Islands companies and subsidiaries of Industries, a Louisiana corporation. None of these entities have offices, transact business or own real estate in California. Offshore is in the business of providing maritime support to the oil and gas industry and Tracy is a California resident who had worked for Global in the past. In January 1998, a Global employee telephoned Tracy in San Diego from out of state and offered him a job as a barge foreman in Mexico. Global faxed Tracy a contract that he signed, dated and faxed back to the company. Global signed the contract in Texas. Thereafter, Global sent Tracy a visa application and a plane ticket to Texas. After obtaining a visa, Tracy flew to Texas to undergo a physical examination and then to Louisiana where he began working for Global. He later undertook assignments in Mexico, Southeast Asia and Africa.

During his employment, Global never assigned Tracy to work in California, but it regularly paid for his periodic return to California as provided by his employment contract. In early 2002, Tracy began experiencing pain and numbness in his hands and arms, but he did not know what caused these symptoms. Tracy ended his employment with Global in March 2002 when he experienced chest pains while working off the coast of Thailand. Global paid for his transportation to Thailand and then to San Diego for treatment. Global paid Tracy's maintenance and cure for his heart condition, but terminated the payments after two months even though he was still experiencing problems with his hands and arms. In May 2002, a physician in California diagnosed Tracy's continued pain and numbness as carpal tunnel syndrome. Tracy requested that Global pay for the treatment of this condition, but it refused.

In May 2004, Global filed an action against Tracy in a Louisiana federal court seeking a declaratory judgment that Tracy was not entitled to benefits under the Longshore and Harbor Workers' Compensation Act and that his claims did not give rise to liability against Global for negligence or maintenance and cure benefits. In October 2004, Tracy filed the instant action alleging seven causes of action against Global based on his prior employment and Global's failure to pay maintenance and cure benefits to treat his carpal tunnel syndrome. A few months later, the federal court denied Tracy's motion to dismiss the Louisiana action, concluding it had personal jurisdiction over him and that he failed to show how the exercise of jurisdiction would be unfair.

In this action, Global specially appeared and moved for an order quashing service of summons based on lack of personal jurisdiction. The trial court granted the motion, concluding Tracy failed to meet his burden of establishing that Global purposefully availed itself of jurisdiction within California. Tracy appeals from the resulting dismissal.

DISCUSSION

General Jurisdictional Requirements and Standard of Review

A state's exercise of personal jurisdiction over a nonresident defendant may be either "general" or "specific." (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445-446 (Vons Companies).) General jurisdiction exists if the defendant's contacts "'in the forum state are "substantial . . . continuous and systematic.'" (Ibid. quoting Perkins v. Benquet Mining Co. (1952) 342 U.S. 437, 445-446.) Tracy did not argue general jurisdiction existed and the trial court properly concluded that the motion hinged on the existence of specific jurisdiction. Specific jurisdiction exists if (1) the defendant has purposely availed itself of the forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 536, citing Vons Companies, supra, 14 Cal.4th at pp. 446-447.) The purposeful availment inquiry is satisfied "'when the defendant purposefully and voluntarily directs his activities toward the forum so that he should expect, by virtue of the benefit he receives, to be subject to the court's jurisdiction based on' his contacts with the forum." (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269.)

"When a nonresident defendant challenges personal jurisdiction, the plaintiff must prove, by a preponderance of the evidence, the factual basis that would justify the exercise of jurisdiction. [Citations.]" (F. Hoffman-La Roche v. Superior Court (2005) 130 Cal.App.4th 782, 794-795.) Where there is conflicting evidence, we review the trial court's factual determinations under the substantial evidence standard (Vons Companies, supra, 14 Cal.4th at p. 449) and resolve all conflicts "against the appellant and in support of the order." (Wolfe v. City of Alexandria (1990) 217 Cal.App.3d 541, 546.) When there is no conflict in the evidence, the question of jurisdiction is one of law, which we review de novo. (Vons Companies, supra, 14 Cal.4th at p. 449.)

Tracy Failed to Show the Existence of Specific Jurisdiction

Tracy argues that his causes of action for breach of contract and unpaid maintenance and cure directly arise out of the employment agreement entered into with Global in California. Although the parties dispute whether they entered the contract in California or Texas, the place of contracting, and the mere existence of the contract, are not dispositive to the jurisdictional analysis. (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 478-479 (Burger King).) "Rather, a court must evaluate the contract terms and the surrounding circumstances to determine whether the defendant purposefully established minimum contacts within the forum. Relevant factors include prior negotiations, contemplated future consequences, the parties' course of dealings, and the contract's choice-of-law provision. [Citation.]" (Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 907.)

Here, a Global representative telephoned Tracy in California and sent him a contract to sign. Tracy admitted that the job assignment was in Mexico and that they discussed the job classification and pay rate over the telephone. The contract did not contain a choice of law provision, but provided for arbitration of all disputes relating to the contract in Houston, Texas. The contract contemplated a continuing working relationship between Global and Tracy, but California did not play any part in this relationship because Tracy's work assignments were all outside California. The contract had no relationship to commerce in California, nor did it promote business within California. Although the contract provided that Global would pay for Tracy's periodic return to California as his "point of origin," this is the type of "attenuated" connection with the forum that is insufficient to support jurisdiction, particularly where Global has never done business in California and has no offices and owns no property here. (Burger King, supra, 471 U.S. at pp. 479.)

Tracy contends the facts here are similar to those in Coats v. Penrod Drilling Corp. (5th Cir.1993) 5 F.3d 877 (Coats), rehearing granted by 20 F.3d 614, reinstated in relevant part, 61 F.3d 1113, 1118. In Coats, the plaintiff suffered a maritime personal injury while working for a foreign employer during a foreign assignment. (Coats, supra, 5 F.3d at pp. 880-881.) The defendant provided transportation for the injured seaman to the forum state for treatment, made maintenance and cure payments to the plaintiff in the forum state through its agent and the plaintiff sued the defendant in part because it terminated these payments. (Ibid.) The foreign employer also advertised its job openings in newspapers distributed in the forum state, held a meeting in the forum state for the purpose of recruiting employees and hired the plaintiff at that meeting. (Id. at pp. 882-883.) After the plaintiff's injury, the employer helped decide where the plaintiff would get treatment and replaced him with another individual residing in the forum who had also attended the meeting. (Id. at pp. 882, 884.) Based on these facts, the court concluded that the defendant was "doing business" in the forum and that the plaintiff's claims arose from facts sufficiently incident to these activities to meet the nexus requirement for personal jurisdiction. (Id. at p. 883.)

In the present case, however, there is no evidence that Global advertised its jobs or conducted recruiting activities in California. Similarly, there is no evidence that Global participated in Tracy's decision to go to California, rather than some other location, for medical treatment. Global's solicitation of Tracy in California, followed by Tracy's unilateral decision to obtain medical treatment here and Global's act of paying for some of this treatment are insufficient to constitute doing business in California so as to establish specific jurisdiction.

Tracy also argues that Global caused an effect in California by refusing to pay for his continued medical treatment here that resulted in economic gain for Global. It is reasonable for a court to exercise jurisdiction if a defendant has intentionally caused effects in California by an act or omission done elsewhere, if the effects are of a nature that California treats as exceptional and subject to special regulation, or the defendant has invoked the benefits and protections of California laws in connection with the effects caused. (Quattrone v. Superior Court (1975) 44 Cal.App.3d 296, 306 (Quattrone).) In Quattrone, the court upheld the exercise of jurisdiction over a nonresident defendant who had allegedly violated a special California regulation designed to protect shareholders of California corporations. (Id. at pp. 306-307; St. Joe Paper Co. v. Superior Court (1981) 120 Cal.App.3d 991, cert. den. (1982) 455 U.S. 982 [out-of-state defendant's alleged activities constituting violations of the Cartwright Act (Bus. & Prof. Code, § 16720 et seq.) subjected him to California jurisdiction].) Merely causing an effect in California, however, is not necessarily sufficient to establish a constitutional basis for jurisdiction. (Sibley v. Superior Court (1976) 16 Cal.3d 442, 446.)

Tracy cites no authority to support his assertion that Global's denial of maintenance and cure benefits to treat his carpal tunnel syndrome was an exceptional act subject to special regulation in California. Maintenance and cure is a right afforded to all seamen under general maritime law (Calmar S.S. Corp. v. Taylor (1938) 303 U.S. 525, 527) and the Jones Act (46 U.S.C.A. Appen. § 688(a)). California, however, has no law regulating benefits to seamen. The present record also contains no evidence showing Global's conduct was intended or expected to provide any benefit to it under the laws of this state. The mere fact Tracy had to pay for his medical treatment because Global refused to do so, is an insufficient ground on which to base personal jurisdiction.

The trial court correctly determined that the evidence was insufficient to establish specific jurisdiction over Global in California. Accordingly, the burden never shifted to Global to prove that the exercise of jurisdiction would be unreasonable. (Sibley v. Superior Court, supra, 16 Cal.3d at p. 448.)

DISPOSITION

The judgment is affirmed. Global is to recover its costs on appeal.

McINTYRE, J.

WE CONCUR:

HUFFMAN, Acting P. J.

McDONALD, J.

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