Filed 5/27/16 Gleaming International Co. Ltd. v. Superior Court CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      SIXTH APPELLATE DISTRICT

GLEAMING INTERNATIONAL                                                 No. H042123
COMPANY LIMITED, et al.,                                              (Santa Clara
                                                                       Super. Ct. No. 1-14-CV-272501)
         Petitioners,

         v.

THE SUPERIOR COURT OF SANTA
CLARA

         Respondent,

SUNMING CHEUNG, as Administrator, etc.

         Real Party in Interest.


         The six petitioners in this original proceeding are defendants in an action brought
by real party in interest Sunming Cheung. Five of these defendants, who live outside the
United States, unsuccessfully moved to quash service of summons for lack of personal
jurisdiction over them. In their petition for a writ of mandate or prohibition, defendants
contend that the court erred in finding sufficient contacts with California to justify the
assumption of personal jurisdiction over the five foreign defendants. We conclude that
jurisdiction was proper as to all but two of the defendants and will therefore grant writ
relief limited to those two.
                                        Background
       The underlying subject of the parties’ dispute is a residence located in Los Altos.
Defendants are three adult children and one grandchild of Peter Chi Yu Chang (Peter)
and two foreign corporations, Gleaming International Company (GIC) and Pacific Grace
Limited (PGL). In July of 1978, Peter purchased the property as an “ancestral” home for
his family. He first created GIC to hold title and issued stock to his wife and four
children. The 10,000 total shares in GIC were issued as follows: 20 percent (2,000
shares) to Peter; 20 percent (2,000 shares) to Peter’s wife, Yao Liang Chang; 15 percent
(1,500 shares) to his son Paul Chu Kong Chang (Paul); 15 percent (1,500 shares) to his
daughter Helen Yung Chang (Helen); 15 percent (1,500 shares) to his daughter Lilian
Wai Chang (Lilian); and 15 percent (1,500 shares) to his son Lincoln Chu Shing Chang
(Lincoln).
       From the July 1978 purchase to 1984 Helen and her husband, real party in interest
Sunming Cheung (hereafter, Sunming), lived in the Los Altos residence and paid the
mortgage, taxes, and maintenance expenses on the property. Peter and his grandchildren
would spend a month there during each summer until his death in 1987. Through his will
Peter granted 20 percent “of the estate” pertaining to the Los Altos property to his eldest
grandson, Chris Chang Chao Yuan (Chris).
       In 1984, when Helen and Sunming purchased another home, Lincoln moved into
the Los Altos residence and continued to live there with his family throughout the
subsequent proceedings. Helen was a director of GIC along with Paul and their mother.
In 1998 Helen died, leaving her interest in the Los Altos residence to Sunming as the
administrator of her estate and trustee of the Helen Yung Chang Revocable Trust.
According to Sunming’s complaint, in July 1999 Lilian removed Helen as director of
GIC, and in December that year she replaced the remaining directors with herself and her
husband, Donald U Dong Woo (Donald).

                                             2
       Sunming further alleged that in 1999 Lilian and Donald transferred all of the 6,500
shares (65 percent) held by Lilian, Yao, Paul, and Lincoln—that is, all except Peter’s and
Helen’s shares—to PGL, a British Virgin Islands corporation. PGL has its principal
place of business in Hong Kong, and Lilian is its sole director. In 2002, Lilian purported
to transfer Helen’s 1,500 shares in GIC to herself individually and to transfer Chris’s
20 percent interest in the residence to PGL. Both transfers, Sunming alleged, were
“illegal, unauthorized, without consideration[,] and fraudulent.” Thus, as of 2002 Lilian
controlled 8,500 shares (85 percent) of GIC through PGL besides individually controlling
the 1,500 shares she had obtained from Helen.
       It was only in 2014 that Sunming discovered Lilian’s appropriation of Helen’s
shares. In January of that year Lilian and Lincoln mentioned that they were considering
selling the Los Altos residence. Sunming thereafter discovered the transfer in the annual
GIC filings with the Hong Kong government, and, according to the complaint, Lilian
“denied that [Helen] (and thus her heirs) had any right to the shares of the Residence.”
On the contrary, Sunming believed, Lilian “intended to sell the Residence and keep the
entire proceeds for herself individually and for PGL . . . and distribute no proceeds of any
future sale to them.”
       Sunming filed the instant litigation in Santa Clara County Superior Court, alleging
breach by Lilian and Donald of their fiduciary duty (though Donald was not specifically
named as a defendant) and conversion of Helen’s interest in GIC and the residence.
Sunming also asserted claims for declaratory relief, imposition of a constructive trust,
quiet title, and injunctive relief to restore Helen’s interest in GIC and the residence and to
prevent any transfer of the residence. Plaintiff named four family members as
defendants: Lilian, a Hong Kong resident; Paul, a resident of Ontario, Canada; Chris,
Paul’s son and a resident of Ontario, Canada; and Lincoln, a resident of Santa Clara
County. Sunming also named the two foreign corporations, GIC and PGL.



                                              3
       The foreign defendants (i.e., all defendants except Lincoln) collectively filed a
motion to quash service of summons on the ground that plaintiff could not show that
defendants had sufficient minimum contacts for the court to exercise personal jurisdiction
since none of the foreign defendants resided or did business in California. Alternatively,
the foreign defendants sought to dismiss the action based on the forum non conveniens
doctrine. Concurrently with the filing of the motion to quash, the one local defendant,
Lincoln, moved for judgment on the pleadings, asserting that if the court granted the
foreign defendants’ motion, then the court should grant him judgment on the pleadings
because necessary and indispensable parties would no longer be in the action.
       Sunming opposed the motion to quash and Lincoln’s motion for judgment on the
pleadings. Sunming argued that the court had specific personal jurisdiction over the
foreign defendants because the center of the dispute was the real property in Santa Clara
County, of which defendants had asserted ownership and control.
       The court denied the motion to quash and the motion to dismiss the action based
on forum non conveniens. Addressing the first motion, the court reasoned that all of the
defendants had asserted an interest in the California residence, “whether through GIC or
directly.” The court agreed with Sunming that GIC was only “a shell entity created for
the sole purpose of holding title to the Residence,” and which had not been shown to do
any business. That fact was significant in rebutting defendants’ assertion that the dispute
concerned only ownership in GIC, not interests in the residence. In addition, plaintiff’s
evidence indicated that defendants had directed “tortious activities towar[d] California”
that “aim[ed] to harm [Sunming] in California with respect to his interest in the
Residence.” Thus, the evidence established that the foreign defendants had purposely
availed themselves of this state’s forum benefits, and they had presented “virtually no
evidence” that would make the court’s assumption of jurisdiction unreasonable. The
court also denied Lincoln’s motion for judgment on the pleadings as to all but the third
cause of action.

                                             4
       Defendants then filed the instant petition for a writ of mandamus or prohibition to
overturn the court’s order. On March 21, 2016, having obtained preliminary opposition
from Sunming and a reply from defendants, we issued an order to show cause directed
only at the order denying the motion to quash, while denying the petition in all other
respects.1 Sunming did not file a return.
                                         Discussion
1. Legal Framework
       California’s long-arm statute, Code of Civil Procedure section 410.10, provides
that “[a] court of this state may exercise jurisdiction on any basis not inconsistent with
the Constitution of this state or of the United States.” As the California Supreme Court
has explained, “[a] state court’s assertion of personal jurisdiction over a nonresident
defendant who has not been served with process within the state comports with the
requirements of the due process clause of the federal Constitution if the defendant has
such minimum contacts with the state that the assertion of jurisdiction does not violate
‘ “ ‘traditional notions of fair play and substantial justice.” ’ ” (Vons Companies, Inc. v.
Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444 (Vons), quoting International Shoe Co. v.
Washington (1945) 326 U.S. 310, 316.)
       “[T]he minimum contacts test asks ‘whether the “quality and nature” of the
defendant’s activity is such that is “reasonable” and “fair” to require him [or her] to
conduct his [or her] defense in that State.’ [Citations.]” (Snowney v. Harrah’s
Entertainment, Inc., (2005) 35 Cal.4th 1054, 1061 (Snowney).) The test “ ‘is not
susceptible of mechanical application; rather, the facts of each case must be weighed to
determine whether the requisite “affiliating circumstances” are present.’ [Citations.]”
(Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 (Pavlovich).) Thus, whether a

       1
        The superior court’s ruling on forum non conveniens is not challenged in this
proceeding, and this court’s order to show cause did not encompass the ruling on
Lincoln’s motion for judgment on the pleadings.

                                              5
nonresident defendant has minimum contacts with California such that the exercise of
personal jurisdiction comports with due process is determined on a case-by-case basis.
(Snowney, supra, at p. 1061.) “Due process requires that a defendant be haled into court
in a forum State based on his own affiliation with the State, not based on the ‘random,
fortuitous, or attenuated’ contacts he makes by interacting with other persons affiliated
with the State . . . or on the ‘unilateral activity’ of a plaintiff.” (Walden v. Fiore (2014)
134 S.Ct. 1115, 1123 (Walden).)
       Although the property at the center of this dispute is located in California, the
same minimum contacts test applies to actions that are in rem or quasi in rem. (Shaffer v.
Heitner (1977) 433 U.S. 186, 207 (Shaffer).) “[I]n order to justify an exercise of
jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising
‘jurisdiction over the interests of persons in a thing.’ ” (Ibid.)
       “Personal jurisdiction may be either general or specific. A nonresident defendant
may be subject to the general jurisdiction of the forum if his or her contacts in the forum
state are ‘substantial . . . continuous and systematic.’ [Citations.]” (Vons, supra, 14
Cal.4th at p. 445.) “If the nonresident defendant does not have substantial and systematic
contacts in the forum sufficient to establish general jurisdiction, he or she still may be
subject to the specific jurisdiction of the forum.” (Id. at p. 446.)
       Specific jurisdiction, which is at issue in this case, is determined by examining
“the relationship among the defendant, the forum, and the litigation.” (Shaffer, supra,
433 U.S. at p. 204; Walden, supra, 134 S.Ct. at p. 1121.) As recently described by the
United States Supreme Court, for a state to exercise specific jurisdiction over a
nonresident defendant, “the defendant’s suit-related conduct must create a substantial
connection with the forum State.” (Walden, supra, at p. 1121.) “The proper question is
not where the plaintiff experienced a particular injury or effect but whether the
defendant’s conduct connects him to the forum in a meaningful way.” (Id. at p. 1125.)
“[T]he plaintiff cannot be the only link between the defendant and the forum. Rather, it

                                               6
is the defendant’s conduct that must form the necessary connection with the forum State
that is the basis for jurisdiction over him.” (Id. at p. 1122.) Thus, in order to establish
minimum contacts, “the relationship must arise out of contacts that the ‘defendant
himself’ creates with the forum State . . . , not the defendant’s contacts with persons who
reside there.” (Ibid.)
       “A court may exercise specific jurisdiction over a nonresident defendant only if:
(1) ‘the defendant has purposefully availed himself or herself of forum benefits’
[citation]; (2) ‘the “controversy is related to or ‘arises out of’ [the] defendant’s contacts
with the forum” ’ [citations]; and (3) ‘ “the assertion of personal jurisdiction would
comport with ‘fair play and substantial justice’ ” ’ [citations].” (Pavlovich, supra, 29
Cal.4th at p. 269; Snowney, supra, 35 Cal.4th at p. 1062.)
       The parties’ respective burdens in addressing specific jurisdiction are well
established. The plaintiff “has the initial burden of demonstrating facts justifying the
exercise of jurisdiction. [Citation.] Once facts showing minimum contacts with the
forum state are established, however, it becomes the defendant’s burden to demonstrate
that the exercise of jurisdiction would be unreasonable. [Citation.] When there is
conflicting evidence, the trial court’s factual determinations are not disturbed on appeal if
supported by substantial evidence. [Citation.] When no conflict in the evidence exists,
however, the question of jurisdiction is purely one of law and the reviewing court
engages in an independent review of the record.” (Vons, supra, 14 Cal.4th at p. 449;
Snowney, supra, 35 Cal.4th at p. 1062; Pavlovich, supra, 29 Cal.4th at p. 273.)
2. Defendants’ Contacts with California
       In determining whether specific jurisdiction is applicable to defendants, we first
consider whether defendants have purposefully availed themselves of forum benefits.
The California Supreme Court has described five circumstances that indicate purposeful
availment by a nonresident defendant: (1) purposefully directing his or her activities at
residents of the forum state; (2) purposefully deriving benefits from his or her activities in

                                               7
the forum; (3) creating a substantial connection with the forum; (4) deliberately engaging
in significant activities within the forum state; or (5) creating continuing obligations
between himself or herself and residents of the forum state. (Snowney, supra, 35 Cal.4th
at p. 1063.)
       In Sunming’s view, the key to jurisdiction over all of the foreign defendants is the
substantial connection afforded by owning property in Los Altos. Sunming cites Shaffer,
supra, 433 U.S. at p. 207, where the United States Supreme Court considered the
application of “ ‘fair play and substantial justice’ ” to interests in rem. The high court
acknowledged that “the presence of property in a State may bear on the existence of
jurisdiction by providing contacts among the forum State, the defendant, and the
litigation. For example, when claims to the property itself are the source of the
underlying controversy between the plaintiff and the defendant, it would be unusual for
the State where the property is located not to have jurisdiction. In such cases, the
defendant’s claim to property located in the State would normally indicate that he
expected to benefit from the State’s protection of his interest. The State’s strong interests
in assuring the marketability of property within its borders and in providing a procedure
for peaceful resolution of disputes about the possession of that property would also
support jurisdiction, as would the likelihood that important records and witnesses will be
found in the State. The presence of property may also favor jurisdiction in cases such as
suits for injury suffered on the land of an absentee owner, where the defendant’s
ownership of the property is conceded but the cause of action is otherwise related to
rights and duties growing out of that ownership.” (Id. at p. 207-208, fns. omitted.)
       It is clear to this court that the superior court has properly asserted specific
personal jurisdiction over GIC, the title holder to the Los Altos property; PGL, the holder
of 8,500 shares of GIC; Lilian, who controls PGL and (with her husband) GIC, and who
allegedly transferred Helen’s 1,500 shares of GIC to herself; and Lincoln, who has not
disputed jurisdiction over him. Contrary to defendants’ oversimplified depiction of the

                                               8
issues, this case is not simply about interests of shareholders in a corporation unrelated to
ownership of California property. The allegations of the complaint are directed at
Lilian’s breach of fiduciary duty and conversion by wrongfully transferring Helen’s legal
interests in a corporate shell, which served only to hold title to California property for the
benefit of the family. PGL is further subject to jurisdiction in California through its
agent, Lilian. (Cf. Magnecomp Corp. v. Athene Co. (1989) 209 Cal.App.3d 526, 539
[agent’s tortious conduct may be imputed to corporation for purposes of jurisdiction over
corporation].) Thus, there is a substantial connection between these defendants and
California. Moreover, the controversy arises out of those contacts, and in light of the
alleged conduct by them, the assertion of personal jurisdiction would comport with fair
play and substantial justice. Jurisdiction is therefore properly assumed over both
corporations, Lilian, and Lincoln.
       As to Paul and Chris, however, Sunming has presented no evidence that either of
these Canadian residents has retained or even asserts any active interest in either GIC or
the Los Altos property. Paul’s shares in GIC have been transferred to PGL under Lilian’s
control, as has Chris’s purported 20 percent interest in the residence. Whether
voluntarily divested or misappropriated, these interests apparently no longer bring Paul
and Chris within reach of California’s long-arm statute. We therefore conclude that the
motion to quash should have been granted as to Paul and Chris.
                                         Disposition
       Let a peremptory writ of mandate issue directing respondent court to vacate its
March 9, 2015 order denying the motion to quash and to enter a new order which
(1) grants the motion as to Paul Chu Kong Chang and Chris Chang Chao Yuan and
(2) denies the motion as to the remaining foreign defendants. The parties shall bear their
own costs.




                                              9
                                  _________________________________
                                  ELIA, ACTING P.J.


WE CONCUR:




_______________________________
BAMATTRE-MANOUKIAN, J.




_______________________________
MIHARA, J.
