Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-00620/USCOURTS-caed-2_19-cv-00620-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DANIEL BREAKEY, et al.,

Plaintiffs,

v.

JOSHUA LINDSEY, et al.,

Defendants.

No. 2:19-cv-00620-TLN-KJN

ORDER

This matter is before the Court on Defendants Joshua Lindsay, American Business 

Brokers L.L.C., and American Business Brokers Utah L.L.C.’s (collectively “Defendants”) 

Motion to Dismiss (ECF No. 4) and Motion to Strike (ECF No. 7). For the reasons set forth 

below, the Court GRANTS Defendants’ Motion to Dismiss and DENIES Defendants’ Motion to 

Strike as moot. 

I. FACTUAL AND PROCEDURAL BACKGROUND

The instant Motion arises from a business dispute between the parties. Defendants assert 

they entered into an agreement with Plaintiffs Daniel Breakey, D. Breakey Delivery, Inc., and 

Samantha Breakey (collectively “Plaintiffs”), under which Defendants would broker the sale of 

Plaintiffs’ business for a ten percent commission. (See ECF No. 1-2 at 31–36, 38.) Plaintiffs 

claim this agreement is invalid. (Id. at 5 ¶ 30; id. at 7 ¶¶ 51–54.) Defendants purportedly 

procured a buyer in February 2018, which resulted in a sale for $900,000, but Plaintiffs did not 

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pay Defendants their commission. (Id. at 30, 39–40.) On October 25, 2018, Defendants filed a 

UCC Financing Statement with the California Secretary of State against Plaintiffs. (Id. at 44.) 

On October 31, 2018, Defendants sent Plaintiffs a demand letter for payment of their commission 

of ten percent, or $90,000. (Id. at 30.) On December 6, 2018, Defendants initiated a lawsuit in 

Utah against Plaintiffs and the buyer to enforce the terms of the alleged contract. (Id. at 37.) 

On December 7, 2018, Plaintiffs filed the instant case in the Superior Court of the State of 

California, County of Yolo, alleging multiple causes of action under state law. (ECF No. 1-1.) 

Plaintiff attached two different versions of the “Executive Business Listing Agreement,” both of 

which included a forum selection clause, which states:

9. Jurisdiction. This Agreement shall be governed by the laws of the 

state of Utah. The parties hereby consent to sue and be sued for any 

action arising out of a breach or threatened breach of this Agreement 

exclusively in the courts in and for Salt Lake County, Utah and all 

lawsuits shall be litigated in this county.

(ECF No. 1-2 at 32, 35.) Additionally, Plaintiffs Daniel and Samantha Breakey assert they are 

California residents and are the owners of D. Breakey Delivery, Inc., which is domiciled in West 

Sacramento, California. (Id. at 2 ¶¶ 1–2.) Plaintiffs also allege Defendant Lindsey is a licensed 

attorney and resident of Utah, who is either the owner or employee of American Business 

Brokers, LLC, a Delaware L.L.C. and American Business Brokers Utah L.L.C. (Id. at 3 ¶¶ 6–11.) 

On April 11, 2019, Defendants removed the action to this Court. (ECF No. 1.) On April 

26, 2019, Defendants filed the instant Motion to Dismiss, on the basis that Defendants are not 

subject to personal jurisdiction in California, or alternatively, that venue is improper. (ECF No.

4.) Plaintiffs oppose Defendants’ Motion to Dismiss, asserting that the Court may assert personal

jurisdiction over Defendants based on the UCC filing, Plaintiffs’ residency, and the fact that the 

contract dispute concerns a business located in California. (ECF No. 11.) On June 6, 2019, 

Defendants replied to Plaintiffs’ opposition to the Motion to Dismiss. (ECF No. 13.)

On April 26, 2019, Defendants also filed a Motion to Strike the Third, Fourth, Seventh, 

and Ninth Causes of Action as violations of California’s anti-SLAPP law. (ECF No. 7 at 5.) 

Plaintiffs oppose Defendants’ Motion to Strike, asserting that Defendants were not engaging in 

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protected speech. (ECF No. 10.) On June 6, 2019, Defendants replied to Plaintiffs’ opposition to 

the Motion to Strike. (ECF No. 14.) 

II. STANDARD OF LAW

A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(2)

Federal Rule of Civil Procedure (“Rule”) 12(b)(2) allows a party to file a motion to 

dismiss for lack of personal jurisdiction. When there is no federal statute authorizing personal 

jurisdiction, the district court applies the law of the state in which the district court sits. Mavrix 

Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). California’s long-arm 

statute is coextensive with federal due process requirements. Cal. Code Civ. Proc. § 410.10. 

Accordingly, the “jurisdictional analyses under state law and federal due process are the same.” 

Mavrix Photo, Inc., 647 F.3d at 1223 (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 

797, 800–01 (2004)). “For a court to exercise personal jurisdiction over a nonresident defendant, 

that defendant must have at least ‘minimum contacts’ with the relevant forum such that the 

exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’” 

Schwarzenegger, 374 F.3d at 801 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 

(1945)). Under the minimum contacts test, there are two categories of personal jurisdiction: 

general jurisdiction and specific jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 126–27

(2014). 

A court may assert general personal jurisdiction over corporations “when their affiliations 

with the State are so ‘continuous and systematic’ as to render them essentially at home in the 

forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). 

There are two “paradigm all-purpose forums” in which a corporation will primarily be “at home” 

for the purposes of general jurisdiction: its place of incorporation and its principal place of 

business. Daimler, 571 U.S. at 137. General jurisdiction is not limited to these two forums, but it 

will only be available elsewhere in the “exceptional case” that a corporation’s affiliations with a 

forum are “so substantial and of such a nature as to render the corporation at home in that State.” 

Id. at 139 n.19; see also Martinez v. Aero Caribbean, 764 F.3d 1062, 1070 (9th Cir. 2014) (“Only 

in an ‘exceptional case’ will general jurisdiction be available anywhere else.”). Indeed, under the 

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modern jurisdiction theory, general jurisdiction “has played a reduced role,” and “[the Supreme 

Court’s] post-International Shoe opinions on general jurisdiction ... are few.” Daimler, 571 U.S. 

at 128–29. 

Specific jurisdiction, on the other hand, is satisfied when the defendant’s activities are 

directed toward the forum state and the defendant’s liability arises out of or relates to those 

activities. Id. at 127. In the Ninth Circuit, courts employ a three-part test to determine whether a 

defendant’s contacts suffice to establish specific jurisdiction: “(1) the nonresident defendant must 

have purposefully availed himself of the privilege of conducting activities in the forum by some 

affirmative act or conduct; (2) plaintiff’s claim must arise out of or result from the defendant’s 

forum-related activities; and (3) exercise of jurisdiction must be reasonable.” Roth v. Garcia 

Marquez, 942 F.2d 617, 620–21 (9th Cir. 1991) (emphasis omitted). The plaintiff bears the 

burden of satisfying the first two prongs, and if they are met, the burden shifts to the defendant 

“to set forth a ‘compelling case’ that the exercise of jurisdiction would not be reasonable.” 

Mavrix Photo Inc., 647 F.3d at 1228.

In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff 

bears the burden of establishing the court’s jurisdiction over the defendant. Wash. Shoe Co. v. A–

Z Sporting Goods Inc., 704 F.3d 668, 671–72 (9th Cir. 2012). However, when the defendant’s 

motion is based on written materials rather than an evidentiary hearing, the plaintiff need only 

make a “prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Id.

(quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)). The court resolves 

all disputed facts in favor of the plaintiff. Id. at 672.

B. Motion to Dismiss Under Rule 12(b)(3)

A party may move to dismiss an action based on improper venue pursuant to Rule

12(b)(3). Fed. R. Civ. P. 12(b)(3). Once a defendant challenges venue, the plaintiff bears the 

burden of demonstrating that the chosen venue is proper. Piedmont Label Co. v. Sun Garden 

Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In determining whether venue is proper, the 

pleadings need not be accepted as true and the court may consider facts outside of the pleadings. 

Doe 1 v. AOL, LLC, 552 F.3d 1077, 1081 (9th Cir. 2009). 

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Venue in a civil action is proper in:

(1) a judicial district in which any defendant resides, if all defendants 

are residents of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or 

omissions giving rise to the claim occurred, or a substantial part of 

the property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought 

as provided in this section, any judicial district in which any 

defendant is subject to the court’s personal jurisdiction with respect 

to such action.

28 U.S.C. § 1391(b)(1)–(3). “The first two paragraphs of §1391(b) define the preferred judicial 

districts for venue in a typical case, [while] the third paragraph provides a fallback option.” Atl. 

Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49, 56 (2013). When venue 

is improper, the district court can either dismiss the action, “or if it be in the interest of justice, 

transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 

1406(a). “A determination of improper venue does not go to the merits of the case and therefore 

[dismissal] must be without prejudice.” In re Hall, Bayoutree Assocs., Ltd., 939 F.2d 802, 804 

(9th Cir. 1991).

III. ANALYSIS

A. Personal Jurisdiction

i. General Jurisdiction

The facts offered by Plaintiffs indicate that Defendants are residents of Utah, are 

incorporated in Delaware, and are registered and located in Utah. (ECF No. 1-2 ¶¶ 6–10.) 

Defendants assert none of them live in, are incorporated in, or have their principal places of 

business in California. (ECF No. 4 at 6.) In opposition, Plaintiffs generally claim Defendants 

have an ongoing brokerage business in California with 75 percent of their business listings in 

California and provide an exhibit showing three California listings on a webpage that appears to 

belong to Defendants. (ECF Nos. 11, 11-1.) The Court construes Plaintiffs’ assertion as an

attempt to establish general personal jurisdiction, since it describes general forum-related conduct 

instead of claim-specific conduct. However, Plaintiffs fail to establish Defendants’ listings 

qualify as conduct “so ‘continuous and systematic’ as to render them essentially at home in the 

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forum State” because Plaintiffs fail to offer any legal arguments that the Court has personal 

jurisdiction over Defendants. Goodyear Dunlop Tires Operations, 564 U.S. at 919. Accordingly, 

the Court declines to assert general personal jurisdiction. 

ii. Specific Jurisdiction

The Ninth Circuit employs a three-part test to determine whether a defendant’s contacts 

are sufficient to establish specific jurisdiction, for which the plaintiff bears the burden of 

establishing the first two prongs. See Roth, 942 F.2d at 620–21; Mavrix Photo Inc., 647 F.3d at 

1228. Here, Plaintiffs fail to meet their burden under either prong. Plaintiffs only offer 

conclusory assertions that Defendants have contacts with California. Beyond the business listing 

discussed above, Plaintiffs generally state, “Defendants have plenty of ongoing ties to 

California,” offering Defendants’ “illegal” UCC financing statement and the “void, unenforceable 

contract” based on “California res” as proof of that ongoing contact. (ECF No. 11 at 4.) 

Plaintiffs argue that the UCC financing statement constitutes a contact with California, 

which the Court construes as an argument that Defendants have “purposefully availed” 

themselves of the privilege of doing business in California. (Id.) However, Plaintiffs fail to offer 

any legal argument to support this assertion. Moreover, existing legal authority supports a 

contrary finding. In Goehring v. Superior Court, for example, the court considered whether it 

could assert jurisdiction over Texas residents based on the filing of a California UCC financing 

statement. Goehring, 62 Cal. App. 4th 894, 907 (1998). The Goehring court found the “filing of 

a single financing statement, considered along or in connection with the sales and security 

agreements, does not demonstrate purposeful availment.” Id. at 908. In sum, although the Texas 

corporation used a California procedure to protect its security interest, it was protecting “Texasbased security interests on Texas promissory notes related to a Texas-based sales contract.” Id.

1

 

1 The Goehring court also analyzed a number of cases from various jurisdictions that reach

similar conclusions regarding financing statements, which this Court finds persuasive. See

Occidental Fire & Cas. Co. of North Carolina v. Cont’l Illinois Nat’l Bank and Trust Co., 689 F. 

Supp. 564, 568 (E.D. N.C. 1988) (“[The] filing of financing statements is not akin to soliciting 

business in the forum, introducing products into the forum, or signing and performing a contract 

within the forum.”); NFD, Inc. v. Stratford Leasing Co., 433 N.W.2d 905, 909 (Minn. App. 1988) 

(concluding that the nonresident’s filing of a UCC-1 financing statement did not show 

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Similarly here, Defendants argue they filed the California UCC statement “to protect their interest 

in being paid on a Utah-based listing agreement with a Utah venue clause.” (ECF No. 13 at 5.) 

Accordingly, the Court finds Plaintiffs may not rely solely upon Defendants’ filing of a UCC 

financing statement to establish specific jurisdiction. 

Plaintiffs’ other argument suggests that the Court may exercise specific jurisdiction over 

Defendants since the underlying contract covered the sale of a California business. (ECF No. 11 

at 4.) This argument, too, is unavailing. The Supreme Court has squarely addressed this issue 

and determined that if a contract forms the basis for specific jurisdiction, then it should be one 

which “envision[s] continuing and wide-reaching contacts” with the forum state. Burger King 

Corp. v. Rudzewicz, 471 U.S. 462, 480 (1985). Plaintiffs do not allege or argue that the contract 

with Defendants would lead to continuing and wide-reaching contacts in California. They simply 

assert that the contract touched on property that resides in California. “If the question is whether 

an individual’s contract with an out-of-state party alone can automatically establish sufficient 

minimum contacts in the other party’s home forum, we believe the answer clearly is that it 

cannot.” Id. at 478. Plaintiffs fail to allege that Defendants conducted any activities in the forum 

beyond filing a UCC financing statement and signing a contract with California residents. Since 

neither the UCC statement nor the contract establishes sufficient minimum contacts with the 

forum, the Court declines to assert jurisdiction over Defendants. Accordingly, the Court 

GRANTS Defendants’ Motion to Dismiss for lack of personal jurisdiction.

B. Improper Venue

Defendants alternatively request the Court dismiss for improper venue. (ECF No. 4 at 4.) 

However, because the Court has determined dismissal for lack of personal jurisdiction is 

appropriate, it does not reach Defendants’ improper venue arguments. 

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nonresident “purposefully availed itself of the benefits of the forum state’s laws”); Prentice v. 

Prentice Colour, Inc., 779 F. Supp. 578, 588 (M.D. Fla. 1991) (“[T]he filing of Uniform 

Commercial Code financing statements in Florida by an out-of-state defendant to protect its 

security interests does not constitute a voluntary or purposeful effort to do business in Florida.”); 

Milberg Factors, Inc. v. Greenbaum, 585 So.2d 1089 (Fla. App. 1991) (same). 

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C. Motion to Strike

Defendants asked the Court to strike the Third, Fourth, Seventh, and Ninth Causes of 

Action of Plaintiffs’ Complaint in their Motion to Strike. (ECF No. 7.) However, in light of the

Court’s ruling on Defendants’ Motion to Dismiss for lack of personal jurisdiction, the Court 

DENIES Defendants’ Motion to Strike as moot. 

IV. CONCLUSION

For the foregoing reasons, the Court finds Plaintiffs’ Complaint fails to convey personal 

jurisdiction over Defendants. Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion 

to Dismiss for lack of personal jurisdiction (ECF No. 4) is GRANTED, and Defendants’ Motion 

to Strike (ECF No. 7) is DENIED as moot. 

IT IS SO ORDERED. 

DATED: March 16, 2020

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