Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-00867/USCOURTS-cand-3_10-cv-00867-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-Personal Property

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United States District Court

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

DALE LAUE, 

Plaintiff, 

v. 

KENNETH G. CAMPBELL, 

Defendant. 

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Case No. 10-867 SC 

ORDER GRANTING 

MOTION TO DISMISS 

I. INTRODUCTION

 This action concerns the administration of the estate of South 

Dakota resident Doris Laue ("Doris"). ECF No. 1 ("Compl."). 

Doris's son, Dale Laue ("Plaintiff"), is a devisee of Doris's will 

and a former personal representative of her estate. Id. ¶ 19. In 

response to a request by the other devisees, a South Dakota court 

removed Plaintiff as personal representative and replaced him with 

Kenneth G. Campbell ("Defendant"), a South Dakota resident. Id.

¶ 24. Plaintiff brought this suit, alleging Defendant negligently 

administered the estate and breached his fiduciary duty to the 

devisees. Id. ¶¶ 32-33. Now Defendant moves to dismiss this 

action, arguing that this Court lacks personal jurisdiction over 

Defendant; this Motion is fully briefed. ECF Nos. 7 ("Mot."), 9 

("Opp'n"), 12 ("Reply"). For the following reasons, the Court 

GRANTS Defendant's Motion and DISMISSES Plaintiff's action. 

Case 3:10-cv-00867-SC Document 14 Filed 08/24/10 Page 1 of 10
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United States District Court

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II. BACKGROUND

Plaintiff is a California resident. Compl. ¶ 17. Plaintiff's 

parents, Richard and Doris Laue, were South Dakota residents. Id.

¶ 29. Richard and Doris owned a 150-acre ranch in South Dakota, as 

well as other property and assets outside South Dakota. Id. ¶¶ 29, 

32. In 2002, Richard died, and his property descended to Doris. 

Id. ¶ 16. In 2003, Plaintiff moved from California to South Dakota 

to care for Doris and the ranch. Id. ¶ 17. In 2004, Doris died. 

Id. ¶ 18. As provided by Doris's will, Plaintiff was appointed 

personal representative of her estate. Id. ¶ 19. 

 Plaintiff began to administer Doris's estate. Doris's will 

provided that in the event Richard predeceased her, the estate 

would be distributed in equal shares to her sons, Wayne, Bryan, and 

Dale (Plaintiff). Id. ¶ 18. If any children predeceased her, that 

child's share was to descend to and vest in equal shares to the 

children of her deceased child. Id. Wayne, a California resident, 

had died four years earlier in 2000, and was survived by three 

children, Michael, Ashley, and Kevin Laue, and his ex-wife, Jodi 

Jarnagin ("Jarnagin"); Wayne had established a revocable trust 

("the Trust") to provide for his children. Id. ¶¶ 11-13. 

 Plaintiff alleges that in the course of his duties as personal 

representative of the estate, he learned of an outstanding loan 

from Richard and Doris to Wayne. Id. ¶ 20. Plaintiff claims that 

Wayne purchased a home in San Jose, California from Richard and 

Doris in 1981, and that Wayne financed this purchase through a 

mortgage owed to Richard and Doris, secured by a Deed of Trust. 

Id. ¶ 8. In 1991, Richard and Doris relinquished this Deed of 

Trust, which allowed for the sale of the San Jose home and helped 

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United States District Court

For the Northern District of California 

Wayne and Jarnagin qualify for the purchase of a home in 

Pleasanton, California ("the California Property"). Id. ¶ 10. 

Plaintiff claims that although Richard and Doris relinquished the 

secured Deed of Trust, Wayne continued making payments until his 

death in 2000. Id. at 14. Plaintiff alleges that when Wayne died, 

this debt had not been paid in full, with a remaining balance of 

$41,216. Id. ¶ 14. Plaintiff made attempts to collect this amount 

from Jarnagin and the Trust, but Jarnagin denied owing the debt and 

the trustees "took the position that Richard and Doris had forgiven 

the loan after Wayne's death." Id. ¶ 21. 

 In 2006, Wayne's children petitioned a South Dakota court to 

remove Plaintiff as a personal representative of the estate and 

appoint Defendant, a South Dakota lawyer, in his place. Id. ¶ 24. 

The court granted this petition. Id. ¶ 25. Plaintiff left the 

ranch and returned to California. Id. ¶ 27. 

 In 2007, as personal representative, Defendant petitioned the 

South Dakota court for an order authorizing him to abandon any 

potential claim to the California property, as well as any claims 

in the two cemetery lots in San Jose, California. Id. ¶ 29. The 

court granted this order. Id. Defendant also subdivided and sold 

Richard and Doris's South Dakota ranch. Id. ¶ 32. Plaintiff 

claims that Defendant "refused to conduct a meaningful 

investigation of the Estate's rights in connection with the 

California Property." Id. ¶ 26. Plaintiff claims that Defendant 

breached his duties through the sale of the South Dakota ranch, 

which he characterizes as an "unauthorized forced sale." Id. ¶ 32. 

Plaintiff claims that Defendant did not order a current appraisal 

of the ranch, and that the actual value of the property was 

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United States District Court

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significantly greater than the amount paid. Id. Plaintiff claims 

that Defendant wasted estate funds by "depleting Estate funds to 

pay real property taxes for the buyer, unnecessarily subdividing 

the property and paying advertising expenses." Id. ¶ 33. As to 

the California property, Plaintiff claims: "Had Defendant not 

abandoned his duties in pursuing the Estate's claims to the 

California Property, the Estate would have been entitled to a 

constructive trust based on the $42,216 balance of the original 

$75,500 mortgage not repaid from the Trust to Richard and Doris at 

the time of Wayne's death, and a pro rata share of the appreciation 

of the Property purchased with the loan's proceeds." Id. ¶ 28. 

Plaintiff argues that this share would be considerably larger than 

the $41,216 balance, as the property had an estimated fair-market 

value of more than $900,000 at the time. Id. 

 Defendant moves to dismiss this action under Rules 12(b)(2) 

and 12(b)(6) of the Federal Rules of Civil Procedure, arguing that 

the Court lacks jurisdiction over the Defendant and that the claims 

asserted by Plaintiff are barred by res judicata principles. Mot. 

at 1. Defendant claims he lacks the requisite minimum contacts 

with California, and that jurisdiction cannot be founded on the 

fact that "the subject Estate, created, probated, and administered 

in South Dakota, purportedly included an 'interest' in a piece of 

property in California as well as cemetery plots in California." 

Id. at 7. Defendant argues that the focus of Plaintiff's Complaint 

is the South Dakota ranch, which sold at auction for nearly $2.7 

million, and not the alleged interest in the California property. 

Id. at 8. Defendant also argues that when Defendant was named 

personal representative of the estate, Plaintiff lived in South 

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Dakota, and so Defendant never purposefully availed himself of the 

laws of California. Id. at 9. Defendant argues in the alternative 

that res judicata principles should bar Plaintiff's action, because 

Plaintiff had the opportunity to raise these claims during the 

South Dakota probate actions and did not do so. Id. at 12-18. 

 Plaintiff responds that this Court's jurisdiction over 

Defendant is proper.1

 Opp'n at 6. In the alternative, Plaintiff 

requests the Court transfer the case to the District of South 

Dakota. Id. at 14. 

III. LEGAL STANDARD

 Where a court considers a motion to dismiss for lack of 

jurisdiction without an evidentiary hearing, "the plaintiff need 

only demonstrate facts that if true would support jurisdiction over 

the defendant." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 

1995) (citations omitted). Jurisdiction must comport with both the 

long-arm statute of the state in which the district court sits and 

 

1

 Plaintiff also argues that Defendant's Motion should be denied 

because it is time-barred, arguing that under Federal Rule of Civil 

Procedure 12, a responsive pleading is due three weeks from service 

of process, and because Defendant was served on May 6, 2010, a 

response was due on May 27, 2010. Opp'n at 6. Defendant's Motion 

was filed on June 2, 2010. See Mot. Defendant responds that the 

Motion was filed on time. Defendant was served at his place of 

work through substituted personal service on Cindy Goetze, 

identified in the Proof of Service as Defendant's office manager. 

ECF No. 8 ("Proof of Service"). Defendant argues that as such, the 

methods of service provided by Federal Rule of Civil Procedure 

4(e)(2)(A)-(C) are not satisfied, and thus service must be proper 

under Rule 4(e)(1), which allows any method of service proper under 

the law of the state in which the district court is located or 

where service is made. Reply at 2-3. Under Section 415.20 of 

California's Code of Civil Procedure, service at a defendant's 

place of work must be followed with a mailed copy of the summons, 

with service being deemed complete on the tenth day after the 

mailing. Because the summons was mailed on May 10, 2010, service 

was not complete until May 20, and thus the Motion was filed well 

within the timeline provided by Rule 12. Accordingly, the Court 

DENIES Plaintiff's request to strike the Motion as time-barred. 

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the constitutional requirements of due process. Mattel, Inc., v. 

Greiner & Hausser GmbH, 354 F.3d 857, 863 (9th Cir. 2003). Under 

California's long-arm statute, Cal. Code Civ. Proc. § 410.10, 

courts may exercise jurisdiction to the extent permitted by the Due 

Process Clause of the Constitution. Panavision v. Toeppen, 141 

F.3d 1316, 1320 (9th Cir. 1998). The Due Process Clause allows 

federal courts to exercise jurisdiction where either: (1) the 

defendant has had continuous and systematic contacts with the state 

sufficient to subject him or her to the general jurisdiction of the 

court; or (2) the defendant has had sufficient minimum contacts 

with the forum to subject him or her to the specific jurisdiction 

of the court. Id. at 1320. 

IV. DISCUSSION

 A. Personal Jurisdiction

 Plaintiff does not argue that Defendant's contacts with 

California are continuous and systematic enough to support general 

jurisdiction. Opp'n at 7. Were he to do so, the undisputed facts 

would be against him: Defendant is a South Dakota lawyer who has 

never lived in California, has no office in California, and has no 

assets or bank accounts in California. Campbell Decl. ¶ 3.2

 

Defendant does not engage in business activities in California, 

solicit California residents, or advertise his services in 

California. Id. Defendant has never owned any property or held a 

job in California. Id. ¶¶ 4-5. 

 In light of these facts, Plaintiff argues that the Court may 

exercise specific jurisdiction over Defendant. Id. The Ninth 

 

2

 Defendant Campbell filed a Declaration in support of his Motion. 

ECF No. 7-1. 

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United States District Court

For the Northern District of California 

Circuit provides a three-part test to determine if such 

jurisdiction comports with due process: 

(1) The nonresident defendant must do some act 

or consummate some transaction with the forum 

or perform some act by which he purposefully 

avails himself of the privilege of conducting 

activities in the forum, thereby invoking the 

benefits and protections of its laws; (2) the 

claim must be one which arises out of or 

results from the defendant's forum-related 

activities; and (3) exercise of jurisdiction 

must be reasonable. 

Panavision, 141 F.3d at 1320. 

 To satisfy the first prong of the test, the defendant must 

have either purposefully availed himself of the privilege of 

conducting business activities within the forum or purposefully 

directed activities toward the forum. Id. Plaintiff does not 

claim that Defendant purposefully availed himself of the laws of 

California through contacts with the state; rather, he alleges a 

theory of purposeful direction. Opp'n at 7. Purposeful direction 

exists when a defendant has committed an act outside of the forum 

state that was intended to and does in fact cause injury within the 

forum. Calder v. Jones, 465 U.S. 783, 788-89 (1984). Under 

Calder's "effects test," the defendant must have (1) committed an 

intentional act, (2) expressly aimed at the forum state, (3) which 

causes harm that the defendant knows is likely to be suffered in 

the forum state. Id. 

An "intentional act" is an act by the defendant committed with 

the "intent to perform an actual, physical act in the real world, 

rather than . . . intent to accomplish a result or consequence of 

that act." Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 

1124, 1128 (9th Cir. 2010). The acts and omissions underlying 

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United States District Court

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Plaintiff's claims are the failure to investigate the estate's 

interest in the California property, the sale of the ranch, and the 

wasting of assets in connection with the sale of the ranch. Id. ¶ 

38. The Ninth Circuit has not spoken definitively as to whether 

negligence or breach of fiduciary duty may constitute an 

intentional act under Calder, but some courts have suggested that 

only an intentional tort can satisfy Calder's first requirement. 

E.g., Rosenberg v. Seattle Art Museum, 42 F. Supp. 2d 1029, 1037 

n.8 (W.D. Wash. 1999). 

The Court need not resolve this issue, however, because even 

if these alleged actions constitute intentional acts under Calder, 

they fail Calder's "express aiming" prong, which requires the 

defendant's conduct to be expressly aimed at the forum. Brayton 

Purcell, 606 F.3d at 1128. When Defendant was appointed by the 

South Dakota court as the personal representative of the estate, 

Plaintiff had been living in South Dakota for several years. Then, 

while Defendant executed the will, Plaintiff relocated to 

California. As such, Plaintiff's status as a California resident 

does not alone demonstrate express aiming -- to hold otherwise 

would ignore the long-standing precedent of Hanson v. Denckla, 357 

U.S. 235 (1958) (holding that a plaintiff's unilateral activity 

within a state cannot satisfy the jurisdictional requirement that 

the defendant have contacts with the state). The fact that the 

estate may have included interest in California property, or that 

some of the devisees were California residents, does not aim 

Defendant's activity toward California. Defendant was appointed by 

a South Dakota court to administer the estate of a South Dakota 

resident. The primary dispute in Plaintiff's Complaint is over the 

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sale of the South Dakota ranch. None of these facts suggest 

Defendant aimed his out-of-state activity toward California. 

For these reasons, the Court finds that it lacks personal 

jurisdiction over Defendant. Defendant is correct that if the 

Court held otherwise, any personal representative of an estate "in 

any of the other 49 states could be subject to California 

jurisdiction simply because an asset in the estate which they were 

appointed to administer was located in California." Mot. at 12. 

This would eviscerate the minimum contacts test set forth by the 

U.S. Supreme Court in International Shoe Co. v. Washington, 326 

U.S. 310 (1945), and would be inconsistent with "traditional 

notions of fair play and substantial justice." Id. at 316. 

Because it lacks personal jurisdiction, the Court does not reach 

the substantive question of whether res judicata principles bar 

Plaintiff's suit. 

B. Transfer to the District of South Dakota 

 Plaintiff requests that if the Court finds that it lacks 

jurisdiction, it should transfer the action to the District of 

South Dakota, pursuant to 28 U.S.C. § 1406(a). Opp'n at 14. 

Section 1406(a) provides: "The district court of a district in 

which is filed a case laying venue in the wrong division or 

district shall dismiss, or if it be in the interest of justice, 

transfer such case to any district or division in which it could 

have been brought." Id. (emphasis added). Plaintiff provides a 

single sentence in support of transfer: "Plaintiff may face statute 

of limitations obstacles preventing him from pursuing his claims in 

an alternative forum." Opp'n at 14. 

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United States District Court

For the Northern District of California 

 Plaintiff's use of the vague modal auxiliary "may" troubles 

the Court. The Court will not transfer a case simply for the 

convenience of one party, and the mere possibility that Plaintiff's 

causes of action might be barred by South Dakota's statute of 

limitations does not demonstrate that transfer is within the 

interest of justice. Because Plaintiff has neither identified 

these statute-of-limitations obstacles, nor shown the likelihood 

that his action will be barred if re-filed in a court in South 

Dakota, Plaintiff's request to transfer is DENIED. 

V. CONCLUSION 

 For the foregoing reasons, the Court finds that it lacks 

jurisdiction over Defendant Kenneth G. Campbell, and GRANTS 

Defendant's Motion to Dismiss. Plaintiff Dale Laue's request to 

transfer the case to the District of South Dakota is DENIED. 

 

IT IS SO ORDERED. 

Dated: August 24, 2010 

UNITED STATES DISTRICT JUDGE

Case 3:10-cv-00867-SC Document 14 Filed 08/24/10 Page 10 of 10