Court Opinion

ID: 4652859
Source: CourtListenerOpinion
Date Created: 2021-01-20 21:02:27.627908+00
Date Added: 2024-06-11T08:01:50.331836
License: Public Domain

Filed 1/20/21 Sweikhart v. Akebono Brake Industry Co., Ltd. CA2/3

  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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(a). This opinion has
not been certified for publication or ordered published for purposes of rule 8.1115(a).

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION THREE

GEORGE SWEIKHART, et al.,                                       B305065

      Plaintiffs and Appellants,                                Los Angeles County
                                                                Super. Ct.
      v.                                                        No. 19STCV26549
AKEBONO BRAKE
INDUSTRY CO., LTD.,

      Defendant and Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County, Maurice A. Leiter, Judge. Reversed.
     Weitz & Luxenberg, Benno Ashrafi, Tyler Stock; Bartlett
Barrow and Brian P. Barrow for Plaintiffs and Appellants.
     Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Tracy D.
Forbath, Florence A. McClain, and Lesa M. Meyers for Defendant
and Respondent.
                           INTRODUCTION

      The Hague Convention, which the United States has
adopted, governs service of process in international civil disputes.
But states may enact more liberal service rules—and California
has. Under California law, plaintiffs may serve a foreign
corporation through its “general manager in this state” (Corp.
Code,1 § 2110; Code Civ. Proc., § 416.10), a term courts have
construed to include domestic corporate subsidiaries.
      Plaintiffs and appellants George and Christina Sweikhart
sued defendant and respondent Akebono Brake Industry Co., Ltd.
(ABIC), a Japanese company. Instead of serving the summons
and complaint under Hague Convention procedures, however, the
Sweikharts delivered the papers to the designated agent for
service of process in California for ABIC’s wholly-owned
American subsidiary, Akebono Brake Corporation (Akebono). On
appeal from the trial court’s order granting ABIC’s motion to
quash, the Sweikharts argue that they were not required to
comply with Hague Convention procedures because Akebono is
ABIC’s “general manager” under California law. We agree.
Because the Sweikharts satisfied California’s service rules,
service on ABIC was proper, and the court erred in granting the
motion to quash. We therefore reverse.

                            BACKGROUND

      ABIC, which was established in Japan in 1929, develops,
manufactures, and sells automotive brake systems around the
world. In 1980, ABIC created Akebono as a wholly-owned

1   All undesignated statutory references are to the Corporations Code.

                                     2
subsidiary to serve as its sales and marketing arm in the United
States.2 Akebono is incorporated in Michigan.
1.    Complaint and Service of Process
      In June 2019, George Sweikhart was diagnosed with
mesothelioma.
      The next month, he and his wife filed a complaint alleging
occupational exposure to ABIC’s and Akebono’s asbestos-
containing products while working at various automotive
dealerships. The complaint alleged causes of action for
negligence, breach of warranties, strict products liability,
premises owner/contractor liability, and loss of consortium.
      On August 1, 2019, the Sweikharts served ABIC and
Akebono, in Los Angeles, through CT Corporation, Akebono’s
designated agent for service of process in California. Akebono
accepted service and answered the complaint. ABIC, on the other
hand, specially appeared and moved to quash.
2.    Motion to Quash
      ABIC argued that the Sweikharts did not effectuate valid
service because they did not comply with the Convention on the
Service Abroad of Judicial and Extrajudicial Documents in Civil
or Commercial Matters (20 U.S.T. 361-367, T.I.A.S. 6638)
(hereafter the Hague Convention or the Convention). ABIC
maintained that it is “a Japanese company, organized under the
laws of Japan, with its principal place of business in Tokyo,
Japan and in Hanyu, Japan” and that it does not have an agent

2Because ABIC does not dispute that Akebono is its wholly-owned
American subsidiary, we do not address the relationship between
ABIC and Akebono in any detail.

                                 3
for service of process in California, has no offices or real property
in California, and has never manufactured any products in
California. In support of its motion, ABIC relied primarily on an
unpublished two-page alternative writ in another case issued by
our colleagues in Division One.3
       The Sweikharts filed an opposition and ABIC filed a reply.
After a contested hearing, the court found that section 2110 had
not been satisfied and granted the motion to quash.
       The Sweikharts filed a timely notice of appeal.

                           DISCUSSION

      The Sweikharts contend that because Akebono is ABIC’s
wholly-owned subsidiary, they properly served ABIC under
California law by serving Akebono’s designated agent for service
of process in California. As such, they argue, the Hague
Convention does not apply, and the trial court erred by granting
ABIC’s motion to quash. We agree.
1.    Standard of Review
      When “a defendant moves to quash out-of-state service of
process for lack of jurisdiction, the plaintiff has the burden of
proving jurisdiction by a preponderance of the evidence.
[Citation.] When the evidence conflicts, we review the trial court
for abuse of discretion. [Citation.] When the parties do not
dispute the facts, we review the issue of jurisdiction de novo.
[Citation.]” (As You Sow v. Crawford Laboratories, Inc. (1996) 50

3ABIC’s reliance, below and on appeal, on an unpublished order in
Akebono Brake Industry Co., Ltd. v. Superior Court (Gibbins) (Mar. 21,
2019, B295133) is improper and we decline to consider it. (Cal. Rules of
Court, rule 8.1115(a).)

                                   4
Cal.App.4th 1859, 1866.) In this case, ABIC concedes that
because “the facts relevant to service are essentially undisputed,
de novo review here is proper.”
2.    The Hague Convention
       The Hague Convention applies to “ ‘all cases, in civil or
commercial matters, where there is occasion to transmit a
judicial or extrajudicial document for service abroad.’ ”
(Volkswagenwerk Aktiengesellschaft v. Schlunk (1988) 486 U.S.
694, 699.) The United States signed the Convention in 1969;
Japan signed it the following year. (Suzuki Motor Co. v. Superior
Court (1988) 200 Cal.App.3d 1476, 1479.) But the Convention
does not apply where service on a foreign corporation’s domestic
agent is valid and complete under state law and the due process
clause. (Volkswagenwerk, at p. 707.)
       In California, Code of Civil Procedure section 416.10 allows
service of process on foreign corporations using the procedures
established in section 2110. And under section 2110, “delivery by
hand of a copy of any process to the ‘general manager in this
state’ of a foreign corporation ‘shall constitute valid service on the
corporation.’ ” (Yamaha Motor Co., Ltd. v. Superior Court (2009)
174 Cal.App.4th 264, 272 (Yamaha).) Although general manager
is not specifically defined by statute, courts have construed it to
mean any agent of sufficient rank to make it reasonably certain
the agent will apprise the defendant of service. (Cosper v. Smith
& Wesson Arms Co. (1959) 53 Cal.2d 77, 83 (Cosper).)
       In Yamaha, the court faced an issue identical to the one we
are asked to decide in this case: “whether a Japanese
manufacturer can be served under California law simply by
serving the Japanese manufacturer’s American subsidiary.”
(Yamaha, supra, 174 Cal.App.4th at p. 267.) It concluded, based

                                  5
on the California Supreme Court’s decision in Cosper, supra, 53
Cal.2d 77: “yes, it really is that easy.” (Yamaha, at p. 267.)
       In Cosper, “a police officer whose revolver exploded on him
sued the Massachusetts corporation that manufactured the
firearm. The Massachusetts corporation, however, had no agents,
salesmen, or other employees in California. [Citation.] But it did
have a contract with a California representative to promote, on a
‘ “non-exclusive basis” ’ the sale of its products on the West Coast.
Basically, he was a sporting goods salesman. [Citation.] The
Supreme Court held that service on this representative was
sufficient to serve the Massachusetts corporation because the
representative was the ‘ “general manager in this State.” ’
[Citation.]” (Yamaha, supra, 174 Cal.App.4th at p. 273.)
       “To be sure, the bulk of the Cosper decision is devoted to
the due process minimum contacts problem on which first-year
civil procedure professors usually spend too much time. (The
court held that, yes, Smith & Wesson had done enough business
in California that it would not be a denial of due process to have
the firm sued in this state.) Even so, the court also clearly held
that service on the sales representative was valid service on the
corporation itself, reasoning that the representative had ‘ample
regular contact’ so that it was ‘ “reasonably certain” ’ that the
representative would apprise the manufacturer of the service.
(Cosper, supra, 53 Cal.2d at p. 83.)” (Yamaha, supra, 174
Cal.App.4th at p. 273.)
       As the court in Yamaha explained: “Cosper applies a
fortiori to this case—that is, the relationship between the
manufacturer’s representative and the manufacturer in Cosper
was far less intimate, far less connected, and far less interrelated
than the relationship between [the domestic subsidiary] and [the

                                  6
foreign parent company] in the case before us. If, in Cosper, a
sporting-goods-oriented nonexclusive purveyor of Smith &
Wesson guns on the West Coast was a ‘general manager in this
State’ under … [former] section 6500, how much more so is [the
subsidiary] the ‘general manager in this State’ here, where
(unlike Cosper), [the subsidiary] is the American face of the
Japanese company … .” (Yamaha, supra, 174 Cal.App.4th at
p. 274.)
       In this case, Akebono is a wholly-owned corporate
subsidiary of ABIC. Indeed, although Akebono, as an American
corporate entity, was established in the United States in 1980,
the company claims on its website that it was in fact “established
in Japan in 1929” and has “more than 85 years of brake design
and production expertise.” Akebono lists ABIC and its address in
Japan as its “Japanese Headquarters.” Further, as in Yamaha,
Akebono is ABIC’s United States representative for product
testing and certification—including in California. And, as in
Cosper, Akebono has sales representatives responsible for
particular geographic locations, including California.
       Accordingly, “[p]robable contact between the domestic
representative and the foreign corporation leading to actual
notification is far more present here than in Cosper. If it was
reasonably certain that a relatively casual sporting goods
representative would apprise the ‘foreign’ manufacturer of service
in Cosper, it is doubly reasonably certain” that Akebono will
apprise ABIC “of any service in California.” (Yamaha, supra, 174
Cal.App.4th at p. 274.)
       To be sure, ABIC quotes dicta in Yamaha disputing the
proposition that an agent for service of process in California
serving the out-of-state subsidiary of a foreign corporation should

                                7
constitute a general manager within the meaning of section 2110.
But as Yamaha plainly states—and ABIC fails to acknowledge—
that is the rule in California unless and until the California
Supreme Court opts to revisit Cosper. (See Yamaha, supra, 174
Cal.App.4th at pp. 272–273; id. at pp. 274–275, citing Auto
Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455–
456.) And despite the Yamaha court’s urging, the Supreme Court
has not done so. (See Yamaha, at p. 275.)

                               8
                       DISPOSITION

     The order granting the motion to quash is reversed. George
and Christina Sweikhart shall recover their costs on appeal.

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                         LAVIN, Acting P. J.
WE CONCUR:

     EGERTON, J.

     DHANIDINA, J.

                               9