Court Opinion

ID: 2654077
Source: CourtListenerOpinion
Date Created: 2014-02-21 18:47:54.509481+00
Date Added: 2024-06-11T12:12:46.338813
License: Public Domain

Filed 2/21/14

                           CERTIFIED FOR PUBLICATION

           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            FOURTH APPELLATE DISTRICT

                                      DIVISION THREE

GILMORE BANK et al.,

   Plaintiffs and Appellants,                       G048053

      v.                                            (Super. Ct. No. 30-2011-00452056)

ASIATRUST NEW ZEALAND LIMITED                       OPINION
as Trustee, etc.,

   Defendant and Respondent.

                Appeal from a judgment of the Superior Court of Orange County, William
D. Claster, Judge. Reversed.
                Hallstrom, Klein & Ward and David T. Ward for Plaintiffs and Appellants.
                DiMascio & Berardo, Dianne DiMascio and David Berardo for Defendant
and Respondent.

                                  *          *          *
              Plaintiffs Gilmore Bank and Jay Cho seek to collect a $3.2 million
                                                       1
judgment from judgment debtor, Cindy Dalrymple. Toward this end, they have sued
Cindy, AsiaTrust New Zealand Limited — a New Zealand company (AsiaTrust), and
other defendants for fraudulently transferring and sequestering Cindy’s assets.
              This appeal concerns the trial court’s order granting nonresident defendant
AsiaTrust’s motion to quash service of summons for lack of personal jurisdiction. The
primary issue presented is whether the test for specific jurisdiction in tort cases requires
the defendant to have expressly aimed its intentional conduct at the plaintiff. We hold
that California’s specific jurisdiction test in tort cases is not so narrow or rigid.
Accordingly, we reverse the court’s order.

                                            FACTS

The Underlying Judgment
               In 2008, Cindy sold her manufacturing company to plaintiff Cho. Plaintiff
Gilmore Bank financed Cho’s purchase. Within six months of the sale, the company’s
revenues dropped precipitously and it laid off all its workers and closed.
              Cho commenced arbitration proceedings against Cindy for
misrepresentation and other causes of action.
              On the second day of the arbitration hearing (Jan. 12, 2010), Cindy formed
the CD Private Retirement Trust (Cindy’s Retirement Trust) and appointed her 25-year-
old niece, Sonia, as the trustee. The trust provides that the trustee is to pay Cindy
$203,000 of trust income or capital every year during Cindy’s lifetime.

1
            For ease of reference and to avoid confusion, we sometimes refer to Cindy
Dalrymple and her niece, Sonia Jolene Dalrymple, by their first names. We mean no
disrespect.

                                               2
              The three-arbitrator panel awarded Cho approximately $3.2 million from
Cindy. The arbitrators found that during the sale negotiations, Cindy made false and
misleading statements to plaintiffs and failed to tell them that the company faced a
significant loss of business and that its sales volume and profits would plummet.
              In May 2010, the court entered a judgment of almost $3.3 million on the
arbitration award in plaintiffs’ favor against Cindy and her former company.

Plaintiffs’ Action Against Cindy for Fraudulently Transferring Her Assets
              In February 2011, plaintiffs sued Cindy, Sonia (as trustee of Cindy’s
Retirement Trust), five corporations, and a law firm for fraudulent transfers and other
causes of action. (In this opinion we refer to Cindy, Sonia, and the defendant entities
collectively as “the Dalrymple defendants.”) Plaintiffs’ complaint alleged that, at the
start of the arbitration proceeding, Cindy owned assets valued at over $5 million, but
during the proceeding, as her liability became clear, she frantically formed trusts and
other entities, fraudulently transferred her assets to them in order to hinder plaintiffs from
collecting their claims, and appointed Sonia as the trustee or manager of the newly
formed trusts and entities. Plaintiffs further alleged that Cindy’s Retirement Trust
initially held $3 million in stocks and bonds (as well as a significant amount of cash and
other assets), but, recently, $1 million of its assets had “disappeared.” Plaintiffs further
alleged that defendants knew that plaintiffs would satisfy their judgment from Cindy’s
assets, but defendants nonetheless fraudulently concealed and transferred Cindy’s assets
to hinder, delay, and defraud plaintiffs.
              In June 2012, plaintiffs amended their complaint to name AsiaTrust (as
trustee of the CD PRT NZ Trust) as a defendant.

                                              3
AsiaTrust’s Motion to Quash Service for Lack of Personal Jurisdiction
              AsiaTrust (represented by the same attorneys who have represented the
Dalrymple defendants in this litigation) moved to quash service of summons for lack of
personal jurisdiction. The motion was supported by the declaration of Lauren Cherie
Willis, a barrister and solicitor who is the general manager of AsiaTrust’s parent
company, Asiaciti Trust (Asiaciti). Willis declared the following:
              Asiaciti and AsiaTrust are New Zealand companies that conduct all their
business in New Zealand and have offices only in New Zealand. In June 2011, Willis
was “introduced by email” to Sonia, as trustee of Cindy’s Retirement Trust, “for the
purpose of having AsiaTrust take title to an annuity that was to be issued by a Swiss
insurance company.”
              AsiaTrust agreed to serve as trustee for a trust that would be created to hold
the annuity. Willis drafted a deed of settlement for a trust (the New Zealand Trust)
between AsiaTrust, as trustee, and Sonia (trustee of Cindy’s Retirement Trust) as settlor
and beneficiary. Willis e-mailed the deed of settlement to Sonia. Willis and Sonia
exchanged fully executed copies of the deed of settlement via e-mail.
              “Since approximately October 3, 2011, the [New Zealand Trust] has
received annuity payments from the Swiss Insurance Company which have been
distributed to [Cindy’s] Retirement Trust pursuant to the terms of the Annuity. The
distributions have been made via wire transfers from AsiaTrust’s [bank account] to
[Cindy’s] Retirement Trust’s bank in the United States.”
              Willis “did not travel to California to solicit, negotiate or execute the Deed
of Settlement,” has never met Sonia in person, and is not required to travel and has not
traveled to California in connection with conducting business or administering the assets
of the New Zealand Trust.

                                             4
Plaintiffs’ Opposition to AsiaTrust’s Motion to Quash Service
              In plaintiffs’ opposition to AsiaTrust’s motion, they argued AsiaTrust was
subject to personal jurisdiction in California because it had received, managed, and
disbursed funds to and from California, and had formed “a contract that it sent to
California for execution, pursuant to which it sends regular payment to California, all as
part of an on-going effort to sequester funds from Plaintiffs and hinder collection . . . .”
              Plaintiffs’ counsel’s declaration and exhibits thereto evidence the following
facts. Cindy, Sonia, David Berardo (counsel for the Dalrymple defendants), and
plaintiffs are California residents. Cindy’s Retirement Trust and its bank account are
located in California. As of November 1, 2009 (two months before the creation of
Cindy’s Retirement Trust), Cindy’s assets had totaled over $5 million and she had no
debt.
              Berardo was familiar with AsiaTrust. Over the years, he had consulted
with AsiaTrust about the formation of various legal entities and had introduced people to
AsiaTrust for that purpose.
              In a June 2011 e-mail to AsiaTrust, Berardo wrote: “We have a new
matter. We need to set up a NZ Trust to be settled by the trustee of a California [private
retirement trust]. The form of the transaction is identical to the Elins [New Zealand
private retirement trust].”
              Berardo asked AsiaTrust to begin its due diligence on Sonia as soon as
possible. He provided AsiaTrust with documents on Sonia, as trustee of Cindy’s
Retirement Trust. Willis and Berardo exchanged e-mails about Sonia’s plan to contact
Willis as part of Sonia’s due diligence on Asiaciti.
              In an e-mail, Sonia asked Willis for information concerning “the annuities
you offer . . . .” Willis replied by e-mail to Sonia that it “was a pleasure to speak with
you the other day.” Willis attached “a document which outlines the advantages of [New

                                              5
Zealand] as a trust jurisdiction,” and stated that a New Zealand foreign trust is “a great
entity” with tax advantages.
              Willis also attached a draft trust deed for Sonia’s and Berardo’s review. In
a subsequent e-mail, Willis attached an “updated” trust deed reflecting a change
negotiated by Berardo. In an e-mail to Willis, Berardo attached an amendment to the
trust deed that had been signed by Sonia and witnessed by Berardo, and asked Willis to
have it countersigned.
              Under the terms of the trust deed for the New Zealand Trust, the trust is
irrevocable. The trust deed entitles AsiaTrust to remuneration for its services and to be
indemnified out of the New Zealand Trust’s assets against liabilities incurred as trustee.
The trust deed empowers Sonia to carry out her fiduciary duties to Cindy (the beneficiary
of Cindy’s Retirement Trust) and to recommend to AsiaTrust that retirement benefits be
paid directly to beneficiaries of Cindy’s Retirement Trust.
              Asiaciti billed Sonia (as settlor of the New Zealand Trust) $3,750 as an
establishment fee and an additional $3,500 as an annual trustee fee. Sonia used funds
from Cindy’s Retirement Trust to pay $500,000, as well as initial fees, to the New
Zealand Trust. The New Zealand Trust put the $500,000 into an interest-bearing client
account.
              Sonia liquidated over $2 million in stocks and bonds from Cindy’s
California accounts (held by Cindy’s Retirement Trust) and wired the money to the New
Zealand Trust. The New Zealand Trust bought a Swiss annuity for $2.5 million.
              In an e-mail, Berardo instructed Willis to arrange to meet with the Swiss
annuity company while she was in Zurich, Switzerland. Berardo stated the Swiss
company had “issued a written binder confirming that it will issue an annuity to
AsiaTrust as the owner and beneficiary.” Berardo asked Willis to get a copy of the
binder, to “confirm that AsiaTrust is the owner and beneficiary,” and to circulate the
binder at her earliest opportunity.

                                              6
              The Swiss annuity certificate reflects that (1) the New Zealand Trust is the
owner and beneficiary of the annuity, (2) the insured person is Cindy Dalrymple, a
resident of Tustin, California, (3) the annuity was purchased for $2.5 million, (4) the
annuity pays about $67,500 every quarter, and (5) the annuity income is payable so long
as Cindy lives. At the time the annuity was issued, Cindy was 55 years old.
              In September 2011 e-mails between Sonia and Asiaciti, (1) Sonia instructed
AsiaTrust to immediately wire transfer $70,000 to Cindy’s Retirement Trust’s bank
account in California, (2) Willis asked Sonia to print a copy of the e-mail and sign and
send it to Willis as soon as possible for Asiaciti’s files, and (3) Asiaciti’s legal counsel
subsequently confirmed that the funds had been transferred.
              In depositions, Sonia testified to the following. The September 2011
distribution of $70,000 from the New Zealand Trust went to Cindy. Sonia has e-mailed
Willis to ask for money from the New Zealand Trust more than once (possibly two or
three times), and the New Zealand Trust has each time wire transferred the money in
response to Sonia’s requests. The money received from the New Zealand Trust is used
exclusively to disburse funds to Cindy or to pay legal fees. The wire transfers from the
New Zealand Trust go to the California bank account of Cindy’s Retirement Trust. Sonia
anticipated she would request the next distribution from the New Zealand Trust sometime
in 2013. She made such requests whenever the funds “in the accounts” were insufficient
to meet Cindy’s requests. All disbursements from the annuity are distributed to Cindy’s
Retirement Trust through the New Zealand Trust. The flow of money originates from the
annuity, moves to the New Zealand Trust, then to Cindy’s Retirement Trust, and
ultimately to Cindy herself. This enables Sonia to make the retirement payments required
of her as trustee. Sonia has spoken to Willis once or twice and has e-mailed Willis a
“lot.” Asiaciti sent Sonia an invoice (addressed to a California address) for establishing
the New Zealand Trust and for its annual trustee fee, and later e-mailed Sonia an invoice

                                               7
for a subsequent annual fee, which fees were paid from the $500,000 in the New Zealand
Trust’s fund.

Court Rulings
                On December 3, 2012, the court granted plaintiffs’ motion for a preliminary
injunction to freeze the “defendants’ assets,” to restrain them from transferring any
property, and to require them to repatriate to the United States all assets transferred to the
New Zealand Trust and the Swiss annuity.
                On December 12, 2012, a different judge granted AsiaTrust’s motion to
quash service of summons for lack of personal jurisdiction.

                                        DISCUSSION

General Legal Principles on Personal Jurisdiction
                California’s long-arm statute authorizes its “courts to exercise jurisdiction
over a foreign corporation to the fullest extent consistent with due process.” (Sanders v.
CEG Corp. (1979) 95 Cal. App. 3d 779, 783; see Code Civ. Proc., § 410.10.)
Consequently, California has personal jurisdiction over a nonresident defendant who “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).) The defendant’s minimum
contacts with the state must reasonably justify haling it into a California court to conduct
a defense. (Pavlovich v. Superior Court (2002) 29 Cal. 4th 262, 268 (Pavlovich).) Courts
apply the minimum contacts test on a case by case basis, focusing on the nature and
quality of the defendant’s activities in the state or with state residents. (Burger King
Corp. v. Rudzewicz (1985) 471 U.S. 462, 474-475 (Burger King).)

                                               8
              Personal jurisdiction may be general or specific. If the defendant’s contacts
are substantial, continuous, and systematic, the defendant may be subject to California’s
general jurisdiction. (Vons, supra, 14 Cal.4th at p. 445.)
              If general jurisdiction is not established, a nonresident defendant may still
be subject to California’s specific jurisdiction if a three-prong test is met. (Vons, supra,
14 Cal.4th at p. 446.) First, the defendant must have purposefully availed itself of the
state’s benefits. Second, the controversy must be related to or arise out of the
defendant’s contacts with the state. (Ibid.) Third, considering the defendant’s contacts
with the state and other factors, California’s exercise of jurisdiction over the defendant
must comport with fair play and substantial justice. (Id. at p. 447.)
              The parties agree the sole issue here is whether AsiaTrust is subject to
California’s specific jurisdiction. Plaintiffs bear the burden of establishing that the first
two requirements for specific jurisdiction have been met. (Pavlovich, supra, 29 Cal.4th
at p. 273.) If plaintiffs do so, the burden shifts to AsiaTrust to show that California’s
exercise of jurisdiction would be unreasonable. Because the facts are undisputed, we
decide the question of jurisdiction de novo. (Ibid.)

Prong One of the Specific Jurisdiction Test: AsiaTrust Purposefully Availed Itself of
Forum Benefits
              For purposes of the purposeful availment prong, the “United States
Supreme Court has described the forum contacts necessary to establish specific
jurisdiction as involving variously a nonresident who has ‘purposefully directed’ his or
her activities at forum residents [citation], or who has ‘purposefully derived benefit’ from
forum activities [citation], or ‘“purposefully avail[ed himself or herself] of the privilege
of conducting activities within the forum State, thus invoking the benefits and protections
of its laws,”’” or “‘“deliberately” has engaged in significant activities with a State
[citation] or has created “continuing obligations” between himself and residents of the

                                               9
forum [citation].’” (Vons, supra, 14 Cal.4th at p. 446, italics added.) This disjunctive
language, along with the Supreme Court’s rejection of mechanical or “‘talismanic’”
formulas (id. at pp. 450, 460), suggests that the above formulations describe alternative,
but not mutually exclusive, tests for purposeful availment.
              AsiaTrust, however, argues that in tort cases, the purposeful availment
issue is determined exclusively by applying the “effects” test (also known as the
“purposeful direction” test). Furthermore, AsiaTrust interprets the effects test to require
the defendant to have expressly aimed its intentional act at a plaintiff whom the defendant
                                          2
knows to be a resident of the forum state. To support these contentions, AsiaTrust relies
primarily on federal district court rulings and a Ninth Circuit opinion — decisions that
lack precedential value. (Raven v. Deukmejian (1990) 52 Cal. 3d 336, 352 [“Decisions of
the lower federal courts interpreting federal law, though persuasive, are not binding on
state courts”].) For the reasons discussed below, we are unpersuaded by AsiaTrust’s
effort to read into purposeful availment law an inflexible dichotomy between tort and
contract cases.

              1. The effects test
              The effects test was established by the United States Supreme Court in
Calder v. Jones (1984) 465 U.S. 783 (Calder). (Pavlovich, supra, 29 Cal.4th at pp. 269-
270.) In Calder, Shirley Jones, “an entertainer whose television career was centered in
California” (Calder, at p. 788), sued, among others, a reporter and an editor (who were

2
                At the hearing on AsiaTrust’s motion to quash service of summons, defense
counsel argued that specific jurisdiction hinged on whether AsiaTrust purposely directed
its activities at plaintiffs. Later, the court stated, “But more than anything else, it looks
like, to the extent [AsiaTrust] had any connection with California, it was with one of the
[Dalrymple] defendants, and it didn’t direct its activities in any way toward the plaintiffs,
nor would it have reasonably been able to assume that its activities were in any way
directed toward the plaintiffs.”

                                              10
both Florida residents) for libel in California in connection with a National Enquirer
article (id. at pp. 785-786). The Florida defendants moved to quash service of process for
lack of personal jurisdiction. (Id. at pp. 784-785.) The Calder court found California
was “the focal point both of the story and of the harm suffered” and consequently held
that jurisdiction over the Florida residents was proper “based on the ‘effects’ of their
Florida conduct in California.” (Id. at p. 789.)
              In Pavlovich, a trade secrets misappropriation case, our Supreme Court held
that the “Calder effects test requires intentional conduct expressly aimed at or targeting
the forum state in addition to the defendant’s knowledge that his intentional conduct
would cause harm in the forum.” (Pavlovich, supra, 29 Cal.4th at p. 271, original italics
omitted, first and second set of italics added.) Pavlovich applied the effects test to
conclude that, under the particular facts presented, California lacked personal jurisdiction
over the defendant, a Texas resident who had posted on his Web site the plaintiff’s
confidential proprietary information. (Id. at pp. 266, 267, 273.) The plaintiff’s principal
place of business was California. (Id. at p. 266.) Its proprietary information enabled
users to decrypt and copy DVD’s containing motion pictures. (Id. at p. 267.) The court
examined broadly whether the defendant’s internet posting met the effects test (id. at p.
273), but ultimately concluded no evidence in the record suggested that the defendant’s
Web site targeted California, that any California resident ever visited the defendant’s
Web site, that the defendant knew the plaintiff’s identity or that the plaintiff’s primary
place of business was California, or that the defendant expressly aimed his conduct to
harm the motion picture industry in California or licensees of the plaintiff’s proprietary
information in California (id. at pp. 274-277).
              Thus, contrary to AsiaTrust’s insistence to the contrary, the effects test
requires express aiming at the forum (not necessarily at the plaintiff). (Vons, supra, 14
Cal.4th at pp. 455, 458; see Archdiocese of Milwaukee v. Superior Court (2003) 112
Cal. App. 4th 423, 440 (Archdiocese of Milwaukee) [effects test does not require defendant

                                             11
to know identities of future victims].) The issue raised by AsiaTrust — i.e., whether the
defendant’s conduct affected the plaintiff — is relevant to the second prong of the
specific jurisdiction test, i.e., whether the controversy is related to or arises out of the
defendant’s forum contacts. Yet, even as to this second prong, our Supreme Court has
clarified that the “‘forum contacts need not be directed at the plaintiff in order to warrant
the exercise of specific jurisdiction.’” (Snowney v. Harrah’s Entertainment, Inc. (2005)
35 Cal. 4th 1054, 1068.)
                 Furthermore, the effects test is not the sole purposeful availment test used
in tort cases.

                 2. Purposeful availment tests in tort cases
                 In Vons, a tort case, our Supreme Court applied the forum benefits test for
purposeful availment, not the effects test. (Vons, supra, 14 Cal. 4th 434.) There, Vons
Companies, Inc. (Vons), the California cross-complainant, alleged negligence and other
tort causes of action against a franchisor whose principal place of business was California
                     3
(Jack-in-the-Box) and several of Jack-in-the-Box’s Washington-based franchisees. (Id.
at pp. 440-442.) Our Supreme Court held that California had specific jurisdiction over
the Washington franchisees because they had “purposefully availed themselves of
benefits in the forum by reaching out to forum residents to create an ongoing franchise
relationship.” (Id. at p. 449.) The Washington franchisees had “purposefully availed
themselves of the benefits of doing business with [Jack-in-the-Box]. They formed a
substantial economic connection with this state. To require them to answer [Vons’]
claim, as well, is not to allow a third party unilaterally to draw them into a connection
with the state; rather, it was [the Washington franchisees] who established the
connection.” (Id. at p. 451.) Our Supreme Court recognized that Vons “was not a party
to the franchise contract, and thus the claim is not on the contract . . . . This distinction,
3
                 Jack-in-the-Box was a division of the franchisor.

                                               12
however, does not render the exercise of specific jurisdiction improper.” (Id. at p. 452.)
“The due process clause is concerned with protecting nonresident defendants from being
brought unfairly into court in the forum, on the basis of random contacts. That
constitutional provision, however, does not provide defendants with a shield against
jurisdiction when the defendant purposefully has availed himself or herself of benefits in
the forum.” (Ibid.)
              Thus, the test for purposeful availment does not hinge mechanically on
whether the plaintiff’s claim sounds in tort or contract. Rather, a court must apply “‘a
“highly realistic” approach’” on a case by case basis and select the most appropriate test
for purposeful availment based on the particular facts presented. (Vons, supra, 14
Cal.4th at p. 450; see Pavlovich, supra, 29 Cal.4th at p. 268.) Indeed, because
California’s long-arm statute “‘manifests an intent to exercise the broadest possible
jurisdiction’” (Magnecomp Corp. v. Athene Co. (1989) 209 Cal. App. 3d 526, 535), its
courts may apply the purposeful availment test most conducive to establishing specific
jurisdiction over a defendant in a particular case, consistent with due process.
              AsiaTrust relies on Schwarzenegger v. Fred Martin Motor Co. (9th Cir.
2004) 374 F.3d 797 (Schwarzenegger) for the proposition that courts must apply the
effects test in tort cases. There, the defendant, an Ohio car dealership, ran advertisements
in a local Ohio newsletter that included a photograph of the plaintiff, Arnold
Schwarzenegger, a California resident. (Id. at p. 799.) Schwarzenegger sued the
dealership for infringing his right of publicity. (Ibid.) As in Vons and Pavlovich, the
defendant’s sole contact with California was a publication created in another state. The
Ninth Circuit applied a “purposeful direction analysis” (id. at p. 802) to conclude that the
dealership’s advertisement “was not expressly aimed at California” (id. at p. 807). The
Ninth Circuit stated that the purposeful direction test “is most often used in suits
sounding in tort” (Schwarzenegger, at p. 802), but did not state that the purposeful
direction test is the only one used in tort cases.

                                              13
                In Calder, Pavlovich, and Schwarzenegger, the respective defendants’ only
direct contact with California was the effect in California of a nationally or internationally
disseminated publication created by the defendants in another state. Consequently, the
only purposeful availment test which could potentially apply to establish California’s
specific jurisdiction was the effects test. The effects test was not meant to restrict a
court’s jurisdictional reach, but rather to serve as an additional tool for a forum to
exercise constitutional jurisdiction.

                3. AsiaTrust’s conduct satisfies several purposeful availment tests
                Here, as in Vons, AsiaTrust has a contractual relationship with its
codefendants, who are California residents. Also as in Vons, AsiaTrust’s contacts with its
codefendants need not have been wrongful. “In any personal jurisdiction case we must
evaluate all of a defendant’s contacts with the forum state, whether or not those contacts
involve wrongful activity by the defendant.” (Yahoo! Inc. v. La Ligue Contre Le Racisme
(9th Cir. 2006) 433 F.3d 1199, 1207.) Furthermore, AsiaTrust’s alleged liability as a
transferee of a fraudulent conveyance is “based not upon tort but upon quasi-contract.”
(United States v. Neidorf (9th Cir. 1975) 522 F.2d 916, 918.) “‘A quasi contractual
obligation is created by the law for reasons of justice, without any expression of
assent . . . .’” (Ibid.)
                We conclude it is unnecessary to apply the effects test here. Instead, we
apply several other purposeful availment formulas, any one of which is sufficient to meet
the first requirement for specific jurisdiction. The undisputed facts show Asiatrust (1)
created continuing obligations between itself and California residents, (2) purposefully
directed (and continues to direct) its activities towards California residents, and (3)
purposefully derived (and continues to derive) benefits from its activities in California.
AsiaTrust conducted due diligence on California resident Sonia, the trustee of Cindy’s
Retirement Trust. AsiaTrust sent promotional materials to Sonia and otherwise marketed

                                              14
to her the advantages of forming a New Zealand trust. AsiaTrust drafted the trust
contract, negotiated the contractual terms with California residents Sonia and Berardo,
and amended the contract. Sonia signed the amended contract, witnessed by Berardo, in
California. AsiaTrust communicated by e-mail and telephone with Sonia and Berardo in
California. AsiaTrust has invoiced Sonia in California for fees owed to AsiaTrust.
AsiaTrust has received funds from Cindy’s Retirement Trust in California and from a
Swiss annuity that insures California resident Cindy. AsiaTrust has followed Berardo’s
instructions concerning the ownership of the Swiss annuity. AsiaTrust has wire
transferred funds to Cindy’s Retirement Trust’s bank account in California in accordance
with Sonia’s instructions. Essentially, AsiaTrust has received compensation for
accepting, investing, managing, disbursing, and shielding the assets of Cindy, a
California judgment debtor, in a scheme that contemplates an ongoing contractual
relationship for Cindy’s lifetime.
              AsiaTrust stresses that Willis never visited California. But “in this age of
telecommunications, fax machines, and rapid mail services it is possible to [solicit and
negotiate investments] without face-to-face meetings in any jurisdiction.” (Checker
Motors Corp. v. Superior Court (1993) 13 Cal. App. 4th 1007, 1017.) It “is an inescapable
fact of modern commercial life that a substantial amount of business is transacted solely
by mail and wire communications across state lines, thus obviating the need for physical
presence within a State in which business is conducted.” (Burger King, supra, 471 U.S.
at p. 476.) “While any single telephone call or piece of correspondence might not be
enough to satisfy the ‘minimum contacts’ requirement, there is much more in this case.
Here there was a veritable ‘latticework’ of contacts linking [AsiaTrust] and the State of
California: not one but many calls and other communications to California during the
negotiations. The execution in California of the legal documents which formed the
arrangement . . . . A continuing stream of payments from [AsiaTrust] to California.” (Id.
at p. 1018.) A continuing receipt by AsiaTrust of compensation from the California

                                            15
trustee of a California trust. AsiaTrust’s acceptance from the California trust of money
which AsiaTrust invested as directed by the California trustee and a California lawyer.
              Finally, the underlying rationale of all the purposeful availment tests is that
“it is fair to subject defendants to specific jurisdiction, because their forum activities
should put them on notice that they will be subject to litigation in the forum.” (Vons,
supra, 14 Cal.4th at p. 446.) Here, the indemnity and lien clause in the trust deed for the
New Zealand Trust evidences AsiaTrust’s awareness of the inherent litigation risks of its
contacts with California residents Cindy, Sonia, and Berardo.
              Plaintiffs have met their burden to demonstrate that AsiaTrust’s contacts
meet the purposeful availment prong of the specific jurisdiction test.

Prong Two of the Specific Jurisdiction Test: A Substantial Connection Exists Between
Plaintiffs’ Claims and AsiaTrust’s Forum Contacts
              The second prong of the specific jurisdiction test requires that the
controversy relate to or arise out of the defendant’s contacts with the forum. The
question is whether the plaintiff’s causes of action arose out of or had a substantial
connection with a relationship the defendant purposefully established with the forum
state. (Vons, supra, 14 Cal.4th at p. 448.) “[T]he cause of action must arise out of an act
done or transaction consummated in the forum . . . .” (Ibid.) Stated another way, there
must “be a substantial nexus or connection between the plaintiff’s cause of action and the
defendant’s forum contacts . . . .” (Id. at p. 453.) “[T]he ‘arising out of or relating to’
standard is in the disjunctive, and is intended as a relaxed, flexible standard . . . .” (Id. at
p. 455.)
              In Vons, our Supreme Court concluded Vons’ counterclaims against the
Washington franchisees bore a substantial relationship to the franchisees’ contacts with
California, in part because Vons’ counterclaims arose out of the franchisees’ contractual
relationship with Jack-in-the-Box. (Vons, supra, 14 Cal.4th at p. 457.) Our Supreme

                                               16
Court emphasized that the lack of a relationship between Vons and the franchisees was
not “critical in determining whether the claim was sufficiently related to the forum
contacts to permit the exercise of specific jurisdiction in California” because “the
defendant’s forum activities need not be directed at the plaintiff in order to give rise to
specific jurisdiction.” (Ibid.) “The United States Supreme Court has stated more than
once that the nexus required to establish specific jurisdiction is between the defendant,
the forum, and the litigation [citations] — not between the plaintiff and the defendant.”
(Id. at p. 458.) Nor is it necessary that the defendant’s forum contacts have proximately
caused the injury to the plaintiff. “The United States Supreme Court long ago rejected
the notion that personal jurisdiction might turn upon mechanical tests such as a proximate
cause test.” (Id. at p. 463.) Instead, the high court “has spoken of a relationship between
the cause of action and the contacts in the forum, and has used relatively broad terms to
describe the necessary relationship.” (Id. at p. 468.) “[T]he central issue presented by a
motion to quash for lack of specific jurisdiction [is] whether the defendant’s forum
contacts and the plaintiff’s claim are related sufficiently so that it is fair to subject the
defendant to jurisdiction in the forum.” (Id. at p. 469.) Thus, personal jurisdiction is
fundamentally a matter of “relationship and fairness,” and answers are rarely “‘“written
‘in black and white.’”’” (Id. at p. 475.)
               Here, the New Zealand Trust is the instrumentality by which the Dalrymple
defendants have transferred Cindy’s assets out of plaintiffs’ reach and which enables
Cindy to continue to enjoy a substantial income from her transferred assets. Although
Cindy’s assets are central to plaintiffs’ lawsuit against her, half of her assets reside in an
irrevocable trust or Swiss annuity in AsiaTrust’s possession or under its control. This is a
sufficient nexus to fairly subject AsiaTrust to California’s jurisdiction.

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Prong Three of the Specific Jurisdiction Test: California’s Exercise of Personal
Jurisdiction over AsiaTrust is Fair and Reasonable
              “In assessing fairness, we consider (1) the burden on [AsiaTrust] of
defending in California, (2) California’s interests, (3) [plaintiffs’] interest in obtaining
relief, (4) the interstate judicial system’s interest in obtaining the most efficient resolution
of the controversy, and (5) ‘“the shared interest of several States in furthering
fundamental substantive social policies.”’ [Citations.] [AsiaTrust] bears the burden of
presenting a ‘compelling case’ that jurisdiction would be unreasonable.’” (Archdiocese
of Milwaukee, supra, 112 Cal.App.4th at pp. 442-443 [quoting a U.S. Supreme Ct. opn.
                               4
& a Cal. Supreme Ct. opn.].)
              To require AsiaTrust to defend itself in California would not impose an
unreasonable burden. Although AsiaTrust argues that a more “stringent” reasonableness
test applies because it is a foreign national, “modern advances in communications and
transportation have significantly reduced the burden of litigating in another country.”
(Sinatra v. National Enquirer, Inc. (9th Cir. 1988) 854 F.2d 1191, 1199.) In fact, Willis
traveled to Europe and conducted business in Switzerland on Cindy’s behalf. Cost is
presumably not a factor for AsiaTrust since it has a first priority lien on the assets of the
New Zealand Trust for indemnification purposes. Berardo’s law firm in Los Angeles
represents AsiaTrust, apparently pursuant to the indemnity and lien clause in the trust
deed. The New Zealand Trust in this case is not the first trust AsiaTrust has formed and
managed for Berardo’s clients. Furthermore, we “‘examine the burden on the defendant
in light of the corresponding burden on the plaintiff.’” (Ibid.) “It presents as much of a
burden for [plaintiffs] to litigate in [New Zealand] as it does for [AsiaTrust] to litigate in

4
                AsiaTrust relies on the Ninth Circuit’s seven-factor reasonableness test set
forth in Dole Food Co., Inc. v. Watts (9th Cir. 2002) 303 F.3d 1104, 1114, continuing a
pattern in its respondents’ brief of relying on Ninth Circuit and federal district court
opinions.

                                              18
California.” (Ibid.) In addition, the “factor of conflict with the sovereignty of the
defendant’s state ‘is not dispositive because, if given controlling weight, it would always
prevent suit against a foreign national in a United States court.’” (Ibid.)
              As to the other factors, AsiaTrust “concedes that California has an interest
in adjudicating the fraudulent transfer dispute between [plaintiffs] and the Dalrymple
Defendants,” but contends California has “little, if any, interest in adjudicating a dispute
between [plaintiffs] and AsiaTrust — an innocent third party that has not directed any
activity at [plaintiffs] and has neither sought nor solicited business in California.”
Irrespective of the accuracy of AsiaTrust’s characterization of itself, California has a
strong interest in enforcing its judgments.
              Plaintiffs have an obvious interest in collecting the $3.3 million judgment
entered against Cindy and her former company by a California court over three and one-
half years ago. AsiaTrust does not even mention this factor.
              Because plaintiffs and the Dalrymple defendants are located in California, a
California court can provide the most efficient conflict resolution. AsiaTrust quotes
Panavision Intern., L.P. v. Toeppen (9th Cir. 1998) 141 F.3d 1316, 1323, for the
proposition that this factor is “no longer weighed heavily,” but omits Panavision’s
reasoning that geographical location is no longer critical “given the modern advances in
communication and transportation.” (Ibid.)
              Finally, New Zealand and California share an interest in enforcing
judgments, strengthening respect for judicial systems, and promoting cooperation among
sovereign nations. AsiaTrust does not mention this factor.
              In sum, AsiaTrust has failed to make a compelling case that California’s
exercise of specific jurisdiction would be unfair and unreasonable. (Indeed, AsiaTrust
failed below to argue or even mention this third prong in its initial written motion to
quash and instead raised the issue in its reply to plaintiffs’ opposition.) Under the
particular circumstances of this case and taking into account modern telecommunications

                                              19
and transportation, we conclude California’s exercise of personal jurisdiction over
AsiaTrust is both fair and reasonable.

                                      DISPOSITION

              The order granting the motion to quash is reversed and the court is directed
to enter a new order denying the motion. Plaintiffs are entitled to their costs on appeal.

                                                  IKOLA, J.

WE CONCUR:

O’LEARY, P. J.

THOMPSON, J.

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