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Sonora Diamond Corp. v. Superior Court of Tuolumne County8/30/2000
Original Proceeding; petition for writ of mandate.
INTRODUCTION
Real Party in Interest Sonora Union High School District (District) sued Sonora Mining Corp. (Sonora Mining) and Petitioner Sonora Diamond Corp. (Diamond) for breach of contract. Diamond moved for an order quashing service of process on the ground the trial court was without personal jurisdiction over Diamond. The District's position that jurisdiction existed relied upon three independent grounds -- alter ego, agency (including the representative services doctrine) and availment. Ultimately, the trial court denied Diamond's motion. In this opinion, we explore the nature of, and compare, the three jurisdictional theories advanced by the District and apply each to the record evidence. We will grant the petition and order appropriate relief.
STATEMENT OF THE CASE
On June 29, 1998, the District filed an action in Tuolumne County Superior Court for breach of a real estate sales contract. Named as defendants were Diamond, a Canadian corporation, and Sonora Mining, a Nevada corporation doing business in California. Sonora Mining is a wholly owned subsidiary of Diamond. Diamond was not a signatory to the contract, but the complaint alleged that Sonora Mining was the alter ego of Diamond and therefore that Diamond was liable on the contract. On June 30, 1998, Sonora Mining filed its answer, consisting of a general denial and two affirmative defenses.
On January 11, 1999, Diamond filed a motion to quash service of process, asserting the trial court did not have personal jurisdiction over Diamond. The District opposed the motion, arguing in part that jurisdiction over Diamond existed because Sonora Mining was the alter ego of Diamond and because Diamond exercised such control over the mining operations conducted on the subject property as to make Sonora Mining the agent or instrumentality of Diamond.
On October 21, 1999, the trial court granted Diamond's motion to quash, finding that the District had failed to prove Sonora Mining was the alter ego of Diamond and that Diamond had insufficient minimum contacts with California to support personal jurisdiction.
The District thereafter brought a motion for reconsideration, arguing that the trial court had erroneously found certain declarations, allegedly containing evidence favorable to the District, inadmissible because they lacked signatures. The District's moving papers established that the problem with the declarations was the result of a court clerk's error.
On December 10, 1999, the trial court granted the motion for reconsideration and vacated its previous order. After reevaluating all the evidence (including the previously rejected declarations) and hearing further argument by counsel for the parties, the trial court denied Diamond's motion to quash, finding that Sonora Mining was an instrumentality of Diamond in California.
On January 19, 2000, Diamond filed a petition for writ of mandate with this court seeking extraordinary review (Code Civ. Proc., ยง 418.10, subd. (c)) of the trial court's order. We issued an order to show cause.
STATEMENT OF FACTS
Sonora Mining and Diamond
Sonora Mining, a Nevada corporation, was formed in 1983. On August 14, 1984, Sonora Mining entered into the contract by which Sonora Mining bought the real property from the District. The property, valued at $900,000 and located in the Jamestown area of Tuolumne County, was the site of a gold mining operation (the Jamestown Mine). As consideration for the property, the contract provided for an exchange and an endowment. Under the exchange, Sonora Mining agreed to
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