Central Mountain Air Limited, Petitioner, v. The Superior Court of the City and County of San Francisco, Respondent; Linda Payne et al., Real Parties in Interest.

Silver Hilton Steelhead Lodge et al., Petitioners, v. The Superior Court of The City and County of San Francisco, Respondent; Lani Waller et al., Real Parties in Interest, No. A067071

In the Court of Appeal of the State of California, First Appellate District, Division Four, January 30, 1995

PRIOR HISTORY:
Superior Court of City and County of San Francisco, No. 954764, Laurance D. Kay, Judge.

DISPOSITION: Statutory petition for writ of mandate granted.

COUNSEL: David A. Senior for Defendant and Petitioner Central Mountain Air Ltd.; Peter Dixon for Defendant and Petitioner Silver Hilton Steelhead Lodge; B. Mark Fong, Harlem & Assoc. for Plaintiffs and Respondents

JUDGES: Opinion by Anderson, P.J., with Poche, J., Reardon, J., concurring.

OPINION by Anderson, P.J.

Petitioners Silver Hilton Steelhead Lodge, Robert Wickwire, Jerrie Lou Wickwire and Jud Wickwire (referred to collectively as Silver Hilton) and Central Mountain Air Limited (CMA) seek writs to require respondent court to grant their motions to quash service on the ground of insufficient contacts with California. We have consolidated the petitions and grant the relief requested.

PROCEDURAL HISTORY - FACTS

The Silver Hilton Steelhead Lodge is a fishing lodge on the Babine River in British Columbia. The lodge is owned and operated by Robert Wickwire, Jerrie Lou Wickwire and Jud Wickwire, and began operating in 1984. Silver Hilton can accommodate eight people at the lodge itself and another four at a camp one mile east. Its maximum capacity in any one season, which runs for eight weeks in September and October, is 96 persons.
Silver Hilton and the Wickwires have no relevant contacts with California except through Lani Waller. As International Angler, Waller maintained an office and telephone listing on the premises of Golden Bear Travel Agency, Inc., in Novato, California. An authority on steelhead fly-fishing, Waller marketed and booked fishing trips for fly-fishermen and led guided fishing trips himself. In 1977 Waller took a small party of fishermen up to the Wickwire lodge. Waller and the Wickwires came to a verbal arrangement whereby Waller would promote their business in return for a commission for each person whom he referred to them. When the Wickwires opened the Silver Hilton lodge, the arrangement was changed so that all reservations to the lodge were booked through Waller. If another travel agent called the Silver Hilton, he would be referred to Waller to arrange the booking. Waller received a commission of 10 percent of the package price for reservations he originated. If another agent procured the guest, Waller would receive a 20 percent commission which he would split with the originating agent. (Exs. pp. 406-407) Under Wallet's arrangement with the Wickwires, he was obligated to first attempt to place a client with Silver Hilton before using a competing lodge.
Waller promoted fishing tours at trade and fishing shows, at fishing clubs and civic groups. For example, at fishing shows he would set up a booth in the name of "International Angler" where he would promote the Silver Hilton as well as other lodges. He wrote magazine articles promoting the lodge, placed magazine advertisements and produced a film shot on location at the Silver Hilton. He prepared a brochure on the Silver Hilton Lodge which was approved by the Wickwires. He was not paid to advertise the Silver Hilton but he was reimbursed for the cost of preparing and mailing the brochure. Although the Wickwires and Waller advertised widely, Waller focused on California because he was well-known there; as a result, a large portion of Silver Hilton's clients came from California. The Silver Hilton lodge itself could only be reached by air from Smithers and the tour package included transportation from Smithers to the lodge.(1) This flight was routinely, although not exclusively, furnished by Central

Mountain Air (CMA). Silver Hilton selected and made the arrangements for CMA to provide transportation. That was not part of Waller's responsibility. Arrangements with CMA were tentatively made at the start of the fishing season when Silver Hilton would know, quite accurately, how many clients they would have on specific dates. Occasionally, Waller would contact CMA to arrange special charter flights for customers who had to leave on a day other than Saturday, the day normally scheduled for lodge departures and arrivals. He received no commissions as a result of these special flights.
On September 12, 1992, CMA undertook a flight from Smithers to the lodge, carrying as passengers Lani Waller, Donald Payne and Anton Holter. The plane crashed on landing. The pilot, Payne and Holter were killed and Waller was seriously injured. Actions arising from the death of Payne and Holter were filed in respondent court against Silver Hilton, the Wickwires, CMA and Lani Waller. An action arising from the injury of Lani Waller was filed against Silver Hilton, the Wickwires and CMA. In the consolidated proceedings, Silver Hilton and the Wickwires moved to quash service, as did CMA, on the ground that they lacked connections with California sufficient for jurisdiction. Silver Hilton also moved, in the alternative, for a stay based on forum non conveniens.
On August 25, 1994, the motions were denied. As to the motion of Silver Hilton and the Wickwires, the court found that Lani Waller was Silver Hilton's exclusive agent. As to the motion of CMA, the court found "that inasmuch as [CMA] carried all the SILVER HILTON patrons into and out of the Lodge, and inasmuch as WALLER booked all such patrons on [CMA], WALLER was the exclusive agent of [CMA] for its SILVER HILTON flights . . ." As to the ground of inconvenient forum, the court found that all damages evidence is in California where the survivors reside.
Separate timely petitions for writ of mandate were filed on August 31, 1994, and September 7, 1994. (Code Cir. Proc., § 418.10, subd. (c); Code Civ. Proc., S 1013, subd. (a); Shearer v. Superior Court (1977) 70 Cal.App.3d 424, 426.)(2)

DISCUSSION

Under Code of Civil Procedure section 410.10, a California court may exercise jurisdiction over nonresidents on any basis not inconsistent with the Constitution of this state or of the United States. "As a general constitutional principle, a court may exercise personal jurisdiction over a nonresident individual so long as he has such minimal contacts with the state that '.. . the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."'" (Sibley v. Superior Court (1976) 16 Cal.3d 442, 445.) If contacts are not sufficient to exercise general jurisdiction over a nonresident defendant, they may yet be sufficient to warrant the exercise of jurisdiction over a particular cause of action. In this event, "[t]he crucial inquiry concerns the character of defendant's activity in the forum, whether the cause of action arises out of or has a substantial connection with that activity, and upon the balancing of the convenience of the parties and the interests of the state in assuming jurisdiction." (Cornelison v. Chaney (1976) 16 Cal.3d 143, 148.)
The burden of proof is upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence, and where there is a conflict in the evidence, resolution of the conflict by the trial court will not be disturbed on appeal if the determination of that court is supported by substantial evidence. (Bruns v. DeSoto Operating Co. (1988) 204 Cal.App.3d 876, 880.) In cases where a review of orders on motions to quash service of summons for lack of jurisdiction turns on the legal significance of undisputed facts, an appellate court may conduct a de novo review of the trial court's actions. (See generally, Eisenberg, Horvitz & Wiener, Cal. Practice Guide, Appeals and Writs (Rutter 1994) § 8:106.)

Central Mountain Air

Turning first to the jurisdiction of California over CMA, the defendant with the closest and most direct relationship to the incident which gave rise to the actions, we conclude that no basis exists for the exercise of jurisdiction in California. CMA has none of the usual contacts with California upon which jurisdiction is based. CMA is an airline which serves various cities and towns in British Columbia and the Yukon Territories. It has never flown to or from California. It has never advertised in California. It owns no property here and maintains no bank accounts or employees here.
CMA's relationship with Waller is not such as to confer jurisdiction upon California. CMA did not contract with Waller but with Silver Hilton. CMA did not choose Waller to book the flights and had no control over any activities of Waller. "The significant test of an agency relationship is the principal's right, which need not be exercised, to control the activities of the agent." (Sklar v. Princess Properties International, Ltd. (1987) 194 Cal.App.3d 1202, 1206.) The fact that the transportation from Smithers to the lodge was a part of the package booked by Waller, without more, does not make Waller an agent of CMA.
In arguing that CMA engaged in activities directed at California residents, real party Holter cites two cases to illustrate analyses used to assert jurisdiction where an accident victim, injured out of state, seeks to sue in the plaintiff's home state. In Scholnik v. National Airlines (6th Cir. 1955) 219 F.2d 115, an Ohio resident was injured in Florida in a National Airlines airplane. National Airlines was a Florida corporation which did not itself fly in Ohio. However, it was held to be present in Ohio through its reciprocal activities with an Ohio carrier. In Gelfand v. Tanner Motor Tours, Ltd. (2d Cir. 1967) 385 F.2d 116, a New York resident was injured in Arizona when a wheel broke off a Gray Line tour bus. The tour was operated by an out-of-state firm but was booked in New York. The tour operator was subject to jurisdiction in New York because of its arrangement with the booking firm who promoted and booked the tour. "It is clear from the record that unless defendants had arrived at this working arrangement with DeGraff or a similar arrangement with some other New York representative, they would either have had to open their own reservation office in New York or give up the Grand Canyon tour . . ." (385 F.2d at p. 121.)
In marked contrast to the purposeful activities in the above cases, CMA had no arrangement with Waller. It had no contract with Waller or the passengers it carried. Its sole contractual arrangement was with Silver Hilton.
Real party Payne's contention that CMA, Silver Hilton and Waller had a cooperative arrangement akin to a joint venture, and were thus liable for the actions of the other joint venturers, is fanciful. "'A joint venture . . . is an undertaking by two or more persons jointly to carry out a single business enterprise for profit.' [Citation.] The elements necessary for its creation are: (1) joint interest in a common business; (2) with an understanding to share profits and losses; and (3) a right to joint control. . . ." (April Enterprises. Inc. v. KTTV (1983) 147 Cal.App.3d 805, 819.) The record in the instant case contains no facts from which the existence of these elements can be inferred.

Silver Hilton and the Wickwires

Unlike CMA, Silver Hilton had contacts in California through advertising and promotional activities conducted on its behalf by Waller. Furthermore, the fishing trips on which the airplane accident occurred were booked in California through Waller who acted as an agent for Silver Hilton.
Silver Hilton likens its contacts with California to those in Circus Circus Hotels. Inc. v. Superior Court (1981) 120 Cal.App.3d 546 and Sklar v. Princess Properties International. Ltd., supra, 194 Cal.App.3d 1202, where appellate courts held that California could not constitutionally exercise personal jurisdiction over a nonresident defendant for injuries occurring out of state.
In Circus Circus, California residents were staying in a Nevada hotel when their room was burglarized and they sought to sue the hotel in California based upon the hotel's advertising in this state. After extensive discussion of the bases for personal jurisdiction, the court concluded: "To summarize, it is an obvious corollary to Fisher Governor that sales and travel promotion activities within this state, either through agents or by advertising, including use of an '800' telephone number, do not, without more, operate to confer in personam jurisdiction over a nonresident defendant instituting such activities, where the plaintiff seeks to recover in California from such defendant for a grievance occurring in the course of recreational activities wholly outside the forum state, even though the plaintiff's sojourn outside the forum state was in response to such promotional activities." (Circus Circus Hotels, Inc. v. Superior Court, supra, 120 Cal.App.3d at p. 572, emphasis in original, referring to Fisher Governor Co. v. Superior Court (1959) 53 Cal.2d 222.)
In Circus Circus the advertising activities were not carried out in California through an agent of the defendant but this was the case in Sklar. In Sklar a visitor to a hotel in Bermuda suffered injuries when she fell on the premises. The defendant had an agent (PHI) in California through whom it advertised and booked reservations. "Under the agreement between PHI and defendant, PHI performed such services for defendant on a nonexclusive basis, i.e., defendant had the right to engage others to perform those services for it and PHI had the right to render like services to clients other than defendant . . . " (Sklar v. Princes Properties International, Ltd., supra, 194 Cal.App.3d at p. 1207.) The Sklar court, also citing Fisher Governor, held that the presence in California of an "independent nonexclusive sales representative" was not sufficient activity to subject defendant to general jurisdiction here. The Sklar court then turned to the test articulated in Cornelison for the determination of jurisdiction over the particular cause of action before it. "If . . . the defendant's activities in the forum are not so pervasive as to justify the exercise of general jurisdiction over him, then jurisdiction depends upon the quality and nature of his activity in the forum in relation to the particular cause of action. In such a situation, the cause of action must arise out of an act done or transaction consummated in the forum, or defendant must perform some other act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its law." (Cornelison v. Chaney, supra, 16 Cal.3d at pp. 147-148.)
The Sklar court reasoned that the cause of action had insufficient relation to the California activity. Even had plaintiff shown that the hotel reservation was booked in California, "[i]t cannot seriously be contended that sale to plaintiff in California of accommodations at defendant's hotel in Bermuda was the proximate cause of plaintiff's personal injuries allegedly sustained in a slip-and-fall accident at the hotel; . . ." (Sklar v. Princes Properties International, Ltd., supra, 194 Cal.App.3d at p. 1208) Furthermore, plaintiff, having failed to provide evidence that the agent actually sold in California rooms at any of defendants' hotels, did not establish that the defendant, acting through its agent "'purposely availed [itself] of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws.'" (Id. at p. 1209)
Unlike the Circus Circus and Sklar cases, the court in Dialysis at Sea, Inc. v. Superior Court(1989) 216 Cal.App.3d 788, found a sufficient connection between the California activity and the cause of action under a Cornelison analysis. A California resident went on a cruise arranged by a nonresident defendant on which dialysis would be provided under the supervision of a qualified physician. The complaint alleged that the dialysis was negligently performed and the California resident died as a result. (Id. at p. 791.) The court rejected some broad language in Circus Circus and Sklar "which, if taken literally, would preclude a contractual arrangement consummated in California from ever forming the basis for jurisdiction over a tort cause of action for injuries inflicted in another state." (Id. at p. 795.) The Dialysiscourt concluded its analysis by applying the Cornelison final step of "'the balancing of the convenience of the parties and the interests of the state in assuming jurisdiction.'" (Id. at p. 796) The court pointed out that California has a strong interest in protecting the rights of its residents who are allegedly the victims of malpractice and that neither party had furnished any evidence as to the relative convenience of California as a forum state. (Ibid.)
The three cases discussed above provide guidance in the application of the Cornelison three-step analysis. The first step is to determine if the defendant's activities in California are "so substantial or wide-ranging as to justify general jurisdiction." In Cornelison, the court cited Koninklijke L. M. v. Superior Court (1951) 107 Cal.App.2d 495 to illustrate the type of activity which would suffice. There a Dutch airline was compelled to defend a suit arising from an airplane accident in England. "The defendant's substantial purchases of airplanes in California, some 30 local employees, and other local business operations were sufficient to warrant jurisdiction, even though the subject matter of the action was wholly unrelated to the business conducted by the corporation in California." (Cornelison v. Chaney, supra, 16 Cal.3d at pp. 148-149, fn. omitted.) In contrast, the Silver Hilton's activities in California are much more similar to the defendant's activities in Sklar, i.e., sales activities by an agent. Although respondent court characterized Waller as an "exclusive agent," his arrangement with Silver Hilton was almost precisely that of the agent in Sklar. Waller had the right to arrange fishing trips with competitors of Silver Hilton and other travel agents could arrange fishing trips at Silver Hilton. Waller was exclusive only in the sense that all bookings had to go through him for scheduling purposes and he received a commission for that booking and scheduling service, We conclude that Silver Hilton's activities in California were not sufficient to warrant general jurisdiction in California for causes of action unrelated to California.
As to whether there was a sufficient nexus between the California activities and the cause of action, the issue is much closer than it was in Circus Circus or Sklar since Silver Hilton acted through a California agent who actually promoted and sold the fatal trip. Although this was a situation where a contractual arrangement consummated in California formed the basis for jurisdiction over a tort cause of action for injuries inflicted elsewhere, the Dialysis caution against automatically rejecting jurisdiction in such a situation is well-taken. This appears to be a situation where, as in Cornelison, "the exercise of jurisdiction is not obvious" (Cornelison v. Chaney, supra, 16 Cal.3d at p. 150) and the balancing factors mentioned in that case, and in Dialysis, are relevant.
In this regard, the Cornelison court listed some of the considerations involved: ". . . the relative availability of evidence and the burden of defense and prosecution in one place rather than another; the interest of a state in providing a forum for its residents or regulating the business involved; the ease of access to an alternative forum; the avoidance of a multiplicity of suits and conflicting adjudications; and the extent to which the cause of action arose out of defendant's local activities." (Cornelison v. Chaney, supra, 16 Cal.3d at p. 151.)
All of the balancing factors mentioned in Cornelison convince us that jurisdiction should be denied in this case. The evidence as to the cause of the accident is in Canada. Real parties state that the only issue to be determined is the amount of damages because the cause of the accident was determined by the Transportation Safety Board of Canada. That is inaccurate. Although the Board concluded that the pilot misjudged the landing, the report contains the caveat that the purpose of the investigation was not to assign fault or determine civil or criminal liability. Liability of both CMA and Silver Hilton is still to be determined and California may not have the power to compel the attendance of relevant witnesses. California has no special interest in the subject as it has in medical malpractice, the subject in Dialysis at Sea. As petitioners point out, in considering the competing interests of California and Canada in adjudicating the case, Canada has the greater interest in the conduct of professionals licensed in its country. There appears to be no possibility that plaintiffs would not have access to a forum in Canada. Finding jurisdiction over Silver Hilton in California where the liability of CMA cannot be tried invites a multiplicity of actions and conflicting adjudications. Finally, as to the extent to which the cause of action arose out of defendant's local activities, there is not a close nexus between the promotion and sale of a fishing trip in California and the crash of an airplane in Canada, even though the fishing trip included the transportation.
The petitions are granted. Let a peremptory writ of mandate issue directing respondent court to vacate its order of August 25, 1994, and to issue a new order granting the motions to quash service of summons.

Anderson, P.J.

We concur:

Poche, J.
Reardon, J.
1. The camp could not be reached by fixed-wing aircraft but was reached by helicopter.
2. The verification by petitioners' attorneys was sufficient. Contrary to real party's contention, the attorneys did not verify facts obtained from the client. The facts of the petitions themselves are almost exclusively derived from the documents filed in the court below.