Draft a Summons and Complaint for Breach of Contract and Fraud

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					                          LONG & LEVIT LLP

                          PROFESSIONAL LIABILITY UPDATE
                          July 23, 2001                                                                      Issue No. 106
Jennifer A. Becker

Shoshana Y. Chazan
Edward F. Donohue, III

Kathleen M. Ewins
                          California Law

Mehrdad Farivar           by Jennifer A. Becker
Bruce N. Furukawa
                          A New York based attorney licensed in California who negotiated contracts with
Howard M. Garfield        California residents under California law has sufficient contacts with the state to invoke
                          subject matter jurisdiction.
Jason A. Geller

J. Michael Higginbotham   Simon et al. v. Steverson, et al. 01 C.D.O.S. 3269
John B. Hook              In 1997 film producer Shawn Simons               that Steverson functioned essentially as a
Farand C. Kan             retained Mark Steverson of the New               supervised law clerk. Steverson claimed
                          York firm Rudolph & Beer to negotiate            he was a New York resident and did not
Anna Kapetanakos          agreements in connection with a planned          travel to California to conduct business
Joseph P. McMonigle
                          film. According to the complaint, the            on any other matter.
                          venture was compromised due to Mr.
Douglas J. Melton         Steverson’s failure to negotiate contracts       The Court of Appeals rejected the
                          on a timely basis and his subsequent             “Sher/Cubbage” analysis. The correct
Peter B. Molgaard
                          misrepresentations about their status.           analysis is whether the court can
Marsha L. Morrow                                                           exercise specific jurisdiction. Under
                          Plaintiffs sued Mr. Steverson and                Carnelson v. Charney (1976) 16 Cal.3d
Robin M. Pearson
                          Rudolph & Beer for breach of contract,           143 there must be a substantial
Jessica B. Rudin          fraud, constructive fraud, and                   connection between the defendant’s
                          professional negligence. Defendants              forum contacts and the plaintiff’s claim.
Richard J. Sciaroni       sought to quash service of the summons           This is not a rigid analysis; courts should
Steven Sharafian          on grounds that the court lacked both            employ a flexible approach.
                          general and limited personal jurisdiction.
Jennifer W. Suzuki        Defendants urged the court to analyze            The court found that Steverson’s
Jeanette Traverso
                          whether the non-resident defendants had          activities established sufficient contacts
                          sufficient contacts with California to           to invoke specific subject matter
Karen L. Uno              subject them to the court’s jurisdiction         jurisdiction in California. The court
                          based on Sher v. Johnson (9th Cir.               rejected Rudolph & Beer’s claim that
Seth E. Watkins
                          (1990) 911F.2d, 1357, 1361 and                   Steverson was acting as a law clerk. He
Gerald G. Weisbach        Cubbage v. Merchant (9th Cir. 1984)              was a licensed attorney who agreed to
                          744 F.2d. 665, 668. Rudolph & Beer               provide legal services to California
Irene K. Yesowitch        claimed that they did not solicit or             residents. The Court of Appeals also
                          conduct legal business in California and         rejected the trial court’s finding that the
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act of negotiating a contract did not                                    California to draft contracts for
qualify as the practice of law. The                                      California residents under California
practice of law includes giving legal                                    law. Thus, Rudolph & Beer sought
advice and contract preparation outside a                                benefits and privileges specific to
litigation context. The attorney’s                                       California.
physical presence or absence is not
determinative. The practice of law in                                    Comment: Physical absence from
California can occur through telephone,                                  California will not shield attorneys
fax, computer or other means.                                            servicing California clients from
                                                                         responding to claims in California
Plaintiff’s retention of New York                                        courts. There are no bright lines
counsel was not relevant. It was relevant                                delineating when a court will refrain
that New York counsel employed an                                        from invoking subject matter jurisdiction
attorney licensed to practice in                                         over out-of-state attorneys.

This publication is intended for general information purposes only and does not constitute nor is it intended to constitute legal advice.
The reader must consult with legal counsel to determine how laws or decisions discussed here apply to the reader’s specific
circumstances including whether the case may have been depublished after the date of this publication.


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