In Buchanan v. Soto (Filed 11/6/2015, No. D065652), the Court of Appeal, Fourth District, held that a deportee who held an interest in real property within the State of California was subject to personal jurisdiction in California, despite being barred from re-entering the United States.
Plaintiff, Diana Buchanan, sold her bridal business to Maria Soto, the wife of defendant and appellant, Ramon Soto. Pursuant to the purchase of the bridal business, Maria executed a deed of trust by which she pledged certain real property located in San Marcos, California, as security for her payment obligations. Thereafter, Maria breached her obligations under the sale agreement, and Buchanan filed suit against Maria.
Thirteen days after Maria was served with Buchanan’s complaint, Maria signed and recorded two deeds by which she conveyed the collateral real property to her husband, Ramon Soto, as his separate property. A default judgment was entered against Maria in the amount of $416,854.80. Around the time the default judgment was entered, Buchanan filed the present action against Maria and Ramon Soto, seeking an order from the Court setting aside the transfer of the real property as a fraudulent conveyance.
Maria was personally served with the summons and complaint in California. Despite reasonable and diligent efforts to personally serve Ramon, Buchanan was unable to do so, and obtained an Order permitting her to serve Ramon by publication. Ramon was residing in Mexico after having been deported from the United States upon serving a prison sentence.
Ramon never entered an appearance, and a default judgment was entered against him. After a bench trial, the Court determined the conveyance was fraudulent, and set it aside. Several months after the Court made this determination, Ramon filed motions to vacate the entry of default against him, and to quash service of summons and complaint for lack of personal jurisdiction. The trial court denied the motions, determining that the exercise of jurisdiction over Ramon was proper because Ramon acquired a purported interest in the real property in issue while he was living in California, before he was deported.
The Fourth District Court of Appeal affirmed, holding that California’s long-arm statute permitted the exercise of jurisdiction over Ramon, despite that he had been deported from the United States, and could not legally return.
First, the Court noted that Ramon had purposefully availed himself of the benefits of conducting activities within California by receiving the conveyed interest in the real property which existed within California.
Second, the Court held that the action arose out of Ramon’s contacts with California because the suit involved questions of whether the real property purportedly owned by Ramon was fraudulently conveyed to him.
Third, the Court determined that the exercise of personal jurisdiction over Ramon was reasonable because Ramon hired counsel and filed motions despite that he was not permitted to re-enter the United States. Moreover, Ramon was a necessary party to the fraudulent conveyance suit asserted by Buchanan, meaning that it would offend traditional notions of fair play and substantial justice to bar Buchanan from a remedy simply because Ramon resided in another country. With respect to Ramon’s argument, the Court noted “[s]uch a rule, if adopted, would effectively insulate a transfer of real property done with the intent to hinder, delay or defraud a third party, as was the case here, when the transferor is a resident of California and when the transferee is a nonresident who-like Ramon-claims to lack sufficient contacts with California.”
The case is significant in that it demonstrates California’s personal jurisdiction long-arm statute can extend beyond national borders, when the party owns and maintains an interest in real property within the State of California, even if the party is legally not permitted to reenter the United States.
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