Professional Negligence Law Reporter

A federal district court held that it did not have personal jurisdiction over negligence claims a California resident filed against her former accounting and financial advising firm, an Ohio corporation.

For approximately 20 years, Tracy Ann Hoffman received accounting and financial services from Michael A. Rolf C.P.A. & Co. and its employee, Michael A. Rolf. During that time, Hoffman lived in different states, including Ohio, Florida, and California. Hoffman took a job in California with Genentech and received stock options. Rolf allegedly advised her not to sell these options.

Approximately seven years after starting at Genentech, Hoffman began communicating with other Rolf C.P.A. employees in addition to Rolf. Early the next year, Genentech terminated Hoffman’s employment and advised her several months later of her two-month window to exercise her stock options. Hoffman failed to act on this and lost investments totaling more than $175,000. She later learned that Rolf was no longer working with clients due to serious cognitive impairments.

Hoffman sued Rolf and the firm, alleging it negligently failed to inform her that she should sell her stock options before their expiration date and failed to advise that Rolf had a deteriorating mental condition. The defendants moved to dismiss.

Granting the motion, the district court noted that absent general jurisdiction, a court may exercise specific jurisdiction based on a defendant’s contacts with the forum state. Whether those contacts are sufficient to establish specific jurisdiction depends on whether the defendant purposefully directed his or her activities toward the state, whether the claim arises out of or relates to the defendant’s forum-related activities, and whether the exercise of jurisdiction comports with fair play and substantial justice.

Applying these principles, the court found that the plaintiff alleged omissions by the defendants but not commission of an intentional act. Although the consequences of those alleged omissions were experienced by the plaintiff in California, the court said, this does not transform the defendants’ alleged actions into intentional conduct aimed at the state. Citing case law, the court found that a defendant’s contacts must be with a forum state itself, not simply with its residents.

Consequently, the court dismissed.

Citation: Hoffman v. Michael A. Rolf C.P.A. & Co., 2019 WL 2451007 (N.D. Cal. June 12, 2019).