Judge: Andrew E. Cooper, Case: 22STCV38230, Date: 2023-05-16 Tentative Ruling

Case Number: 22STCV38230    Hearing Date: May 16, 2023    Dept: F51

Dept. F-51 

Date: 5/16/23

Case #22STCV38230

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER

Demurrer filed: 2/7/23

MOVING PARTY: Defendant The Congregational Church of Chatsworth (“Defendant”)

RESPONDING PARTY: Plaintiff Southern California Nevada Conference of the United Church of Christ (“Plaintiff”)

NOTICE: OK

RELIEF REQUESTED: Defendant demurs to Plaintiff’s entire complaint.

TENTATIVE RULING: The demurrer is overruled. Defendant shall file and serve an answer to Plaintiff’s complaint within 30 days.

REQUEST FOR JUDICIAL NOTICE: Defendant’s request for judicial notice is granted. Plaintiff’s request for judicial notice is granted.

EVIDENTIARY OBJECTIONS: Plaintiff’s evidentiary objections are overruled.

BACKGROUND

Factual

This is a quiet title action wherein Plaintiff is a religious organization operating under the United Church of Christ (“UCC”), a nationwide religious organization, and was at all relevant times the parent denomination responsible for overseeing Defendant, a member church located at 20440 Lassen Street, Chatsworth, CA 91311 (the “Property”). On 4/1/01, a grant deed (the “Deed”) was recorded with the Official Records of the County of Los Angeles, through which Plaintiff conveyed fee title of the Property to Defendant but reserved a reversionary interest in the Property in the event Defendant ceased to be or function as Plaintiff’s member. (Compl. ¶ 12; Ex. 2 to Compl.)

On 4/6/22, in compliance with the bylaws of Plaintiff’s Northern Association, a meeting was held to discuss Defendant’s membership and standing with Plaintiff. (Id. at ¶ 14.) At that meeting, the UCC, Plaintiff, and the Northern Association’s Committee on Ministry determined that Defendant’s standing and membership should be terminated and voted to notify Defendant of their intention to terminate Defendant’s standing and membership at a subsequent meeting. (Ibid.) On 7/27/22, the UCC, Plaintiff, and Northern Association’s Committee on Ministry moved that Defendant did not have standing and was not a member of the UCC, Plaintiff, or Northern Association, and majority of the members present voted to terminate Defendant’s standing and membership with immediate effect. (Ibid.)

Therefore, since Defendant’s membership and standing was allegedly terminated, Plaintiff filed this action seeking (among other things) a declaration that Plaintiff has fee title to the Property from 7/28/22 (the day after the standing and membership was terminated) pursuant to the Deed’s reversion provision. (Id. at ¶ 16.)

Procedural

On 1/24/23, the Court determined that this case (Case No. 22STCV38230) and another Los Angeles Superior Court Case, Southern California Nevada Conference United Church of Christ, et al. v. The Congregational Church of Chatsworth, et al., (Case No. 21CHCV00417) (the “First Action”) are related within the meaning of California Rules of Court, rule 3.300(a), and that the First Action is the lead case.

In the operative pleading for the First Action, Plaintiff alleged that its reversionary interest was triggered when the Church’s Former Council “voted to dissolve itself by motions duly made, seconded and carried at council meetings duly held on January 13, 2021, January 17, 2021, February 7, 2021, and February 28, 2021, and at a duly noticed (by first-class mail on January 17, 2021) and held and conducted a congregational meeting of the Church on January 27, 2021.” (First Action SAC ¶ 13; Ex. 1 to Def.’s RJN.)

On 6/1/21, Plaintiff filed the First Action. On 7/1/21, Plaintiff filed its First Amended Complaint for: (1) Quiet Title and Injunctive Relief; (2) Declaratory and Injunctive Relief; and (3) Imposition of Constructive Trust and Injunctive Relief. On 12/1/21, Plaintiff filed a Second Amended Complaint (“SAC”) pursuant to stipulation, which asserted the same three causes of action as the First Amended Complaint.

On 2/9/22, the Court sustained Defendant’s demurrer to Plaintiff’s SAC without leave to amend, finding that the reversionary interest had not been triggered because the purported dissolution vote was unlawful. (2/9/22 Minute Order; Ex. 2 to Def.’s RJN.) On 10/7/22, the Court entered its judgment for Defendant. (Ex. 3 to Def.’s RJN.) On 12/5/22, the Court of Appeal dismissed Plaintiff’s appeal of the judgment. (Ex. 5 to Def.’s RJN.)

On 12/8/22, Plaintiff filed the instant action, alleging against Defendant the following causes of action: (1) Quiet Title and Injunctive Relief; (2) Declaratory and Injunctive Relief; and (3) Imposition of Constructive Trust and Injunctive Relief.

On 1/25/23, Plaintiff filed, and the Court granted, a CCP § 170.6 peremptory challenge to the Honorable Judge Melvin Sandvig. The case was therefore reassigned to this Department for all further proceedings. On 4/19/23, the Court denied Defendant’s motion for reconsideration of the order granting the peremptory challenge.

On 2/7/23, Defendant filed the instant demurrer. On 5/3/23, Plaintiff filed its opposition. On 5/9/23, Defendant filed its reply.

ANALYSIS

Meet-and-Confer 

Before filing its demurrer, “the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc. § 430.41, subd. (a).) The demurring party must file and serve a meet and confer declaration stating either: “(A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer;” or “(B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith.” (Id. at subd. (a)(3).)

Here, Defendant’s counsel declares that on 2/1/23, he sent Plaintiff’s counsel an email to meet and confer regarding the issues raised in the instant demurrer. (Decl. of Marcus G. Larson, ¶ 2.) On 2/2/23, the parties met and conferred telephonically, but were unable to come to an agreement. (Id. at ¶ 3.) Therefore, the Court finds that Defendant’s counsel has satisfied the preliminary meet and confer requirements of Code of Civil Procedure section 430.41, subdivision (a). 

Legal Standard 

As a general matter, a party may respond to a pleading against it by demurrer on the basis of any single or combination of eight enumerated grounds, including that “the person who filed the pleading does not have the legal capacity to sue;” “there is another action pending between the same parties on the same cause of action;” and “the pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subds. (b), (c), (e).)

In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿“A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) 

Here, Defendant demurs to the Plaintiff’s entire complaint on the grounds that “all three causes of action in Plaintiffs’ New Action are barred as a matter of law by this state’s well-established law of res judicata, collateral estoppel, and the primary rights doctrine.” (Dem. 2:5–6.)

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A.    Res Judicata/Primary Rights

Res judicata, or claim preclusion, “applies when (1) the decision in the prior proceeding is final and on the merits, (2) the present proceeding is on the same cause of action as the prior proceeding, and (3) the parties in the present proceeding or parties in privity with them were parties to the prior proceeding. Upon satisfaction of these conditions, claim preclusion bars not only issues that were actually litigated but also issues that could have been litigated. (Planning & Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 226 [internal quotations and citations omitted].)

“Primary right theory,” which the res judicata doctrine is based on, provides that a cause of action is comprised of a primary right of the plaintiff, a corresponding primary duty of the defendant, and a wrongful act by the defendant constituting a breach of that duty. (Colebrook v. CIT Bank. N.A. (2021) 64 Cal.App.5th 259, 263.) “As far as its content is concerned, the primary right is simply the plaintiff's right to be free from the particular injury suffered.” (Ibid.)

Here, Defendant argues that each of the elements for claim preclusion have been met, as the judgment has been entered in the First Action, and its appeal dismissed, and the First Action involved the same causes of action and the same parties. (Dem. 8:4–17.) Defendant further argues that the two lawsuits concern the same primary right, as “the harm claimed is the Conference’s purported dispossession of title to the Church’s real property, located at 20440 Lassen Street in Chatsworth. That ‘harm’ is identical to the harm alleged, and adjudicated, in the Senior Action.” (Id. at 10:24–26.)

Plaintiff argues in opposition that res judicata does not apply to bar the instant action, because “the primary right in the prior case was the Church's right under to dissolve itself under Corporations Code § 9140 in February of 2021 under the Church's organic documents during the COVID-19 pandemic whereas the primary right in this action is the Conference's right to terminate membership of its members under the Conference's organic documents in July of 2022, and that the particular relief which Plaintiff seeks in this action is immaterial.” (Pl.’s Opp. 9:18–24.)

In reply, Defendant argues that “the primary right—indeed, the only alleged right—sued upon is the right to wrest title to the Subject Property away from the record title-holder the Church, by way of the reversion clause in the 2001 Deed.” (Def.’s Reply 3:7–9.) “Here, the Judgment in the Senior Action adjudicated Plaintiff’s lack of ownership rights in the Subject Property.” (Id. at 4:15–16.)

The Court finds that Defendant misinterprets the 10/7/22 judgment in the First Action as establishing a final determination that Plaintiff may never bring a quiet title action against Defendant, the record title holder of the fee simple interest in the Property, under a different set of facts. The Court’s ruling in the First Action is limited to the particular facts of that case, where the Court found that the event that allegedly triggered Plaintiff’s termination right was unlawfully executed and, therefore, Plaintiff did not have the right to re-enter/terminate under that specific reversionary interest. Notably, the reversionary interest involved in the First Action is distinct from that asserted in the instant action.

Exhibit “A” to the 4/6/01 Grant Deed, attached as Exhibit 2 to Plaintiff’s complaint, provides for the relevant reversionary interests as follows:

“2. [Plaintiff] SCNC, and its successors or assigns, shall have and may exercise a right of re-entry and a power of termination upon the occurrence of any one or more of said conditions.

3. SCNC shall have the right to renter [sic] the Property and to exercise its power to terminate upon the occurrence of any one or more of the following:

a.       In the event [Defendant] Chatsworth ceases to be or to function as a member of SCNC, within the meaning of Paragraph 16 of SCNC's By-Laws;

b.      In the event Chatsworth dissolves its corporate status; …”

(Ex. 2 to Compl., p. 3.)

In the First Action, Plaintiff alleged that a dissolution vote had taken place which triggered Paragraph 3b. Here, however, Plaintiff alleges a different set of facts and invokes a different provision of the reversion clause. Here, Plaintiff alleges that Defendant’s membership with Plaintiff was terminated in compliance with the bylaws of the Northern Association, thereby triggering Paragraph 3a of the reversion clause. (Compl. ¶¶ 14–15.)

Based on the foregoing, the Court agrees with Plaintiff’s argument that the facts of the instant case are distinct from those of the First Action. The Court acknowledges Defendant’s observations that both actions involve the same plaintiff and primary defendant, similar attempts to seize title to the same Property through the same three causes of action and involve the same reversion clause contained in the same Deed. However, at the demurrer stage, the Court is satisfied that Plaintiff has alleged different facts which purportedly gave rise to a separate injury than that alleged in the First Action.

Accordingly, the Court finds that the instant action is not barred by the doctrine of res judicata, and the demurrer is overruled as to this issue.

B.     Collateral Estoppel

The doctrine of collateral estoppel, or issue preclusion, is narrower than that of res judicata, and operates to bar the relitigation of issues previously litigated, applying only “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (Samara v. Matar (2018) 5 Cal.5th 322, 327.) “The identical issue requirement for issue preclusion addresses whether identical factual allegations are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same. (Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511–512.)

Here, Defendant argues that in the First Action, the parties already litigated, and the Court made a final judgment regarding: “(1) the lack of legal standing, preventing Plaintiff from asserting a quiet title claim; (2) the threshold bar on Plaintiff’s Constructive Trust cause—due to the fact it is a remedy, not a viable cause of action; and (3) that the declaratory and injunctive relief claims fail with the quiet title claim.” (Def.’s Reply 7:16–19.)

Plaintiff argues that it is chronologically impossible for the Conference to have litigated the issues that are involved in this action in the prior action,” since the vote to terminate Defendant’s membership and standing took place five months after the Court ruled on the demurrer in the First Action. (Pl.’s Opp. 10:1–3, 11:8–9.)

As earlier discussed, the Court concludes that while the same parties are in dispute over title to the same Property, the underlying facts alleged in the two actions are different. The primary issue previously litigated and decided, specifically Plaintiff’s lack of standing to bring a quiet title action, was premised on the Court’s finding that the purported dissolution vote triggering Paragraph 3b of the Deed’s reversion clause was unlawful. Here, Plaintiff alleges different facts triggering a different provision in the same reversion clause. Additionally, unlike in the First Action, here, Defendant does not cite to any legal authority which would render the triggering event, namely the membership termination vote, unlawful.

Based on the foregoing, the Court finds that the issues between the two actions are not identical, and therefore the instant action is not barred by the doctrine of collateral estoppel. Accordingly, the demurrer is overruled as to this issue.

C.     Derivative Causes of Action

It is undisputed by the parties that Plaintiff’s second and third causes of action are theories of relief derivative of Plaintiff’s first cause of action for quiet title. As the Court finds that Plaintiff has sufficiently alleged facts to support its first cause of action for quiet title against Defendant, the demurrer to the second and third causes of action are overruled.

CONCLUSION

The demurrer is overruled. Defendant shall file and serve an answer to Plaintiff’s complaint within 30 days.