Judge Christopher K. Lui, Case Number: 23STCV11307, Date: 2024-01-11 Tentative Ruling

Judge: Christopher K. Lui, Case: 23STCV11307, Date: 2024-01-11 Tentative Ruling

Case Number: 23STCV11307 Hearing Date: January 11, 2024 Dept: 76

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. Counsel must contact the staff in Department 76 to inform the Court whether they wish to submit on the tentative, or to argue the matter. As required by Rule 3.1308(a), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue.

Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.

Per Rule of Court 3.1308, if notice of intention to appear is not given, the Court may adopt the tentative ruling as the final ruling.

This is a dispute over ownership of church property. Plaintiffs allege the church property was conveyed by Defendant Lazell L. Rodgers without church authority. Defendants Blackgem and USC Capital allegedly encumbered the property with a loan.

Defendant Lazell L. Rodgers demurs to the First Amended Complaint and moves to strike portions thereof.

TENTATIVE RULING

Defendant Lazell L. Rodgers’ demurrer to the First Amended Complaint is SUSTAINED without leave to amend.

Given the ruling on the demurrer, the motion to strike is MOOT.

The case is hereby ordered dismissed with prejudice.

ANALYSIS

Demurrer

Request For Judicial Notice

Defendant’s request that the Court take judicial notice of the Complaint and Amended Complaint filed in this action is GRANTED per Evid. Code, § 452(d)(court records).

Meet and Confer

The Declaration of Arpine Khachikyayn reflects that Plaintiff did not respond in good faith to meet and confer efforts. This satisfies Civ. Proc. Code, § 430.41(a)(3)(B).

Discussion

Defendant Lazell L. Rodgers demurs to the First Amended Complaint as follows:

1. First Cause of Action (Fraud)—Page 33 of 1AC.

A. Re: Lack of Standing.

“A litigant's standing to sue is a threshold issue to be resolved before the matter can be reached on the merits. [Citation.]” (Blumhorst v. Jewish Family Services of Los Angeles (2005) 126 Cal.App.4th 993, 1000 [24 Cal. Rptr. 3d 474].) Because elements for standing “are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation. [Citations.]” (Citation omitted.) . . .

“Because standing goes to the existence of a cause of action, lack of standing may be raised by demurrer or at any time in the proceeding, including at trial or in an appeal. [Citations.]” (Citations omitted.)

(Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1345.)

(a) The provisions of Chapter 4 (commencing with Section 5410) of Part 2 apply to religious corporations except for subdivision (b) of Section 5420 [liability of person receiving distributions].

(b) Suit may be brought in the name of the corporation by a creditor, a director, or the authorized number of members. In any such action in addition to the remedy provided in subdivision (a) of Section 5420, the court may award punitive damages for the benefit of the corporation against any director, officer, member or other person who with intent to defraud the corporation caused, received or aided and abetted in the making of any distribution.

(Corp. Code § 9610 [bold emphasis added].)

Defendant argues that Plaintiffs are not members of Normandie Community Worship Center and have no standing to bring derivative actions under Corp. Code, § 5710 which provides:

(b) No action may be instituted or maintained in the right of any corporation by any member of such corporation unless both of the following conditions exist:

(1) The plaintiff alleges in the complaint that plaintiff was a member at the time of the transaction or any part thereof of which plaintiff complains; and

(2) The plaintiff alleges in the complaint with particularity plaintiff’s efforts to secure from the board such action as plaintiff desires, or the reasons for not making such effort, and alleges further that plaintiff has either informed the corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the corporation or the board a true copy of the complaint which plaintiff proposes to file.

(Corp. Code § 5710(b)[bold emphasis added].)

As Defendant points out, the Bylaws of Normandie Community Worship Center, attached as Exhibit 10 to the First Amended Complaint, do not provide for any members.

Corp. Code, § 5056 provides that a “member” must be identified as such in the corporation’s articles or bylaws:

(a) “Member” means any person who, pursuant to a specific provision of a corporation’s articles or bylaws, has the right to vote for the election of a director or directors or on a disposition of all or substantially all of the assets of a corporation or on a merger or on a dissolution unless the provision granting such right to vote is only effective as a result of paragraph (2) of subdivision (a) of Section 7132. “Member” also means any person who is designated in the articles or bylaws as a member and, pursuant to a specific provision of a corporation’s articles or bylaws, has the right to vote on changes to the articles or bylaws.

(b) The articles or bylaws may confer some or all of the rights of a member, set forth in this part and in Parts 2 through 5 of this division, upon any person or persons who do not have any of the voting rights referred to in subdivision (a).

(c) Where a member of a corporation is not a natural person, such member may authorize in writing one or more natural persons to vote on its behalf on any or all matters which may require a vote of the members.

(d) A person is not a member by virtue of any of the following:

(1) Any rights such person has as a delegate.

(2) Any rights such person has to designate or select a director or directors.

(3) Any rights such person has as a director.

(Corp. Code § 5056.)

Corp. Code, § 9310 provides:

(a) A corporation may admit persons to membership, as provided in its articles or bylaws, or may provide in its articles or bylaws that it shall have no members. In the absence of any provision in its articles or bylaws providing for members, a corporation shall have no members.

(b) Subject to the articles or bylaws, in the case of a corporation which has no members:

(1) Any action for which there is no specific provision of this part applicable to a corporation which has no members and which would otherwise require approval by a majority of all members (Section 5033) or approval by the members (Section 5034) shall require only approval of the board.

(2) All rights which would otherwise vest under this part in the members shall vest in the directors.

(c) Reference in this part to a corporation which has no members includes a corporation in which the directors are the only members.

(Corp. Code § 9310 [bold emphasis added].)

Here, the Bylaws do not provide for any members, but instead vest the powers in the Board of Trustee and in the directors. (Bylaws, Sections 2 – 16.) None of the named Plaintiffs appear to be on the Board of Trustee or a director. (See Bylaws, Pages 1, 17.)

“[F]acts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence. (Citation omitted.)” (Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1627.) As such, the allegations at ¶¶ 1 – 7 of the 1AC that Plaintiffs are “members” of Normandie Community Worship Center must give way to the above facts appearing in the exhibits, when construed with Corp. Code §§ 5056 and 9310, that Normandie Community Worship Center has no members. There are no allegations that Plaintiffs are members of the Board.

As such, Plaintiffs cannot allege standing under Corp. Code, § 5710(b) to assert derivative claims on behalf of Normandie Community Worship Center. To the extent this is asserted as a derivative claim, Plaintiffs lack standing to assert it.

B. Re: Failure To Allege Reliance and Actual Damages.

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff. (Citations omitted.)” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498 [italics omitted].)

Here, Plaintiffs have not alleged that they personally relied upon a misrepresentation by Defendant, nor that they suffered damages as a result of Defendant’s alleged fraud. There can be no reliance on a representation to which Plaintiffs were never exposed:

The problem with plaintiffs' argument, as the trial court recognized, is that the record is devoid of evidence showing reliance. “It is settled that a plaintiff, to state a cause of action for deceit based on a misrepresentation, must [prove] that he or she actually relied on the misrepresentation.” (Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088 [23 Cal. Rptr. 2d 101, 858 P.2d 568].)

(Burch v. CertainTeed Corp. (2019) 34 Cal.App.5th 341, 353.)

At most, Plaintiffs allege they suffered emotional distress after finding out that Defendant lied about the ownership of church property. However, this does not suffice for a deceit claim, because Plaintiffs do not allege they relied upon Defendant’s misrepresentation in parting with property.

This ground for demurrer is persuasive as to the individual claim.

The demurrer to the first cause of action is SUSTAINED without leave to amend.

2. Second Cause of Action (Breach of Fiduciary Duty)—1AC, Page 38.

A. Re: Lack of Standing.

To the extent that this cause of action is asserted on a derivative basis, this ground for demurrer is persuasive for the reasons discussed above re: the first cause of action.

B. Re: No Fiduciary Relationship.

“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)

There are no facts pled which give rise to a fiduciary duty owed by Defendant Lazell L. Rodgers to the individual Plaintiffs personally with regard to their property. Defendant Lazell L. Rodgers is alleged to be a member and pastor of Normandie Community Worship Church, C.O.G.I.C. (1AC, ¶ 7.) While case law has recognized a confidential relation exists between priest and parishioner, this extends to dealings between the two which would constitute undue influence affecting transactions between them:

Confidential relations are presumed to exist between priest and parishioner, principal and agent, counsel and client, and in each of said relations the party in whom the confidence is reposed must stand in his dealings with the other party unimpeached of the slightest abuse of the confidence reposed, and if he derives or claims any advantage from the relation the law places upon him the burden of showing that the transaction out of which the advantage arose was fair and just and fully understood and consented to by the party confiding in him. (Bacon v. Soule, 19 Cal. App. 428, 434 [126 P. 384].)

" That the influence which the spiritual adviser of one who is about to die has over such person is one of the most powerful that can be exercised upon the human mind, especially if such mind is impaired by physical weakness, is so consonant with human experience as to need no more than its statement; and in any transaction between them wherein the adviser receives any advantage, a court of equity will not enter into an investigation of the extent to which such influence has been exercised. Any dealing between them under such circumstances will be set aside as contrary to all principles of equity, whether the benefit accrue to the adviser or to some other recipient who, through such influence, may have been made the beneficiary of the transaction." (Italics ours.) ( Ross v. Conway, 92 Cal. 632, 636 [28 P. 785].)

The testimony in this case shows that the respondent in whom a confidence was reposed by the deceased used such confidence for the purpose of obtaining an unfair advantage over the deceased. This constitutes undue influence. ( Sec. 1575, Civ. Code.)

[*153] As before pointed out, there is no evidence showing any intention on the part of the deceased to make respondent a gift of the property in controversy. The intent to make a gift is an essential element to constitute a gift. (Cal. Jur., vol. 13, p. 36; Hotaling v. Hotaling, 193 Cal. 368 [224 P. 455, 56 A. L. R. 734

(In re Estate of Miller (1936) 16 Cal.App.2d 141, 152-153.)

Here, Defendant is not alleged to have exercised undue influence in connection with a transaction with the Plaintiffs regarding their property (as opposed to church property).

To the extent this is an individual cause of action, this ground for demurrer is persuasive.

The demurrer to the second cause of action is SUSTAINED without leave to amend.

4. Third Cause of Action (Conversion)—1AC, Page 40.

A. Re: Lack of Standing.

This cause of action does not specify that it is being asserted on a derivative basis. However, to the extent that it is, this ground for demurrer is persuasive for the reasons discussed above re: the first cause of action.

B. Re: Failure to Allege Elements.

“Conversion is the wrongful exercise of dominion over the property of another.” (Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 543 [50 Cal. Rptr. 2d 810].) Proof of conversion requires a showing of ownership or right to possession of the property at the time of the conversion, the defendant's conversion by a wrongful act or disposition of property rights, and resulting damages. (Id. at pp. 543–544; Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066 [80 Cal. Rptr. 2d 704].) “Money can be the subject of an action for conversion if a specific sum capable of identification is involved.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452 [61 Cal. Rptr. 2d 707].)

(Avidor v. Sutter's Place, Inc. (2013) 212 Cal.App.4th 1439, 1452.)

To the extent this is an individual/direct action, Plaintiffs do not plead that they have a right to any sums converted. Moreover, real property cannot be the subject of conversion. “The tort of conversion applies to personal property, not real property. (Citation omitted.)” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1295.)

The demurrer to the third cause of action is SUSTAINED without leave to amend.

5. Fourth Cause of Action (Constructive Fraud)—1AC, Page 42.

A. Re: Lack of Standing.

B. Re: Failure To Allege Reliance and Actual Damages.

As for constructive fraud, the complaint fails to plead facts establishing the requisite fiduciary or special confidential relationship between plaintiff and defendant. (Citations omitted [*961].) And even assuming plaintiff could overcome the standing hurdle, fraud causes of action must be pleaded with specificity, meaning “(1) general pleading of the legal conclusion of fraud is insufficient; and (2) every element of the cause of action for fraud must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is defective in any material respect.” (Citation omitted.) Plaintiff's complaint utterly fails the specificity test, not because she is an inartful pleader, but because those facts that are well pleaded necessarily negate the existence of the facts supporting the requisite elements of fraud.

(Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 960-61.)

As noted above, there are no facts pled which give rise to a fiduciary or confidential relationship between Defendant Lazell L. Rodgers and the individual Plaintiffs personally with respect to property they (as opposed to the church) owned.

To the extent this is an individual cause of action, this ground for demurrer is persuasive.

The demurrer to the fourth cause of action is SUSTAINED without leave to amend.

5. Fifth Cause of Action (Accounting).

A. Re: Lack of Standing.

To the extent this is an individual/direct claim, the specific statutory section giving Plaintiffs an individual right to an accounting is not specified. ¶ 79 of the 1AC cites the Bylaws and Corporation Code § 9110. However, nothing in the Bylaws gives Plaintiffs—who are not identified in the Bylaws—a right to an accounting. Corp. Code, § 9110 simply states: “This part shall be known and may be cited as the Nonprofit Religious Corporation Law.” Corp. Code, § 9512 provides the right to an accounting only be a “member.”

Except as otherwise provided in the articles or bylaws, the accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person’s interests as a member.

(Corp Code § 9512.)

The demurrer to the fifth cause of action is SUSTAINED without leave to amend.

Motion To Strike

Given the ruling on the demurrer, the motion to strike is MOOT.

The case is hereby ordered dismissed with prejudice.