Opinion
B324429
08-12-2024
GREATER LIBERTY BAPTIST CHURCH CORPORATION OF LOS ANGELES, Plaintiff and Respondent, v. BRIAN W. PETERS et al., Defendants and Appellants.
Decker Law, James D. Decker, and Griffin R. Schindler for Defendants and Appellants. Law Offices of Ashton Watkins and Ashton R. Watkins for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment and order of the Superior Court of Los Angeles County No. BC709109 . Rupert A. Byrdsong, Judge. Affirmed.
Decker Law, James D. Decker, and Griffin R. Schindler for Defendants and Appellants.
Law Offices of Ashton Watkins and Ashton R. Watkins for Plaintiff and Respondent.
VIRAMONTES, J.
Appellants Brian W. Peters, Corey W. Peters, Regina W. Peters, and Dawn L. Jones appeal from a judgment and order certifying an election of officers for plaintiff and respondent Greater Liberty Baptist Church Corporation of Los Angeles (the Church). Appellants argue the trial court lacked jurisdiction to order an election as cross-defendants Aneisha Davis, Karen McNulty, Jerry Peters, Virginia Peters, Calvin Williams, Brenda Gauff, and Antwan Sophia Ducree (collectively as Crossdefendants) lacked standing to initiate the underlying lawsuit on behalf of the Church.
Appellants also challenge the validity of the certification order on the grounds that the election occurred in violation of an automatic stay, the election was not held in accordance with the trial court's orders or the Church's governing documents, and the trial court lacked jurisdiction to certify the election results after Appellants dismissed their cross-complaint.
We conclude Appellants' challenges to the trial court's authority to order an election are forfeited as their arguments were previously raised and rejected in a prior appeal. Likewise, with respect to whether the election was held in violation of an automatic stay, we find that argument was also raised and rejected in the prior appeal. We find Appellants' remaining challenges to the certification order unpersuasive.
For these reasons, we affirm the judgment and order.
FACTUAL AND PROCEDURAL BACKGROUND
On June 7, 2018, the Church sued Appellants, alleging causes of action for declaratory relief, conversion, and intentional interference with business relationships. The complaint alleged that Cross-defendants were appointed as the Church's trustee board members in April 2017. It further alleged the trustee board had found Brian Peters lacked the character fitness and aptitude to serve as the Church's chief operating officer and pastor. The complaint also alleged Appellants filed fraudulent statements of information with the California Secretary of State, falsely claiming to be the Church's officers. The complaint sought a declaration that the statements of information were void and that the only persons authorized to act on behalf of the Church were the trustee board members. The Church's bylaws, along with meeting agendas and minutes showing the appointment of the trustee board members, and the statement of information filed by Brian Peters were attached to the complaint.
Appellants responded by cross-complaining against the trustee board members, alleging the Cross-defendants illegally took control of the Church and their appointments were invalid. The cross-complaint sought a declaration of Appellants' rights with respect to the Church.
Appellants filed a demurrer to the complaint, arguing that the trustee board members lacked standing to bring a lawsuit on behalf of the Church, as they were not the Church's officers or directors or the real parties in interest.
On May 8, 2019, the trial court overruled the demurrer. The minute order indicates the trial court held a hearing and heard argument before it overruled the demurrer; however, there was no court reporter at the hearing.
On February 27, 2020, Appellants filed motions for judgment on the pleadings, arguing the complaint was defective because the trustee board members lacked standing, among other things. The Church opposed the motion, arguing the complaint's allegations were sufficient to allege standing, and that there was an actual controversy regarding who could act on the Church's behalf. The opposition cited to the parties' competing claims regarding their corporate authority.
The trial court granted the motions on the grounds that it had no jurisdiction to resolve internal church disputes, i.e., controversies over religious doctrine and practice, without violating the First and Fourteenth Amendments to the United States Constitution. For example, the trial court found it would be inappropriate to resolve the question of whether Brian Peters" 'lacked the character fitness and aptitude to serve as CEO and/or Pastor of [the Church].'" However, the trial court recognized that it could resolve the parties' primary dispute, i.e., who could act on behalf of the Church, through" 'neutral principals of law'" by ordering an election of officers akin to the court in Singh v. Singh (2004) 114 Cal.App.4th 1264, thereby avoiding First Amendment issues.
While the trial court granted the motions and entered judgment in favor of Appellants, the judgment stated it would be "held in abeyance pending the outcome of the election of officers ordered by the Court." The judgment further stated that neither party was to act without the approval and consent of a receiver to be appointed December 1, 2020.
On November 23, 2020, the trial court held a status conference. Again there is no reporter's transcript on this date in the appellate record. However, the minute order indicates the trial court considered the parties' briefing and oral argument, and made the following orders. "The parties are to set up the process for an election with a [c]ourt appointed [r]eceiver. The [c]ourt will select the [r]eceiver by December 1, 2020. [¶] All bank account documents, official records and any other documents regarding the operation of the church and its properties/holdings are to be turned over to the [r]eceiver. [¶] No side may act without the approval of the [r]eceiver."
On December 1, 2020, the trial court appointed a receiver and held a hearing to modify the appointment order. It ordered the parties to split the receiver's fees, and to turn over the Church's official records, including bank account documents, membership rolls, bylaws, minutes and other documents regarding the operation of the church and its properties.
On January 25, 2021, Appellants appealed the judgment.
On March 29, 2021, the receiver held an election for the Church's board of directors. The receiver indicated that Jerry Peters, Aneisha Davis and Steve Gandy were the winners and could move forward with the necessary registration steps with the California Secretary of State.
On April 2, 2021, Appellants filed a writ of supersedeas in another division of this court seeking an immediate stay" 'on the work of the receiver'" pending appeal.
On April 6, 2021, the receiver certified the results.
On April 21, 2021, the trial court held a status conference and noted the election results had been certified. The trial court stayed the case in its entirety pending the appeal.
On May 20, 2022, another division of this court issued its decision in the first appeal and denied the petition for writ of supersedeas. The court found "Appellants' writ filing, in conjunction with the trial record provided, suggests that appellants strategically refrained from asserting any objections or stay requests until the election was held." Therefore, the request for stay was forfeited. The court also held that Appellants' challenges to the election order were similarly forfeited. "What this record demonstrates is that despite numerous opportunities to object to the trial court's orders, [A]ppellants neither objected nor raised any of the issues they advance in this court-i.e., (1) the court lacked authority (under Singh, or otherwise) to order an election[,] (2) the court failed to provide adequate notice prior to issuance of its election order[,] (3) the court lacked statutory authority to appoint a receiver[,] and (4) the court's orders are not supported by evidence or findings." It explained that Appellants "proceeded to express approval of, and compliance with, the court's orders through both their conduct and statements, including: (1) recognizing that the court 'ordered . . . an election of officers, akin to the decision by the Singh court,' (2) stating 'the [c]ourt does not make idle reorders,' and (3) stating that the receiver will conduct the election so the 'corporation can start out fresh.'" "In so doing, [A]ppellants not only failed to preserve their claims, constituting forfeiture, but acquiesced in a manner suggestive of 'affirmative waiver.'" Appellants' petition for rehearing was denied.
On June 20, 2022, Appellants dismissed their crosscomplaint.
On August 17, 2022, Respondents requested an order confirming the election results and related orders.
On September 20, 2022, another division of this court denied Appellants' petition for writ of prohibition, which argued the Church did not have standing to bring the lawsuit, the election violated an automatic stay, and the election was not held in accordance with the court's orders.
On October 25, 2022, the trial court certified the election results. Appellants appealed.
DISCUSSION
Appellants argue the trial court lacked jurisdiction to order the election of the Church's officers. They also raise various challenges to the certification order. With respect to the election order, we find the arguments are barred by the law of the case given the outcome of the prior appeal, which held Appellants' challenges were forfeited or waived. We find the argument that the election violated the automatic stay is similarly forfeited given the denial of the petition for writ of supersedeas to stay the action. Regarding Appellants' remaining challenges to the certification order, we find them either forfeited or otherwise unpersuasive.
I. Demurrer
Appellants argue the trial court should have sustained the demurrer and entered a judgment of dismissal, which would have divested it of jurisdiction to order the election and certify the results.
"An order overruling a demurrer is not directly appealable, but may be reviewed on appeal from the final judgment. [Citation.] Appeal is presumed to be an adequate remedy and writ review is rarely granted unless a significant issue of law is raised, or resolution of the issue would result in a final disposition as to the petitioner." (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 182.) We review an order overruling a demurrer de novo. (Cryolife, Inc. v. Superior Court (2003) 110 Cal.App.4th 1145, 1152.) In determining whether the demurrer should have been overruled, we accept the properly pleaded allegations as true. (Ibid.)
We find Appellants' challenges to the trial court's order overruling the demurrer fail for several reasons.
First, to the extent Appellants use the trial court's order overruling the demurrer as a means to challenge the trial court's election order, that argument is barred by law of the case.
" 'Where an appellate court states in its opinion a principle or rule of law necessary to its decision, that principle or rule becomes the law of the case. [Citation.] The law of the case must be adhered to both in the lower court and upon subsequent appeal. [Citation.] This is true even if the court that issued the opinion becomes convinced in a subsequent consideration that the former opinion is erroneous. [Citation.]' [Citation.] '" 'The rule of "law of the case" generally precludes multiple appellate review of the same issue in a single case.... [Citations.]'" [Citation.] [¶] . . . [¶] We will apply the law of the case doctrine where the point of law involved was necessary to the prior decision and was" 'actually presented and determined by the court.'" '" (Nelson v. Tucker Ellis, LLP (2020) 48 Cal.App.5th 827, 837 (Nelson).)
Here, as discussed in the prior appeal, Appellants' challenges to the election order were either forfeited or affirmatively waived based on their conduct. (Greater Liberty Baptist Church Corporation v. Peters (May 20, 2022, B310416) [nonpub. opn.] (Greater Liberty Baptist Church I).)
In any event, Appellants have failed to meet their burden to show error as they have not presented a complete record. "[I]t is settled that: 'A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.'" (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Just as in the prior appeal, Appellants only provided us with the minute order indicating the trial court overruled the demurrer after reading and considering the parties' arguments. There is no reporter's transcript in the appellate record, thus, we cannot determine whether the trial court's ruling was erroneous in light of what the parties actually argued and represented to the court.
Moreover, it is apparent Appellants' argument regarding the demurrer was that the trustee board members lacked standing to bring the lawsuit; therefore, the demurrer should have been sustained. However, this argument is without merit in light of the complaint's allegations, which state that the trustee board members were duly appointed and acted with the authority of the Church. For purposes of ruling on the demurrer, the trial court had to accept these allegations as true. Moreover, as Appellants seem to argue, the trustee board members could have appropriately brought a derivative action requesting the trial court to order an election. Thus, by Appellants' own reasoning, it appears the trial court could have granted leave to amend the complaint to allow the trustee board members to bring a derivative action. While we can only speculate on the trial court's reasoning for overruling the demurrer because there is no reporter's transcript of the hearing, what is clear is that Appellants have failed to affirmatively show error on this limited record.
II. Motions for judgment on the pleadings
Appellants argue, when the trial court granted the motions for judgment on the pleadings, it divested itself of jurisdiction to enter the election and certification orders. Appellants assert that the trial court's order granting the motions mandated the entry of judgment of dismissal, and divested the trial court of the authority to take any other action.
While Appellants frame their argument in terms of the certification order, they are effectively arguing against the trial court's jurisdiction to order the election. However, as discussed above, the prior appeal rendered any challenges to that order forfeited or waived. (Greater Liberty Baptist Church I, supra, B310416.) Further, the trial court's judgment was held in abeyance pending the election, which the parties appeared to have consented to on this limited record.
Accordingly, we find Appellants' challenges to the court's order granting the motions for judgment on the pleadings without merit.
III. Certification order
Appellants also challenge the trial court's authority to certify the election. They argue the election violated the automatic stay and it should not have been certified because it did not comply with the trial court's order, the Church's governing documents, or the Corporations Code. We disagree.
A. Automatic stay
Appellants argue the election was void because it violated the automatic stay while the first appeal was pending. Again, we find this argument is forfeited under the law of the case. Appellants expressly argued in the petition for writ of supersedeas that the work of the receiver should have been stopped in light of the automatic stay. The prior appellate court disagreed, finding Appellants "strategically refrained from asserting any objections or stay requests until the election was held." (Greater Liberty Baptist Church I, supra, B310416.) While there is some indication that Appellants tried to communicate to the receiver that the election should not be held while the first appeal was pending, the fact remains that Appellants waited until after the election to file their writ to request enforcement of the stay. Moreover, Appellants argued the election order was subject to an automatic stay in their direct appeal, which the prior reviewing court rejected. Thus, we find Appellants' automatic stay argument is barred as the law of the case must still be adhered to in the subsequent appeal. (Nelson, supra, 48 Cal.App.5th at p. 837.)
B. Whether the election was held in accordance with the trial court's order, the Church's governing documents, and the Corporations Code
Appellants argue that, even if the election and certification orders did not violate the automatic stay, the certification order should still be set aside because the election was held not in accordance with the trial court's election order, the Church's governing documents, or the Corporations Code. We disagree.
First, Appellants assert the trial court should have denied certification because the receiver erroneously held an election for a board of directors when he was ordered to hold an election of "officers." Appellants' argument is not well taken.
Appellants suggest that even if the election of officers was valid, those officers serve at the pleasure of the board of directors, who they assert are themselves. In other words, the election had no substantive effect and resolved nothing with respect to who could act on behalf of the Church. Appellants' argument elevates form over substance. It is plain from the entirety of the record, that the underlying dispute in this case was always about who had the authority to act on behalf of the Church. The trial court ordered an election to resolve that issue. Whether the trial court characterized those individuals as officers or directors is immaterial.
Our conclusion is supported by the Corporations Code, which defines "directors" as any natural persons "designated in the articles as such or elected by the incorporators and natural persons designated, elected or appointed by any other name or title to act as directors, and their successors." (Corp. Code, § 164; see also Corp. Code, § 5047 [defining "directors" as natural persons, designated in the articles or bylaws or elected by the incorporators, and their successors and natural persons designated, elected, or appointed by any other name or title to act as members of the governing body of the corporation].) Thus, it is not the title of director that matters, rather, it is that individual's ability to act on behalf of the Corporation.
Appellants also argue the trial court should have denied certification because the election was inconsistent with the Church's governing documents and the Corporations Code. We disagree.
The Church's Articles of Incorporation state that the original directors are to serve until the selection of their successors. They also state that "the voting and other rights and privileges of members . . . shall be as set forth in the By-laws." In turn, the bylaws provide that members shall have voting rights but do not reference an election of directors. As Appellants correctly point out, the Church's governing documents are devoid of any reference to a member-decided election of directors.
Given this lack of guidance within the Church's governing documents, Appellants argue that the trial court was required to act according to the Corporations Code in ordering an election. Specifically, Appellants argue the trial court was required to comply with Corporations Code section 9224, which states: "Unless otherwise provided in the articles or bylaws and except for a vacancy created by the removal of a director by the members, vacancies on the board may be filled by approval of the board (Section 5032) or, if the number of directors then in office is less than a quorum, by (1) the unanimous written consent of the directors then in office, (2) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section 9211, or (3) a sole remaining director." Thus, Appellants argue any board vacancies were to be chosen by the existing board members, here, themselves.
Appellants' argument ignores the fact that Corporations Code section 9224 permits the election of directors in another way. Relevant here, the statute states: "members may elect a director at any time to fill any vacancy not filled by the directors." (Id., subd. (b).) Further, the Corporations Code states the trial court can order an election of directors and determine the election's validity. (Corp. Code, § 9418, subds. (a)-(c).) The trial court followed this procedure here. It ordered an election of officers to be voted upon by the members, and then certified the election.
Accordingly, we find the election was held in accordance with the trial court's order, the Church's governing documents, and the Corporations Code.
C. Whether there were grounds for a permanent injunction or injunctive relief
Appellants argue certification should have been denied because there were no grounds for injunctive or mandatory relief. Again, although Appellants make this argument with respect to the certification order, the substance of their challenge is to the election order. As discussed above, those challenges are barred by the law of the case. This includes any argument that the trial court's tentative grant of the motions for judgment on the pleadings or its decision overruling the demurrer divested it of jurisdiction to order the election.
D. Whether the certification was invalid given the dismissal of the cross-complaint
Lastly, Appellants argue the certification order was invalid to the extent it was based on the cross-complaint once that pleading was dismissed. We find Appellants' voluntary dismissal of the cross-complaint of no import. The trial court retained jurisdiction to order the election and certify the results when it held the judgment in abeyance.
DISPOSITION
The judgment and order are affirmed. Respondent shall recover its costs on appeal.
WE CONCUR: STRATTON, P. J. GRIMES, J.