Opinion
F072136
01-30-2017
JOHN LUCAS, Plaintiff and Appellant, v. BAKERSFIELD GREEN THUMB GARDEN CLUB et al., Defendants and Respondents.
John Lucas, in pro. per., for Plaintiff and Appellant. Brett V. Myers for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. CV273053)
OPINION
APPEAL from a judgment of the Superior Court of Kern County. Lorna H. Brumfield, Judge. John Lucas, in pro. per., for Plaintiff and Appellant. Brett V. Myers for Defendants and Respondents.
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After being elected president of the Bakersfield Green Thumb Garden Club (the Club), plaintiff John Lucas began to carry out his office in a manner that many Club members described as overbearing, autocratic and offensive. When plaintiff persisted in this style of leadership, the members of the Club took action. At a general membership meeting, a vote was taken that removed plaintiff from office. Thereafter, plaintiff filed the instant action against numerous individual Club members (collectively defendants), and also named the Club itself, a nonprofit corporation, as a defendant. During the ensuing litigation, the Club was legally dissolved as a corporation, apparently due to insolvency resulting from the litigation expenses. Following a bench trial, the trial court concluded that all of plaintiff's causes of action were without merit or sought equitable relief that was inappropriate or unnecessary under the circumstances. A judgment for defendants was duly entered. Plaintiff appeals, asserting several claims of error. We conclude that plaintiff has failed to demonstrate the existence of any reversible error or abuse of discretion. Accordingly, the judgment of the trial court is affirmed.
The individual defendants named in the caption of plaintiff's third amended complaint included Joyce Darrow, Gloria Aminian, Sally Wortendyke, Patti Kamps-Lucas, Karen Abercrombie, Trudy E. Albrecht, Rose Mary Maguire, Rob Rephan, Shirley Stevens, Patricia Tennant, Sandra Steinberg, Helen Maas, Monica Lewis, Stewart Lewis and Ben McMahan. Only four of these defendants have, through their counsel Brett Myers, filed a brief as respondents in the instant appeal (i.e., Joyce Darrow, Shirley Stevens, Rob Rephan, and Patti Kamps-Lucas). For convenience, and because of their identity of interest herein, we refer to all of the individual defendants named in the third amended complaint collectively as defendants. Where context requires, we shall reference particular individuals by name.
FACTS AND PROCEDURAL HISTORY
The Club, according to its bylaws, was organized in 1995, incorporated in 1997, and its purpose was "to encourage interest and education in all phases of home gardening and promote better horticultural practices, floral design, civic beauty, and the conservation of natural resources." In summary, the Club served to bring people together with a shared love of gardening and horticulture, to discuss ideas on that subject and learn from guest speakers, as well as to beautify the community and provide scholarships. Further, the Club was formed as a nonprofit public benefit corporation under California law, and it was qualified as an educational or charitable organization under section 501(c)(3) of title 26 of the Internal Revenue Code. The Club was highly successful and received awards and recognition for its work in beautifying the City of Bakersfield.
The Club was entirely a volunteer organization. All of the Club's directors were volunteers, and Club members voluntarily accepted various responsibilities to assist in the operation of the Club. Individual defendants who had served as directors testified that they believed they consistently acted in the best interest of the Club and carried out its purposes. Throughout its history, the Club's practice was to encourage members to attend all meetings, including board meetings, to freely give input, participate in the discussions and propose ideas.
The bylaws provided that the members of the board (i.e., directors) were the elected officers.
According to the testimony of long-term members, from the Club's earliest beginnings through the first half of 2009 (prior to the date plaintiff was installed as the Club's president), the Club consistently had a friendly, sociable and harmonious atmosphere and the members enjoyed close comradeship. During that time period, the Club flourished and enjoyed a steady increase in numbers. However, as soon as plaintiff was installed as president, in June of 2009, significant problems and discord arose, with members expressing that they felt offended, demoralized and put off by plaintiff's attitude and dictatorial manner. When plaintiff presided, the Club was no longer the same friendly and welcoming gardening club. As a result, people stopped going to meetings and there was a significant decrease in membership.
Plaintiff was elected as the Club's president in April 2009. According to the bylaws, he would have been installed in June 2009. As will be noted presently, he was removed from office by the members in September 2009.
Although the manner of plaintiff's leadership was a big issue, that was not the only thing that concerned members. The substance of many of plaintiff's remarks and proposals were also not well received. Among other things, there was evidence that plaintiff insinuated the Club's past leaders were guilty of a general failure to operate the Club properly, but he (plaintiff) announced that he would change how things were done. As one member put it, plaintiff introduced himself by effectively "insult[ing] every previous board director and officer since the entire organization existed." Among the changes plaintiff insisted on after his installation as president, two seemed to stand out: First, he wanted to stop the longstanding practice of allowing non-board members to attend and give input at the Club's board meetings, which practice he believed permitted non-board members to interject themselves into official deliberations. At one board meeting, plaintiff unilaterally decreed an executive session and threatened to call the authorities to have a member removed who was not a board member. Second, plaintiff demanded strict compliance with Robert's Rules of Order, which he viewed as broadly mandatory. In contrast to the exacting procedural standard insisted on by plaintiff, it appeared that defendants had generally conducted Club business more flexibly or less formally than what might be specified by Robert's Rules of Order, and they understood said parliamentary rulebook to have a more limited role at Club meetings than plaintiff did.
Plaintiff reportedly referred to non-board members who sought to attend the meetings as "'officious intermeddlers.'"
The bylaws provided that "Robert's Rules of Order, Newly Revised" was the parliamentary authority to govern the Club "on all points not covered by the Bylaws."
The turmoil from plaintiff's leadership style reached a boiling point on September 19, 2009, at the third monthly meeting of the Club members since plaintiff was installed as president. In the weeks prior to that meeting, a number of directors and/or members of the Club wrote to plaintiff, urging him to step down. Plaintiff did not do so, but he did submit a letter challenging the validity of the April 2009 election of officers, which ironically was the election that resulted in him becoming Club president. Plaintiff's letter was read to the members present at the September 19, 2009, meeting. One of the members proposed a motion to the membership that, in light of plaintiff's objection to the April 2009 election, the Club should reactivate the previous board members to serve until a new nominating committee could meet and a new election could be held. In other words, the motion (if passed) would replace the current board with the previous board members, thereby removing plaintiff (among others) from office. The matter was called for a vote, and the vast majority of members present at that meeting voted in favor of the motion, which resulted in the removal of plaintiff as president of the Club.
In fact, the vote was nearly unanimous. Immediately following the vote, the membership meeting reconvened with the reactivated president, Joyce Darrow, presiding, who proceeded to several items of business, including the approval of a bylaws amendment affirming that members may remove a director at any time, even without cause, by a sufficient vote at a membership meeting. We note that an existing statute already provided that such action may be taken by the members. (Corp. Code, § 5222, subd. (a).)
Thereafter, the present litigation ensued. Plaintiff's original complaint was filed on March 2, 2011. By the time the matter proceeded to trial, the operative pleading was the third amended complaint. The third amended complaint asserted both personal or direct causes of action by plaintiff as well as derivative causes of action allegedly on behalf of the Club. However, the Club was not merely named derivatively; it was sued directly as a defendant in at least two of plaintiff's personal causes of action. The purported bases for relief in the third amended complaint consisted of plaintiff's assertions that the bylaws were defective and needed fixing, and that defendants' dealings toward plaintiff breached fiduciary or contractual duties owed to plaintiff and/or to the Club. The relief sought included declaratory relief or related equitable relief, along with claims seeking the recovery or repayment of attorney fees incurred in the litigation, both for himself (on his direct causes of action) and for the Club (on the derivative claims). Other than attorney fees, no monetary relief was sought in the pleading, although at trial plaintiff testified that he thought he was also entitled to recover the value of his Club membership fees, which was between $120 and $150.
In the course of the litigation, the Club was dissolved due to insolvency, and a certificate of dissolution was issued and filed with the California Secretary of State on October 18, 2013. The Club's insolvency was asserted to be due to litigation expenses incurred as a result of having to defend plaintiff's lawsuit.
The matter was tried as a bench trial in November 2014. In lieu of closing argument, the parties submitted posttrial briefs. A final statement of decision was issued by the trial court on April 21, 2015. The statement of decision was concise, but, as will be seen, it was adequate in explaining the legal and factual basis for the trial court's judgment. The trial court explained that in light of the corporation's (i.e. the Club's) dissolution, the declaratory relief sought by plaintiff was inappropriate. Accordingly, the trial court declined to grant such relief. Further, the trial court found that the purported derivative claims were really all about plaintiff, not the corporation, as evidenced by how plaintiff pocketed settlement sums that came in from a few of the individual defendants who settled out. In any event, the trial court found that plaintiff had failed to comply with the requirements for filing a derivative action set forth in Corporations Code section 5710, noting that plaintiff "did not consult any of the Board members before filing suit and his original complaint sought $300,000 in damages." As to the direct or personal claims asserted by plaintiff, the trial court found that plaintiff failed to establish that any of defendants breached a fiduciary or contractual duty. On the latter issue, the trial court explained it was unconvinced of plaintiff's theory that the bylaws of the Club, a nonprofit organization, created a contractual cause of action in plaintiff's favor. Finally, as to the allegations that the Club improperly paid individuals' attorney fees, the trial court found as follows: "The evidence and testimony has shown that the individuals have paid their own way as far as appearance fees and attorneys' fees. In the event that they had not paid their own way, California Corporations Code, Section 5238[, subdivision ](c) allows a corporation to indemnify any person who is defending the rights of the corporation as long as the individual acted in good faith. From the facts in the present case, it appears that the Defendants were responding to the lawsuits and acting in good faith." Thus, the trial court's statement of decision disposed of all of plaintiff's causes of action, resolving them in defendants' favor.
Plaintiff moved for a new trial, which was denied by the trial court because, as explained in its minute order, the court had properly exercised its discretion in declining to issue declaratory relief concerning the meaning or propriety of the bylaws of a dissolved corporation.
A judgment for defendants was entered by the trial court. Plaintiff then filed the present appeal from the judgment.
DISCUSSION
I. Burden on Appeal
A judgment or order of a trial court is presumed to be correct on appeal, and reversible error must be affirmatively shown. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564; Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 645.) Thus, an appellant must affirmatively show prejudicial error based on adequate legal argument and citation to the record. (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 556-557; Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856; McComber v. Wells (1999) 72 Cal.App.4th 512, 522-523.) These requirements apply equally to an appellant who is acting without an attorney. (McComber v. Wells, supra, at p. 523.)
In light of the burden on appeal, when points are perfunctorily raised, without adequate analysis and authority or without citation to an adequate record, we may pass over them and treat them as abandoned. (See, e.g., Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862 [waiver of issue where lack of adequate legal or factual analysis in the appellant's brief]; Tilbury Constructors, Inc. v. State Comp. Ins. Fund (2006) 137 Cal.App.4th 466, 482; Placer County Local Agency Formation Com. v. Nevada County Local Agency Formation Com. (2006) 135 Cal.App.4th 793, 814-815; see also People v. Stanley (1995) 10 Cal.4th 764, 793 [issue raised in perfunctory manner waived]; People v. Gionis (1995) 9 Cal.4th 1196, 1214, fn. 11; People v. Turner (1994) 8 Cal.4th 137, 214, fn. 19.) Moreover, a failure to provide an adequate record on an issue requires that the issue be resolved against the appellant. (Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.) As summarized in Nielsen v. Gibson (2009) 178 Cal.App.4th 318 at page 324: "[A]n appellant must not only present an analysis of the facts and legal authority on each point made, but must also support arguments with appropriate citations to the material facts in the record. If he fails to do so, the argument is forfeited."
Finally, it is an appellant's burden to demonstrate not only that error occurred, but that it was actually prejudicial; that is, the appellant must show a reasonable probability the error affected the outcome—i.e., that a result more favorable to him or her may reasonably have been reached in the absence of the error. (Yield Dynamics, Inc. v. TEA Systems Corp., supra, 154 Cal.App.4th at p. 557; Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800; see Code Civ. Proc., § 475.)
II. No Reversible Error Shown Relating to the Club's Dissolution Status
Plaintiff's opening brief itemized his appeal into a list of enumerated issues. Issues Nos. 1 and 2 of plaintiff's appeal are substantially the same. In these two issues, plaintiff cites to the principle that, even though a corporation such as the Club has been dissolved, the corporation still exists for purposes of winding up its affairs, which would include prosecuting or defending an action, and that the dissolution does not cause such an action to abate. (See Corp. Code, § 6720 [so stating].) Plaintiff appears to argue the trial court erroneously violated the principles stated in Corporations Code section 6720.
Contrary to plaintiff's contentions, our review of the trial court's statement of decision reveals no finding that the Club was found nonexistent for purposes of conducting or defending the present action or that the action was ordered abated. Instead, we discern from the statement of decision and the record on appeal that the trial court conducted a full trial on all claims, including corporate derivative claims, received testimony and evidence, heard argument, and reached a decision on the merits. Although the reality that the corporation was in fact dissolved played a factor in the trial court's analysis of the declaratory relief claims, which matter is discussed post, that is not the same as either abating the action or failing to recognize the existence of the corporation for purposes of hearing and deciding the case. We conclude that no violation of Corporations Code section 6720 is shown. Consequently, plaintiff has failed to demonstrate that any prejudicial error or abuse of discretion occurred as a result of the fact that the corporation was dissolved.
There were one or two stray comments during the trial where the trial court mentioned the Club's dissolution and indicated that, for some purposes, it no longer existed. Nevertheless, the trial court proceeded to address all of the claims in plaintiff's third amended complaint and conducted a trial on the merits. Thus, no prejudice is shown.
III. Declaratory Relief Properly Denied
Under the heading of issues Nos. 3 and 6 in his opening brief on appeal, plaintiff contends that the trial court erred in declining to grant declaratory relief. We disagree. The declaratory relief sought in plaintiff's third amended complaint primarily concerned plaintiff's allegations that the Club's bylaws were deficient in certain respects, needed clarification, and/or did not fully comply with certain statutory requirements. The trial court concluded in substance that, in light of the Club's dissolution, declaratory relief was unnecessary or improper. We review the trial court's ruling for abuse of discretion. "[T]he court's decision to grant or deny relief will not be disturbed on appeal unless it is clearly shown its discretion was abused." (Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 974.)
The third amended complaint also mentioned injunctive relief, but plaintiff has failed to raise any claim on appeal concerning injunctive relief, which issue is abandoned and forfeited on appeal. In any event, the same facts and circumstances before the trial court would support denial of declaratory relief and injunctive relief in this case.
Declaratory relief is primarily designed to operate prospectively, rather than to redress past wrongs. (In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 804-805; Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1404; Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 59.) It operates to declare rights or duties within the context of an actual, present controversy as means of "'preventive justice,'" before obligations are repudiated, rights are invaded or wrongs are committed. (In re Tobacco Cases II, supra, at pp. 804-805.) As a result of the prospective focus of this form of relief, courts have "considerable discretion" to deny declaratory relief when resolution of the controversy "'would have little practical effect in terms of altering parties' [future] behavior.'" (Poniktera v. Seiler (2010) 181 Cal.App.4th 121, 139, following Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 648.) In such cases, declaratory relief may properly be denied in the trial court's sound discretion under Code of Civil Procedure section 1061, which allows the court "to deny declaratory relief because 'it is not necessary or proper at the time under all the circumstances.'" (Meyer v. Sprint Spectrum L.P., supra, at p. 648.)
Applying the above principles here, we conclude that the trial court properly denied declaratory relief. The alleged defects in the Club's bylaws no longer mattered in any prospective sense, because the Club had dissolved. To a significant extent, the matter had become merely an academic question, since no future conduct on the Club's part (or of its directors) would be impacted, nor any right or interest regarding the Club's prospective operations conceivably protected, by a grant of declaratory relief. On this record, plaintiff has failed to demonstrate that the trial court abused its discretion in denying declaratory relief. Instead, it is clear to us that the trial court was within its considerable discretion to deny such relief "where its declaration or determination is not necessary or proper at the time under all the circumstances." (Code Civ. Proc., § 1061.)
IV. Derivative Claims Properly Rejected
Under issue No. 3 of his appeal, plaintiff contends the trial court erred in concluding that plaintiff failed to comply with Corporations Code section 5710 in regard to its derivative claims. Corporations Code section 5710 permits members of a nonprofit public benefit corporation to maintain a derivative action if certain conditions are met. Subdivision (b) of Corporations Code section 5710 provides: "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."
To summarize, there must have been an adequate presuit demand made by the complaining party to the board, or allegations specifying the reasons for not making such a demand. (Bader v. Anderson (2009) 179 Cal.App.4th 775, 793 [applying nearly identical wording of Corp. Code, § 800, subd. (b)(2)]). The pleading must set forth the requisite facts with "particularity." (Corp. Code § 5710, subd. (b)(2).) A failure to comply with the requirements of a derivative action statute deprives the litigant of standing. (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 127.)
It has been held that the statutory requirements are not mere pleading requirements, but are also elements of plaintiff's case and subject to proof, even if the derivative allegations survive a demurrer. (See Oakland Raiders v. National Football League (2001) 93 Cal.App.4th 572, 584-585.)
Here, the trial court found that plaintiff "did not consult any of the Board members before filing suit," and it concluded that plaintiff "failed to comply with ... Corporations Code Section 5710." We agree with the trial court that plaintiff has failed to comply with the statutory prerequisites for a derivative action. The two pleadings (plaintiff's complaints) included in the record on appeal contain vague allegations to the effect that earlier versions of the complaint were served on defendants and that defendants failed to take remedial action, and further alleged that a demand letter of some sort was sent. Such generalities are patently insufficient. As noted, the statute requires that plaintiff plead with particularity (1) the presuit effort to secure from the board the action he desires or the reasons for not making such effort and (2) that plaintiff informed the corporation or the board in writing of the ultimate facts of each cause of action or delivered a true copy that he proposed to file. (Corp. Code, § 5710, subd. (b).) The trial court found that this was not done, and plaintiff has failed to demonstrate any error.
Moreover, even if we were to assume hypothetically that error occurred on this point, plaintiff has failed to demonstrate any prejudice because the finding of failure to comply with section 5710 of the Corporations Code was mentioned by the trial court as an additional or alternative ground for denial of the derivative claims. Plaintiff has not directly challenged the validity of the trial court's separate and distinct conclusion, supported by substantial evidence, that plaintiff's claims were not derivative in nature and/or were not being prosecuted as derivative claims—as was shown by the evidence of plaintiff's handling of certain settlement proceeds in a manner that solely benefitted himself.
For all of these reasons, we conclude that the trial court properly rejected plaintiff's derivative claims. Plaintiff has failed to establish any error, much less reversible error, on this issue.
V. Attorney Fees Issue Properly Resolved
As part of plaintiff's issue No. 3 on appeal, plaintiff further contends that the trial court erred in its application of Corporations Code section 5238, which section defines when individuals may be indemnified by a nonprofit public benefit corporation for litigation expenses such as attorney fees. Plaintiff's argument on this point is clearly misplaced because the trial court's ruling was that the individual defendants "paid their own way as far as appearance fees and attorneys' fees" and, thus, the indemnification statute did not come into play. (Italics added.) Moreover, the trial court's finding that defendants paid their own litigation expenses and fees was adequately supported by substantial evidence in the record. Hence, plaintiff has failed to establish any error on the issue of attorney fees.
We note that the trial court's statement of decision added, in passing, that if defendants had not paid their own way, in that event they would then have been entitled to indemnification under Corporations Code section 5238, subdivision (c), since defendants had (the court found) acted in good faith on behalf of the corporation. Obviously, because the trial court's allusion to Corporations Code section 5238 was presented as an alternative or supplemental ground, or even dicta, it does not affect the otherwise supported judgment on this issue. In any event, plaintiff has failed to establish by reference to an adequate record and cogent legal argument that defendants would not have been entitled to such indemnification. (See Nielsen v. Gibson, supra, 178 Cal.App.4th at p. 324 [failure to support issue with adequate legal and factual analysis results in forfeiture of issue on appeal].) For all of the above reasons, plaintiff has failed to demonstrate any reversible error concerning the attorney fee issue.
VI. Statement of Decision Was Adequate
Identified as issue No. 4 in his appeal, plaintiff argues that certain statements set forth in the trial court's statement of decision were too general or conclusory to satisfy the requirements of Code of Civil Procedure section 632. As more fully explained below, we disagree.
A statement of decision must provide an explanation of the factual and legal basis for the trial court's decision on each of the principal controverted issues of the case. (Code Civ. Proc., § 632.) "'A trial court rendering a statement of decision under Code of Civil Procedure section 632 is required only to state ultimate rather than evidentiary facts. A trial court is not required to make findings with regard to detailed evidentiary facts .... All that is required is an explanation of the factual and legal basis for the court's decision regarding such principal controverted issues at trial ....'" (Kazensky v. City of Merced (1998) 65 Cal.App.4th 44, 67-68.) A trial court need not address or make findings on immaterial issues, but only those actually pertinent to the court's ultimate determination. (Bandt v. Board of Retirement (2006) 136 Cal.App.4th 140, 163.) And even if a court fails to make a finding on a particular matter, "'if the judgment is otherwise supported, the omission is harmless error unless the evidence is sufficient to sustain a finding in favor of the complaining party which would have the effect of countervailing or destroying other findings.'" (Kazensky v. City of Merced, supra, at p. 68.) Generally, the statement of decision "need do no more than state the grounds upon which the judgment rests, without necessarily specifying the particular evidence considered by the trial court in reaching its decision." (Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1124-1125.)
We briefly summarize and address the particular statements in the statement of decision that plaintiff asserts were too general or conclusory. First, plaintiff argues that the trial court's statement declining to issue declaratory relief with regard to a dissolved corporation did not adequately state the trial court's legal or factual basis. Plaintiff is mistaken. The ultimate factual basis was stated (i.e., the dissolution), and the legal basis for declining relief was the trial court's understanding that it would be improper or inappropriate to grant such relief under that particular circumstance, a conclusion that we have held to be well within the trial court's considerable discretion in such matters.
The second statement challenged by plaintiff as being allegedly too conclusory was the trial court's statement that "[plaintiff's] direct claim for relief was not supported by the evidence and otherwise invalid cannot stand under California law." By isolating the above sentence from what came after it, plaintiff cuts short the trial court's analysis. In the larger discussion, this sentence was the trial court's introductory statement of its conclusion, which was followed by explanation of why plaintiff's direct claims failed. In particular, the trial court explained its rejection of plaintiff's legal theory that he was owed contractual duties under the Club's bylaws. Although dicta in some older cases had indicated that, under their particular facts, provisions of bylaws may potentially create contractual rights or obligations, the trial court expressly refused to treat the bylaws of the Club, a nonprofit Internal Revenue Code section "501(c)(3) corporation, as a contract in favor of the Plaintiff," and held that the cases cited by plaintiff were "not on point." Thus, when the challenged statement is considered in the entire context of the remainder of the trial court's analysis in its statement of decision, it is clear that the trial court adequately set forth the basis for its decision.
Scott v. Lee (1962) 208 Cal.App.2d 12 at page 14, points out that the "true holding" of such cases was simply that "the by-laws fixed the rights and duties of the corporation against and to its shareholders." It was further noted that while it was possible that parties may, as among themselves, assume a contractual obligation to comply with the bylaws of a voluntary association, that would require all of the elements of a contract to be present. (Id. at p. 15.)
No intelligible or cogent challenge is made in plaintiff's opening brief to the trial court's holding that the bylaws do not create a cause of action premised on breach of contract. Therefore, any such issue is forfeited or abandoned. (See Nielsen v. Gibson, supra, 178 Cal.App.4th at p. 324 [failure to support issue with adequate legal and factual analysis results in forfeiture of issue on appeal].)
The third purportedly conclusory statement challenged by plaintiff was the trial court's statement that "[t]he damages to [plaintiff] were simply incidental to the alleged damages to the corporation and thus did not support a direct action by [plaintiff]. Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 106." Once again, we are of the opinion that the trial court's statement was adequate. In essence, the trial court was stating an ultimate factual finding that plaintiff did not establish any damages unique to himself, as distinct from any alleged damage to the corporation. (See Kazensky v. City of Merced, supra, 65 Cal.App.4th at pp. 67-68 [court need only state ultimate facts, not evidentiary facts].) We would add that the statement was a fair and accurate assessment of plaintiff's evidence presented at trial, where plaintiff's claim of individual harm was merely an assertion that he was entitled to be a part of a properly operated corporation—that is, he expected the Club or corporation to be operated in accordance with all laws, codes, the bylaws, the articles of incorporation, etc. Thus, it would be reasonable to find (as the trial court did) that plaintiff's damages, if any, would be indistinguishable from the alleged harm to the corporation, if any. In conclusion, the statement adequately apprised the parties of the legal and ultimate factual basis for the trial court's ruling on that issue.
When pressed on the witness stand, the best plaintiff could come up with in terms of supposed individual harm was Club membership fees in the range of $120 to $150, as noted in the trial court's statement of decision.
The trial court also concluded that such damages were speculative.
The fourth purportedly conclusory statement challenged by plaintiff was the trial court's finding that defendants would have been entitled to indemnification by statute because they defended plaintiff's lawsuit brought against the corporation (and against them as directors thereof) in good faith. Defendants respond that plaintiff's contention ignores earlier portions of the trial court's statement of decision, where it was found that the directors of the Club "acted in good faith for the betterment of the Club," which finding was supported by the trial court's extensive references to testimony at trial. Defendants are correct. In any event, the particular statement under consideration is not material because the trial court did not rely on the indemnification statute, but concluded the individual defendants had paid their own appearance and attorney fees.
The fifth and sixth statements challenged by plaintiff as being too general were conclusions expressed by the trial court that the evidence demonstrated plaintiff's derivative causes of action were not actually being prosecuted as derivative claims. As in the prior challenges, plaintiff's argument isolates statements while ignoring the surrounding explanation provided by the trial court. On its face, we find the statement of decision adequately described both legal and factual reasons for the trial court's conclusion that plaintiff's derivative claims would be rejected.
As to the seventh statement attacked as conclusory by plaintiff, which found that the individual defendants "paid their own way" as far as appearance and attorney fees, the trial court's statement plainly constituted an adequately described determination of an ultimate fact. Moreover, as we have already observed above, this finding was sufficiently supported by substantial evidence at trial.
The eighth statement challenged by plaintiff was the trial court's ruling that plaintiff's evidence did not support his claim that defendants breached their fiduciary duties as directors. This statement was clearly adequate, since it informed plaintiff there was a failure to proof on that particular claim alleged by plaintiff. Thus, plaintiff was made aware of the factual and legal basis for the trial court's determination. The ninth statement attacked by plaintiff, "[i]f the Court assumed that the Plaintiff's action was derivative, all of the damages would go in to a trust for the corporation," is amply explained by the trial court's statement of decision elaborating on the nature of derivative actions. The 10th statement challenged by plaintiff was the trial court's finding that plaintiff failed to comply with Corporations Code section 5710. The trial court explained that plaintiff did not consult the board prior to filing his lawsuit. Thus, the legal and factual basis for the trial court's determination were conspicuous. Moreover, as we have explained ante, the trial court's decision that plaintiff failed to comply with Corporations Code section 5710 was adequately supported by substantial evidence in the record.
In conclusion, plaintiff's arguments challenging the adequacy of the trial court's statement of decision are entirely without merit. The grounds upon which the trial court's judgment rested were sufficiently articulated. The trial court adequately apprised the parties of the legal and factual basis for its judgment on each of the principal controverted material issues in the case.
VII. Withdrawal by Corporate Attorney Not Grounds for Reversal
Finally, submitted as plaintiff's issue No. five on appeal, plaintiff maintains that the trial court erred when it allowed an attorney defending the Club to withdraw, thereby leaving the Club without legal representation. To appreciate the situation referred to by plaintiff, we shall summarize the procedural background relating to this issue.
Apparently, after plaintiff commenced this lawsuit, attorney Katherine Fox represented the Club and a number of the individual defendants. In October 2012, Fox moved to withdraw as attorney of record. According to the register of actions, on November 6, 2012, the motion was granted to allow Fox to withdraw as attorney of record for the Club. On February 20, 2013, a substitution of attorney was filed by the Club, signed by non-attorney Stephen Lyster on the Club's behalf, confirming that Fox was no longer the Club's attorney. The substitution of attorney form did not provide that a new attorney was being substituted in, which caused the Club to be without an attorney to represent it at that time.
Individual defendants had apparently filed substitutions of attorney prior to the hearing.
On May 29, 2013, plaintiff filed a motion to set aside the substitution of attorney, arguing that the Club could not represent itself but must be represented by a licensed attorney, and Stephen Lyster was not a licensed attorney.
Fox filed opposition to the motion to set aside. Fox argued that while she agreed the corporation cannot be represented by an unlicensed attorney, that matter "can be addressed by this Court in a different setting than this Motion." She added that she had closed her practice in Kern County, and she urged that the substitution of attorney not be set aside. Stephen Lyster also filed an opposition to the motion, stating as follows: "[I] signed the Substitution of Attorney on Behalf of The Green Thumb Garden Club in good faith as the current President with majority consent of the membership. The club is broke and unable to retain an attorney to represent the now defunct and dissolving non-profit corporation. Most of the membership has since resigned their membership and other members have dwindled away as there are no funds to even provide for a meeting place. Presently, the club exists only on paper."
The trial court heard the motion to set aside the substitution of attorney on June 27, 2013. Following oral argument, the trial court denied the motion.
Plaintiff has failed to demonstrate that the trial court's ruling constituted error. It is well established that an attorney may be permitted to withdraw, even though it would leave a corporation without legal representation. "The ban on corporate self-representation does not prevent a court from granting a motion to withdraw as attorney of record, even if it leaves the corporation without representation. Such an order puts pressure on the corporation to obtain new counsel, or risk forfeiting important rights through nonrepresentation." (Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1284, fn. 5; accord, Ferruzzo v. Superior Court (1980) 104 Cal.App.3d 501, 504.) We discern no error or abuse of discretion on the trial court's part in allowing Fox to withdraw as corporate counsel under the circumstances, and none has been demonstrated by plaintiff.
Plaintiff further argues that the trial court failed to inform the parties that the corporation could not represent itself. (See Gamet v. Blanchard, supra, 91 Cal.App.4th at p. 1284, fn. 5 ["It is the duty of the trial judge to advise the representative of the corporation of the necessity to be represented by an attorney."].) Defendants disagree with plaintiff's bare assertion, stating that at the November 6, 2012 hearing on the motion to withdraw, the trial court did advise Lyster that an attorney was needed to represent the corporation. Moreover, as correctly pointed out by defendants, plaintiff has not furnished this court with the transcripts of the hearings on either (1) the motion to withdraw as attorney of record for the Club or (2) plaintiff's motion to set aside the substitution of attorney for the corporation. This means that plaintiff has failed to provide an adequate appellate record on this issue, as was his burden as appellant. Accordingly, the issue must be resolved against plaintiff. (Hernandez v. California Hospital Medical Center, supra, 78 Cal.App.4th at p. 502.)
Additionally, the trial court informed the parties at the trial that a corporation such as the Club must be represented by an attorney in court. Indeed, the same principles were set forth in plaintiff's motion to set aside the substitution of attorney. --------
Finally, even if error hypothetically occurred, plaintiff has not demonstrated any prejudice. Plaintiff had a full and fair opportunity to have his entire case heard on the merits. He had his day in court and lost, altogether failing to prove any entitlement to relief. On the record before us, there is no reason to believe that said judicial outcome had anything to do with whether or not the Club had an attorney representing it.
DISPOSITION
The judgment of the trial court is affirmed. Costs on appeal are awarded to defendants and respondents Joyce Darrow, Shirley Stevens, Rob Rephan and Patti Kamps-Lucas.
/s/_________
KANE, J. WE CONCUR: /s/_________
LEVY, Acting P.J. /s/_________
GOMES, J.