Opinion
A103777.
11-19-2003
PACIFIC REGION OF OPEN BIBLE STANDARD CHURCHES, Petitioner, v. THE SUPERIOR COURT OF CONTRA COSTA COUNTY, Respondent; CONCORD CHRISTIAN CENTER et al., Real Parties in Interest.
Petitioner Pacific Region of Open Bible Standard Churches (Pacific Region) seeks a writ of mandate directing the trial court to require real parties in interest Concord Christian Center (Concord Christian) and Lloyd Mashore (Mashore) to give an undertaking to stay execution of the judgment on appeal in Concord Christian Center et al. v. Open Bible Standard Churches et al., Case No. A102858. Pacific Region contends that a judgment directing the delivery of personal and real property, such as the judgment at issue here, is not stayed by the perfecting of an appeal unless an undertaking in a sum fixed by the trial court is given. We agree and, accordingly, grant the petition for writ of mandate.
FACTUAL AND PROCEDURAL BACKGROUND
The action below arises from a May 2001 attempt by real party in interest Concord Christian, a California nonprofit religious corporation, to secede from Open Bible Standard Churches (OBSC), a hierarchical church with which Concord Christian has been affiliated since 1953. In response to Concord Christians attempt to secede, OBSC and its regional governing agency, petitioner Pacific Region, refused to recognize the disaffiliation, suspended and ultimately revoked the ministerial credentials of Concord Christians pastor, real party in interest Mashore, and imposed direct regional supervision by Pacific Region over Concord Christian.
Concord Christian is a small congregation described as having just 18 active members as of March 2001. Despite Concord Christians small membership, it controls valuable assets. According to Concord Christians complaint, in 1982 it purchased a former public elementary school on ten acres of land in Concord. Concord Christians church is located on this property, as are the Kings Valley Preschool and Kings Valley Christian School, which are owned and operated by Concord Christian. During the 2000-2001 school year, over 600 students were enrolled in the two schools. The annual revenue from the schools approaches $ 3 million.
In July 2001, Concord Christian filed a complaint against OBSC and Pacific Region seeking declaratory relief and a permanent injunction. In its cause of action for declaratory relief, Concord Christian sought a judicial determination concerning, among other things, whether the vote of its members to sever Concord Christians affiliation with OBSC was valid and whether OBSC has any right to possess and exclude Concord Christians current board members from Concord Christians facilities. Pacific Region filed a cross-complaint against Concord Christian and Mashore seeking a declaration that the attempt by Concord Christian to disaffiliate was ineffective and an order giving possession and use of the property to which Concord Christian held title to a board of directors designated by Pacific Region.
A court trial commenced in July 2002, and the matter was argued and submitted on August 9, 2002. On March 24, 2003, the trial court filed its statement of decision. In relevant part, the trial court ruled that the attempt by Concord Christian to disaffiliate from OBSC was ineffective, that the imposition of regional supervision by Pacific Region was proper, and that Pacific Regions board of directors had assumed control and possession of Concord Christian and its assets. The trial court entered judgment on May 7, 2003. The judgment states, in pertinent part, that "[a]ll assets of Concord Christian, including but not limited to Kings Valley Christian School, are subject to the control and direction of its current officers and Board of Directors and a writ of possession in favor of Pacific Region shall issue immediately upon application for same."
Concord Christians "current" board of directors is Pacific Regions board of directors, which according to the judgment has been the board of directors of Concord Christian since June 15, 2001. Notwithstanding the characterization of Pacific Regions board of directors as the "current" board of directors, Mashore and his putative board of directors (described in the judgment as the "previous" board and officers) remain in control of Concord Christian.
Concord Christian and Mashore filed a notice of appeal from the judgment on June 7, 2003. The appeal is currently pending before Division Three of this court in Concord Christian Center et al. v. Open Bible Standard Churches et al., Case No. A102858. In addition to filing a notice of appeal, Concord Christian and Mashore filed a "notice of stay" in the trial court, purporting to give notice that further trial court proceedings are automatically stayed by virtue of the filing of the notice of appeal. Mashore and his putative board of directors, not the Pacific Region board of directors, continue to control and utilize the assets of Concord Christian.
On June 19, 2003, Pacific Region applied for and the clerk of the trial court issued a writ of possession in favor of Pacific Region for the real property owned by Concord Christian, in accordance with the judgment. Before Pacific Region could serve the writ of possession and execute on the judgment, the trial court stayed enforcement of the judgment on its own motion on June 26, 2003, permitting Concord Christian and Mashore to file a motion regarding a stay of enforcement pending appeal. On June 30, 2003, real parties in interest filed a motion seeking to confirm an automatic stay pending appeal, or in the alternative setting conditions for the stay pending appeal. Pacific Region opposed the motion, contending there is no automatic stay of the judgment on appeal. Rather, according to Pacific Region, under Code of Civil Procedure sections 917.2 and 917.4, which govern stays of judgments directing the delivery of personal and real property, respectively, enforcement of the judgment is not stayed unless real parties in interest post an undertaking in an amount fixed by the trial court.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
During oral argument on the motion, the trial court expressed its disagreement with Pacific Regions contention that an undertaking is required: "I think that while certainly the — there is real property whose control is ultimately determined by the judgment, the ultimate issue here is the control of the board of directors of the corporation as opposed to direct control of the property. [¶] That the effect of judgment is to give the Pacific Region indirect control of the property through its control of the Board of Directors of Concord Christian, rather than direct control of the property as a separate entity. And therefore I do not agree that a monetary bond, at least, is mandatory in this instance."
The trial court issued an order on the motion of real parties in interest on August 13, 2003, ruling that enforcement of the judgment be stayed pending appeal, subject to compliance by Mashore and his putative board of directors with certain accounting and other conditions. The conditions include, among other things, a prohibition against selling or committing waste with respect to the assets of Concord Christian, a prohibition against changing salaries or expense reimbursements for employees of Concord Christian without the courts prior approval, and a requirement that Concord Christian provide a court-appointed accountant with monthly financial reports as well as full access to all financial records of Concord Christian. The trial courts order does not require real parties in interest to give an undertaking as a condition for staying enforcement of the judgment pending resolution of the appeal.
Pacific Region thereafter filed this petition, seeking a writ directing the trial court to modify its August 13, 2003 order to require and fix the amount of an undertaking to stay execution of the judgment pending appeal. We requested opposition from real parties in interest and advised the parties we might issue a peremptory writ in the first instance if circumstances warranted.
DISCUSSION
A writ of mandate "must be issued in all cases where there is not a plain, speedy, and adequate remedy, in the ordinary course of law." (Code Civ. Proc., § 1086.) As Pacific Region acknowledges, the trial courts August 13, 2003 order is appealable under section 904.1, subdivision (a)(2), as an order made by the trial court after an appealable judgment. Ordinarily, the existence of the remedy of appeal is considered an adequate remedy at law. (Citizens for Responsible Behavior v. Superior Court (1991) 1 Cal.App.4th 1013, 1021, fn. 3.) However, an appeal does not afford an adequate remedy for a defective stay pending an appeal. (Cf. Hinkel v. Crowson (1920) 182 Cal. 68, 69 [remedy for trial courts alleged error in fixing amount of appeal bond is by writ of mandate].) Accordingly, we exercise our discretion to review the matter by way of writ proceeding due to the need for a speedy resolution of this issue. (See Citizens for Responsible Behavior v. Superior Court, supra, 1 Cal.App.4th at p. 1021, fn. 3.)
The question presented by this writ petition is whether real parties in interest must give an undertaking in order to stay enforcement of that portion of the judgment directing issuance of a writ of possession. The answer is found in sections 917.2 and 917.4, which concern stays of judgments directing the delivery of personal property and real property, respectively. Section 917.4 provides in relevant part that "[t]he perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order appealed from directs the sale, conveyance or delivery of possession of real property which is in the possession or control of the appellant unless an undertaking in a sum fixed by the trial court is given." (Italics added.) Similarly, section 917.2 provides that the perfecting of an appeal shall not stay enforcement of a judgment directing the delivery of personal property unless the appellant in possession of the property gives an undertaking in a sum fixed by the trial court.
A statutes plain language controls its construction and application. (See Kobzoff v. Los Angeles County Harbor/UCLA Medical Center (1998) 19 Cal.4th 851, 861 [a "statutes plain meaning controls the courts interpretation unless its words are ambiguous"].) The plain language of sections 917.2 and 917.4 specifies that the trial court "shall not" stay enforcement of a judgment to which section 917.2 or section 917.4 applies unless an undertaking is given. It is well settled that the word "shall" is usually construed as a mandatory term. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 443.) Likewise, when a statute indicates that some act "shall not" be done unless certain conditions are satisfied, the trial court lacks discretion to avoid the statutory prohibition. (See Los Angeles County Dept. of Children & Fam. Services v. Superior Court (2001) 87 Cal.App.4th 1161, 1166.) Therefore, in cases where section 917.2 or section 917.4 applies, the trial court does not have discretion to stay the judgment pending appeal without requiring an undertaking in a sum fixed by the court. The trial court does, however, have discretion to fix the amount of the undertaking.
The judgment in this case falls under sections 917.2 and 917.4 because it directs the issuance of a writ of possession in favor of Pacific Region for all of the assets of Concord Christian. The writ of possession has the effect of directing Concord Christian to deliver possession of all its assets, including all of its personal property and real property, to Pacific Region. Accordingly, the trial court must require and fix the amount of an undertaking in compliance with sections 917.2 and 917.4.
Real parties in interest dispute the applicability of sections 917.2 and 917.4, contending that the judgment does not order Concord Christian to sell or dispose of any of its real or personal property. Instead, according to real parties in interest, a fair reading of the entire judgment suggests that the only thing the judgment changes is the identity of the board of directors. Relying primarily on DeGarmo v. Goldman (1942) 19 Cal.2d 755, they argue that the judgment is automatically stayed by the perfection of an appeal because the judgment merely effects a change in corporate control.
It is undisputed the judgment effects a change in corporate control, but the judgment also directs delivery of possession of the real and personal property of Concord Christian to Pacific Region. By contrast, in DeGarmo v. Goldman, supra, the judgment did not direct delivery of possession of the corporations assets to the prevailing party. (See DeGarmo v. Goldman, supra, 19 Cal.2d at pp. 759, 767-768.) Consequently, the statutory predecessors of sections 917.2 and 917.4 were not implicated by the judgment, and there was no requirement of an undertaking to secure a stay pending appeal. Furthermore, it is immaterial that Concord Christian will retain title to and ownership of its assets. Sections 917.2 and 917.4 apply when a judgment directs a change in possession or ownership of property. (See § 917.4 [undertaking required when judgment directs the "sale, conveyance or delivery of possession of real property."].)
Sections 917.2 and 917.4 were added to the Code of Civil Procedure by 1968 legislation.
Real parties in interest also contend that the requirement of an undertaking must be determined according to the judgments "intent and central holding." We disagree to the extent real parties in interest suggest the trial court can ignore that portion of the judgment directing delivery of possession of Concord Christians assets to Pacific Region. Section 917.6 provides that "[t]he perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order appealed from directs the performance of two or more of the acts specified in Sections 917.1 through 917.5, unless the appellant complies with the requirements of each applicable section." Therefore, an appellant must comply with all applicable stay statutes implicated by a judgment, not just those implicated by the judgments central holding.
Real parties in interest cite Freeman v. Donohoe (1922) 188 Cal. 170 (Freeman), for the proposition that a judgments intent and central holding dictate whether an undertaking is required. In Freeman, the issue was not whether an automatic stay applied to the entire judgment, but instead whether the appellant was required to provide a separate and additional undertaking with respect to a portion of the judgment directing payment of a sum of money even though the appellant had already provided an undertaking with respect to a portion of the judgment directing the sale of property. (Id. at pp. 173-174.) To the extent the holding in Freeman has any application beyond its unique set of facts, the case has questionable precedential value because it predates the enactment of section 917.6, which mandates compliance with all stay statutes implicated by a judgment.
Finally, real parties in interest ask this court to treat its opposition to Pacific Regions writ petition as a petition for a writ of supersedeas because they might not have the resources to post a large undertaking. (See Cal. Rules of Court, rule 49.) We decline to treat the opposition brief filed by real parties in interest as a petition for a writ of supersedeas. Until the trial court has set the amount of the undertaking, we cannot consider whether real parties in interest would suffer irreparable harm absent supersedeas relief.
We have reached our decision after notice to all parties that we might act by issuing a peremptory writ in the first instance and after considering the opposition from real parties in interest. (Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 180.) Petitioners right to relief is obvious and no purpose would reasonably be served by plenary consideration of this issue. (Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1241.)
DISPOSITION
Let a peremptory writ of mandate issue directing respondent court to modify its order of August 13, 2003, and provide that enforcement of the judgment shall not be stayed pending resolution of the appeal unless real parties in interest give an undertaking in an amount to be fixed by the trial court pursuant to sections 917.2 and 917.4. In order to prevent frustration of the relief granted, and due to the need for a speedy resolution of this issue, our decision is final immediately as to this court. (Cal. Rules of Court, rule 24(b)(3).) Petitioner shall recover the costs it incurred in this writ proceeding. (Cal. Rules of Court, rule 56.4(a).)
We concur: Corrigan, J., Pollak, J.