Opinion
E051513 Super.Ct.No. INCR376768
01-19-2012
GLENN VERDULT, Plaintiff and Appellant, v. ANGEL ARCHER ESTATE JEWELERS et al., Defendants and Respondents.
Weiner Law Office and Bruce S. Weiner for Plaintiff and Appellant. Donald R. Holben & Associates, Daniel M. Dire and Donald R. Holben for Defendant and Respondent F. J. Kashi, Inc. No appearance for Defendant and Respondent Angel Archer Estate Jewelers.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from the Superior Court of Riverside County. Kenneth Andreen (retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.), and Harold W. Hopp, Judges. Affirmed.
Judge Andreen conducted the trial and entered the court's tentative decision; Judge Hopp signed the judgment.
Weiner Law Office and Bruce S. Weiner for Plaintiff and Appellant.
Donald R. Holben & Associates, Daniel M. Dire and Donald R. Holben for Defendant and Respondent F. J. Kashi, Inc.
No appearance for Defendant and Respondent Angel Archer Estate Jewelers.
Plaintiff and appellant Glenn Verdult, owner of Winston's Newport Jewelers, initiated this action for imposition of a constructive trust on a diamond against Angel Archer Estate Jewelers (Angel Archer) and F.J. Kashi, Inc. (Kashi). Plaintiff was second in a line of a fraud committed by Scott Wayne Simmons. Simmons fraudulently stole the diamond from Angel Archer (who had it on consignment from Kashi) by purchasing it with a bad check and then pawning it to plaintiff for $40,000. Simmons was apprehended by law enforcement and the diamond was seized. Ultimately, the diamond was released by court order to Angel Archer. The release order was later reversed by this court (People v. Simmons (June 11, 2003, E031618) [nonpub. opn.]); however, Angel Archer had already returned the diamond to Kashi, who had sold it to a third person. Following a court trial on plaintiff's action, judgment was entered in favor of Angel Archer and Kashi. Plaintiff appeals, contending: (1) Angel Archer and Kashi are liable to plaintiff for conversion; (2) Angel Archer and Kashi are collaterally estopped from challenging plaintiff's ownership of the diamond; (3) plaintiff did not need to file a bond to perfect the appeal; and (4) the trial court erred in assessing the value of the diamond.
I. PROCEDURAL BACKGROUND AND FACTS
In late February or early March 2002, Kashi consigned a 15-carat diamond to Angel Archer. On March 1, Simmons acquired the diamond from Angel Archer with a personal check in the amount of $70,000, which was later dishonored. On March 4, Simmons sold the diamond to plaintiff, receiving a $40,000 cashier's check in a pawn transaction. On March 19, the Riverside County Sheriff's Department retrieved the diamond via a search warrant.
On or about March 29, 2002, the People petitioned the court to release the property (the diamond) seized on March 14. The motion for release was sent to plaintiff, Angel Archer, and Cheryl Coleman. Plaintiff and Angel Archer each filed responses to the release motion claiming they were respectively entitled to the diamond. There is no evidence in the record that Kashi was ever served with the motion, nor is there any evidence that he responded to the motion. On May 3, 2002, the court held an evidentiary hearing and ordered that the diamond be released to Coleman, dba Angel Archer.
Immediately thereafter, plaintiff appealed the release order. The diamond was released by the Riverside County Sheriff's Department to Angel Archer, who then returned it to Kashi on May 8, 2002. Kashi thereafter sold the diamond to a third party. Plaintiff did not seek a stay of the release order either at the trial level or on appeal. Instead, on June 14, 2002, plaintiff initiated this action alleging negligence for "wrongful retention of personal property" against Angel Archer and Kashi. (Capitalization omitted.)
Nearly one year later, on June 11, 2003, this court issued its opinion (People v. Simmons, supra, E031618) reversing the order for release of the diamond and remanding the matter to the trial court for a determination as to whether plaintiff was a good faith purchaser for value. On remand, the trial court (Judge Thomas N. Douglass) held a further hearing in which it found that plaintiff was a good faith purchaser for value and directed the diamond be provided to plaintiff. Kashi was not a party at this further hearing, although plaintiff had named Kashi in the civil action. Also, there is nothing in the record before this court showing that plaintiff sought to join Kashi in the further release hearing. By the time of this hearing, June 18, 2004, over two years after the original release proceeding on May 3, 2002, the diamond had been released to Angel Archer, returned to Kashi, and sold.
On August 24, 2005, plaintiff filed a first amended complaint seeking imposition of a constructive trust on the property. Kashi responded by filing an answer. The matter proceeded to a court trial (Judge Andreen) on October 20, 2008. Although both sides stipulated to most of the facts, there were two issues of fact that were contested and as to which plaintiff presented testimony. The first factual issue was whether Kashi had notice of plaintiff's claim to the diamond at the time he sold it. Plaintiff argued that by virtue of Attorney Morton Gollin's representation, Kashi had notice of the release proceeding and appeal, such that Kashi was bound to the ultimate order in 2004 entitling plaintiff with possession of the diamond. The second factual issue was the value of the diamond. Plaintiff offered his opinion of the value of the diamond.
After taking the matter under submission, the trial court (Judge Andreen) issued a tentative decision. The court found that the diamond, by order of the court, was released to Angel Archer, who returned it to Kashi; plaintiff did not request a stay of the order and then filed an appeal without filing an undertaking (Code of Civ. Proc., § 917.2); the diamond was returned to Kashi, who sold it prior to the appellate court reversal of the release order and subsequent finding by the trial court that plaintiff was a good faith purchaser; Kashi did not obtain the diamond by fraud, accident or other wrongful act; Gollin did not represent Kashi; and the value of the diamond in 2002 was $40,000. Finding no conversion of the diamond, the court (Judge Andreen) announced its tentative decision on October 27, 2008; however, judgment was not entered until February 26, 2010, and was in favor of Angel Archer and Kashi, awarding them costs.
All further statutory references are to the Code of Civil Procedure unless otherwise noted.
The judgment was signed by Judge Hopp.
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Plaintiff appeals, contending: (1) Angel Archer and Kashi are liable to plaintiff for conversion; (2) Angel Archer and Kashi are collaterally estopped from challenging plaintiff's ownership of the diamond; (3) plaintiff did not need to file a bond to perfect the appeal; and (4) the trial court erred in assessing the value of the diamond.
II. STANDARD OF REVIEW
We conduct a substantial evidence review of the trial court's factual findings: "'A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.' [Citation.] 'Under the substantial evidence standard of review, our review begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the trial court's factual determinations. . . . Substantial evidence is evidence of ponderable legal significance, reasonable in nature, credible, and of solid value. . . . The substantial evidence standard of review applies to both express and implied findings of fact made by the court in its statement of decision.' [Citation.]" (Monks v. City of Rancho Palos Verdes (2008) 167 Cal.App.4th 263, 295.) Otherwise, we review de novo questions of law and the application of law to the facts. (Ibid.; Gagan v. Gouyd (1999) 73 Cal.App.4th 835, 839 [Fourth Dist., Div. Two], disapproved on other grounds in Mejia v. Reed (2003) 31 Cal.4th 657, 669, fn. 2.)
III. CONVERSION
Plaintiff contends the trial court erred in finding that Angel Archer and Kashi were not liable for conversion, arguing they knew about plaintiff's claim as owner of the diamond.
"The essence of conversion is 'the wrongful exercise of dominion over the personal property of another.' [Citation.] 'The basic elements of the tort are (1) the plaintiff's ownership or right to possession of personal property; (2) the defendant's disposition of the property in a manner that is inconsistent with the plaintiff's property rights; and (3) resulting damages.' [Citation.] In order to state a claim for conversion, the plaintiff must identify some property in which he had property rights with which the defendant could, and did, interfere." (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, 238, italics omitted, disapproved on other grounds in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337.)
The key words in the above paragraph are "'wrongful exercise of dominion over the personal property of another.'" Plaintiff's complaint alleged that Angel Archer and Kashi "willfully exercised . . . wrongful dominion over the personal property of plaintiff. [¶] . . . [And, Angel Archer and Kashi] hold [the] property in constructive trust for plaintiff, it[]s lawful owner." According to plaintiff, Kashi knew, or should have known, about plaintiff's claim to the diamond by virtue of Angel Archer's knowledge. However, "'[a] constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. [Citations.] The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. [Citations.]' [Citations.] Before a constructive trust can be imposed, the plaintiff must prove that the defendant's acquisition of the property was wrongful. [Citation.]" (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398.)
Here, Simmons fraudulently obtained the diamond from Angel Archer and then fraudulently sold it to plaintiff. After the diamond was seized by law enforcement, a court having jurisdiction ordered it delivered to Angel Archer, who returned it to Kashi. At this time, plaintiff had no possessory interest in the diamond. Moreover, plaintiff failed to take any immediate action to stay the delivery of the diamond pending challenge to the release order. There was no fraud, accident or other wrongful act on Angel Archer's or Kashi's part to acquire the diamond. (Civ. Code, § 2224.) Accordingly, we, like the trial court, conclude that it was neither fraudulent nor wrongful for Angel Archer to take the diamond pursuant to the court order and then return it to Kashi, who likewise did nothing fraudulent or wrongful in accepting it. Substantial evidence supports the court's ruling against plaintiff on the conversion claim.
IV. COLLATERAL ESTOPPEL
Plaintiff argues that Angel Archer and Kashi are collaterally estopped from challenging plaintiff's ownership of the diamond. Because Angel Archer was a party to the relevant action, which determined ownership of the diamond, the issue is conclusively determined. Thus, we limit our analysis to application of the doctrine to Kashi.
"Collateral estoppel precludes relitigation of issues argued and decided in prior proceedings. [Citation.]" (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 (Lucido), fn. omitted.) It may also be applied to prevent relitigation of a legal theory or factual matter which could have been but was not asserted in support of or in opposition to an issue which was litigated. (Sutphin v. Speik (1940) 15 Cal.2d 195, 202.) Collateral estoppel applies not only to the actual parties to the prior litigation but also to those in privity with them. (Lucido, supra, at p. 341.) Plaintiff contends that Kashi is "'sufficiently close' and/or in privity, being the 'actual owner' of the diamond before Simmons purchased it, and being the successor in interest to possession of the diamond once it received it from Angel Archer on May 8, 2002."
In the context of collateral estoppel, the concept of privity generally refers "'to a mutual or successive relationship to the same rights of property, or to such an identification in interest of one person with another as to represent the same legal rights [citations] and, more recently, to a relationship between the party to be estopped and the unsuccessful party in the prior litigation which is "sufficiently close" so as to justify application of the doctrine of collateral estoppel. [Citations.]' [Citations.]" (Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn. (1998) 60 Cal.App.4th 1053, 1069-1070 (Citizens for Open Access).)For purposes of collateral estoppel, the determination that a party is in privity with another is fundamentally a policy decision. (Gikas v. Zolin (1993) 6 Cal.4th 841, 849.) Stated differently, the fact that a party is in privity with another is not in itself sufficient to warrant application of the doctrine. Collateral estoppel is an equitable concept based on fundamental principles of fairness. (Sandoval v. Superior Court (1983) 140 Cal.App.3d 932, 942.) Even if all of the threshold requirements are met, "the public policies underlying collateral estoppel—preservation of the integrity of the judicial system, promotion of judicial economy, and protection of litigants from harassment by vexatious litigation-strongly influence whether its application in a particular circumstance would be fair to the parties and constitutes sound judicial policy. [Citation.]" (Lucido, supra, 51 Cal.3d at p. 343.) The doctrine will not be applied if its application would not serve its underlying fundamental principles. (Gikas v. Zolin, supra, at p. 849.)
Here, policy considerations override Kashi's status as privy of Angel Archer. Kashi was not noticed in connection with the release motion filed by the People. Kashi made no appearance and filed no documents in that proceeding. Plaintiff did not seek to join Kashi in the proceeding, either at the trial level or on appeal. There was no evidence presented at trial that Kashi had any type of contact with or control over Angel Archer in the release proceeding. While there was an issue as to whether Attorney Gollin, who had represented Angel Archer, was also representing Kashi, the evidence confirmed that Gollin was never retained or paid by Kashi. For these reasons, we conclude the doctrine of collateral estoppel does not apply to bind Kashi to the court's ruling as to Angel Archer in the release proceeding.
V. NECESSITY OF FILING A BOND ON APPEAL
Plaintiff faults the trial court for ruling that plaintiff erred in not requesting the trial court to stay the order until an appeal was filed, and then not filing a bond on appeal.
Section 917.2, in relevant part, provides, "The perfecting of an appeal shall not stay enforcement of the . . . order of the trial court if the . . . order appealed from directs the assignment or delivery of personal property . . . whether by the appellant or another party to the action . . . unless an undertaking in a sum and upon conditions fixed by the trial court, is given that the appellant or party ordered to assign or deliver the property will obey and satisfy the order of the reviewing court, and will not commit or suffer to be committed any damage to the property, and that if the . . . order appealed from is affirmed, or the appeal is withdrawn or dismissed, the appellant shall pay the damage suffered to such property and the value of the use of such property for the period of the delay caused by the appeal. The appellant may cause the property to be placed in the custody of an officer designated by the court to abide the order of the reviewing court, and such fact shall be considered by the court in fixing the amount of the undertaking. . . ."
Clearly, merely filing an appeal did not stay the order releasing the diamond to Angel Archer. Rather, plaintiff should have complied with section 917.2 and obtained an undertaking to stay delivery of the diamond. Plaintiff disagrees, arguing that, because plaintiff was not in possession of the diamond, section 917.2 does not apply. (Baar v. Smith (1927) 201 Cal. 87, 103 (Baar).)However, "Baar was decided in 1927 under former section 943, from which section 917.2 was in part derived. [Citation.] Former section 943 then provided in part: 'If the judgment or order appealed from direct the assignment or delivery of documents or personal property, the execution of the judgment or order cannot be stayed by appeal, unless the things required to be assigned or delivered be placed in the custody of such officer or receiver as the court may appoint, or unless an undertaking be entered into on the part of the appellant, with at least two sureties, and in such amount as the court, or a judge thereof, may direct, to the effect that the appellant will obey the order of the appellate court upon the appeal.' [Citations.] In Baar, the petitioner was not in possession of the property she was ordered to deliver. [Citations.]" (In re Ringgold (2006) 142 Cal.App.4th 1001, 1010.) Because Baar was decided prior to section 917.2, we find plaintiff's reliance on it misplaced.
Section 917.2 requires an undertaking to perfect an appeal. Plaintiff's failure to comply with this requirement resulted in no automatic stay being issued.
VI. VALUE OF THE DIAMOND
Finally, plaintiff contends the trial court erred in assessing the value of the diamond. However, because we have rejected each of plaintiff's challenges to the judgment, this issue is moot.
VII. DISPOSITION
The judgment is affirmed. Defendant and respondent Kashi to recover its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
HOLLENHORST
J.
We concur:
RAMIREZ
P.J.
MCKINSTER
J.