Opinion
B232076
01-25-2012
WAT KHMER VIPASSANARAM et al., Plaintiffs and Appellants, v. DAVID J. PASTERNAK et al., Defendants and Respondents.
Law Offices of Stroud & Do, Van T. Do and James T. Stroud for Plaintiffs and Appellants. Pasternak, Pasternak & Patton and John W. Patton, Jr., for Respondent David J. Pasternak. Scott Lee Shabel, in pro. per., for Respondent Scott Lee Shabel.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC427291)
APPEAL from a judgment of the Superior Court of Los Angeles County, Luis A. Lavin, Judge. Affirmed.
Law Offices of Stroud & Do, Van T. Do and James T. Stroud for Plaintiffs and Appellants.
Pasternak, Pasternak & Patton and John W. Patton, Jr., for Respondent David J. Pasternak.
Scott Lee Shabel, in pro. per., for Respondent Scott Lee Shabel.
INTRODUCTION
This case is part of a long-running dispute regarding the composition of the Board of Directors of Khmer Buddhist Association (KBA). In the first of two prior related appeals, we concluded that an oral stipulation between the parties was not enforceable under Code of Civil Procedure section 664.6. (Khmer Buddhist Association v. Sar (Aug. 27, 2009) B208846, opn. modified Sept. 21, 2009 [nonpub. opn.] (KBA v. Sar).)We therefore reversed the trial court's order entering the stipulation as an enforceable order and reversed an order of the trial court appointing David J. Pasternak as receiver to enforce the stipulation. We instructed the trial court to supervise the termination of the receivership upon issuance of the remittitur.
All undesignated statutory references are to the Code of Civil Procedure.
The trial court followed our instructions, approving the receiver's final report and account and authorizing the receiver to pay his fees and costs from the receivership estate, over the objection of KBA and Siphann Tith, who appealed from the court's order. We affirmed the trial court's order and, as pertinent here, rejected the arguments that our reversal of the order appointing the receiver rendered the appointment void ab initio and that the appellants were entitled to restitution under section 908. (Khmer Buddhist Association v. Pasternak (Oct. 24, 2011) B228019 [nonpub. opn.] (KBA v. Pasternak).)
Following the issuance of the remittitur in the first appeal, but before our decision in the second appeal, Tith and Wat Khmer Vipassanaram (WKV) (collectively appellants) filed a complaint against Pasternak and Scott Lee Shabel (collectively respondents), based primarily on Pasternak's actions as receiver in taking control of KBA's assets pursuant to the trial court's orders. The trial court sustained without leave to amend respondents' demurrers to the complaint. Appellants now challenge the judgment entered following the trial court's order. We conclude that the trial court did not err and therefore affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The underlying facts are not pertinent to this appeal and therefore are set forth only as needed to understand this opinion.
In February 2008, KBA and nine individuals claiming to be the duly appointed or elected directors of KBA filed a complaint seeking, inter alia, a judicial determination as to who was entitled to be a director of KBA. Shabel, an attorney, appeared on behalf of Larry Sar, one of the named defendants in the underlying complaint. Following numerous hearings, the trial court entered an order pursuant to an oral stipulation and entered another order appointing Pasternak as receiver to enforce the stipulation. We reversed both orders and instructed the trial court to terminate the receivership upon the filing of the remittitur by issuing appropriate instructions, including instructions regarding the receiver's final account and report pursuant to California Rules of Court, rule 3.1184. (KBA v. Sar, supra, B208846.)
In June 2008, in the midst of the dispute and before the prior appeals were decided, Tith formed another religious association, WKV, and purportedly transferred the assets of KBA to WKV. However, Tith subsequently was jailed for contempt of court for refusing to turn over KBA's assets to the receiver. In October 2008, appellants turned over KBA's records and assets to the receiver.
In December 2009, appellants filed a complaint against respondents and numerous unnamed defendants. Following numerous filings, in November 2010, appellants filed a Second Amended Complaint (the complaint), which is the operative pleading in this appeal. Appellants alleged causes of action for conversion, restitution, trespass, intentional infliction of emotional distress, negligent infliction of emotional distress, abuse of process, and unjust enrichment.
The claims were supported by the following allegations. The trial court's appointment of a receiver on July 2, 2008, was null and void pursuant to our opinion in KBA v. Sar, supra, B208846. Prior to the allegedly void appointment of the receiver, KBA's "legitimate" Board of Directors transferred KBA's assets to WKV as part of KBA's process of enlightenment pursuant to Buddhist doctrine, seeking a "different plane of existence" without worldly possessions. The receiver did not have authority to seek contempt charges against Tith for refusing to turn over the assets of KBA because Tith was merely following his religious principles. The receiver and the superior court did not have jurisdiction over WKV's property because WKV was not a party in the prior case, and WKV accepted the donation of KBA's assets in accordance with Internal Revenue Service regulations. On October 31, 2008, the receiver took control of $310,000 that belonged to WKV. From November 2008 through August 2009, the receiver paid himself approximately $220,000 in fees from money belonging to WKV. On March 11, 2009, the receiver transferred $50,000 to KBA and Sar, who transferred it to Shabel. The receiver or his agents trespassed on WKV's property, and the receiver caused Tith to be wrongfully incarcerated despite his knowledge that his appointment as receiver was null and void.
Shabel filed a demurrer to the complaint as to the two causes of action against him: the third (conversion) and ninth (for unjust enrichment). Shabel argued that our opinion in KBA v. Sar, supra, B208846, did not mean that the appointment of the receiver was void ab initio and that the trial court authorized the $50,000 payment to KBA in an order on March 11, 2009.
Pasternak filed a demurrer to the complaint as to all the causes of action against him: the first (conversion), second (restitution), fifth (trespass), sixth (intentional infliction of emotional distress), seventh (negligent infliction of emotional distress), eighth (abuse of process), and ninth (unjust enrichment). Pasternak argued that all of his actions as receiver were pursuant to court order and that derivative judicial immunity protects a court-appointed receiver from liability. He further argued that a lawsuit against a receiver is prohibited unless the claimant obtains permission from the court. (See Vitug v. Griffin (1989) 214 Cal.App.3d 488, 493; McCarthy v. Poulsen (1985) 173 Cal.App.3d 1212, 1219.)
The trial court held a hearing, at which appellants argued that our opinion in KBA v. Sar, supra, B208846, meant that the appointment of the receiver was void for lack of jurisdiction. The court disagreed, reasoning that the opinion indicated that the receivership was in existence and needed to be terminated by the trial court. The court further reasoned that appellants should have raised their concerns with the receivership when the receiver initially was appointed. The court thus sustained both respondents' demurrers without leave to amend and entered an order of dismissal and judgment in favor of respondents. Appellants filed a timely notice of appeal.
DISCUSSION
"'"'On appeal from an order of dismissal after an order sustaining a demurrer, our standard of review is de novo, i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.'"' [Citation.] In reviewing the complaint, we must assume the truth of all facts properly pleaded by the plaintiff and matters properly judicially noticed. [Citation.] However, we 'do not assume the truth of contentions, deductions, or conclusions of fact or law and may disregard allegations that are contrary to the law or to a fact which may be judicially noticed.' [Citation.] Additionally, we are not bound by the trial court's stated reasons supporting its ruling; we review the ruling, not its rationale. [Citation.]" (Haro v. City of Solana Beach (2011) 195 Cal.App.4th 542, 549.)
The complaint turns on the premise that the appointment of the receiver was void ab initio. All of the allegations are based on actions the receiver took in his role as receiver; that is, he took control of KBA's assets, entered KBA's property, sought contempt charges against Tith for refusing to turn over KBA's assets, paid himself fees, and transferred $50,000 to KBA and Sar to transfer to Shabel. Thus, if the receivership was valid, none of the allegations would state a cause of action because the conduct was pursuant to a valid receivership.
In KBA v. Pasternak, supra, B228019, we held that the receivership was not void ab initio. The reasoning in our prior appeal applies here, and we rely on it to conclude that the trial court did not err in sustaining respondents' demurrers.
Appellants, Tith and WKV, cite the same line of cases that Tith and KBA relied upon in the prior case, KBA v. Pasternak, supra, B228019, to argue that the receivership was void ab initio: Sullivan v. Gage (1905) 145 Cal. 759 (Sullivan), disapproved on another ground in Metropolitan Water Dist. v. Marquardt (1963) 59 Cal.2d 159, and Lewis v. Shaw (1926) 77 Cal.App. 99 (Lewis). As we reasoned in the prior appeal, unlike Sullivan and Lewis, in which the appointment of the receiver was completely unauthorized and therefore void, the initial appointment of the receiver in this case was valid. "We reversed the order appointing the receiver only because the stipulation to be enforced by the receiver was reversed, not because of the lack of merit of the appointment." (KBA v. Pasternak, supra, B228019.) The actions alleged in the complaint accordingly were performed by the receiver pursuant to a valid receivership.
Because the receiver's conduct was pursuant to a valid receivership, the allegations in the complaint fail to "state[] a cause of action under any possible legal theory. [Citation.]" (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) The receiver acted in accordance with the court order appointing the receiver. Thus, the receiver did not commit conversion when he took control of KBA's assets; nor did he trespass upon appellants' property. Seeking contempt charges against Tith for refusing to turn over KBA's assets was not intentional infliction of emotional distress, negligent infliction of emotional distress, or abuse of process because, contrary to the allegations of the complaint, the receiver was acting as a valid appointee of the court, and not for his own pecuniary interests. Shabel was not unjustly enriched by the payment of fees from KBA's assets because the $50,000 payment was pursuant to court order and the receivership.
Pasternak was not unjustly enriched and is not liable for restitution because the payment of his fees was pursuant to the receivership and approved by the court. We disagree with appellants' argument that restitution is appropriate under section 908. We addressed this contention in KBA v. Pasternak, supra, B228019, and again conclude that appellants are not entitled to restitution under section 908.
Section 908 provides: "When the judgment or order is reversed or modified, the reviewing court may direct that the parties be returned so far as possible to the positions they occupied before the enforcement of or execution on the judgment or order. In doing so, the reviewing court may order restitution on reasonable terms and conditions of all property and rights lost by the erroneous judgment or order, so far as such restitution is consistent with rights of third parties and may direct the entry of a money judgment sufficient to compensate for property or rights not restored. The reviewing court may take evidence and make findings concerning such matters or may, by order, refer such matters to the trial court for determination."
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Appellants' claim for restitution is based on their argument that the receivership was void ab initio. As set forth above, we disagree.
Moreover, under section 908, "[w]hether a party is entitled to restitution following reversal 'present[s] a question calling for judicial discretion in determining what equity required.' [Citation.] The court's ruling will not be disturbed 'in the absence of a showing of manifest abuse of . . . discretion.' [Citations.] It is appellants' burden to demonstrate that the court's 'discretion was so abused that it resulted in a manifest miscarriage of justice.' [Citation.]" (Gunderson v. Wall (2011) 196 Cal.App.4th 1060, 1065.) There is no indication here that equity required restitution to appellants.
The allegations of the complaint do not state a cause of action under any legal theory. The trial court did not err in sustaining the demurrers.
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, J.
We concur:
EPSTEIN, P. J. SUZUKAWA, J.