Case Number: 18STCV05268 Hearing Date: May 15, 2019 Dept: 34

SUBJECT: Demurrer to FAC and Motion to Strike

Moving Party: Defendants Glenn Oyan, Felicitas J. Maliksi, Ruth Canare

Resp. Party: Plaintiffs Sang Kwon Lee, Los Angeles Multiethnic Mission Church formerly known as Los Angeles Filipino Baptist Church

The Court SUSTAINS with leave to amend Defendants’ demurrer due to lack of capacity of Plaintiff LAMMC.

The Court SUSTAINS with leave to amend Defendants’ demurrer pursuant to Code of Civil Procedure section 430.10(d) for the misjoinder of parties by failing to add the indispensable party of LAFBC.

The Court OVERRULES Defendants’ demurrer to the entire complaint based on lack of jurisdiction of the subject of the cause of action alleged in the pleading.

The Court OVERRULES Defendants’ demurrer to the first, third, and fifth causes of action pursuant to Code of Civil Procedure sections 430.10(e) and (f).

The Court SUSTAINS Defendants’ demurrer with leave to amend as to the second cause of action for a violation of the RICO Act.

Defendants Glenn Oyan, Felicitas J. Maliksi, and Ruth Canare’s request for judicial notice is GRANTED.

Defendants’ motion to strike is DENIED as moot.

Plaintiffs Sang Kwon Lee, Los Angeles Multiethnic Mission Church, formerly known as Los Angeles Filipino Baptist Church’s objections are OVERRULED.

PRELIMINARY COMMENT:

Because the Court is sustaining the demurrer for failure to add an indispensable party, the Court did not have to reach the other bases of the demurrer. However, to avoid future demurrers, the Court is indicating it analysis of the other grounds alleged in the demurrer, in section I(c)(3), (4) and (5).

BACKGROUND:

On November 16, 2018, Plaintiffs Sang Kwon Lee and the Los Angeles Multiethnic Church, formerly known as Los Angeles Filipino Baptist Church, filed a complaint against Defendants Glenn Oyan, Felicitas J. Maliski, and Ruth Canare for (1) declaratory judgment; (2) violation of Federal Racketeer Influenced and Corrupt Organization Act (“RICO”) and (3) breach of fiduciary duty.

On February 15, 2019, Plaintiffs Sang Kwon Lee, Los Angeles Multiethnic Mission Church, formerly known as Los Angeles Filipino Baptist Church, and First Filipino Baptist Church of Los Angeles filed a first amended complaint (“FAC”) against Defendants Glenn Oyan, Felicitas J. Maliski, and Ruth Canare (“Defendants”) for (1) declaratory judgment; (2) violation of Federal Racketeer Influenced and Corrupt Organization Act (“RICO”); (3) breach of fiduciary duty; and (4) fraud & deceit – concealment.

On March 11, 2019, Defendants filed this instant demurrer to the entire FAC and the first, second, third, and fourth causes of action of Plaintiffs’ FAC. On March 11, 2019, Defendants also filed a motion to strike portions of Plaintiffs’ FAC.

On May 1, 2019, Plaintiffs filed an opposition to the demurrer and motion to strike.

ANALYSIS:

I. Demurrer

Defendants demur to Plaintiffs’ first amended complaint on nine different grounds which are as follows:

1. Demurer to the entire First Amended Complaint as Plaintiff is not the real party in interest and lacks standing to file the instant complaint

2. Demurrer to the entire First Amended Complaint as Plaintiff does not have the capacity to file or maintain a lawsuit as they are not a valid corporation pursuant to CCP §§430.10(b)

3. Demurrer to the entire First Amended Complaint as Plaintiff failed to join necessary and indispensable parties pursuant to Code of Civil Procedure §389 and/or §430.10(d)

4. Demurrer to the entire First Amended Complaint as Plaintiffs claims are non-justiciable by the Court based upon the First Amend[ment] of the Constitution of the United States of America. Pursuant to Code of Civil Procedure §430.10(a)

5. Demurrer to the FIRST cause of action of Plaintiff’s First Amended Complaint, purporting to assert a cause of action for Declaratory Judgment pursuant to Code of Civil Procedure §430.10(e) on the basis that the pleading does not state facts sufficient to constitute a cause of action and it is uncertain, vague, ambiguous and unintelligible pursuant to § 430.10(f).

6. Demurrer to the SECOND cause of action of Plaintiff’s First Amended Complaint, purporting to assert a cause of action for Violation of Federal Racketeer Influence and Corrupt Organization Act pursuant to Code of Civil Procedure §430.10(e) on the basis that the pleading does not state facts sufficient to constitute a cause of action and it is uncertain, vague, ambiguous and unintelligible pursuant to § 430.10(f).

7. Demurrer to the THIRD cause of action of Plaintiff’s First Amended Complaint, purporting to assert a cause of action for Breach of Fiduciary Duty pursuant to Code of Civil Procedure §430.10(e) on the basis that the pleading does not state facts sufficient to constitute a cause of action and it is uncertain, vague, ambiguous and unintelligible pursuant to § 430.10(f).

8. Demurrer to the FOURTH cause of action of Plaintiff’s First Amended Complaint, purporting to assert a cause of action for Fraud – Concealment pursuant to Code of Civil Procedure §430.10(e) on the basis that the pleading does not state facts sufficient to constitute a cause of action and it is uncertain, vague, ambiguous and unintelligible pursuant to § 430.10(f).

9. Demurrer to all causes of action based on the litigation privilege under CCP §47.

(Demurrer, pp. 1:27-2:22 [typos in original].)

A. Legal Standard

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party’s pleading. It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purpose of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true, however improbable they may be. (Edmon & Karnow, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2017) ¶ 7:5.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). A demurrer is brought under Code of Civil Procedure § 430.10 (grounds), § 430.30 (as to any matter on its face or from which judicial notice may be taken), and § 430.50(a) (can be taken to the entire complaint or any cause of action within).

Specifically, a demurrer may be brought under Code of Civil Procedure Section 430.10(a) if the court has no jurisdiction of the subject of the cause of action alleged in the pleading. Under Code of Civil Procedure section 430.10(b), a demurrer may be brought if the person who filed the pleading does not have the legal capacity to sue. A demurrer may be brought under Code of Civil Procedure section 430.10(d) if there is a defect or misjoinder of parties. A demurrer may also be brought under Code of Civil Procedure section 430.10(e) if insufficient facts are stated to support the cause of action asserted. A demurrer for uncertainty will be sustained only where the complaint is so bad that the defendant cannot reasonably respond. (Code of Civ. Proc., § 430.10(f).)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.)

B. Procedural Issues

1. Defendants’ Request for Judicial Notice and Plaintiffs’ Evidentiary Objections to this Request

Defendants request that the Court take judicial notice of:

· Letter from the Los Angeles County Tax Collector (Exhibit 1)

· Los Angeles Superior Court Document (Exhibit 2)

· California Secretary of State Certificate of No Record Found on the Los Angeles Multiethnic Mission Church, a Religious Non-Profit (Exhibit 3)

· California Secretary of State Corporate Records of the Los Angeles Filipino Baptist Church and the current Statement of Officers (Exhibit 4)

· Grant Deed of the Property located at 837 S. Park View, Los Angeles, CA 90057 (Exhibit 5)

· California Secretary of State Corporate Record of First Filipino Baptist Church of Los Angeles (Exhibit 6)

(03/11/2019 Request for Judicial Notice (“RJN”), pp. 1:22-2:22.)

Defendants state that their request for judicial notice is pursuant to Evidence Code sections 451, 452, 452.5, and 453, but Defendants do not state which Evidence Code provision corresponds to which exhibit. (Id. at p. 1:19-21.)

In contrast, Plaintiffs filed evidentiary objections to Defendants’ request for judicial notice, stating: (1) Exhibit 1 is not an “official act” if the government, citing to Evidence Code section 452(c); (2) Exhibit 2 are confidential records; (3) Exhibit 3 is not an “official act” of the government, citing to Evidence Code section 452(c); (4) Exhibit 4 is not an “official act” of the government, citing to Evidence Code section 452(c); and (5) Exhibit 5 is not an “official act” of the government, citing to Evidence Code section 452(c) and that it is not a “court record” subject to judicial notice. (Evidentiary Objections to Request for Judicial Notice, pp. 2:1-4:19.) Plaintiffs also object to Exhibits 1, 2, 3, and 4 on the grounds that even if judicial notice is granted, “the court should not accept the truth of the matters alleged.” (Id. at pp. 2:5-4:1 [citing Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal. 4th 1057].)

Under Evidence Code section 452, a court may take judicial notice of the following:

(a) The decisional, constitutional, and statutory law of any state of the United States and the resolutions and private acts of the Congress of the United States and of the Legislature of this state.

(b) Regulations and legislative enactments issued by or under the authority of the United States or any public entity in the United States.

(c) Official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.

(d) Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.

(e) Rules of court of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.

(f) The law of an organization of nations and of foreign nations and public entities in foreign nations.

(g) Facts and propositions that are of such common knowledge within the territorial jurisdiction of the court that they cannot reasonably be the subject of dispute.

(h) Facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.

(Evid. Code § 452.)

Evidence Code section 453 provides that “[t]he trial court shall take judicial notice of any matter specified in Section 452 if a party requests it and (a) [g]ives each adverse party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and (b) [f]urnishes the court with sufficient information to enable it to take judicial notice of the matter.”

California Rules of Court, Rule 3.1306(c) provides that a party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party a copy of the material.

The Court must take judicial notice of “[f]acts and propositions of generalized knowledge that are so universally known that they cannot reasonably be subject of dispute.” (Evi. Code § 451(f).) However, taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. (Freemont Indemnity Co. v. Freemont General Corp. (2007) 148 Cal. 4th 97, 113-115.)

a. Request for Judicial Notice: Exhibits 1, 3, 4, 5, 6

Defendants request that the Court take judicial notice of the letter they received from the Los Angeles County Tax Collector notifying them that their religious exemption may be terminated (RJN, Ex. 1); the California Secretary of State’s certificate of no record found on the Los Angeles Multiethinic Mission Church (RJN, Ex. 3); the California Secretary of State’s corporate records of the Los Angeles Filipino Baptist Church and the current statement of officers (RJN, Ex. 4); the grant deed of the property located at 837 S. Park View, Los Angeles, CA 90057 (RJN, Ex. 5); and the California Secretary of State Corporate Record of First Filipino Baptist Church of Los Angeles (RJN, Ex. 6).

Plaintiffs object to this request of judicial notice of these documents arguing that these are not “official acts” of the government pursuant to Evidence Code 452(c) and also that “[j]udicial notice cannot be taken where the ‘official acts are themselves in dispute.’’ (Evidentiary Objections to Defendants’ RJN, pp. 2:9-12; 3:14-15; 3:18-21; 4:10-11; 4:15-16; 5:6-7; 5:11-12; 6:2-3; 6:7-8.)

The Court finds that these documents are all official acts of executive departments of the United States pursuant to Evidence Code section 452(c) because they relate to actions of the Los Angeles Tax Collector department, California Secretary of State, and the Los Angeles County Registrar-Recorder.

The Court may take judicial notice of “[f]acts and propositions of generalized knowledge that are so universally known that they cannot reasonably be subject of dispute.” (Evi. Code § 451(f).) However, taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. (Freemont Indemnity Co. v. Freemont General Corp. (2007) 148 Cal. 4th 97, 113-115.)

The Court therefore GRANTS the request for judicial notice of Exhibits 1, 3, 4, 5, and 6 as to the existence of these documents because the existence of these documents do not seem to be disputed by the parties. (See Evi. Code §§ 451(f), 452(c).)

b. Request for Judicial Notice: Exhibit 2

Defendants request that the Court take judicial notice of the Los Angeles Superior Court case (under seal), Glenn Oyan, Los Angeles Filipino Baptist Church v. (Named Defendant in Action) documents that are filed under seal for the judge’s review only and determination of usage. (RJN, pp. 1:27-2:3.) Defendants note that they will file a true and correct copy as Exhibit 2 after a motion or order to unseal is made. (RJN, Ex. 2, caption.)

Plaintiffs object to this request for judicial notice because these documents may include the “parties’ settlement agreement, if there was one, [which] does not constitute the court’s judgment” and that “[t]he court should not accept as true the contents of the pleadings or exhibits in another action just because they are part of the court record or file.” (Evidentiary Objections to Defendants’ RJN, pp. 2:26-27; 3:2-3.)

These documents are records of a court of this state, thus, pursuant to Evidence Code section 452(d), the Court GRANTS Defendants’ request for judicial notice as to Exhibit 2.

2. Plaintiffs’ Evidentiary Objections

Plaintiffs filed six evidentiary objections to Defendants’ request for judicial notice. The Court OVERRULES Plaintiff’s evidentiary objections to Defendants’ request for judicial notice.

C. Discussion

Defendants demur to Plaintiffs’ first amended complaint on the grounds that Plaintiffs lack both capacity and standing; Plaintiffs failed to add indispensable parties to all claims; Plaintiffs’ claims are non-justiciable; the litigation privilege bars Plaintiffs’ claims; and Plaintiffs’ first, second, third, and fourth causes of action fail to state facts sufficient to constitute causes of action and are uncertain, vague, ambiguous, and unintelligible. (Demurrer, pp. 1:27-2:22 [typos in original].)

1. Capacity and Standing

Defendants demur to Plaintiffs’ first amended complaint on the grounds that Plaintiff Los Angeles Multiethnic Mission Church, a religious non-profit corporation (LAMMC) does not exist, thus Plaintiff LAMMC lacks capacity to file a lawsuit or allege standing against Defendants. (Demurrer, p. 5:8-10.)

Defendants also argue that Plaintiff LAMMC is not the real party in interest, thus lacks standing to file the instant lawsuit. (Id. at p. 6:11-12.) Defendants assert that Plaintiff First Filipino Baptist Church of Los Angeles (FFBCLA) also lacks standing and is not the real party in interest because it failed to exist as an entity at the time of purchase. (Id. at p. 7:19-20, 7:25-26.)

Under Code of Civil Procedure section 430.10(b), a demurrer may be brought if the person who filed the pleading does not have the legal capacity to sue. Courts have found that the “[s]uspension of corporate powers results in a lack of capacity to sue.” (The Rossdale Group, LLC v. Walton (2017) 12 Cal. App. 5th 936, 945 [quoting Color-Vue v. Abrams (1996) 44 Cal. App. 4th 1599, 1603-1604.)

Code of Civil Procedure section 367 “provides the general rule that every action must be prosecuted in the name of the real party in interest.” (Id. at 943 [citing Code of Civ. Proc., § 367.) “The question for purposes of standing is not the name used by the party suing but whether the party suing is the party possessing the right sued upon.” (Id. at p. 946 [quoting Doe v. Lincoln Unified School District (2010) 188 Cal. App. 4th 758, 765].)

The court in The Rossdale Group, LLC v. Walton explained the difference between capacity and standing:

“ ‘There is a difference between the capacity to sue, which is the right to come into court, and the standing to sue, which is the right to relief in court.’ ” (Color–Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604 [citation].) ‘A plaintiff lacks standing to sue if, for example, it [is] not … a real party in interest.’ (Id. at p. 1604, fn. 4.) Incapacity, on the other hand, is merely a legal disability, such as minority or incompetency, that can be cured during the pendency of the litigation. (Id. at p. 1604.)

(Id. at 944-945 [citing Washington Mutual Bank v. Blechman (2007) 157 Cal.App.4th 662, 669–670].)

a. Capacity of Plaintiff LAMMC

Defendants argue that Plaintiff LAMMC “does not exist as an entity[,] [t]herefore Plaintiff lacks capacity to prosecute any of the claims alleged in the complaint and further cannot be a real party in interest.” (Demurrer, p. 5:15-18.) In opposition, Plaintiffs argue that “[t]he FAC properly alleged that the governing body of LAFBC changed its’ name to LAMMC.” (Opp., pp. 5:27-6:1.)

Paragraph 3 of the FAC alleges that:

“LAMMC, formerly known as the Los Angeles Filipino Baptist Church (hereinafter “LAFBC”) is a non-profit religious corporation doing business in Los Angeles. LAMMC was incorporated on August 19, 1998. LAMMC changed its name to the current name on November 11, 2018. The governing body of LAFBC approved this change of name on the same date. LAMMC is located at 837 S Park View, Los Angeles, CA 90057.”

Paragraph 4 of the FAC explains that:

“FFBCLA is a separate and distinct entity from LAMMC and/or LAFBC. FFBCLA owns the real property located at 837 S Park View, Los Angeles, CA 90057. However, LAMMC operates church businesses at this location and has management and/or control over the properties owned by the FFBCLA.”

Paragraph 30 of the FAC also alleges that “LAMMC also formally adopted the new name of Los Angeles Multiethnic Church.”

The Court finds that Plaintiff LAMMC lacks capacity to bring an action because the judicially noticeable facts found within the certificate of no record from the Secretary of State demonstrate that a corporation under the name of LAMMC does not exist. (See RJN, Ex. 3.) Even though Plaintiffs’ FAC explains the timeline of the name change from the LAFBC to the LAMMC, Plaintiffs have not alleged in the FAC that they filed a certificate of amendment to the articles of incorporation to show the name change that would show that the former entity LAFBC was changed to LAMMC.

Accordingly, the Court SUSTAINS Defendants’ demurrer with leave to amend because Plaintiff LAMMC lacks capacity to sue.

b. Standing of Plaintiff FFBCLA

Defendants assert that “Plaintiff FFBCLA failed to exist as an entity at the time of the purchase and . . . therefore lacks standing as it is not the real party in interest to assert any claims over the property.” (Demurrer, p. 7:24-26.) Defendants argue that Plaintiff FFBCLA has “no interest in the subject matter as [it was] non-existent at the time of purchase and had no capacity to contract.” (Id. at pp. 7:27-8:1.)

In opposition Plaintiffs allege that “[e]ven an unincorporated association has a standing to sue,” “the FAC properly alleged that FFBCLA owns the church building,” and “FFBCLA is clearly a real party in interest and therefore has standing to sue—for purposes of the demurrer.” (Opp., p. 6:7-15.)

The FAC alleges that “SANG is the head pastor at FFBCLA and LAMMC.” (FAC, ¶ 1.) Paragraph 2 of the FAC alleges that:

“FFBCLA is a non-profit religious corporation doing business in Los Angeles. FFBCLA was formed prior to June 1974 and acquired real property located at 837 S Park View, Los Angeles, CA 90057. A non-profit religious corporation was formed on November 28, 2018 wherein Sang is the current CEO and Joon Kim is the Secretary and CFO.”

The FAC also contains allegations that on December 28, 2018, Defendants “unilaterally transferred title and ownership of real property located at 837 S Park View, Los Angeles, CA 90057 from FFBCLA to LAFBC without obtaining the approval and/or consent of the governing body and/or the members of FFBCLA and/or LAFBC [and] Defendants are purported to be the officers of LAFBC.” (FAC, ¶ 26.)

The Court finds that even though there is a discrepancy between the FFBCLA that is named on the grant deed of July 1974 (RJN, Ex. 5) and the FFBCLA whose articles of incorporation was filed on November 28, 2018 (RJN, Ex. 6), these raise issues of fact not suited for resolution at this demurrer stage. The Court finds that there are sufficient allegations within the FAC that establish that FFBCLA owned the church building and existed as a corporation before it was alleged that Defendants transferred title and ownership, therefore FFBCLA is a real party of interest and has standing. (See FAC, ¶¶ 2, 26.)

Accordingly, the Court OVERRULES Defendants’ demurrer as to the lack of standing of Plaintiff FFBCLA.

2. Code of Civil Procedure § 430.10(d)

A demurrer may be brought under Code of Civil Procedure section 430.10(d) if there is a defect or misjoinder of parties. Code of Civil Procedure section 389(a) provides:

“A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.”

Defendants demur to the FAC arguing that Plaintiffs have failed to add indispensable parties to all claims because LAFBC is an indispensable party to any judgment and they have not been added to these claims. (Demurrer, p. 8: 20.) Defendants assert that “LAFBC also claims an interest in the assets that are claimed by Plaintiffs which will impede their ability to protect their interest alleged in this matter . . . or will leave them subject to a substantial risk of incurring double, multiple, or inconsistent obligations . . . .” (Id. at p. 9:2-5.)

Plaintiffs argue that Defendants’ “argument has no merit . . . [because] [t]he FAC properly alleges that LAMMC was formerly known as LAFBC.” (Opp., p. 6:17-20.)

As explained above, the Court finds that LAMMC does not have the capacity to sue and even if the Plaintiffs allege that LAFBC changed its name to LAMMC, it has been shown the LAMMC has not been found as a registered entity by the Secretary of State. Plaintiffs could have named LAFBC as a Plaintiff by naming it “LAFBC, now known as LAMMC” instead of naming a Plaintiff as “LAMMC, formerly known as LAFBC” (see FAC, caption of parties) because LAFBC is the entity that is registered with the Secretary of State. (See RJN, Ex. 4.) Because the case can affect LAFBC’s ability to protect its interest, the Court finds that LAFBC is an indispensable party. Therefore, LAFBC needs to be added as an indispensable party to this case, which Plaintiffs failed to do.

Accordingly, the Court SUSTAINS with leave to amend Defendants’ demurrer in its entirety pursuant to Code of Civil Procedure section 430.10(d).

3. Litigation Privilege

Defendants asserts that “[s]ome of Plaintiffs’ claims derive from, or relate to, the allegations of the notice to perform under the lease, the filing of any unlawful detainer or restraining order actions and are absolutely privileged pursuant to California Civil Code §47.” (Demurrer, p. 16:18-20.)

The principal purpose of Civil Code 47 “is to afford litigants and witnesses the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.” (Silberg v. Anderson (1990) 50 Cal. 3d 205, 213.)

Plaintiffs maintain that Defendants’ argument that the litigation privilege bars Plaintiffs’ causes of action is completely frivolous (Opp., p. 7:7-8) and the Court agrees. Defendants do not note which claims they are referring to that should be barred by this privilege or which part of Section 47 they are referring to. The Court also finds that any allegations relating to the events leading up to the unlawful detainer is meant to provide context for Defendants’ conduct including “trying to assault and/or remove Plaintiffs and transferring the church properties to another organization without obtaining permission from the governing body of the church—which in turn created the actual controversy” here. (Id. at p. 7:10-12; see FAC, ¶¶13-28.)

Accordingly, the Court OVERRULES Defendants’ demurrer because the litigation privilege does not preclude Plaintiffs’ action.

4. Jurisdiction of the Subject Matter of this Case

A demurrer may be brought under Code of Civil Procedure Section 430.10(a) if the court has no jurisdiction of the subject of the cause of action alleged in the pleading.

When a religious corporation owns real and personal property, “[t]he general rule [is] that courts will not interfere in religious societies with reference to their ecclesiastical practices [when they] stem[] from the separation from church and state, but [this general rule] has always been qualified by the rule that civil and property rights would be adjudicated.” (Burnett v. Banks (1955) 130 Cal. App. 2d 631, 635.) “As long as civil or property rights are involved, the courts will entertain jurisdiction of controversies in religious bodies although some ecclesiastical matters are incidentally involved.” (Id. at 637 [quoting Providence Baptist Church v. Superior Court (1952) 40 Cal. 2d 55, 60-61].)

The Supreme Court of California has held that “California courts should use neutral principles of law to decide church property disputes.” (Episcopal Church Cases (2009) 45 Cal. 467, 485.) The Supreme Court in Episcopal Church Cases explained:

“[W]e conclude that secular courts called on to resolve church property disputes should proceed as follows: State courts must not decide questions of religious doctrine; those are for the church to resolve. Accordingly, if resolution of a property dispute involves a point of doctrine, the court must defer to the position of the highest ecclesiastical authority that has decided the point. But to the extent the court can resolve a property dispute without reference to church doctrine, it should apply neutral principles of law. The court should consider sources such as the deeds to the property in dispute, the local church’s articles of incorporation, the general church’s constitution, canons, and rules, and relevant statutes, including statutes specifically concerning religious property, such as Corporations Code section 9142.” (Id.)

Defendants argue that because “the inquiry is the claim that Defendants are ‘excommunicated’ from the church” and “[i]f this cannot be determined, then this Court has no right to determine any issues that follow from it — namely all of the declaratory judgment issues raised by Plaintiffs.” (Demurrer, p. 11:16-19.) Defendants assert that “the Court may not decide the meaning or truth value of whether some[one] has been ‘excommunicated’ — or whether anyone is to be ‘head pastor,’ these issues are barred from consideration by the First Amendment Religion Clauses and are non-justiciable by this Court.” (Id. at p. 16:10-12 [emphasis in original].) Defendants assert that “[a]s all of the issues of the declaratory relief cause of action, the RICO cause of action (as to whose property or business it is that has been harmed) or to a breach of any fiduciary dugites that stem from any Church issues, or any property transfer by the church, this Court has no authority to adjudicate these issues and the complaint must be dismissed with prejudice.” (Id. at p. 16:13-16 [emphasis in original].)

Plaintiffs argue that “the court has jurisdiction to decide who has a right to control and/or manage the church properties if it can be done by applying a ‘neutral principle of law.’” (Opp., p. 6:22-24.) Plaintiffs assert that “[t]here is no reason why the court has to resolve religious doctrine and/or the policy to decide who has a right to management and/or control the church property in this case.” (Id. at pp. 6:25-7:1.)

The Court also finds that it has jurisdiction to determine who has a right to control and/or manage the church properties because it would be able to apply a “neutral principle of law” that does not resolve religious doctrine or policy.

Accordingly, the Court OVERRULES Defendants’ demurrer to the entire complaint because it has jurisdiction of the subject of the cause of action alleged in the pleading.

5. Code of Civil Procedure §§ 430.10(e) and (f)

A demurrer can also be brought under Code of Civil Procedure section 430.10(e) on the basis that the pleading does not state facts sufficient to constitute a cause of action and under Section 430.10(f) if a cause of action is uncertain, vague, ambiguous and unintelligible.

a. First Cause of Action: Declaratory Judgment

Defendants argue that Plaintiffs have failed to state facts sufficient to sustain a cause of action for declaratory relief against Defendants because “Plaintiffs[’] First Cause of Action requests a declaration that they are to control the Church assets, and administration based on the ‘excommunication’ of the current officers.” (Demurrer, p. 10:17-20.) Defendants assert that Plaintiffs have also failed to allege this cause of action because “they simply make conclusory statements and refer to declarations and exhibits that make mostly conclusory or irrelevant statements . . . and do not properly allege an actual controversy.” (Id. at p. 11:1-6.)

The Court finds that the FAC sufficiently alleges that “Sang was properly elected as the head pastor and that all Defendants had been properly excommunicated” (FAC, ¶ 28); “[a]n actual controversy exists between all parties relating to the rights of management and ownership of FFBCLA and/or LAMMC’s properties” (FAC, ¶ 32); “[h]aving been excommunicated from LAMMC, all Defendants have no right to interfere with the affairs of FFBCLA and/or LAMMC, including the board possession, control, and management of its properties” (FAC, ¶37); and that “all Defendants continue to knowingly, willingly, and intentionally interfere with FFBCLA and/or LAMMC’s possession, control, and management of its properties even after being excommunicated” (FAC, ¶ 38). The Court also finds that this cause of action is not uncertain, vague, ambiguous or unintelligible.

Accordingly, the Court OVERRULES Defendants’ demurrer on the first cause of action pursuant to Code of Civil Procedure sections 430.10(e) and (f).

b. Second Cause of Action: Violation of RICO Act

The Federal Racketeer Influenced and Corrupt Organization Act (“RICO Act”) under 18 U.S.C. 1962(c) states as follows:

“It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debts.”

To allege a violation of RICO, the plaintiff must generally “prove that the defendant caused injury to the plaintiff’s business or property by engaging in a pattern of racketeering activity in connection with an enterprise which affects interstate commerce.” (Gervase v. Superior Court (1995) 31 Cal. App. 4th 1218, 1232.)

Defendants assert that Plaintiffs “have not alleged any such crimes by the Defendants that are enumerated in 18 U.S.C. Code § 1961” and have failed to allege the elements of the RICO Act or any harm to any of their property or business. (Demurrer, p. 13:1-2, 10-11.) Defendants argue that “Plaintiffs fail to allege which particular Defendant performed any such act, and against what, if any witnesses, stolen property or law enforcement officials” (id. at p. 13:12-13); Plaintiffs fail “to allege any predicate acts under the RICO statute as required by law” (id. at p. 13:13-14); “Plaintiffs failed to allege any criminal conduct on behalf of any Defendant” (id. at p. 13:26-27); Plaintiffs have not alleged a pattern of racketeering activity (id. at p. 14:3-8); and Plaintiffs have not alleged facts showing that the activity was made in connection with an enterprise that engages in or affects interstate commerce (id. at p. 14:12-13.)

The FAC alleges that Defendants “got together and conspired to remove Sang and his supporters from the LAMMC [and][t]his was done in order to misappropriate and wrongfully acquire properties and/or funds owned by LAMMC and FFBCLA for their own private use.” (FAC, ¶ 16.) The FAC also alleges that Defendants’ wrongful conduct constitute a violation of the RICO Act (FAC, ¶ 46); their wrongful conduct constitutes a widespread “criminal enterprise” engaged in a “pattern” of “racketeering activity” (FAC, ¶ 47); and that “[t]he predicate acts alleged herein also involve tampering with and retaliation against a witness, interstate and/or international transportation of stolen property, obstruction of justice, and obstruction of State and local law enforcement” (FAC, ¶ 48).

The Court finds that these allegations are not sufficient to allege a cause of action for a violation of the RICO Act. Plaintiffs have not alleged facts showing that Defendants engaged in a pattern of racketeering activity that was made in connection with an enterprise that affects interstate commerce.

Accordingly, the Court SUSTAINS Defendants’ demurrer with leave to amend as to the second cause of action for a violation of the RICO Act.

c. Third Cause of Action: Breach of Fiduciary Duty

“The elements of a cause of action for breach of fiduciary duty are: (1) existence of fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” [Citation.]” (People ex rel. Harris v. Rizzo (2013) 214 Ca1.App.4th 921, 950.)

Defendants demur to the third cause of action for breach of fiduciary duty because this “claim fails as no duties are alleged in the complaint nor are any alleged to have been breached.” (Demurrer, p. 10:5-6.)

The FAC alleges that “[b]y virtue of their positions, all Defendants owe fiduciary obligations to the Plaintiffs [and] [t]hey had an obligation to act with the utmost good faith for the benefit of the Plaintiffs.” (FAC, ¶ 54 [emphasis added].) The FAC also asserts that Defendant Glenn was hired to be an assistant pastor for LAMMV and when the previous pastor wanted to retire, Defendant Glenn “began acting as head pastor without following proper procedures and/or without LAMMC’s consent and/or approval.” (Id. at ¶¶ 14, 15.) The FAC alleges that all of the Defendants “got together and conspired to remove Sang and his supporters from the LAMMC [and] [t]his was done in order to misappropriate and wrongfully acquire properties and/or funds owned by LAMMC and FFBCLA for their own private use.” (Id. at ¶ 16.)

The Court finds that Plaintiffs have sufficiently alleged that Defendants owed a duty to Plaintiffs by virtue of their positions and that they breached their duties by behaving in the manner alleged in the FAC that is in contradiction of their obligation to act with the utmost good faith and for the benefit of the Plaintiffs.

Accordingly, the Court OVERRULES Defendants’ demurrer to the third cause of action.

d. Fourth Cause of Action: Fraud & Deceit –Concealment

In order to establish a cause of action for fraud, Plaintiffs must allege (1) misrepresentation, (2) knowledge of falsity, (3) intent to defraud or to induce reliance, (4) justifiable reliance, and (5) resulting damage. (See Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.)

In California, fraud must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) “In order to recover for fraud, as in any other tort, the plaintiff must plead and prove the “detriment proximately caused” by the defendant’s tortious conduct. (Civ.Code, § 3333.) Deception without resulting loss is not actionable fraud. (Hill v. Wrather (1958) 158 Cal.App.2d 818, 825, 323 P.2d 567.) ‘Whatever form it takes, the injury or damage must not only be distinctly alleged but its causal connection with the reliance on the representations must be shown.”’ (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1818.)

Defendants argue that “Plaintiffs’ FAC is devoid of facts that support any claim of fraud or concealment” and “Plaintiffs do not specify what alleged assets were taken by any particular defendant, other than a transfer of property by Oyan to LAFBC.” (Demurrer, p. 10:11-13.) Defendants also argue that “Plaintiffs[’] action for fraud is devoid of facts supporting the who, what, when, where requirements of the law [and their] fraud allegation makes only conclusory statements about all ‘defendants.’” (Id. at p. 17:1-3.) Defendants assert that “Plaintiffs failed to allege such facts not only showing [they] actually and justifiably relied on the defendant[s’] misrepresentations, but also how the actions [they] took in reliance of defendant[s’] misrepresentations caused the alleged damages.” (Id. at p. 17:18-21.)

The FAC alleges that Defendants (1) “intentionally and recklessly failed to disclose the above mentioned facts to Plaintiffs both prior and subsequent to the transfer of officer names from Ed to them and/or the transfer of ownership and title of the real property” (FAC, ¶ 61); (2) Defendants knew of the falsity and knew Plaintiffs could not obtain the true facts (id. at ¶¶62,63); (3) they intended to defraud and deceive Plaintiffs by causing them to act in reliance of their belief in the truth (id. at ¶ 63); (4) Plaintiffs acted to their detriment in reasonable and justifiable reliance of Defendants’ misrepresentations and concealment (id. at ¶¶ 64, 65); and (5) that Defendants and their concealment caused Plaintiffs’ damages (id. at ¶¶ 66, 67.)

The Court finds that taken together with the allegations set forth in the FAC, Plaintiffs have satisfied their burden to plead a cause of action for fraud with the requisite specificity.

Accordingly, the Court OVERRULES Defendants’ demurrer as to the fourth cause of action for fraud & deceit- concealment.

II. Motion to Strike

A. Legal Standard

Any party may file a timely notice of a motion to strike the whole or any part of a pleading. (Code Civ. Proc., § 435(b).) For the purpose of a motion to strike, the Code of Civil Procedure defines a “pleading” as a demurrer, answer, complaint, or cross-complaint. (Code Civ. Proc., § 435(a)(2).) Irrelevant allegations include: allegations that are not essential to the statement of a claim, allegations that are not pertinent to or supported by the claim, and demands for judgment requesting relief not supported by the allegations. (Code Civ. Proc., § 431.10(b), (c).) The court may also strike out any or all parts of a pleading that is not drawn or filed in conformity with the laws of this state. (Code of Civ. Proc., § 436(b).)

B. Discussion

Defendants move to strike the following portions of the FAC that allege a request of punitive, exemplary, and treble damages as well as attorney’s fees:

· Page 3, Paragraph 9

· Page 4, Paragraph 21

· Page 4, Paragraph 22, (including Exhibit)

· Page 4, Paragraph 23, (including Exhibit)

· Page 4, Paragraph 24, (including Exhibit)

· Page 6, Paragraph 27: “wrongfully, illegally, and maliciously”

· Page 6, Paragraph 36: “wrongfully”

· Page 6, Paragraph 38: “knowingly, willfully, and intentionally”

· Page 8, line 13: “wrongful conduct”

· Page 8, line 16: “wrongful conduct”

· Page 8, Paragraph 50: “Wrongful conduct as alleged. Plaintiffs are entitled to recover actual, consequential and exemplary damages in excess of $1,000,000.00”

· Page 9, Paragraph 51

· Page 9, Paragraph 52

· Page 9, Paragraph 53

· Page 9, lines 19-20: “fraudulent actions”

· Page 9, line 22: “wrongful conducts”

· Page 9, Paragraph 58

· Page 10, lines 3-7 in Prayer for Relief

· Page 10, line 10: “intentionally and recklessly”

· Page 10, line 15: “wrongful intentions and/or conducts”

· Page 10, lines 25-27: “secret intention to defraud her. Had the plaintiffs known of Defendants and their secret intention to defraud them” [typo in original]

· Page 11, Paragraph 68

· Page 11, line 24: “exemplary damages in excess of $1,000,000.00”

· Page 11, line 26: “Punitive damages according to proof”

· Page 11, line 27: “Treble damages according to proof”

· Page 9, line 26: “reasonable attorney’s fees”

· Page 12, line 5: “Punitive damages according to proof”

· Page 12, line 10: “For punitive damages and exemplary damages in the amount determined at trial”

Given the Court’s ruling sustaining Defendants’ demurrer in its entirety with leave to amend pursuant to Code of Civil Procedure section 430.10(d) for Plaintiffs’ failure to add an indispensable party of LAFBC, Defendants’ Motion to Strike is DENIED as moot.