Case Name: Greenleaf Mutual Benefits Association v. Oh, et al.
Case No.: 2014-1-CV-261230

Defendants (1) Stanzler Law Group (“Stanzler”) and (2) Eum Hee Park, Youn Hwang, Sun Shey, Kyung Suk Yoo, Yong Suk Brock, Eun Hee Kil and Victor Torres (the “Park, et. al Defendants”) each move for summary judgment (and Stanzler alternatively for summary adjudication) in their favor and against plaintiff Greenleaf Mutual Benefits Association (“Plaintiff” or “Greenleaf”).

After full consideration of the evidence, separate statements and authorities submitted by the parties, the Court makes the following rulings:

The Park, et al. Defendants’ Motion for Summary Judgment

The Park, et al. Defendants’ request for judicial notice is GRANTED. (Evid. Code, § 452, subd. (d).)

The Park, et al. Defendants’ motion for summary judgment is GRANTED. The Court finds that Greenleaf’s claims are barred by the doctrines of waiver and equitable estoppel.

With regard to the former, there is no question that Greenleaf, via Smith and Flemate, were aware of the Interpleader Action as early as November 2012, approximately a month after it was filed. (Park, et al. Defendants’ Separate Statement of Undisputed Material Facts in Support of Motion for Summary Judgment (“UMF”) NO. 19.) Both affirmed as much in their depositions, and Flemate appeared at multiple CMCs in the case, specifically on May 28, 2013 and July 16, 2013, where he made it known to the Court that he represented additional parties who had potential claims to the funds. (UMF Nos. 24-28, 30, 33.) Flemate was identified in the May 28th minute order as counsel appearing on behalf of the “intervenor,” and the CMC was continued to August 13, 2013. (UMF No. 31.) Subsequent to the July 16th CMC, Oh sent the fourth of his multiple emails to Flemate over the course of the Interpleader Action (the preceding ones being sent on May 23, June 24 and July 11) requesting on July 23, 2013 that Flemate advise him as to how he wished to proceed in advance of the next CMC in the action. (UMF Nos. 27, 29, 35, 36.) Flemate did not respond to the email and did not appear at the August 13th CMC, despite having been present at the preceding CMC where he was advised of its continuance. (UMF No. 38.) Oh sent a further email to Flemate in advance of the September 3, 2013 CMC, noting Flemate’s failure to appear at the August 13th CMC and failure to provide the details of other potential claimants to Joann Cho’s funds, despite his, Oh’s, repeated efforts to do so. (UMF Nos. 39, 40.) He further advised Flemate that he was once again requesting those names upon the instruction of Judge McKenney. (Id.) After not hearing back from Flemate, Oh submitted the stipulation at the next CMC to the Court, and an order was signed approving it. (UMF Nos. 41, 42.) Flemate and Greenleaf did not do anything subsequent to the entry of order, including filing a motion to reopen the case via a request for relief from the Court pursuant to Code of Civil Procedure section 473, which was suggested by Flemate to Greenleaf/Plaintiff. (UMF Nos. 43-45.)

Thus, to recap: Greenleaf was aware of the Interpleader Action for almost seven months (November 2012- May 2013) before it took any steps with regard to a claim on the funds. At that point, the only steps it took were to have Flemate appear at two CMCs to raise the potential issue of its claim, but nothing further, despite Oh’s repeated urging to participate in some fashion. Greenleaf did not perfect its claim by filing a complaint in intervention, despite such action being warranted, did not respond to any of Oh’s requests for the names of potential additional claimants, despite being advised that the Court desired them, did not appear at further CMCs, and did not move for relief.

Waiver is the voluntary relinquishment of a known right with knowledge of the facts. (McDermott v. Superior Court, supra, 6 Cal.3d at 698, fn. 3.) Based on the foregoing evidence, Greenleaf undoubtedly had knowledge of the Interpleader Action; it expressly admitted as much and made appearances in Court. While there is no evidence that Greenleaf expressly waived its rights to the funds, “[w]aiver may also result from conduct which, according to its natural import, is so inconsistent with the intent to enforce the right in question as to induce a reasonable belief that such right has been relinquished.” (Rubin v. Los Angeles Fed. Sav. & Loan Assn. (1984) 159 Cal.App.3d 292, 298.) In other words, waiver may still be found even in the absence of actual subjective intent on the part of the plaintiff to waive its rights. (Id.)

Here, Greenleaf’s conduct was inconsistent with an intent to enforce its rights to Joann Cho’s funds. Despite several opportunities to do so, and with full knowledge of the Interpleader Action, Greenleaf elected not to intervene in the action or otherwise make efforts to protect the prospective claimant’s rights. In opposition, Greenleaf fails to demonstrate the existence of a triable issue of material fact with regard to whether it impliedly waived its claims based on its actions (and non-actions) in the Interpleader Action. Consequently, Greenleaf waived its rights with regard to the Cho funds.

With regard to equitable estoppel, the essential elements of the doctrine are: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct be acted upon, or must so act that the other party has a right to believe that it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) the other party must rely on the conduct to her injury. (Longshore v. County of Ventura (1979) 25 Cal.3d 14, 28.) Estoppel may not be applied where any of the foregoing elements are missing. (Hair v. State of California (1991) 2 Cal.App.4th 321, 328.)

The Park, et al. Defendants persuasively maintain that the facts and evidence in this case establish of the required elements in the following ways: (1) Greenleaf was undoubtedly aware of the existence of the Cho funds, that the funds were deposited at Hanmi Bank and that an Interpleader Action was filed concerning a dispute over how those funds were to be utilized and disbursed; (2) Greenleaf’s actions (i.e., its failure to get involved in the action and provide the names of members who might have claims to the funds despite several express invitations to do so) gave the defendants the right to believe that Greenleaf intended that the interpleader funds could be disbursed to them without including any additional parties; (3) only Greenleaf would have had knowledge of whether it intended to name additional parties to the Interpleader Action; and (4) the Park, et al. Defendants entered into the settlement and gave up their rights to litigate the amounts in question with Greenleaf having led it to believe, through its inaction, that it was not going to put forth any additional claimants.

Greenleaf is not alleged to have made any affirmative statements to the Park, et al. Defendants which induced it to act; rather it is silence and inaction that are the basis of the estoppel argued by defendants here. In this regard, while estoppel is usually based on affirmative conduct, silence in the face of a duty to disclose may support estoppel in some situations. (Skulnick v. Robert Express, Inc. (1992) 2 Cal.App.4th 884, 891.) However, because “it is necessary to show things such as an intention to induce reliance and actual justifiable reliance, silence as the basis for estoppel usually requires a showing of special circumstances, such as a confidential or fiduciary relationship or an undertaking to provide advice by one who claims to be informed and knowledgeable in the matter.” (Moore v. State Bd. Of Control (2003) 112 Cal.App.4th 371, 385.) In its opposition, Greenleaf relies heavily on the foregoing proposition in support of its contention that doctrine of estoppel does not apply to the circumstances at bar. It was not required, it contends, to do or say anything in the Interpleader Action, and thus its silence in those proceedings cannot be used as grounds for estopping it from asserting its claims in this action. But Greenleaf’s argument neglects the fact that, “[i]t is not necessary that the duty to speak should arise out of any agreement, or rest upon any legal obligation in the ordinary sense. Courts of equity apply in such cases the principles of natural justice, and whenever these require disclosure they raise the duty and bind the conscience and base upon the omission an equitable forfeiture to the extent necessary to the protection of the innocent party.” (Elliano v. Assurance Co. of America (1970) 3 Cal.App.3d 446, 451 [emphasis added] [internal citations omitted].)

Given the fact that Greenleaf was clearly aware of the Interpleader Action, participated in it initially in making the Court aware of the fact that there were other potential claimants to the Cho funds, but ultimately ceased to be involved by failing to respond to Stanzler’s repeated overtures, the Park, et al. Defendants had a right to believe that Greenleaf/Plaintiff was electing not to pursue its claims. What else could one reasonably conclude where a potential claimant had attended hearings in an action relating to those claims, expressed concerns that its interests would not be protected, and then suddenly stopped participating, despite repeated requests to reengage? In the circumstances of this case, silence should be used as grounds for estopping Greenleaf from asserting its claims. The parties involved in the Interpleader Action had no reason to believe that further litigation over the Cho gift funds would follow the resolution of that action after Greenleaf/Plaintiff declined their requests to identify other potential claimants and make their positions known in that particular action. Thus, Greenleaf/Plaintiff’s assertion that its silence should not so be used is without merit, and the Park, et al. Defendants are also entitled to summary judgment based on the doctrine of equitable estoppel.

Stanzler’s Motion for Summary Judgment, or in the Alternative, Summary Adjudication

Stanzler’s request for judicial notice is GRANTED. (Evid. Code, § 452, subd. (d).)

Stanzler’s motion for summary judgment is GRANTED.

In moving for summary judgment, Stanzler first insists that Greenleaf cannot succeed on its second cause of action for “conspiracy to commit fraud” because Stanzler made no misrepresentations to Greenleaf/Plaintiff concerning the Interpleader Action. This cause of action is predicated on allegations that Stanzler and the individual defendants named in this action conspired to file a false interpleader action claiming that a real dispute existed between Greenleaf and the defendants when in truth, there was no dispute and the only purpose of filing the action was to enter into a “bogus settlement without knowledge of Greenleaf, its remaining 58 members, its attorneys, or the court.” (Complaint, ¶ 30.) As Stanzler contends, the evidence that it has submitted clearly demonstrates that Greenleaf/Plaintiff had notice of the Interpleader Action at all times and nevertheless refrained from intervening in the action or otherwise making efforts to protect its interests. There is no allegation that Stanzler made any misrepresentation to Greenleaf/Plaintiff to dissuade it from involving itself in the Interpleader Action; to the contrary, the evidence establishes that Stanzler made numerous affirmative overtures to Greenleaf, via its counsel Flemate, to involve itself in the proceedings. In opposition, Greenleaf/Plaintiff offers nothing which suggests to the contrary. Consequently, summary adjudication of this claim in Stanzler’s favor is warranted.

Stanzler also persuasively argues that all of Greenleaf’s remaining claims are barred by the doctrine of waiver. As explained above in the analysis of the Park, et al. Defendants’ motion, this argument is well taken. Despite its awareness of the Interpleader Action and the fact that its rights to Joann Cho’s funds were directly implicated, Greenleaf made no effort to intervene in the case, outside of Flemate appearances at several of the CMC’s where he advised the Court of the fact that there were additional parties with claims to the funds. (Stanzler’s Separate Statement of Undisputed Materials Facts in Support of MSJ/MSA (“UMF”) Nos. 14, 17-19, 21-23, 52-54, 56-58, 76, 79-81, 83, 85.) Greenleaf, via its counsel, did not respond to multiple emails sent from Oh on behalf of the parties in the Interpleader Action specifically seeking information regarding the other claimants. (UMF Nos. 24-26, 28, 59-61, 63, 86-88, 90.) Without any further action by Greenleaf, Oh proceeded with the resolution of the Interpleader Action, which concluded with the disbursement of the funds held by Hanmi Bank pursuant to the terms of the Court’s order. (UMF Nos. 31-33, 66-68, 93-95.) Greenleaf’s conduct was inconsistent with the intent to enforce its rights to Joann Cho’s funds. Despite several opportunities to do so, and with full knowledge of the Interpleader Action, Greenleaf elected not to intervene in the action or otherwise make efforts to protect the prospective claimant’s rights. Consequently, Greenleaf waived its rights with regard to the Cho funds. Therefore, summary adjudication of the remaining causes of action in Stanzler’s favor is warranted.