Case Name: Singh v. Kumar
Case No.: 2014-1-CV-272725

Plaintiff/cross-defendant Uday Singh (“Singh”) moves for summary judgment, or in the alternative, summary adjudication in his favor as to the cross-complaint (“Cross-Complaint”) filed by defendant/cross-complainant Ashok Kumar (“Kumar”).\

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

Singh’s motion for summary judgment and/or summary adjudication is DENIED. Singh’s motion is entirely based on his contention that he has a complete defense to Kumar’s action to remove him from SSD’s Board of Directors- namely, that Kumar, based on his own wrongful conduct, has come to the Court with unclean hands and is therefore not entitled to the relief he seeks.

The unclean hands doctrine is an affirmative defense that arises from the maxim “[h]e who comes into Equity must come with clean hands.” (Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1059.) “The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim.” (Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 978.) The defense is available in legal as well as equitable actions, and whether it ultimately applies is generally a question of fact. (Id.) The doctrine is meant to protect judicial integrity and promote justice and thus protects the court’s rather than the opposing party’s interests. (Id.)

Not every wrongful act constitutes unclean hands, but the misconduct need not be a crime or actionable tort to qualify. (Kendall-Jackson Winery, supra, 76 Cal.App.4th at 979.) The court in Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048 enunciated a three-pronged test to determine the effect to be given to the plaintiff’s unclean hands conduct; whether the particular misconduct is a bar to the alleged claim for relief depends on (1) analogous case law, (2) the nature of the misconduct, and (3) the relationship of the misconduct to the claimed injuries. (Blain, supra, 222 Cal.App.3d at 1060.) With respect to the last element, the misconduct “must relate directly to the transaction concerning which the complaint is made, i.e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants.” (Fibreboard paper Products Corp. v. East Bay Union of Machinists (1964) 227 Cal.App.2d 675, 728.) Further, the absence of analogous case law alone may be sufficient for unclean hands to be unavailable. (East West Bank v. Rio School District (2015) 235 Cal.App.742, 751.) As the party asserting the defense, the burden of proof of establishing unclean hands (and its applicability) is on Singh. (De Garmo v. Goldman (1942) 19 Cal.2d 755, 765.)

At the outset, and contrary to Kumar’s assertions, the Court finds that the doctrine of unclean hands does apply to an action under Corporations Code section 9223. (See DeGarmo v. Goldman (1942) 19 Cal.2d 755, 761.) While DeGarmo did not involve a nonprofit religious corporation such as SSD but rather a regular corporation, this Court can discern of no reason why its conclusions regarding the need for a party seeking removal of a corporate director to come to the court with clean hands should not apply with equal force to cases such as the one at bar.

The Court finds the Kumar has demonstrated the existence of a triable issue of material fact regarding whether any of the actions taken by him that are claimed by Singh to be misconduct actually qualify as such. The Court finds this to be the case based on the testimony of Gene Takagi, who suggests that Kumar properly acted within the scope of his authority as president of the corporation when making various personnel, strategic and financial decisions involving the company. (See Declaration of Matthew Suess in Support of Opposition to MSJ/MSA, Exhibit 4 (Deposition of Gene Takagi) at 19-20:22, 23:17-18, 45:16-23, 74:15-23, 77:17-78:8, 92:23-93:3.) It is certainly not clear based on what is currently before the Court that Kumar acted in such a manner that he should be disqualified from seeking the relief he seeks in the Cross-Complaint, as the parties sharply disagree over what Kumar was or was not permitted to do as president. Because the unclean hands doctrine is primarily a factual question, the Court declines to dispose of the Cross-Complaint at this time and leaves the decision to the ultimate trier of fact.