JOON CHUL PARK, ET AL. VS DO WOO KIM, ET AL.

Tentative Rulings

Case Number: 19STCP04605    Hearing Date: August 19, 2020    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ demurrer is SUSTAINED without leave to amend.

Plaintiffs’ motion for an order to fix a hearing date pursuant to California Corporations Code § 9418 is DENIED.

On October 22, 2019, Plaintiffs Joon Chul Park, Mary S. Cho, Jong Soon Cho, Young Shin Yoon, and Wilton Korean Presbyterian Church in Los Angeles (“Church”) (collectively, “Plaintiffs”) filed a complaint against Defendants Do Woo (“Woo”) Kim, Do Rim Kim (“Rim”), and Hae Hwan Cho.

On October 25, 2019 Plaintiffs filed a first amended complaint (“FAC”) against Defendants, requesting: (1) a court order making an expedited determination of church membership and the right to vote to elect a new board of directors; and (2) a court order making an expedited call for a meeting of church members to elect a new board of directors. The complaint is brought pursuant to Corporations Code §§ 9414 and 9418(c).

Woo and Rim (collectively, “Defendants”) now demur to Plaintiffs’ FAC in its entirety on grounds that it fails to state facts sufficient to constitute a cause of action and the Corporation Code as pled is inapplicable. Plaintiffs do not oppose.

Plaintiffs now move for an order to fix a hearing date pursuant to Corporations Code § 9418.

I. Demurrer

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.¿ ¿When considering demurrers, courts read the allegations liberally and in context.¿ ¿(2006) 144 Cal.App.4th 1216, 1228.)¿ In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿ ¿ “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.¿ Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.”¿ ¿ “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”¿

Discussion

Defendants argue that Plaintiffs’ causes of actions fail as a matter of law and fail to state sufficient facts to constitute causes of action. The requirements of Corporations Code §§ 9414 and 9418 have not been met. It is not unduly difficult for the Church to conduct a meeting, as a proper election was held on June 23, 2010. (Complaint in Related Case 19STCP02628, filed June 24, 2019 (“Related Complaint”), ¶ 110.) Additionally, Plaintiffs have not alleged sufficient facts to show that valid bylaws exist, and that directors, members, or those with the right to vote have exhausted their remedies under the bylaws. In any event, these sections are inapplicable to the present case because they “are not meant for directly adversarial situations such as this.” (Demurrer, 4:26-27, Exh. A.) At dispute in this and in related actions are the validity of the Church’s bylaws, the validity of elections held in June 2019, and the makeup of the Church’s board of directors. (Complaint, ¶¶ 18, 21(c).)

Corporations Code § 9414(a) states, “If for any reason it is impractical or unduly difficult for any corporation to call or conduct a meeting of its members, delegates or directors, or otherwise obtain their consent, in the manner prescribed by its articles or bylaws, or this part, then the superior court of the proper county, upon petition of a director, officer, delegate, or member, may order that such a meeting be called or that a written ballot or other form of obtaining the vote of members, delegates or directors be authorized, in such a manner as the court finds fair and equitable under the circumstances.”

Corporations Code § 9418(a) states, “Upon the filing of an action therefor by any director or member, or by any person who had the right to vote in the election at issue after such director, member, or person has exhausted any remedies provided in the articles or bylaws, the superior court of the proper county shall determine the validity of

any election or appointment of any director of any corporation.” Corporations Code § 9418(c) states, “The court, consistent with the provisions of this part and in conformity with the articles and bylaws to the extent feasible, may determine the person entitled to the office of director or may order a new election to be held or appointment to be made, may determine the validity of the issuance of memberships and the right of persons to vote and may direct such other relief as may be just and proper.”

Here, these sections are inapplicable. In finding them inapplicable, the court refers to and incorporates herein the ruling in Related Case 19STCV16827 on Motion for an Order Regarding Special Election Proceedings (“Related Ruling.”) (Demurrer, Exh. A.) There, the court analyzed Corporations Code § 9418 and the virtually identical § 7515 to determine the applicability of § 9418 to the facts underlying this and the related actions. Relevant authority suggested that “section 7515 was meant for situations where there is voter apathy or poor-record keeping.” Based on the court’s review, it found that “nothing about section 9414, its religious counterpart, and relevant case law suggests that section 9414 was meant to apply in situations such as this where there are opposing parties before the court whose primary dispute is the makeup of the board of directors and church membership.” (Id.) The court concluded, “Corporations code section 9414 and 9418 are not meant for directly adversarial situations such as this.” (Id.) This line of reasoning aligns with this court’s own research of relevant authority. (See 15A Cal. Jur. 3d Corporations, Court order for meeting of nonprofit mutual benefit corporation when prescribed procedure unduly difficult, § 867; Cal. Civ. Prac. Business Litigation, Meetings and elections, § 21:57.)

Given the inapplicability of these sections and Plaintiffs’ failure to oppose, Defendants’ demurrer to the first and second causes of action is sustained without leave to amend. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [“Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”] (citation omitted).)

II. Motion to Fix Hearing Date

Legal Standard

Corporations Code § 9418(a) states, “Upon the filing of an action therefor by any director or member, or by any person who had the right to vote in the election at issue after such director, member, or person has exhausted any remedies provided in the articles or bylaws, the superior court of the proper county shall determine the validity of any election or appointment of any director of any corporation.”

Corporations Code § 9418(b) states, “Upon the filing of the complaint, and before any further proceedings are had, the court shall enter an order fixing a date for the hearing, which shall be within five days unless for good cause shown a later date is fixed, and requiring notice of the date for the hearing and a copy of the complaint to be served upon the corporation and upon the person whose purported election or appointment is questioned and upon any person (other than the plaintiff) whom the plaintiff alleges to have been elected or appointed, in the manner in which a summons is required to be served, or, if the court so directs, by registered mail; ¿and the court may make such further requirements as to notice as appear to be proper under the circumstances.”

Discussion

Plaintiffs seek an order to fix a hearing date to determine the validity of the removal and election or appointment of directors of the Church.

As discussed above, Corporations Code § 9418 is inapplicable to the facts underlying the instant and related actions. Additionally, there is a dispute to as to whether valid bylaws exist. (Complaint, ¶ 18.) Before determining who sits on the board of directors, there needs to be a determination as to whether there are valid bylaws. Those bylaws would inform the court of remedies an aggrieved party must pursue with the Church before filing suit and of the Church’s process to remove and elect directors. (See Corp. Code §§ 9220(a) and 9418(a).) As stated in the Related Ruling, “It would be inappropriate for the bench to [decide who is on the board of directors] in the instant action; the parties have a right to a factfinder’s determination of whether there are Bylaws before this court will exercise its statutory power” to determine the validity of any election or appointment of any director. (Demurrer, Exh. A; Opp., Exh. A.)

Accordingly, Plaintiffs’ motion to fix a hearing date pursuant to Corporations Code § 9418 is denied.

It is so ordered.

Dated: August 19, 2020

Hon. Jon R. Takasugi

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative. If all parties to a motion submit, the court will adopt this tentative as the final order. If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.

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