Pope v. Even St. Productions CA2/5 ( 2021 )

Filed 9/22/21 Pope v. Even St. Productions CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
VIRGINIA POPE, B275199
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. BC430809)
EVEN ST. PRODUCTIONS, LTD.
et al.,
Defendants and Respondents.
MAJOKEN INC.,
Cross-Complainant and
Appellant,
v.
EVEN ST. PRODUCTIONS, LTD.
et al.
Cross-defendants and
Respondents.
EVEN ST. PRODUCTIONS, LTD.
et al.,
Cross-complainants and
Appellants,
v.
VIRGINIA POPE et al.,
Cross-defendants and
Respondents.
APPEALS from orders and a judgment of the Superior
Court of Los Angeles County, Mark V. Mooney, Judge. Affirmed
in part, reversed in part, and remanded with directions.
Spillane Trial Group, Jay M. Spillane, for Virginia Pope
and Majoken Inc.
Klapach & Klapach, Joseph S. Klapach; Kozberg & Bodell,
Gregory Bodell, for Gerald Goldstein and Glenn Stone.
Ervin Cohen & Jessup, David N. Tarlow, for Even St.
Productions, Ltd. and Majoken, Inc.
2
The procedural posture of these consolidated appeals needs
summarizing. Plaintiff Virginia Pope (Pope), as successor in
interest to now-deceased musician manager Ken Roberts
(Roberts), appeals from a trial court order summarily
adjudicating a cause of action for conversion in favor of
defendants Even St. Productions Ltd., Gerald Goldstein, Glenn
Stone, and Majoken, Inc. (the “Even St. Parties”). Cross-
complainant Majoken Inc. (“Roberts Majoken”), represented on
appeal by the same attorney who represents Pope, appeals from a
judgment after bench trial finding in favor of the Even St. Parties
on, as relevant here, causes of action for constructive fraud and a
common law claim for money had and received. Finally, the Even
St. Parties, as cross-complainants, cross-appeal from a summary
adjudication order declaring Roberts to be the rightful owner of
royalty payments made by Broadcast Music Inc. (BMI) from 1976
through 2009 for public performances by Sylvester Stewart
(Stewart), popularly known as “Sly” of Sly and the Family Stone.
The parties are familiar with the facts, and our opinion
does not meet the criteria for publication. (Cal. Rules of Court,
rule 8.1105(c).) We accordingly resolve the cause before us,
consistent with constitutional requirements, via an opinion with
reasons stated. (Cal. Const., art. VI, § 14; Lewis v. Superior
Court (1999) 19 Cal.4th 1232, 1261-1264 [three-paragraph
discussion of issue on appeal satisfies constitutional requirement
because “an opinion is not a brief in reply to counsel’s
arguments”; “[i]n order to state the reasons, grounds, or
principles upon which a decision is based, [an appellate court]
need not discuss every case or fact raised by counsel in support of
the parties’ positions”].)
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* * *
1. We begin with the Even St. Parties cross-appeal. We
agree it was error for the trial court to summarily adjudicate the
declaratory relief claim in Pope’s favor (in her capacity as
successor to Roberts) because the record before the court reveals
a material dispute of fact requiring trial on the question of who is
entitled to the royalty payments in question during the pertinent
time period.
The document signed by Stewart and Roberts that was sent
to BMI in 1976 (the 1976 Assignment) does state Stewart
“unconditionally, irrevocably and absolutely assigns to Ken
Roberts and/or Ken Roberts Enterprises, Inc. as the Assignee
and/or Judgment Creditor of Sylvester Stewart . . . any and all
payments . . . to be made by [BMI] to the undersigned Sylvester
Stewart pursuant to the terms of the undersigned’s existing
agreement with BMI . . . .” In isolation, the modifier
“irrevocably” in this sentence could be read to mean the
assignment was not revocable in perpetuity—but that is not the
only possible meaning. Rather, when understood in context of
the document’s own characterization of Stewart as a judgment
creditor and Roberts’s later sworn declaration that the
assignment was given “as security for the payment of loans
previously made to [him]”, the 1976 Assignment is ambiguous
about the duration in which it would be irrevocable—namely, in
perpetuity or only until Stewart’s existing debt to Roberts was
repaid.1 Trial of the declaratory relief cause of action is
1
The ambiguity, the existence of which is partly shown by
Roberts’s 2010 declaration, would not have fully appeared to this
court in 2013 when deciding an appeal from a demurrer in a
related appeal—in which this court was obligated to take the
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accordingly necessary to decide that issue, i.e., whether Stewart
or Roberts held the contractual right to royalty payments at the
time of Stewart’s (purported) assignment of those rights to the
Even St. Parties in 1989.
2. Turning to Pope’s appeal, she believes the trial court
erred in concluding there was no material dispute of fact
requiring trial on Roberts’s conversion cause of action against the
Even St. Parties. The trial court’s ruling, however, is correct.
“‘“‘Conversion is the wrongful exercise of dominion over the
property of another. The elements of a conversion claim are: (1)
the plaintiff’s ownership or right to possession of the property; (2)
the defendant’s conversion by a wrongful act or disposition of
property rights; and (3) damages . . . .’”’” (IIG Wireless, Inc. v. Yi
(2018) 22 Cal.App.5th 630, 650.) The Roberts conversion claim
founders on the first of these elements. Roberts did not own the
rights for the Sly Stone musical performances in question or the
royalties BMI collected as the owner of those rights. Instead,
Roberts had a contractual right to payment of royalties (at least
for some period of time) that derived from Stewart’s original
decision to grant to BMI “[a]ll the rights that [he] own[ed]” and
the 1976 Assignment from Stewart to Roberts. Roberts therefore
lacked the ownership interest in property that a conversion claim
requires. (See, e.g., Rutherford Holdings, LLC v. Plaza Del Rey
(2014) 223 Cal.App.4th 221, 233 [“‘[A] mere contractual right of
payment, without more, will not suffice’ to support a claim for
conversion”]; see also PCO, Inc. v. Christensen, Miller, Fink,
facts of the operative complaint as true without considering
extrinsic evidence of a latent ambiguity (see generally Dore v.
Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 391).
5
Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384,
395 [“A ‘generalized claim for money [is] not actionable as
conversion’”]; Rodgers v. Roulette Records, Inc. (S.D.N.Y. 1988)
677 F.Supp. 731, 737 [“When royalties are due pursuant to a
contractual relationship, whether express or implied, plaintiff
cannot recover on a theory of conversion without establishing
more”].)
Pope believes the conversion cause of action was viable
because there was no contract between Roberts and the Even St.
Parties whereas the contract between Stewart and BMI
established BMI had “a perfect, indeed superior, right to possess
performance royalties” as compared to Roberts. Even if true, the
distinction does not matter. The only right to royalty payments
that Roberts had (at least for a time) was a right wholly
derivative of Stewart’s; once Stewart exchanged his ownership
rights for a contractual right to payment, such a right to payment
is all Roberts could ever have and is insufficient to state a claim
for conversion. Pope also asserts the Even St. Parties “employed
a fraudulent scheme to steal the royalties” that should have
entitled Roberts to an equitable lien or made the Even St. Parties
an involuntary trustee. But equitable liens or involuntary trusts
are merely remedies, and remedies depend on the existence of a
viable cause of action—which is lacking here for the reasons
already given. A conversion claim is not made viable by merely
presupposing fraud and usurpation of damages from that fraud.
3. Roberts Majoken, but not Roberts himself, cross-
complained against the Even St. Parties. The operative cross-
complaint was filed just days after the trial court summarily
adjudicated Roberts’s conversion claim in favor of the Even St.
Parties. As relevant for our purposes, the operative cross-
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complaint alleges causes of action for constructive fraud and
money had and received. The trial court entered judgment for
the Even St. Parties on both. That is only half right.
a. The trial court correctly entered judgment for the
Even St. Parties on the constructive fraud claim. Settled law
requires proof of a fiduciary relationship to permit recovery on a
constructive fraud theory. (Engalla v. Permanente Medical
Group, Inc. (1997) 15 Cal.4th 951, 981, fn. 13 [“‘Constructive
fraud allows conduct insufficient to constitute actual fraud to be
treated as such where the parties stand in a fiduciary
relationship’”]; Mark Tanner Constr. v. Hub Internat. Ins. Servs.
(2014) 224 Cal.App.4th 574, 588 [“‘Constructive fraud depends on
the existence of a fiduciary relationship of some kind . . . .’”];
Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223
Cal.App.4th 1105, 1131 [“Constructive fraud ‘‘“‘“is a unique
species of fraud applicable only to a fiduciary or confidential
relationship”’”’’”]; see also Mary Pickford Co. v. Bayly Bros., Inc.
(1939) 12 Cal.2d 501, 525 [Civil Code section 1573 “has never
been applied to fix liability for the breach of a statutory duty
except that of a fiduciary”].) There was no proof at trial that any
of the Even St. Parties had a fiduciary relationship (or any
relationship, really) with Roberts Majoken.
Pope counters that such proof was not required, chiefly
relying on a 1961 Court of Appeal case (County of Santa Cruz v.
McLeod (1961) 189 Cal.App.2d 222 (McLeod)). That case, which
concerns a statute of limitations issue, is inapposite. (Id. at 225.)
McLeod explains a constructive fraud issue was sufficiently
raised in the trial court pleadings and holds the county’s suit to
recover “Old Age Security . . . payments” wrongly made to
McLeod was timely filed. (Id. at 224, 235-236.) Insofar as
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McLeod can be read to opine proof of a fiduciary relationship is
unnecessary to prove constructive fraud (but see id. at 234 [“‘In
its generic sense, constructive fraud comprises all acts, omissions
and concealments involving a breach of legal or equitable duty,
trust, or confidence, and resulting in damage to another’”]), the
overwhelming weight of authority, which we follow, holds to the
contrary.2 Pope also argues there is evidence the requisite
fiduciary relationship did exist because the Even St. Parties
“through a fraudulent artifice, by posing as Roberts
Majoken, . . . took possession of the BMI Royalties” and “thus
became involuntary trustees for the benefit of Roberts Majoken,
with all attendant fiduciary obligations.” This, again, is
impermissibly circular. One cannot prove constructive fraud by
presupposing fraud so as to satisfy otherwise missing proof of the
fiduciary relationship element.
b. The analysis and result are different with respect to
the money had and received claim that the trial court decided in
the Even St. Parties’ favor. “An action for money had and
received lies wherever one person has received money which
belongs to another, and which in equity and good conscience
should be paid over to the latter.” (Weiss v. Marcus (1975) 51
Cal.App.3d 590, 599; accord, Gutierrez v. Girardi (2011) 194
Cal.App.4th 925, 937 [“‘A cause of action is stated for money had
and received if the defendant is indebted to the plaintiff in a
certain sum “for money had and received by the defendant for the
use of the plaintiff”’”].)
2
Furthermore, even on its own terms, the McLeod island of
authority involves a circumstance absent here: violation of
statutes governing welfare assistance.
8
There was ample evidence at trial that would support a
conclusion the Even St. Parties did receive money (royalty
payments from BMI) belonging to another and that should, in
equity and good conscience, be returned to the rightful recipient.
At the same time, substantial evidence does support the trial
court’s determination that Roberts Majoken—as distinguished
from Roberts—was not the rightful recipient of at least some of
the royalty payments: in 1992, Roberts Majoken was dissolved by
the State of New York and Roberts transferred the royalty
payment rights he in 1979 assigned to Roberts Majoken back to
himself as an individual.
The problem for the Even St. Parties, however, is Pope’s
counterargument: the trial court erred by not permitting her—at
the end of the bench trial on Roberts Majoken’s cross-complaint
and having foreshadowed the request before trial—to add Pope
(as Roberts’s successor) as a plaintiff asserting the same money
had and received claim. Such an amendment is authorized under
Code of Civil Procedure section 473, subdivision (a) when in
furtherance of justice, and whether to permit the amendment is
committed to the trial court’s discretion (Branick v. Downey
Savings & Loan Assn. (2006) 39 Cal.4th 235, 242 (Branick)).
Well-settled precedent holds amendments, including
amendments to add a party, should be permitted with “great
liberality” even during trial. (See, e.g., Huff v. Wilkins (2006) 138
Cal.App.4th 732, 746 [“Courts must apply a policy of great
liberality in permitting amendments to the complaint at any
stage of the proceedings, up to and including trial, when no
prejudice is shown to the adverse party”]; Berman v. Bromberg
(1997) 56 Cal.App.4th 936, 945 [“There is a policy of great
liberality in permitting amendments to the pleadings at any
9
stage of the proceeding”].) Where the addition of a party will not
result in a wholly distinct cause of action such that an opposing
party would be prejudiced, it is an abuse of discretion not to
permit the addition and avoid what would otherwise amount to a
forfeiture on standing grounds. (Branick, supra, 39 Cal.4th at
243 [“Defendants argue plaintiffs should not be permitted to
substitute a new plaintiff because their failure to name the new
plaintiff in their original complaint was not a mistake. No such
rule exists. To the contrary, courts have permitted plaintiffs who
have been determined to lack standing, or who have lost standing
after the complaint was filed, to substitute as plaintiffs the true
real parties in interest”]; Klopstock v. Superior Court (1941) 17
Cal.2d 13, 21; see also Atkinson v. Elk Corp. (2003) 109
Cal.App.4th 739, 761 [“‘[I]t is an abuse of discretion to deny leave
to amend where the opposing party was not misled or prejudiced
by the amendment’”]; Honig v. Financial Corp. of America (1992)
6 Cal.App.4th 960, 965 [“Motions to amend are appropriately
granted as late as the first day of trial [citation] or even during
trial [citation] if the defendant is alerted to the charges by the
factual allegations, no matter how framed [citation] and the
defendant will not be prejudiced”]; Morgan v. Superior Court
(1959) 172 Cal.App.2d 527, 530 [“If the motion to amend is timely
made and the granting of the motion will not prejudice the
opposing party, it is error to refuse permission to amend and
where the refusal also results in a party being deprived of the
right to assert a meritorious cause of action or a meritorious
defense, it is not only error but an abuse of discretion”].)
Applying these principles, it was an abuse of discretion not
to permit the addition of Pope (as Roberts’s successor) as a
plaintiff to assert the money had and received cause of action.
10
Yes, the request to add her as a plaintiff was made far later than
it should have been, and that is a significant point in favor of the
trial court’s ruling. But dispositive, in our view, is the evidence
that suggests the money had and received cause of action may be
meritorious (apart from the standing deficiency relied on by the
trial court) and the absence of any meaningful prejudice to the
Even St. Parties, who long had notice of the money had and
received claim—the substance of which was not affected by the
party asserting it (especially in light of the close identification in
litigation of Pope, as Roberts’s successor, and Roberts Majoken).
The Even St. Parties’ only rejoinder is the assertion that
granting the motion to add Pope as a plaintiff asserting the
money had and received claim would have changed the
presentation of evidence at trial because they would contest
whether Roberts, as opposed to Stewart, was truly entitled to
payment of the royalties in question. There are three responses
to this. First, the type of prejudice that would support the trial
court’s refusal to permit amendment to add Pope as a plaintiff is
not shown by an argument that the amendment would have
required a trial on the merits—that is exactly the result that
cases like Branick expect. Nothing in the record suggests the
Even St. Parties are prejudiced in the correct sense, i.e., that they
would for some reason be less able to mount their proffered who-
is-the-real-owner defense on the merits than they would have
been if Roberts Majoken had earlier moved to amend by adding
Pope as a plaintiff. Second, Pope raised in her trial brief filed
before trial the possibility that she would ask to amend to add her
as a plaintiff; so forewarned, any prejudice to the Even St.
Parties was at best de minimis. Third, and finally, we have
accepted the Even St. Parties’ argument on cross-appeal that
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reversal of the declaratory relief cause of action is required. So,
from a practical perspective, there is going to be a trial on the
rightful recipient of the royalty payments one way or the other.
The Even St. Parties cannot be prejudiced by the prospect of
trying an issue that will need to be tried regardless.
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DISPOSITION
The trial court’s summary adjudication of the fourteenth
cause of action for conversion in Pope’s Fourth Amended
Complaint is affirmed. The trial court’s summary adjudication of
the sixth cause of action for declaratory relief in the Even St.
Parties’ Second Amended Cross-Complaint is reversed and
remanded for further proceedings not inconsistent with this
opinion. The trial court’s judgment for the Even St. Parties on
Roberts Majoken’s Amended Cross-Complaint is reversed and
remanded with directions to grant Roberts Majoken’s request to
add Roberts’s successor in interest as a party plaintiff and,
thereafter, for retrial on the second cause of action for money had
and received. All parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BAKER, Acting P. J.
We concur:
MOOR, J.
KIM, J.
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