Lau v. Lau CA2/2

Filed 8/6/13 Lau v. Lau CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO
DAIVD LAU, B241939
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC435921)
v.
DORA LAU,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Elizabeth Allen White, Judge. Affirmed.
Law Offices of Larry Fabrizi, Larry Fabrizi for Defendant and Appellant.
Wong & Mak, Steven W. Hashimoto for Plaintiff and Respondent.
___________________________________________________
Appellant contends that the trial court erred by ordering partition of a property.
She argues that the court should have found that the right to partition was waived.
Because substantial evidence supported the conclusion that there was no waiver, we
affirm the interlocutory judgment ordering partition.
Factual and Procedural Background
Plaintiff and respondent David Lau is the brother of defendant and appellant Dora
Lau. At the time of trial in this matter, David was 54 years old and Dora was 61.1 David
initiated this action in April 2010, and it went to a bench trial in April 2012.
The operative second amended complaint sought, inter alia, partition of the real
property located at 2901 North Beverly Glen Boulevard in Los Angeles (the property). A
two-story house sits on the property.
The property was purchased in 1991 with funds from David and Dora‟s parents,
Lau Tung and Tse Yuen Hen. Dora lived with her sons in the house for a while, and she
and one son continue to use the house on occasion. David and his parents also stayed at
the property from time to time. Title to the property was held by the family at the time of
the parents‟ death, when it passed to David and Dora. Title is currently held by Dora, as
the trustee of a family trust, and by David, with each having a one-half interest as tenants
in common.
Dora testified at trial that her and David‟s parents decided to purchase the property
so that the family would have a home in the United States as well as an American
location for the operations of the family company, Crown Records. Crown Records was
a once-successful Hong Kong-based music company started by the parents in the 1950‟s.
Crown Records, Inc. USA was formed to distribute audio and video recordings produced
by Crown Records.
1 For ease and clarity of reference, we refer to David and Dora by their given names
in this opinion, with no disrespect intended. Further, we note that in 2010 David legally
changed his surname from “Lau” to “D‟I,” although in the record and appellate briefs he
is generally referred to by his former surname.
2
Prior to 1991, Crown Records, Inc. USA had a distribution center located at
another residential address in Los Angeles. Dora introduced exhibits at trial showing that
since 1991 the business address used for the United States-based company was that of the
subject property. Records, tapes, and other Crown Records materials were stored in the
garage and living room of the house and distributed from the house to various locations
throughout the United States. After the death of the parties‟ mother in 2007, however,
the company effectively ceased business. There had been no sales of recordings since
2008. At the time of trial, the California Secretary of State website listed Crown
Records, Inc. USA as suspended.
David worked for Crown Records in Hong Kong, helping his parents run the
business, since 1992. After the death of the mother, Dora initiated a lawsuit in Hong
Kong, contending that the company had been mismanaged by David, and seeking to
recover Crown Records‟ property and publishing rights. She testified that her reason for
filing the lawsuit was to gain control of Crown Records and continue to distribute its
products in the United States. David, on the other hand, testified that Crown Records had
been dissolved and that there were no plans to resume business in the future.
After hearing the evidence and argument presented in this matter, the trial court
issued an oral statement of decision. The trial court stated that, although the right to
partition can be waived, there was no basis to find waiver given the facts of this case. It
found that the parents purchased the property not just to house Crown Records products,
but also for the purpose of having a residence in the United States for the family. There
was no clear intent that the property would be used in perpetuity for the Crown Records
business. Furthermore, Crown Records, Inc. USA was not in good standing in California
and had no sales since 2008, so the business did not appear to be viable. The property‟s
former use as a center of operations for the American company was incidental to its use
as a residence. Accordingly, the trial court found that the property was subject to
partition.
The court entered an interlocutory judgment in favor of David in May 2012. The
interlocutory judgment provided that David was entitled to partition and that the property
3
would be sold to a third party unless the parties could reach an agreement as to its
disposition.
DISCUSSION
Dora appeals from the interlocutory judgment. An interlocutory judgment such as
this one, which determines rights and interests of the parties and directs that partition be
made, is appealable. (Code Civ. Proc., § 904.1, subd. (a)(9).)
“The primary purpose of a partition suit is, as the terminology implies, to partition
the property, that is, to sever the unity of possession.” (Schwartz v. Shapiro (1964) 229
Cal.App.2d 238, 257.) A co-owner of property held by concurrent interests has the right
to partition unless barred from doing so by a valid waiver. (Code Civ. Proc., § 872.710,
subd. (b).) “„Partition is a remedy much favored by the law. The original purpose of
partition was to permit cotenants to avoid the inconvenience and dissension arising from
sharing joint possession of land. An additional reason to favor partition is the policy of
facilitating transmission of title, thereby avoiding unreasonable restraints on the use and
enjoyment of property.‟” (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493.)
Dora argues on appeal, as she did below, that the trial court should have found that
the right to partition was waived. Where the purpose for which the parties acquired the
property may be defeated by partition, an agreement to postpone partition may be
implied. (Pine v. Tiedt (1965) 232 Cal.App.2d 733, 737.) “Most of the cases that have
denied the right of partition have been cases in which the coowner who is seeking
partition was a party to the agreement which restricted the right of partition either
expressly or by implication, or was so intimately connected with the transaction that the
court concluded that out of fairness his subsequent acquisition of an interest in the
property imposed upon him a limitation or obligation not to seek partition as long as the
agreement or plan of ownership could only be carried out through a denial of the right of
partition.” (American Medical International, Inc. v. Feller (1976) 59 Cal.App.3d 1008,
1016; see also Pine v. Tiedt, supra, 232 Cal.App.2d at pp. 738-739 [“[T]he rule applied is
that partition cannot be had without the consent of all parties where it would conflict with
a prior agreement of the parties as to the use of the property”].)
4
Dora contends that a finding of waiver was required because the property was
bought for the purpose of serving as the American center of operations for Crown
Records. She argues that the court would have found waiver if it had not improperly
admitted evidence favorable to David and excluded evidence favorable to Dora. The trial
court‟s evidentiary rulings are reviewed for abuse of discretion. (Landale-Cameron
Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1407; In re S.A. (2010) 182
Cal.App.4th 1128, 1135; Alexander v. Codemasters Group Limited (2002) 104
Cal.App.4th 129, 140, fn. 3.)
We agree with Dora that the trial court abused its discretion on a number of
evidentiary rulings. The trial court should have admitted into evidence exhibit 68, which
was a copy of the document initiating the legal action in Hong Kong (similar to a
complaint), rather than excluding it on the basis of a relevancy objection. Both parties
testified at length about the Hong Kong litigation, and David was allowed to introduce
two documents from the Hong Kong litigation pertaining to the “w[inding] up” of Crown
Records. Dora should have been allowed to introduce equally relevant documents. We
also agree that Dora should have been allowed to testify whether she believed that Crown
Records could continue as a going concern, as David was allowed to testify that Crown
Records had been “wound up” and “dissolved.”
Nevertheless, we find no reason to reverse the judgment. Following a bench trial,
findings on questions of fact are reviewed under the substantial evidence standard of
review. (Brewer v. Murphy (2008) 161 Cal.App.4th 928, 935.) “Where [the] statement
of decision sets forth the factual and legal basis for the decision, any conflict in the
evidence or reasonable inferences to be drawn from the facts will be resolved in support
of the determination of the trial court decision.” (In re Marriage of Hoffmeister (1987)
191 Cal.App.3d 351, 358.)
Viewing the entirety of the evidence, and taking into account that the trial court
should have allowed further evidence submitted by Dora, there is no question that the
judgment was still supported by substantial evidence. The trial court‟s erroneous
evidentiary rulings were not prejudicial. Dora was allowed to testify that she sought to
5
gain control of Crown Records in Hong Kong and that if she did so she would distribute
Crown Records products in the United States. Thus, the excluded evidence was largely
cumulative.
Furthermore, the trial court did not err by declining to stay this action pending the
conclusion of the Hong Kong litigation. The trial court‟s decision did not hinge on the
status of the Hong Kong lawsuit. Dora acknowledged that the property is not an asset of
Crown Records and, as noted by the trial court in its statement of decision, the property
was not leased to Crown Records. Rather, the trial court found that the primary use for
the property was as a residence, and that the business use was merely incidental to that.
David testified that he never agreed that the property could be used indefinitely by Crown
Records. Moreover, except for purposes of storage, the property had not been used by
Crown Records since 2008.
That there existed a chance that Dora could succeed in the Hong Kong litigation
and revive a currently defunct company was not a sufficient reason to deny the much
favored remedy of partition. The trial court found that the property was not unique to the
conduct of a business. Prior to the purchase of the property another residence had been
used to house and distribute Crown Records products. If Dora does succeed in reviving
the business, she can find any number of structures just as well suited to the business of
Crown Records as the subject property.
In sum, the trial court‟s decision is abundantly supported by substantial evidence. 2
2 Dora‟s argument that the judgment violated Code of Civil Procedure section
872.730, which applies to property held by a partnership, is frivolous. The parties in this
case stipulated that the property was held by each as tenants in common. There was no
evidence that the property was held by a partnership—David‟s response to a vague
question about his “partner in the property” did not somehow create a partnership out of
thin air.
6
DISPOSITION
The interlocutory judgment entered on May 2, 2012, is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
BOREN, P.J.
We concur:
ASHMANN-GERST, J.
FERNS, J.*
_______________________________________________________________
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
7