Including information about his associates
[Stamp]
F I L E D
Stephen M. Kelly, Clerk
Oct 31 2000
Court of Appeal Fourth District
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WILLIS CARTO et al., Defendants and Appellants, v. LEGION FOR THE SURVIVAL OF FREEDOM, INC., Plaintiff and Respondent |
D027959 (Super. Ct. No. N64684) |
APPEAL from a judgment of the Superior Court of San Diego County, Runston G. Maino, Judge. Affirmed. [emphasis added]
The complaint filed by respondent Legion for the Survival of Freedom, Inc. (Legion) alleged that a Ms. Farrel intended to make a substantial gift of funds and other assets (the gift) to Legion, and that defendant Willis Carto and codefendants1 (together with Carto, appellants) misappropriated and converted the gift for the benefit of themselves and others. The trial court found for Legion, and appellants appeal [sic].
Legion, a nonprofit corporation organized under the laws of Texas, has been headquartered and operating exclusively in California since the early 1960's. Carto was sympathetic to Legion’s political views and was a close friend of members of Legion’s board of directors, including Lewis Furr and Lavonne Furr (together, the Furrs) but was not an incorporator, officer, director, or member of Legion.
In the early 1980’s Ms. Jean Farrel, a Swiss resident, contacted Legion and expressed her support for Legion’s political views. She began making contributions to Legion and its subsidiary, the Institute for Historical Review (IHR), and promised to continue making contributions to Legion. Mr. Marcellus, who was at the time an officer of Legion and the director for IHR, discussed Farrel’s interest in Legion with Carto. Carto encouraged Marcellus to maintain his contacts with Farrel and to solicit her continued contributions to Legion. Marcellus maintained a vigorous correspondence with Farrel, and Farrel assured Marcellus she intended to make substantial future gifts to Legion.3
By mid-1985, after personally visiting Legion’s offices, Farrel established NECA Corporation, placed substantial assets into NECA, and told Legion that NECA was to come under control of [Legion] upon her death.
Carto and his wife, Elisabeth Carto (Elisabeth), established a relationship with Farrel, and Carto and Elisabeth told Marcellus that Farrel had established NECA solely to benefit Legion.4
Farrel died in August 1985. Her will named Ms. Althaus as sole beneficiary of her estate. Althaus contested Legion’s right to any share of NECA. To recover its interest in NECA, Legion appointed Carto as its business agent and gave powers of attorney to Carto and Henry Fischer to take whatever measures were necessary to recover NECA’s assets for Legion. Carto undertook litigation in various domestic and foreign venues to obtain NECA’s assets for Legion.5
In 1990, Althaus and Legion reached a settlement agreement (the Althaus settlement) that provided NECA’s assets be apportioned 55 percent to Althaus and 45 percent to Legion. Under the Althaus settlement, Mr. Rochat (a Swiss Notary) was appointed to control NECA, collect and liquidate its assets, and distribute its assets 55 percent to Althaus and 45 percent to Legion.
Legion never received the bulk of the funds due it under the Althaus settlement. Carto was concerned that pending lawsuits against Legion could result in judgments against it and the judgment creditors would then levy on the funds received from NECA. Rather than delivering the funds to Legion, Carto hired an attorney (Mr. Foetisch) to form an entity known as Vibet, Inc. Rochat, who was employed by and took orders from Foetisch, deposited the bulk of the NECA funds due Legion from the Althaus settlement into a Vibet, Inc. account, and disbursements from this account were made on instructions from Carto.6
Rochat paid approximately $7.5 million of NECA funds to Vibet, Inc. From these funds, Carto distributed $970,000 to pay expenses of the recovery and settlements to Farrel’s family, and approximately $2,650,000 to Liberty Lobby. He claimed other amounts were paid out as contributions to other groups supported by Farrel or to pay the expenses incurred in pursuing the gift.
Carto claimed Farrel did not intend to leave NECA and its assets to Legion. He claimed she intended to leave NECA’s assets to him, as trustee, to support the various causes with which he was associated, including Liberty Lobby, FDFA and Legion.7
Carto also claimed he was a member and director of Legion; that members have the sole authority to elect and terminate directors; and the he and Lavonne Furr jointly had authority over Legion’s corporate governance. The apparent purpose of his testimony was to demonstrate that the current board of directors of Legion did not have authority to pursue the present lawsuit, and to show that he and Lavonne Furr (as controlling members) ratified his conduct of redirecting Farrel’s gift from Legion to other entities. However, he had previously denied having any official position with Legion other than as a friend of the board of directors and a sympathizer of its political views.
Legion filed this lawsuit against Carto, Elisabeth, the Furrs, Henry Fischer, Liberty Lobby and Vibet, Inc., seeking a declaration that Legion was entitled to the funds from the Althaus settlement and requesting an accounting of the assets obtained by appellants. Legion also sought damages under theories of conversion, money had and received, and negligence.8 The court entered defaults against the Furrs and Vibet, Inc., and denied motions by the Furrs to vacate their defaults.
The trial count’s statement of decision found Legion was entitled to the proceeds of the Althaus settlement, that Carto and the codefendants had converted Legion’s funds, and that Carto and the codefendants (except Liberty Lobby)9 were liable to Legion for $6,430,000, the value of the Althaus settlement less amounts spent to secure the settlement proceeds. The trial court entered judgment against the appellants, and this appeal followed.
Appellants first argue the judgment for Legion is void because the trial court did not have subject matter jurisdiction of the suit. Appellants appear to contend that whenever a lawsuit requires determinations involving the internal affairs of a foreign corporation, only the state of incorporation may entertain the lawsuit.10 Appellants argue this lawsuit necessarily involved issues of the internal affairs of Legion, and because Legion was incorporated under the laws of Texas only Texas courts had subject matter jurisdiction over the present lawsuit.11
Appellants cite no relevant authority holding that California courts do not have subject matter jurisdiction to hear disputes over the internal affairs of a corporation headquartered in and operating exclusively in California merely because the state of incorporation is not California. To the contrary, California courts have adjudicated internal corporate matters of foreign corporations. (See American Center For Education, Inc. v. Cavnar (1978) 80 Cal.App.3d 476, 485-487 [dispute over internal affairs of nonprofit Delaware corporation operating in California; place of incorporation is relevant to choice of law purposes but court applied California law to issues in that case].) Although early cases suggested California courts would abstain from actions involving the internal affairs of a foreign corporation, [t]he modern rule is that a court will exercise jurisdiction unless it is an inappropriate or inconvenient forum for the trial of the action,
with the state of incorporation being relevant only to choice of law issues. (9 Witkin, Summary of Cal. Law (9th ed. 1989) Corporations, § 241, p. 727.) As Witkin explains:
One of the earliest applications of the doctrine of inconvenient forum was the rule that a court ordinarily would not entertain a suit against a foreign corporation or its officers or agents when the issues involved internal affairs of the corporation. [Citation.] But even under this approach, where there was no oppression or great inconvenience in trying the action, the forum would take jurisdiction over many kinds of suits against foreign corporations or their officers, especially where the corporation actually made the forum state its principal place of business and had its records and officers there. [Citations.]
The modern view, emphasized by the United States Supreme Court and the Second Restatement of Conflict of Laws, appears to be that the subject matter (internal affairs) is not in itself a sufficient reason for refusing jurisdiction.
There is no rule of law, moreover, which requires dismissal of a suitor from the forum on a mere showing that the trial will involve issues which relate to the internal affairs of a foreign corporation. That is one, but only one, factor which may show convenience of parties or witnesses, the appropriateness of trial in a forum familiar with the law of the corporation’s domicile, and the enforceability of the remedy if one be granted. But the ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice.[Quoting Koster v. Lumbermens Mut. Casualty Co. (1947) 330 U.S. 518, 527]. (2 Witkin, Cal. Procedure (4th ed. 1996) Jurisdiction, § 377, pp. 980-981.)
Therefore, the fact that Legion was incorporated in Texas is relevant to whether California law or Texas law controls resolution of disputes over the internal affairs of Legion, and whether the California action might be stayed under forum nonconveniens principles, but it does not deprive California courts of subject matter jurisdiction to resolve disputes over Legion’s internal affairs.
The out-of-state authorities cited by appellants do not hold to the contrary. For example, the fact that only Texas may create a corporation under Texas law (A. B. Frank Co. v. Latham (1946) 193 S.W.2d 671, 673-674), that proceedings for the involuntary dissolution of a Texas corporation must be filed in Texas (State v. Dyer (1947) 200 S.W.2d 813, 815), or that a Texas court has jurisdiction to enjoin its domestic corporations from engaging in conduct outside its borders (Owens-Illinois, Inc. v. Webb (1991) 809 S.W.2d 899, 904) are irrelevant to whether California courts have concurrent jurisdiction over foreign corporations headquartered and operating exclusively in California.
We conclude the trial court had subject matter jurisdiction over the present dispute even though the court necessarily made subsidiary determinations involving the internal affairs of Legion.12
Appellants argue the judgment must be vacated and the complaint dismissed because Legion’s complaint was filed without complying with Code of Civil Procedure section 425.15, subdivision (a),13 which provides:
No cause of action against a person serving without compensation as a director or officer of a nonprofit corporation described in this section, on account of any negligent act or omission by that person within the scope of that person’s duties as a director acting in the capacity of a board member, or as an officer acting in the capacity of, and within the scope of the duties of, an officer, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes that claim to be filed after the court determines that the party seeking to file the pleading has established evidence that substantiates the claim …
Legion’s complaint included a negligence claim but Legion did not follow the pre-filing procedures outlined in section 425.15.14 However, appellants' argument that the complaint should be dismissed based on this omission was not raised below until closing argument at trial, more than two years after the complaint was filed. The court denied the motion to dismiss.
Appellants argue that noncompliance with section 425.15 is a jurisdictional defect that may be raised at any time. We conclude there was no jurisdictional defect and appellants waived any rights they might have had under section 425.15 by not earlier raising the issue. The court in Villa Pacific Building Co. v. Superior Court (1991) 233 Cal.App.3d 8, and this court in Vallbona v. Springer (1996) 43 Cal.App.4th 1525, examined statutes analogous to section 425.15 that required the plaintiff, as a condition precedent to filing a complaint containing certain types of claims, to file a petition establishing the factual basis for the claim and obtain a court order permitting the complaint to be filed. (Villa Pacific, supra, at p. 10 [examining Civ. Code, § 1714.10]; Vallbona, supra, at p. 1533 [examining section425.13].) In both cases, the defendant answered and litigated the action without promptly raising noncompliance with the applicable statute. (Villa Pacific, supra, [one-year delay]; Vallbona, supra, at pp. 15331534 [first raised at trial after one-year delay].) Both courts concluded noncompliance was not jurisdictional and that, absent timely objection to a complaint filed without permission of court, the protections conferred by those procedural statutes were waived. (Villa Pacific, supra, at pp. 11 12; Vallbona, supra, at pp. 1534- 1535.) This court in Vallbona, finding persuasive the analysis in Villa Pacific, concluded that:
[S]ection 425.13’s requirement of a court order as a condition precedent to including a claim for punitive damages in an action arising out of the professional negligence of a health care provider is not jurisdictional, and absent timely objection to a complaint’s inclusion of a punitive damages claim without court permission, the protection conferred by section 425.13 is waived. [Citation.] We find nothing in the language of section 425.13 — the pattern for Civil Code section 1714.1 — suggesting its benefit cannot be waived. [Citation.] Further, section 425.13 … is procedural, affecting only a remedy and not a substantive right. [Citation.] Hence, by answering plaintiff’s complaint and litigating this case for almost a year before raising by motion in limine the issue of section 425.13, defendants waived any rights they might have had under the statute. [Citation.] (Vallbona, supra, at p. 1535.)
We follow Vallbona and conclude compliance with section 425.15 is not jurisdictional and its protections are waived if not interposed at the earliest opportunity.15
The cases relied on by appellants do not undermine the analysis of Vallbona and Villa Pacific. In Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, the court held that compliance with section 425.11, requiring notice to a defendant of the amount of damages sought by a personal injury plaintiff before a default could be taken, was mandatory because a plaintiff in a personal injury action was prohibited by section 425.10 from stating the amount of damages in his complaint. Schwab concluded that compliance with section 425.11 was essential to give the defendant notice of the extent of liability to which he or she might be subjected. (Id. at p. 435.) The due process concerns of notice and opportunity to respond in Schwab have no counterpart in the provisions of section 425.15 when a defendant disregards a plaintiffs noncompliance and instead answers and defends on the merits.16
Appellants also cite College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, but that case provides no guidance on the issue of waiver. There the plaintiffs moved for an order under section 425.13 permitting them to amend their complaint to seek punitive damages, and the issue was the sufficiency of the plaintiffs' showing. (Id. at p. 722.) College Hospital provides no guidance on whether a person may waive the protections provided him under a procedural statute by not timely invoking the statute.17
We conclude appellants waived the protections purportedly provided them under section 425.15 by not timely invoking its provisions.18
The trial court’s decision here was predominantly based on questions of credibility, weighing conflicting evidence, and drawing reasonable inferences from the voluminous documentary evidence presented. On appeal, appellants raise several separate claims that essentially argue the judgment is not supported by substantial evidence.19 When an appellant asserts the judgment is not supported by substantial evidence, our role as a reviewing court is limited. We resolve all evidentiary conflicts in favor of the prevailing party, and indulge all reasonable inferences possible to uphold the trial court’s findings. (Western States Petroleum' Assn. v. Superior Court (1995) 9 Cal.4th 559, 571.) Our power begins and ends
with a determination whether any substantial evidence exists, contradicted or uncontradicted, that supports the findings. (Ibid.) The testimony of a single witness, even though a party, may be sufficient to support the trial court’s judgment. (In re Marriage of Slivka (1986) 183 Cal.App.3d 159, 163.)
An important principle of appellate law is that an appellant’s challenge to the sufficiency of the evidence must set forth all material evidence on the point, not merely its own evidence. [emphasis added] (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) Noncompliance with this principle waives the alleged error and we presume the record contains evidence to sustain every finding of fact. (Ibid.)
Appellants' brief so flagrantly violates this established rule of appellate law that their claims based on insufficient evidence must be deemed waived. [emphasis added] Appellants do not cite any of the evidence favorable to the findings or supporting the judgment. Instead, appellants' brief weaves a story predicated on citations to Carto’s own testimony, exhibits proffered in support of the defense, many of which were not even admitted at trial, and excerpts from other witnesses to the extent those excerpts support appellants' theory.20
Because appellants do not set forth all material evidence on the relevant points, and cite only their own testimony (together with inferences from the documents drawn in their favor), they have waived their appellate claims alleging insufficiency of the evidence, and we presume the record contains evidence to sustain every finding of fact necessary to support the judgment.21 (Planned Parenthood Assn. v. Operation Rescue (1996) 50 Cal.App.4th 290, 305; Jordan v. City of Santa Barbara (1996) 46 Cal.App.4th 1245, 1255.)
Appellants argue we must reverse the judgment because Legion pleaded alternative counts alleging a tort claim (conversion) and a common count (money had and received), and the statement of decision found for Legion on both counts. Appellants argue that when a plaintiff files a tort claim against a wrongdoer and elects to waive the tort and proceed on an implied contract, the plaintiff is barred from recovering on the tort claim. (Canepa v. Sun Pacific, Inc. (1954) 126 Cal.App.2d 706.) From this premise, appellants argue the judgment must be vacated because Legion’s election to pursue the common count was an election of remedies barring Legion from a tort recovery.
A plaintiff is permitted to plead alternative, and even inconsistent, theories of liability arising from a single set of facts (4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 363, p. 466) without presenting any election of remedies problem. (3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 174, p. 244.) Although a plaintiff may not recover two inconsistent remedies, must choose between the available remedies and will be bound by his election (ibid.), the doctrine of election of remedies applies only where more than one remedy is sought and the remedies are mutually exclusive. If the plaintiff pleads a single cause of action and seeks only a single remedy, election cannot be compelled no matter how many legal theories in as many counts he uses.
(4 Witkin, supra, Pleading, § 370 at p. 472, emphasis in original.)
Here, Legion’s tort and common count sought, and the judgment of the court awarded, only a single remedy: damages for misappropriation of the gift. Because the judgment did not award inconsistent remedies, it is proper.
Appellants raise two arguments attacking the judgment entered against the Furrs. First, they argue it was an abuse of discretion to deny the Furrs' motion to be relieved from default: Second, they arGue there is no evidence to support the judgment against the Furrs.
The Furrs were served with the summons and complaint on September 29, 1995.22 On Friday, October 27, 1995, counsel for the existing defendants requested an extension of time to file a responsive pleading on behalf of the Furrs. The following Monday, Legion’s counsel notified defense counsel that the requested extension was denied. Two days later, Legion requested and obtained entry of defaults against the Furrs.
On November 7, 1995, defense counsel asked Legion to stipulate to vacating the default in order to permit the Furrs to file a motion to quash service of process. Legion’s counsel declined this request, although he did offer to vacate the default if the Furrs would file an answer to the complaint. Defense counsel did not accept that offer.
On March 22, 1996, one month before the scheduled trial date, the Furrs filed a motion to quash service of summons and to dismiss the complaint, arguing California could not exercise jurisdiction over them and, in the alternative, that the service was improper because they were not served with a summons. The Furrs also filed a motion to vacate the default under sections 473 and 473.5, asserting they were not validly served. The trial court denied the motion to quash service of summons as untimely under section 418.10. The trial court also denied the motion to vacate the default, concluding in part that the motion was untimely because they delayed four months before filing their motion.23
A motion to quash service on the grounds of lack of jurisdiction must be filed on or before the last day for a defendant to file a responsive pleading. (§ 418.10.) Because the Furrs' motion to quash was filed nearly five months after their time to answer had expired, the trial court correctly ruled the motion was untimely. (Ibid.)
However, a trial court has discretionary authority under section 473 to vacate a default and permit late filing of a motion to quash (Floveyor Internat., Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 792) if the default was taken against the party through his or her mistake, inadvertence, surprise, or excusable neglect.
(§473, subd. (b).) A party seeking relief under section 473 has the burden of showing (1) diligence in making the motion after discovering the mistake, and (2) a satisfactory excuse for the mistake. The trial court must generally consider the facts and circumstances of a case to determine whether the party was diligent in seeking relief and whether the reasons given for the party’s mistake are satisfactory. (Eigner v. Worthington (1997) 57 Cal.App.4th 188, 196.) The disposition of a section 473 motion rests largely in the discretion of the trial court, and its decision will not be disturbed on appeal unless there has been a clear abuse of discretion. Although precise definition is difficult, it is generally accepted that the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered. [Citation.] [W]hen two or more inferences can reasonably be deduced from the facts, a reviewing court lacks power to substitute its deductions for those of the trial court.
(In re Marriage of Connolly (1979) 23 Cal.3d 590, 597-598.)
We conclude it was not an abuse of discretion for the trial court to deny the motion because a trial court could reasonably find the Furrs did not satisfy either prong of their burden of showing a satisfactory excuse for not timely acting or diligently acting upon learning of the default. The record permits an inference there was no satisfactory excuse for not timely responding to the complaint.24 Moreover, the trial court-specifically noted that even though the Furrs knew of the default in early November 1995 they delayed four months before bringing the motion for relief from default and their section 473 motion made no effort to justify or explain that delay.
Appellants next assert the evidence does not support the judgment against the Furrs. As previously discussed (see part II.C, ante), this contention is waived. Even assuming this contention were preserved, the legal effect of the Furrs' default is that the allegations of the complaint against them are deemed admitted. (6 Witkin, Cal. Procedure (4th ed. 1997) Proceedings Without Trial, § 153, p. 570.) The only additional proof required was proof of the amount of damages. (Id., § 146 at pp. 561-562.) Because the complaint alleged, and the Furrs' default admitted, facts demonstrating they had converted Legion’s assets, and appellants do not on appeal contest the sufficiency of the evidence on the issue of the amount of damages awarded by the judgment, we reject appellants' claim that the judgment against the Furrs is unsupported by the evidence.
Appellants argue the judgment must be reversed because of alleged inadequacies in the trial court’s statement of decision. They argue the statement of decision did not comply with section 632 and, under Miramar Hotel Corp. v. Frank B. Hall & Co. (1985) 163 Cal.App.3d 1126, failure to prepare and file a proper statement of decision is per se reversible error. Appellants also argue that, under McCurter v. Older (1985) 173 Cal.App.3d 582, a losing party may obtain appellate reversal for alleged inadequacies in the statement of decision even though he or she did not object to its perceived inadequacies at trial.
We conclude appellants have waived any claim based on alleged inadequacies of the statement of decision. First, even assuming the statement of decision here was somehow inadequate, because appellants did not object to its perceived inadequacies below they may not obtain appellate reversal. The court in In re Marriage of Arceneaux (1990) 51 Cal.3d 1130 concluded that when a party claims deficiencies in the trial court’s statement of decision, section 634 requires that the party bring those deficiencies to the attention of the trial court,
and a party waives any claimed deficiencies if he or she does not object below. (Id. at pp. 1136-1138.) The Arceneaux court specifically concluded the contrary approach adopted by McCurter v. Older, supra, merely reflected the prevailing law at the time, a rule abrogated by the present version of section 634 [and] [i]nsofar as McCurter v. Older … can be read to hold that a party who fails to bring to the attention of the trial court an omission or ambiguity in its statement of decision may nevertheless avoid the presumptions in favor of the judgment, [it is] disapproved.
(Id. at p. 1137.)
Section 634 and California Rules of Court, rule 232, considered together, contemplate any defects in the trial court’s statement of decision must be brought to the court’s attention through specific objections to the statement itself. By filing specific objections to the court’s statement of decision a party pinpoints alleged deficiencies in the statement and allows the court to focus on the facts or issues the party contends were not resolved or whose resolution is ambiguous.
(Golden Eagle Ins. Co. v. Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1380 [party waived contention regarding statement of decision by not filing objections below].) Appellants cite nothing suggesting they filed objections below pinpointing those facts or issues that were not resolved or were ambiguously resolved. Accordingly, appellants' claim is waived by their inaction below. (Accord, Tusher v. Gabrielsen (1998) 68 Cal.App.4th 131, 140.)
Second, although appellants assert the statement of decision was inadequate, they make no argument and cite no law in support of this claim.25 Because they present neither argument nor citation to authority supporting this claim we deem it waived on appeal. (San Mateo County Coastal Landowners' Assn. v. County of San Mateo (1995) 38 Cal.App.4th 523, 558-559 [issue raised without argument or citation to authority deemed waived]; Dills v. Redwoods Associates, Ltd., supra, 28 Cal.App.4th at p. 890, fn. 1 ["Other than a passing reference in their appellate briefs to these other issues, they presented no argument or authority. We will not develop the appellants' arguments for them and therefore decline to reach the [unbriefed] issues."].)
The judgment is affirmed. Respondents are entitled to costs on appeal.
[signed]
McDONALD, J.
WE CONCUR:
[signed]
KREMER, P. J.
[signed]
NARES, J.
1. The other parties named as defendants were two entities (Liberty Lobby and Vibet, Inc.) and four individuals (Elisabeth Carto, Lewis Furr, Lavonne Furr, and Henry Fischer.)
2. Our recital of the evidence does not resemble the facts outlined by appellants because they have selected only those portions of the evidence (principally Carto’s testimony) favoring their viewing, a violation of fundamental tenets of appellate advocacy. We recite the evidence viewed most favorably to the judgment. [emphasis added]
3. For a short period prior to Farrel’s death, Carto advised Marcellus to tell Farrel to send donations intended for Legion to a different entity controlled by Carto known as Foundation for Defense of [sic] the First Amendment (FDFA). However, Carto assured Marcellus that funds redirected into FDFA accounts would be repaid to Legion or used to pay Legion’s legal expenses.
4. The stock of NECA was in the form of bearer certificates deposited in several safe deposit boxes in different countries. To complete her gift to Legion of control over NECA’s assets, Farrel gave Carto keys to these safe deposit boxes.
5. For example, in 1986 Legion filed litigation in North Carolina seeking to recover NECA’s assets for Legion. The complaint, verified by Carto, alleged Farrel had made an intervivos gift of NECA to Legion. In that litigation, Legion’s interrogatory answers stated NECA was formed by Farrel to pass control of NECA’s assets to Legion, and that Farrel and Carto had discussed this intent during a personal meeting in 1984. Carto verified these interrogatory answers to be true.
6. Substantial sums were paid from Vibet, Inc.’s account to Liberty Lobby and FDFA, entities controlled by Carto.
7. Carto also argued at trial that Legion’s board of directors adopted a March 5, 1991, resolution to abandon Legion’s right to the money and to authorize Foetisch to deliver the funds to an entity that would disburse the money to groups attuned to Legion’s views. The purported March 5, 1991, resolution recited that the directors of Legion forming the quorum and adopting the resolution were the Furrs, Mr. Kerr and Mr. Taylor. Kerr testified he had never met the Furrs, never spoke to them by phone, neither reviewed nor signed minutes of a board of directors' meeting, never signed any document turning over the Farrel gift to Carto, and did not attend or participate in a March 5, 1991, board meeting adopting the resolution. Taylor testified he neither met nor spoke with the Furrs, neither attended nor reviewed any minutes from a board of directors' meeting, did not attend or participate in a March 5, 1991, board meeting adopting a resolution declining the Farrel gift, and did not become aware of the purported rejection of the gift until late 1993.) [sic]
8. The complaint also alleged claims for civil conspiracy and for violation of statutes. The court rejected the conspiracy claim and found the statutory violation allegations entitle Legion to injunctive relief but was not a separate cause of action.
9. As to Liberty Lobby, the count concluded it had converted only $2,650,000, representing the amount Carto funneled to Liberty Lobby from the Vibet, Inc. account, and the judgment provided Liberty Lobby was liable only for $2,650,000.
10. Appellants make other vague jurisdictional arguments that require only brief discussion. They assert the court lacked personal jurisdiction over Henry Fischer and Vibet, Inc. because they were not served according to the laws of the foreign lands in which they resided. However, Fischer made a general appearance and therefore waived any claimed defect in service. (Neihaus v. Superior Court (1997) 69 Cal. App. 3d 340, 345.) Appellants' argument as to Vibet, Inc. is made without citation to any legal authority and we deem it waived. (Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th 888, 890, fn. 1.) Appellants also assert the court lacked subject matter jurisdiction over the NECA proceeds because proceedings in a Swiss court resulted in a settlement conveying the assets to Carto. However, the court below found the proceeds from the Althaus settlement were to be paid to Legion, not Carto, and a California court has jurisdiction to decide whether Carto, a California resident, misappropriated those funds.
11. Appellants suggest the lawsuit issues included who was empowered to elect directors, who were the directors entitled to act for Legion, and whether the true directors were authorized to direct that Farrel’s gift be redirected from Legion to Carto.
12. Our conclusion that California has subject matter jurisdiction over this dispute necessarily disposes of appellants' subsidiary argument that the judgment is void for lack of subject matter jurisdiction insofar as it enjoins Carto and the others from transferring Legion property or holding themselves out to be members, directors or employees of Legion.
13. All further statutory references are to the Code of Civil Procedure unless otherwise specified.
14. Under section 425.15, subdivision (a), the court may allow the filing of a pleading that includes a negligence claim if the plaintiff files a verified petition accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based, and the court determines there exists evidence substantiating the claim.
15. The considerations discussed in Vallbona apply with even greater force when noncompliance with section 425.15 is not raised until after trial. Section 425.15, subdivision (a) permits a plaintiff to assert the negligence claim if the court determines that the party seeking to file the pleading has established evidence that substantiates the claim.
After a trial, the evidence will either substantiate the claim for negligence (in which event the section 425.15 motion would be granted) or it will not support the negligence claim, in which event no prejudice will accrue to the defendants because the absence of such evidence will result in judgment in their favor on the negligence claim.
16. For the same reasons, appellants' citation to Debbie S. v. Ray (1993) 16 Cal.App.4th 193, in which the court examined a plaintiff’s noncompliance with section 425.11, provides no guidance here.
17. Rowe v. Superior Court (1993) 15 Cal.App.4th 1711, another case cited by appellants, has even less relevance to the issue presented here. Rowe merely held section 425.14 was not unconstitutional under the establishment and free exercise clauses of the First Amendment. (Rowe, supra, at pp. 1725-1734.)
18. Although it is unnecessary to determine whether section 425.15 applied here, its applicability is open to debate. That section does not apply to corporations that unlawfully restrict membership, services, or benefits conferred on the basis of race, religious creed, color, national origin, ancestry, sex, marital status, disability, political affiliation, or age (id. at subd. (e)(2)), and there is no evidence suggesting Legion accepts members without regard to that criteria.
19. Appellants argue the judgment is unsupported by the evidence because the evidence showed Carto did not wrongfully exercise control over money belonging to Legion. Appellants' thesis is that Farrel did not intend to leave NECA’s assets to Legion but instead intended to leave those assets to Carto in trust to disburse among entities adhering to Farrel’s political viewpoint; although Carto had discretion to disburse some or all of those funds to Legion, he had no obligation except to carry out Farrel’s donative intentions that the money be disbursed to politically attuned entities. From this premise, appellants argue (1) there could be no conversion because Legion had no right to any portion of the funds; (2) there could be no negligence asserted against Carto or Fischer because Carto properly obtained the funds and Fischer assisted Carto rather than Legion in that effort; and (3) Legion had no right to either declaratory relief or to an accounting of the amounts collected from the Althaus settlement because Carto was the only party entitled to collect and distribute the proceeds.
20. The full extent of appellants' mention of the evidence supporting Legion’s version of events was that Mr. Weber was a director of Legion, but was unaware of the Farrel gift, the Althaus litigation or the Althaus settlement. Appellants also mention Weber’s testimony that (1) he concluded Carto was exercising authority over Legion’s affairs that Carto did not possess, and (2) Legion did not dispute Carto’s authority to pursue the Farrel gift on Legion’s behalf but only disputed Carto’s right to withhold the assets from Legion.
21. Even were it necessary to reach the issue, substantial evidence supports the judgment. The dispositive issue is whether Farrel intended her gift to be made to Legion or to Carto as trustee. The documents showing Legion appointed Carto as its agent to pursue the Farrel gift, and that Carto agreed to this appointment, permit an inference that Legion and Carto mutually understood he had no independent right to the funds and that Legion was the intended recipient of the gift. The Althaus settlement, signed by Carto, confirms the funds were to be distributed to Legion. The North Carolina litigation included a complaint verified by Carto as well as interrogatory answers verified by Carto stating NECA was formed by Farrel to pass control of NECA’s assets to Legion and that Farrel and Carto had discussed this intent during a personal meeting in 1984. These documents alone provide substantial evidentiary support for the conclusion Farrel intended that Legion, not Carto as trustee, receive the gift. [emphasis added]
22. The Furrs denied receiving the summons. However, the process server filed a declaration testifying he served the Furrs with copies of the summons designating them as persons sued under the fictitious names of Does 10 and 11, and defense counsel’s letter requested an extension on behalf of the Furrs design[ated] … as, respectively, Does 11 and 10,
permitting an inference the Furrs did receive the summons containing the Doe designations.
23. The trial court also concluded the motion for relief from default was procedurally deficient because it was unaccompanied by a proposed responsive pleading.
24. While the Furrs apparently claimed they did not respond because they were not served with a summons designating them as defendants, the process server’s affidavit of service permitted a contrary inference, and the contemporaneous request by defense counsel for an extension to respond on behalf of the Furrs belies their claim that they were unaware they had been named as defendants. Moreover, Lewis Furr admitted in deposition testimony that he had served as a clerk of the court in Louisiana, permitting an inference that he was aware of the requirement of timely responding to process.
25. The totality of their appellate argument supporting the merits of their claim is the assertion that [t]he Statement of Decision filed by [the trial judge] did not comply with C.C.P. Section 632.