Kim v. Cha CA2/3 filed 6/23/26

Filed 6/23/26 Kim v. Cha CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

CHESTER P. KIM et al.,

Plaintiffs and Respondents,

v.

ALEX MYUNG CHA et al.,

Defendants and Appellants.

B341504, B342793

Los Angeles County
Super. Ct. No.
24STCV02973
APPEAL from a judgment of the Superior Court of Los Angeles County, Curtis A. Kin, Judge. Affirmed.
Law Offices of Alex Cha & Associates and Alex M. Cha for Defendants and Appellants.
Lee Law Offices and W. Dan Lee for Plaintiffs and Respondents.
_________________________
Chester P. Kim, Howard Park, and Al Ilsoon Choe (Plaintiffs) brought this action to invalidate the election of Alex Myung Cha, Young Nae Lee, and Benedict J. Pak (Defendants) to the board of directors of a nonprofit corporation. After considering written submissions and live testimony, the trial court entered judgment for Plaintiffs. Cha and Lee appealed. They argue the judgment must be reversed because Plaintiffs failed to give notice to the Attorney General and their action wastime barred. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1.Background
The Los Angeles Korean Festival Foundation (the Foundation) is a California nonprofit public benefit corporation created in 1974 by leaders in the early Korean American community “with the purpose of preserving their Korean roots after immigrating to the United States.” The Foundation organizes an annual four-day festival that preserves and shares Korean cultural heritage.
A board of directors (the Board) governs the Foundation. As of January 2023, the Board consisted of four members: chair Moo Hae Bae and Plaintiffs (Kim, Park, and Choe). Kim became a director in 1986, Park and Bae in 2007, and Choe in 2015.
At a special meeting on January 23, 2023, the Board elected Defendants as new directors. A year later, on January 3, 2024, Bae and Defendants voted to elect Cha as chair of the Board and to remove Plaintiffs as directors.
2.The complaint
In February 2024, Plaintiffs filed the present action against Defendants and the Foundation asserting three causes of action under Corporations Code section 5527. The operative first amended complaint sought declarations and injunctions invalidating the January 2023 election of Defendants as directors, the January 2024 election of Cha as chair, and the January 2024 removal of Plaintiffs as directors.
The complaint alleged the January 2023 elections were invalid because Defendants did not meet all the qualifications of a director. According to Plaintiffs, the Foundation’s bylaws at the time—the 2021 Bylaws—required a director to pay a $10,000 “director fee” before being elected. Plaintiffs alleged they voted to elect Defendants based on Bae’s false representation that Defendants had paid the director fees in full. Bae revealed in July 2023 that Defendants had paid only $5,000 each. Plaintiffs asserted Defendants’ failure timely to pay the director fees rendered their elections invalid, which in turn invalidated any actions Defendants had taken as directors, including their votes to elect Cha as chair and to remove Plaintiffs.
3.The written submissions
The court set a hearing to determine the validity of the elections and removals. Before the hearing, the parties submitted briefs and supporting evidence.
a.Plaintiffs’ evidence
Plaintiffs submitted a copy of the 2021 Bylaws, which are written in Korean. According to an English translation of the document, the 2021 Bylaws contain an article entitled “Qualification of Director,” which includes the following requirement: “A person who has paid the Director’s Fee of USD ($10,000) to this Foundation.”
Each plaintiff submitted a declaration. According to those declarations, Bae suggested adding Defendants to the Board in late 2022. The Board held a special meeting on January 23, 2023 to consider electing Defendants. At the meeting, Kim asked Bae whether Defendants had each paid a $10,000 director fee. Bae responded, “ ‘Of course, they did. I personally received the checks from them and gave the checks to the general manager at the Foundation to deposit.’ ” Choe asked Bae to confirm the payments, to which Bae replied, “ ‘Don’t you trust me! We have been working together as directors for over 10 years. How can I work as chair of the Board if you two don’t trust me?’ ” Plaintiffs ultimately voted with Bae to elect Defendants to the Board.
Kim said he asked Bae about Defendants’ director fees in April 2023. Bae insisted Defendants had given the checks to him personally, and he told Kim to “trust me.” Bae became “very upset” in late May 2023 when Choe asked him about the payments.
Plaintiffs asserted they confronted Bae and demanded proof of the payments at a July 25, 2023 Board meeting. During the meeting, Park directly asked Bae if Defendants had paid their director fees in full before they were elected. Defendants remained silent, and Bae admitted they had not paid the full amount. Plaintiffs “strongly objected” to Defendants’ attendance at future Board meetings.
Plaintiffs, Defendants, and Bae attended a Board meeting on January 3, 2024. On the agenda for the meeting was the election of Cha as chair of the Board. Plaintiffs objected on the ground that Cha was never duly elected or appointed to the Board. Over Plaintiffs’ objections, Defendants and Bae voted to elect Cha as chair and remove Plaintiffs as directors.
b.Defendants’ evidence
In an opposition brief, Defendants asserted Plaintiffs’ claims related to the January 2023 elections were time-barred under section 5527. Section 5527 states an action challenging an election “must be commenced within nine months after the election . . . . If no such action is commenced, in the absence of fraud, any election, appointment or removal of a director is conclusively presumed valid nine months thereafter.” Defendants argued Plaintiffs’ action was untimely because they filed it in February 2024, which was more than nine months after the January 2023 elections. Defendants asserted section 5527’s fraud exception did not apply because there was no fraud.
Defendants submitted a declaration from Bae. According to Bae, Defendants each paid $5,000 to the Foundation in October 2022 in anticipation of the elections. Each Defendant paid another $5,000 in October 2023.
Bae asserted there was no discussion of the fees at the January 23, 2023 Board meeting. Choe asked Bae about the issue during a phone call on April 24, 2023. Bae told Choe Defendants had paid only $5,000 each. The next day, Choe apologized to Bae for questioning him.
Defendants also submitted a declaration from the Foundation’s executive director, Hanna Kim. Hanna attended the January 2023 Board meeting and recalled no discussion of fees. Defendants provided a transcript of the meeting confirming there was no discussion of fees.
c.Plaintiffs’ reply evidence
Plaintiffs submitted supplemental declarations in response to Defendants’ evidence. Kim and Choe asserted Bae made misrepresentations about the fees during an informal conversation before the start of the official meeting on January 23, 2023. The transcript Defendants submitted did not include the informal conversation.
4.The live testimony
After reviewing the parties’ written submissions, the court determined there were contested issues of fact that required live testimony. Therefore, the court held an evidentiary hearing over the course of two days in June 2024. Lee and Pak did not appear or otherwise participate in the hearing. Six witnesses testified: Kim, Park, Choe, Cha, Bae, and Hanna Kim. We summarize their testimony only to the extent it is relevant to the issues in this appeal.
Kim testified that he asked Bae in December 2022 whether Defendants had paid the director fees in full, and Bae replied that they had. Sometime later, the Foundation’s secretary told Kim that Defendants had paid only $5,000 each. Kim wanted to“get everything straight” before the elections. To that end, hehad an informal discussion with Choe and Bae before the start of the January 2023 Board meeting. Kim asked Bae if Defendants had paid $10,000, and Bae confirmed they had.
Bae testified that each defendant paid $5,000 in October 2022, and another $5,000 in April 2023. Bae denied having told Plaintiffs in January 2023 that Defendants had paid $10,000.
Hanna Kim testified she was present at the January 2023 Board meeting. She did not recall any conversations among Board members about director fees, either before or during the meeting. According to Hanna, Choe had access to the Foundation’s checks and other financial information as vice chair of the Board.
Hanna said she overheard a phone call between Bae and Choe on April 24, 2023. Choe asked Bae if Defendants had paid the full director fees. There was a lot of yelling and “40 minutes of nonstop back and forth about $5,000.” According to Bae, he told Choe during the call that Defendants paid only half the required fees.
After the call, Hanna overheard Kim ask Choe, “ ‘[w]hy did you call Mr. Bae,’ ” implying Choe should have left the issue alone. Hanna then heard Kim talking to Bae over the phone. Bae asked why Choe brought up the issue with fees. The next day, Choe apologized to Bae for the phone call.
Park testified that reporters started asking him whether Defendants had paid the full director fees. Because of the reporters’ questions, Park raised the issue at the July 2023 Board meeting. Kim and Choe told Park they believed Defendants had paid in full, but they did not know for certain. Bae hesitated before stating Defendants had paid in full. Park then asked the executive director, Hanna Kim, for proof. Hanna seemed flustered, and Bae eventually admitted Defendants had paid only $5,000 each. According to Kim, Bae said he exercised his discretion to allow Defendants to pay the remaining balance before the start of the next festival, which was scheduled for the fall of 2023.
Cha testified that, at the time he was elected, he and the other defendants understood the director fee to be $10,000. However, they “were informed that [the Board was] trying to change that.” Cha paid $5,000 in October 2022. At Bae’s direction, Cha paid another $5,000 “somewhere around” April 2023.
5.The court’s decision
The court heard argument on September 5, 2024 and took the matter under submission. Five days later, on September 10, 2024, the court issued a detailed 16-page final decision in favor of Plaintiffs.
The court concluded Plaintiffs’ action was timely under section 5527’s fraud exception. The court found Bae committed fraud by telling Plaintiffs before the January 23, 2023 meeting that Defendants had each paid the full director fee. Bae’s fraud prevented Plaintiffs from knowing the elections were invalid at that time. The court found Plaintiffs relied on Bae’s fraudulent assurance in voting to elect Defendants to the Board. The court rejected Bae’s and Hanna’s testimony that there was no discussion of the issue before the January 2023 meeting.
The court noted section 5527 does not specify when an action must be filed if the fraud exception applies. The court said the “sensible approach” is to toll the period for nine months after Plaintiffs “were reasonably on notice as to their claim of the invalidity of defendant[s’] election[s].” The court concluded Plaintiffs “did not learn or have reason to know” about the lack of full payment until July 25, 2023, when Bae admitted Defendants had not paid the fees. The court reasoned, because Plaintiffs filed their action within nine months of July 2023, their action was timely.
Turning to the merits, the court concluded the January 2023 elections of Defendants were invalid. The court determined the 2021 Bylaws required a prospective director to pay a $10,000 director fee before being elected. Because Defendants did not pay the fees in full before they were elected, they were not qualified and their elections were invalid.
The court also found the January 2024 election of Cha as chair and the removal of Plaintiffs were invalid. The court refused to credit Defendants’ votes given they were not validly elected to the Board. Without Defendants’ votes, there were insufficient votes to elect Cha as chair or remove Plaintiffs from the Board.
The court entered judgment for Plaintiffs, granting their requested declaratory and injunctive relief. Cha and Lee timely appealed.
DISCUSSION
Defendants raise two issues on appeal. First, they contend the judgment must be reversed because Plaintiffs failed to give notice of the action to the Attorney General, as required under section 5617. Second, they argue the judgment must be reversed because the action was untimely under section 5527.
1.Relevant law
Section 5110 et seq. governs nonprofit public benefit corporations, including the Foundation. Section 5527 provides, “An action challenging the validity of any election, appointment or removal of a director or directors must be commenced within nine months after the election, appointment or removal. If no such action is commenced, in the absence of fraud, any election, appointment or removal of a director is conclusively presumed valid nine months thereafter.” (Ibid.)
Section 5617 allows a director to file an action in superior court to “determine the validity of any election or appointment of any director of any corporation.” (§ 5617, subd. (a).) A person who brings an action under section 5617 “shall give notice of the action to the Attorney General, who may intervene.” (Id., subd. (b).) The court must set a hearing (id., subd. (c)) and “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” (id., subd. (d)).
2.Defendants forfeited their notice argument
Defendants contend the judgment must be reversed because Plaintiffs failed to give notice of the action to the Attorney General, as required under section 5617, subdivision (b). Plaintiffs argue Defendants forfeited this issue by failing to raise it below. We agree with Plaintiffs.
“In our adversarial system, each party has the obligation to raise [in the trial court] any issue or infirmity that might subject the ensuing judgment to attack.” (JRS Products, Inc. v. Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168, 178.) Therefore, as a general rule, appellate courts will not consider arguments raised for the first time on appeal. (See ibid.; Bialo v. Western Mutual Ins. Co. (2002) 95 Cal.App.4th 68, 73 [asa general rule, appellate courts “ignore arguments, authority, and facts not presented and litigated in the trial court”].) Defendants concede they did not raise the notice issue in the trial court. Their failure to do so forfeits the issue on appeal.
Defendants urge us to exercise our discretion to consider the notice issue on the merits. An appellate court has discretion to consider forfeited issues that raise pure questions of law based on undisputed facts. (Ramirez v. Department of Motor Vehicles (2023) 88 Cal.App.5th 1313, 1335.) However, “an appellate court is under no mandatory duty” to exercise that discretion. (Ibid.; see Wittenberg v. Bornstein (2020) 51 Cal.App.5th 556, 567 [there is no mandatory duty to consider forfeited arguments that raise pure questions of law]; Department of Corrections & Rehabilitation v. Workers’ Comp. Appeals Bd. (2018) 27 Cal.App.5th 607, 623 [“whether we will entertain a new theory raised for the first time on appeal is strictly a matter of discretion”].)
Defendants argue we should exercise our discretion here because Plaintiffs’ purported “noncompliance with the notice requirement raises important questions of public policy or public concern.” Defendants, however, do not explain what those important questions are. Under these circumstances, we decline to excise our discretion to consider the issue.
Even if we were to overlook Defendants’ failure to raise the notice issue below, we still would decline to consider their argument. The appellant has the burden to demonstrate reversible error “by presenting legal authority on each point made and factual analysis.” (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655; see Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1069 [the appellant has the burden to show “the error was prejudicial [citation] and resulted in a ‘miscarriage of justice’ ”—i.e., that “ ‘ “it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error” ’ ”].) Moreover, “ ‘every brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.’ ” (People v. Stanley (1995) 10 Cal.4th 764, 793.) Here, Defendants cite no authority—and provide no meaningful analysis—to support their assertion that Plaintiffs’ failure to comply with section 5617’s notice requirement warrants reversal of the judgment. Accordingly, they have not met their burden to show reversible error.
3.Defendants have not shown the action was untimely
Defendants argue the judgment must be reversed because Plaintiffs’ challenge to the January 2023 elections was time-barred.
Section 5527 generally requires a person to bring an action challenging an election involving a public benefit corporation within nine months of the election. (See ibid.) Plaintiffs filed their action in February 2024, more than nine months after the January 2023 elections. Nevertheless, the trial court determined the action was timely under section 5527’s fraud exception. The court found Bae’s fraudulent misrepresentations caused Plaintiffs not to challenge the elections sooner, and Plaintiffs filed the action less than nine months after they reasonably should have discovered the elections were invalid.
Defendants contend the trial court erred in applying section 5527’s fraud exception. According to Defendants, the exception applies only if a named defendant committed the fraud. In this case, Plaintiffs presented evidence that only Bae committed fraud. Defendants argue, because Bae was not a named defendant, section 5527’s fraud exception does not apply.
Defendants’ argument raises a question of statutory interpretation subject to our independent de novo review. (Committee to Save the Beverly Highlands Homes Assn. v. Beverly Highlands Homes Assn. (2001) 92 Cal.App.4th 1247, 1261.) “In the construction of statutes, the primary goal of the court is to ascertain and give effect to the intent of the Legislature. [Citations.] The court looks first to the language of the statute; if clear and unambiguous, the court will give effect to its plain meaning.” (Id. at p. 1265.) “The words used should be given their usual, ordinary meanings and, if possible, each word and phrase should be given significance. [Citations.] The words used ‘must be construed in context, and statutes must be harmonized, both internally and with each other, to the extent possible.’ ” (Ibid.)
Here, Defendants point to nothing in the statutory text to support their interpretation. Section 5527 states, “in the absence of fraud,” an election is “conclusively presumed valid nine months thereafter.” (Ibid.) The statute does not specify—explicitly or implicitly—the fraud must have been committed by a defendant named in the action.
Defendants suggest the requirement becomes apparent when section 5527 is read together with section 5617. However, they do not identify the language in section 5617 that supports their interpretation. Defendants also contend, “[b]ecause a charge of fraud involves a serious attack on the accused’s character, the accused must be afforded notice and due process.” Defendants cite no relevant authority to support that assertion, nor are we aware of any. Accordingly, Defendants have not demonstrated error on this ground. (See Denny v. Arntz (2020) 55 Cal.App.5th 914, 920 [“Our review is de novo, but appellant bears the burden of demonstrating error.”].)
Defendants argue, even if section 5527’s fraud exception applies, Plaintiffs’ action was untimely under the “delayed discovery rule.” The discovery rule is an exception to the general rule that a “cause of action accrues at ‘the time when the cause of action is complete with all of its elements.’ ” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806–807.) The discovery rule “postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Id. at p. 807.) “A plaintiff has reason to discover a cause of action when he or she ‘has reason at least to suspect a factual basis for its elements.’ ” (Ibid.) Under the discovery rule, “suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period.” (Ibid.)
Even assuming the discovery rule applies in this case, Defendants have not shown reversible error. In passing, Defendants suggest the trial court applied the wrong standard to toll the statute of limitations. They contend the court should have started the statute of limitations when a reasonable person would have suspected the elections were invalid. Instead, Defendants assert, the trial court erroneously applied a subjective standard, tolling the statute of limitations until Plaintiffs actually learned Defendants failed to pay the director fees in full.
The record belies Defendants’ contention that the court applied a subjective, rather than objective, standard. The court stated in its decision it would toll the period for nine months after Plaintiffs “were reasonably on notice as to their claim of the invalidity of defendant[s’] election[s].” (Italics added.) The court also explained it tolled the statute of limitations until July 2023 because Plaintiffs “did not learn or have reason to know until the July 25, 2023 Board meeting that defendants had not paid the full $10,000 director’s fee.” (Italics added.) Whether a person was “reasonably on notice” or had “reason to know” is an objective standard. (See Sun ‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 697, fn. 21 [the “phrase ‘reason to know’ . . . suggests an objective notion of notice”].) Therefore, there is no merit to Defendants’ suggestion that the court failed to apply an objective standard.
Nor is there merit to Defendants’ argument that a reasonable person would have suspected, no later than April 2023, “that the new directors had [not] paid the full $10,000 [in] director’s fees.” Defendants contend this is the only reasonable conclusion flowing from the trial court’s findings that Choe and Kim confronted Bae about the fees in April 2023, and Bae became angry and defensive in response. Defendants also point to the court’s finding that Kim and Choe “were cowed into apologizing to Bae for upsetting him.” According to Defendants, after Bae’s angry and defensive response, a reasonably prudent person would have investigated further by asking for proof of the payments.
“ ‘When a plaintiff reasonably should have discovered facts for purposes of the accrual of a cause of action or application of the delayed discovery rule is generally a question of fact, properly decided as a matter of law only if the evidence . . . can support only one reasonable conclusion.’ ” (Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1252; see Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112 [“resolution of the statute of limitations issue is normally a question of fact”]; Sylve v. Riley (1993) 15 Cal.App.4th 23, 26 [“Whether reasonable diligence was exercised is generally a question of fact.”].) We review the trial court’s factual findings for substantial evidence. (See Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632 [“When the trial court has resolved a disputed factual issue, the appellate courts review the ruling according to the substantial evidence rule.”].) In determining whether substantial evidence exists, our review “begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination.” (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873–874, italics omitted.)
Here, there is sufficient evidence from which the court could have found Plaintiffs did not have reason to know until July 2023 that Defendants failed to pay the director fees in full. Plaintiffs presented evidence that Bae repeatedly assured them that Defendants had each paid $10,000. As the trial court noted in its decision, Bae garnered Plaintiffs’ trust by invoking “his more than 10-year working relationship with Kim, as well as his long-term relationship [with] Choe and Kim as co-directors.” Plaintiffs also presented evidence that, “when Choe asked Bae to confirm the payments, Bae questioned how he could work as chair if Choe and Kim did not trust him.” Given Bae’s leadership position within the Foundation and his longstanding relationship with Plaintiffs, the court reasonably could have concluded it was not unreasonable for Plaintiffs to trust and rely on Bae’s representations, even after the April 2023 phone calls. Accordingly, there is substantial evidence from which the trial court could have found Plaintiffs reasonably relied on Bae’s assurances that Defendants had paid the full director fees.
DISPOSITION
We affirm the judgment. Chester P. Kim, Howard Park, and Al Ilsoon Choe shall recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

EGERTON, Acting P. J.

We concur:

ADAMS, J.

HANASONO, J.