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Sacramento Sikh Society Bradshaw Temple v. Tatla

California Court of Appeals, Third District, Sacramento

September 24, 2013

SACRAMENTO SIKH SOCIETY BRADSHAW TEMPLE, Plaintiff and Respondent,
v.
SATNAM SINGH TATLA et al., Defendants and Appellants.

CERTIFIED FOR PARTIAL PUBLICATION [*]

APPEAL from a judgment of the Superior Court of Sacramento County, No. 04AS02448 Alan G. Perkins, Judge.

Downey Brand, Janlynn R. Fleener, Ramaah Sadasivam, Kevin McKinley and Katie Konz for Defendants and Appellants.

Donahue Blakemore & Mackey and Stephen J. Mackey; and Christopher A. Lee for Plaintiff and Respondent.

HULL, J.

Several founding members of the Sacramento Sikh Society (the Society), a nonprofit religious corporation, donated to the Society a parcel of real property in Elk Grove. The Society later obtained a second, adjacent parcel on which it erected a temple. Sometime later, other individuals took control of the Society from the founders through the election process.

The founders and others took various steps to gain control of the Society’s real property, including recording two transfer deeds purportedly from the Society to some of them. When the Society learned of this conduct, it initiated this action for slander of title against those purportedly responsible, to wit, defendants Satnam Tatla, Vichitra Sandhu, Kehar Singh, Kamal Gill, Gian Gill, Harinder Singh, Hakam Singh, Avtar Dosanjh, Sarban Singh, Mohinder Dosanjh, Manjit Dosanjh (the named defendants). Some of the named defendants in turn filed a cross-complaint against the Society and those who were running it.

Resolution of this dispute turned in part on whether bylaws adopted for the Society in 1996 superseded those adopted earlier. The named defendants claimed they remained in control of the Society by virtue of the earlier bylaws and, therefore, retained the power to transfer the two parcels. In a bench trial, the court concluded otherwise and nullified the two transfer deeds. The court also rejected the named defendants’ claim that they are “life members” of the Society and, because they otherwise failed to maintain membership in the Society, the court concluded the named defendants have no standing to pursue their cross-complaint. In a subsequent proceeding, a jury found against all of the named defendants except Gian Gill and Manjit Dosanjh on the Society’s claim for slander of title and awarded both consequential and punitive damages.

Satnam Tatla, Vichitra Sandhu, Kehar Singh, Kamal Gill, Gian Gill, Harinder Singh, Hakam Singh and Avtar Dosanjh (hereafter collectively defendants) appeal, challenging the judgment and each of the foregoing determinations. They contend the trial court erred in concluding the 1996 bylaws were properly adopted, setting aside the two grant deeds, and finding that they lack standing to pursue their cross-complaint. They also contend there is insufficient evidence to support the jury’s verdict on the slander of title claim, the jury was not properly instructed on the punitive damages issue, and there is insufficient evidence to support the punitive damages award.

We reject each of defendants’ contentions and affirm the judgment.

Facts and Proceedings

Because defendants raise various challenges to the sufficiency of the evidence, we recount the evidence in the light most favorable to the judgment below. (Bunch v. Hoffinger Industries, Inc. (2004) 123 Cal.App.4th 1278, 1303.)

In October 1988, Kamal S. Gill, Vichitra Singh Sandhu, Kehar Singh Shonky and Avtar Singh Dosanjh filed articles of incorporation with the California Secretary of State for the Society, a nonprofit religious organization. In early 1989, a Statement by Domestic Nonprofit Corporation was filed for the Society, listing as officers Vichitra Sandhu (chief executive officer), Kehar Singh (secretary), and Avtar Dosanjh (chief financial officer). The principal office of the Society was listed as 5600 Lerner Way in Sacramento, which was a home owned by Vichitra Sandhu.

In December 1989, Kamal Gill, Avtar Dosanjh and Vichitra Sandhu donated to the Society a 13-acre parcel of property on Gerber Road in Elk Grove for the express purpose of building and maintaining a “Sikh Gurdwara” (temple) and associated facilities.

In October 1992, the board of directors of the Society adopted the first restated bylaws (the 1992 bylaws) to govern the Society. The 1992 bylaws provided that the Society would be governed by a board of directors, whose members would be elected by the “Voting Members.” The 1992 bylaws established a maximum of 100 “Voting Members, ” all of whom must be approved by the board and who alone may be selected as directors. The board in turn would select the officers of the Society.

In 1993, the officers of the Society were Kamal Gill (chief executive officer), Makham Singh (secretary), and Avtar Dosanjh (chief financial officer).

The Society later discovered it could not build a temple on the 13-acre parcel. It purchased an adjacent, 10-acre parcel fronting on Bradshaw Road that contained an old house and garage. The official address of the Society was moved to this Bradshaw Road location. Because the Society could not obtain a loan for the purchase in its own name, the property was placed in the names of Kamal and Gian Gill, Jaswant and Mohinder Hundal, Mohinder and Manjit Dosanjh, and Vichitra Sandhu. After the mortgage was paid off, those individuals signed a grant deed transferring the property to the Society.

In 1995, a dispute arose over governance of the Society. On April 17, 1995, the Society, Makham Singh, Kamal Gill, Darshan Dhaliwal, Jaswant Hundal, and Amrik Kaile filed suit in Sacramento County Superior Court against Vichitra Sandhu, Avtar Dosanjh, Tara Ratenda, Ajit Randhawa, Pargan Bains, Rulda Shekhon, Ajit Grewal, Ranjit Singh, Balwant Virk, Gurbux Singh, Gurdee Singh, Sewa Singh, Pilem Mandi, and Sarwan Mathwalu for declaratory relief, an injunction and an accounting. The complaint alleged the plaintiffs are all member-directors of the Society or otherwise persons who have contributed time, money and/or personal property to the Society and the defendants “were or are purported member-directors of the Society and/or have taken control of the books, records, and assets of the Society....” It further alleged the defendants had “improperly dealt with assets of the Society” in violation of the bylaws, had deprived plaintiffs of access to the books, records, minutes, membership lists, and receipt books of the Society, and had improperly acted as officers and directors of the Society.

A receiver was appointed to run the Society during the pendency of this litigation. In 1996, at the behest of the Society’s congregation, the Council of Five, or Punj Pyara, of the Society approached the parties to the litigation about settling the matter.

On July 10, 1996, in open court, the parties to the pending action entered into a stipulation for settlement. The settlement provided that “[a]ll of the matters that have been placed at issue as a result of this combined litigation shall be ultimately in the domain and be resolved by the [Punj Pyara] selected by the congregation of the [Society].” The settlement also created two advisory committees: an audit committee and a bylaws committee. The audit committee was tasked with investigating alleged financial irregularities within the Society and reporting to the congregation. The function of the bylaws committee was “to make recommendations relating to what type of guidelines would be appropriate and what type of language, if this temple ultimately modifies its by-laws, would be appropriate in those by-laws.” The settlement further provided that any recommendations of the bylaw committee “may or may not be dealt with directly by the [Punj Pyara].”

Not all parties to the litigation were present in court the day the settlement agreement was announced. The agreement provided that counsel for the parties would undertake to obtain signatures on the settlement agreement for those not present and the court would retain jurisdiction to effectuate the settlement. However, signatures were not obtained from all the parties to the litigation. Nevertheless, on September 5, 1996, the trial court dismissed the action.

New bylaws for the Society were prepared pursuant to the settlement agreement (the 1996 bylaws) and were approved by the Punj Pyara. They were thereafter adopted at a meeting of the congregation by a show of hands.

Several of the defendants in the present matter, some of whom had been involved in the Society since its inception, ceased attending services at the Society’s Bradshaw Road location after resolution of the 1995-1996 litigation. One defendant, Satnam Tatla, who lived more than 40 miles away from the Bradshaw Road facility, discontinued attendance even before the lawsuit was filed.

A 15-member board of directors was elected by the Society pursuant to the 1996 bylaws. Another board election was held in 1999-2000, also pursuant to the 1996 bylaws.

Construction of a temple on the Bradshaw Road property was completed in 1999.

In 2002, a new dispute arose over failure of the Society to hold a board election. Suit was filed based on the election provisions of the 1996 bylaws and the court ordered an election for June 2002. However, because of violence that erupted over eligibility to vote, the election did not occur as scheduled. The court ordered a new registration period for membership between November and December 2002 and a new election for January 5, 2003. All those who signed up to vote agreed to be bound by the 1996 bylaws.

Two of the named defendants, Hakam Singh and Mohinder Dosanjh, were on the ballot for the January 2003 election. All of the named defendants except Tatla and Avtar Dosanjh signed up to vote and voted in the election.

Neither Hakam Singh nor Mohinder Dosanjh was elected to the Society’s board of directors.

After the 2003 election, the original defendants began meeting at the Lerner Way address to devise a scheme for reclaiming the two parcels of real property held by the Society. Around this same time, they allegedly discovered a letter purportedly written in 1997 by Morey Fuqua, attorney for the defendants in the 1995-1996 litigation. In that letter, Fuqua opined the 1996 bylaws are of no legal effect because the 1996 settlement agreement was never fully executed. Fuqua indicated a “tentative” settlement was reached in open court that was later signed by all the defendants but not all the plaintiffs. According to Fuqua: “Because the tentative Settlement Agreement negotiated in open court was never signed by the plaintiffs, the Court, on September 5, 1996, dismissed the litigation.” Fuqua opined that this dismissal placed the Society back in the same position it had been in before the lawsuit was filed, i.e., under the governance of the 1992 bylaws. And, since the 1996 bylaws were not adopted pursuant to the terms of the 1992 bylaws, they never came into legal effect.

The named defendants declared themselves to be the true representatives of the Society and elected Tatla to serve as their president. Tatla, acting as president of the Society, later signed grant deeds transferring ownership of one of the parcels to Vichitra Sandhu, Kamal Gill, Gian Gill, Mohinder Dosanjh and Manjit Dosanjh, and the other parcel to Vichitra Sandhu, Kamal Gill and Avtar Dosanjh. Tatla gave the grant deeds to Hakam Singh, who filed them in the county recorder’s office.

The named defendants then hired attorney Richard Corbin to file a quiet title action on the two parcels. Suit was filed, naming as the sole defendant Bhagat Singh, who was purportedly residing on the premises at the time. A default judgment was eventually obtained against Singh.

Thereafter, the named defendants sent letters to the IRS and the Franchise Tax Board claiming to be in charge of the Society. In 2004, the Society received notice that SMUD was about to turn off power at the Bradshaw Road facility. They investigated and discovered a document in the county building department dated May 10, 2004, asserting that there had been unauthorized construction on the Bradshaw Road site. The letter was signed by Vichitra Sandhu and claimed the property was owned by those to whom it had purportedly been transferred by Tatla. Around this same time, the Society also discovered the two deeds executed by Tatla.

The foregoing actions of the named defendants placed a cloud on the title of the two Society parcels and delayed efforts by the Society to construct a new temple. The Society also incurred substantial legal fees in attempting to establish its title to the real property and had difficulty raising funds for the construction project.

On June 17, 2004, the Society filed suit against the named defendants for slander of title. In November, all the named defendants except Sarban Singh and Hakam Singh, filed a cross-complaint against the Society, Balwant Virk, Amrik Kaile, Kashmira Atwal, Amarjit Bassi, and Surinder Dhadda for breach of fiduciary duty, breach of the covenant of quiet enjoyment, declaratory relief, accounting and conversion.

The trial court bifurcated the issues for trial. Following a bench trial, the court concluded the settlement agreement reached in the 1996 litigation was effective and the 1996 bylaws, adopted pursuant to that agreement, governed the Society thereafter. Consequently, the election that occurred in January 2003 pursuant to the 1996 bylaws was valid and the named defendants had no authority to transfer ownership of the two parcels. The court therefore nullified the 2004 grant deeds executed by Tatla. The court also rejected the named defendants’ claim that they are life members of the Society and, therefore, concluded they have no standing to pursue their cross-complaint.

In a subsequent proceeding, a jury found against all of the named defendants except Manjit Dosanjh and Gian Gill on the Society’s claim for slander of title. The jury concluded those defendants acted with malice in their dealings with the Society’s property and awarded damages in the amount of $359, 021.22. The jury also awarded punitive damages in various amounts from $60, 000 to $167, 500 against each of those defendants.

Discussion

I

The Operative Bylaws

Defendants contend the trial court erred in concluding the 1996 bylaws were properly adopted and supersede the 1992 bylaws as the governing document for the Society. As explained hereafter, that finding is the foundation for most of the conclusions reached by the court and the jury in this matter.

Defendants acknowledge the trial court concluded the 1996 settlement placed authority in the Punj Pyara to prepare new bylaws and those bylaws were later approved by a show of hands of the congregation. However, defendants argue, the 1996 settlement was not effective because it was not signed by all the parties to the 1995 litigation. Further, they argue, the 1992 bylaws contained specific provisions for amendment, and those provisions were not ...


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