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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
CHESTER P. KIM et al., B341504, B342793
Plaintiffs and Respondents, Los Angeles County
Super. Ct. No.
v. 24STCV02973
ALEX MYUNG CHA et al.,
Defendants and Appellants.
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
was time 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
2
under Corporations Code section 5527.1 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
1 Statutory references are to the Corporations Code.
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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
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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.
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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, he
had 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
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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
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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
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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.2
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.)
2 Although Pak did not appeal the judgment and is not
a party to this appeal, for the sake of simplicity, we continue
to refer to Cha and Lee as “Defendants.”
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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
[as a 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
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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
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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
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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
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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
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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.
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(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.
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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.
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