Filed 9/10/26 Kung Fury 2 Europe UG v. Creasun Entertainment CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 SEVEN
KUNG FURY 2 EUROPE UG, B340299
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 20STCV35479)
v.
CREASUN ENTERTAINMENT
USA, INC. et al.
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Anthony J. Mohr, Judge. Affirmed.
Law Office of Albert Robles and Albert Robles for
Defendants and Appellants.
Kinsella Holley Iser Kump Steinsapir and Nicholas
Soltman for Plaintiff and Respondent.
__________________________
Creasun Entertainment USA, Inc. and its principal Minglu
Ma (collectively, Creasun) appeal from a judgment in favor of
Kung Fury 2 Europe UG (Kung Fury) after the trial court
granted Kung Fury’s motion to enforce the parties’ settlement
agreement under Code of Civil Procedure section 664.6 (section
664.6). Creasun argues Kung Fury presented insufficient
evidence to show it had performed its own obligations under the
settlement agreement. Creasun also contends Kung Fury does
not have legal capacity to maintain an action as a nonqualified
foreign corporation. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The underlying action arises from a financing dispute
involving the Germany-based production of a feature film, Kung
Fury 2. Creasun was the film’s principal financier, and Kung
Fury was its lead producer.
In September 2020, Kung Fury filed suit against Creasun,
alleging causes of action for breach of contract and fraud.
Creasun filed a cross-complaint against Kung Fury and the film’s
individual producers Philip Westgren and Alex Lebovici, alleging
causes of action for breach of contract, negligent
misrepresentation, fraudulent inducement, Corporations Code
violations, and declaratory relief.
In May 2023, on the eve of trial, the parties settled the
action. This appeal arises out of their written settlement
agreement.
A. The Settlement Agreement
Under the settlement agreement, each side dismissed all
claims with prejudice and released the other from all liabilities.
2
The parties also agreed the trial court would retain jurisdiction
pursuant to section 664.6.
Relevant here, the settlement agreement set forth a three-
step process for transferring production of the film from Kung
Fury, Westgren, and Lebovici to Creasun.
First, under section 2, within 30 days of the settlement
agreement’s execution, Kung Fury was to provide to Creasun:
(1) “a closing bible with the closing documents listing all of the
contracts relating to the Film”; (2) “all documents in [Kung
Fury’s] possession, custody and control documenting all prior
expenditures and income received by the production relating to
the Film within its possession, custody and control (including,
but not limited to, accounting general ledger and trial balance,
and supported by all invoices, agreements, cost reports, cash flow
records)”; (3) “all bank statements for all accounts for KF2
Europe UG, and KF2 Europe Production UG, all bank wire
records for all bank accounts of KF2 Europe UG, KF2 Europe
Production UG, in all cases originals, or if originals are not
available, copies”; (4) “any contracts, agreements, etc. signed with
third parties related to the film”; and (5) “all documentation
relating to the WGA and SAG agreements.” Section 2 further
provided that “[i]f there are any documents that Creasun
contends that [Kung Fury] did not provide, then Creasun shall
provide written notice to [Kung Fury], and [Kung Fury] shall
have the opportunity to cure within ten (10) days of notice.
Should [Kung Fury] provide additional documents following a
notice to cure, Creasun shall have an additional fifteen (15) days
to review and approve such information prior to any obligation to
pay producer fees pursuant to section 3 below.”
3
Second, under section 3, within 30 days of Kung Fury
providing the documents required under section 2, Creasun was
to pay Westgren and Lebovici’s outstanding producer fees of
$365,000.
Third, under section 5, upon its payment of the producer
fees, Creasun was to take over production of the film in
accordance with separate film production agreements.
B. Performance on the Settlement Agreement and Kung Fury’s
First Motion To Enforce
Before the parties executed the settlement agreement,
Kung Fury had already provided Creasun with most of the
documents specified in section 2 in connection with the closing of
the financing of the film, discovery during the litigation, and
earlier settlement discussions. Further, with the help of an
accountant who had worked on the film, Kung Fury identified,
compiled, and electronically provided new copies of those and
other responsive documents to Creasun in May 2023, within 30
days of the settlement agreement’s execution.
Creasun raised concerns on multiple occasions that Kung
Fury had not provided various required documents. In almost
every instance, Kung Fury confirmed the described documents
had already been provided, did not exist, or fell outside the scope
of its settlement agreement obligations. In one instance, Kung
Fury provided a missing document—a contract with a video
special effects company that did some early work on the film. In
another instance, Creasun flagged a discrepancy in a trial
balance that indicated it had paid more money than it had.
While noting it had no obligation under the settlement agreement
to do so, Kung Fury provided Creasun with corrected trial
balances.
4
In July 2023, Creasun asked Kung Fury to request bank
statements from Kung Fury’s Germany-based bank,
Commerzbank. Kung Fury responded by noting that, although
copies of such statements had already been provided, it had
reached out to Commerzbank, which said it would cost 14,844
euros to obtain the requested records directly from the bank. As
the parties disputed who should be responsible for paying this
amount, in August 2023, Creasun informed Kung Fury it had
“located zero credit card statements despite fully inventorying
[Kung Fury’s] production.” In response, Kung Fury pointed
Creasun to the previously produced credit card statements and
noted statements were not generated in months with no charges.
Later that month, Kung Fury notified Creasun that
Creasun was in breach of its obligation to pay the producer fees
under section 3 of the settlement agreement. Nevertheless, Kung
Fury offered to pay half of the cost to obtain the Commerzbank
records in exchange for Creasun’s payment of the producer fees.
Kung Fury subsequently offered to split the cost without any
conditions in an effort to “simplify things and avoid burdening
[the court] with a motion to enforce the settlement agreement.”
Creasun responded that it would share the cost of obtaining the
records but would only pay the producer fees upon receiving the
records and “indicating its satisfaction with the production.”
Kung Fury objected to Creasun’s suggestion it was only obliged to
pay if the records were to its “satisfaction.” Kung Fury proposed
that Creasun agree to unconditionally pay the producer fees
within three days after the records were received. Creasun
considered this proposal unacceptable.
In October 2023, Kung Fury moved to enforce the
settlement agreement, arguing it had complied with its
5
obligations to produce documents and Creasun had failed to pay
the producer fees. Creasun opposed the motion and asked the
court to order Kung Fury “to proceed with the parties’ agreement
to share costs equally in order to order the Commerzbank records
with no alterations to the parties’ rights under the settlement
agreement.” At the motion hearing, the parties agreed (1) Kung
Fury would withdraw its motion, (2) the parties would split the
costs of obtaining the Commerzbank records, and (3) all other
obligations of the parties would remain according to the
settlement agreement. As a result, the court deemed Kung
Fury’s motion withdrawn and moot.
C. Performance on the Amended Settlement Agreement
In December 2023, the parties signed a stipulation
amending the settlement agreement. Under the stipulation,
Kung Fury was to transfer the required payment to
Commerzbank and “concurrently send Commerzbank
correspondence ... in English and German requesting that it
provide physical copies of all records relating to the eight bank
accounts and two credit cards with Commerzbank from their
opening dates, including all ‘account statements and Pre-booked
items’ (‘Kontoauszüge und Vormerkposten’), and all statements
showing the full ‘account transactions’ (‘Kontoumsätze’).” Kung
Fury was to request that Commerzbank send the records to a
third-party document service company, which would then provide
a copy of the records to Creasun and the originals to Kung Fury.
The stipulation stated the terms of the settlement agreement
were otherwise to remain in full effect.
Creasun approved Kung Fury’s proposed correspondence
(in English and German) before Kung Fury sent the
correspondence to Commerzbank on December 26, 2023. Kung
6
Fury sent Commerzbank payment for the records in January
2024.
Commerzbank produced three tranches of records in
February, March, and April 2024. In response to the second
tranche, Creasun’s German counsel reached out to Commerzbank
and expressed concern that the records were incomplete because,
among other things, there were certain months for which no
credit card statements were included.
In a cover letter to the third tranche of records,
Commerzbank stated: “Attached you will find the missing
account statements and credit card documents. We would like to
point out that no billing will be created without credit card
transactions. The documentation is now completed to the best of
our knowledge and belief.”
Upon receiving the third tranche, Kung Fury followed up
with Creasun, seeking confirmation that Creasun would comply
with its obligation under the settlement agreement to pay the
producer fees within 30 days. Creasun did not provide such
confirmation and instead contended Commerzbank records were
still missing.
D. Kung Fury’s Second Motion To Enforce
In April 2024, Kung Fury again moved to enforce the
settlement agreement. Kung Fury argued it had complied with
its document production obligations under the settlement
agreement and Creasun had breached its obligation to pay the
producer fees. Kung Fury submitted a declaration from
Westgren, who stated Kung Fury had provided Creasun with
each of the five categories of documents Kung Fury was required
to provide under section 2 of the settlement agreement. Kung
Fury also presented evidence showing it had complied with the
7
requirement added in the amended settlement agreement to
request bank and credit card statements from Commerzbank and
to pay half the cost to obtain them. Kung Fury argued it had
done everything it was required to do to trigger Creasun’s
obligation to pay the producer fees. Kung Fury asserted
Creasun’s contention that Commerzank records were still
missing was baseless, and “[e]ven if Commerzbank has not
provided all the requested documents …, this does not relieve
[Creasum] of their obligation to pay. [Kung Fury’s] obligations
are limited in relevant part to requesting that Commerzbank
provide bank and credit card statements for the film…. [Kung
Fury] cannot control whether Commerzbank, a third-party
financial institution, provides all the requested documents.”
In opposition, Creasun argued “the documents produced by
Commerzbank ... are manifestly incomplete” and Kung Fury still
“ha[d] not materially satisfied its obligations to provide
documentation” pursuant to section 2 of the settlement
agreement. Creasun asserted it still had not received “all
‘account statements and pre-booked items’ (‘Kontauszuge und
Vormerkposten’), and all statements showing the full ‘account
transactions’ (‘Kontoumsatze’).” Creasun also argued there were
“missing credit card statements for various months for two credit
card accounts belonging to” Kung Fury. Finally, Creasun
emphasized that Commerzbank had represented it had 1,188
statements for eight accounts but ultimately produced only 680
pages of records.
Creasun supported its opposition with a declaration from
Ma. Ma asserted “Commerzbank’s partial document production
does not include the account transactions which are key to
understanding how [Kung Fury] used millions of dollars which
8
remain unaccounted for.” She added that, to date, “Creasun has
still not received all ‘account statements and pre-booked items’
(‘Kontauszuge und Vormerkposten’), and all statements showing
the full ‘account transactions’ (‘Kontoumsatze’).” Ma attached to
her declaration the credit card statements that had been received
and claimed there were still missing statements for numerous
months during the relevant period. Ma disputed Commerzbank’s
explanation that statements were not created for months in
which no transactions took place by pointing to a particular
credit card statement from September 2020 that she contended
showed no transactions for the month. Specifically, Ma described
the September 2020 statement—which, like the rest of the
attached statements, was entirely in German language—as
showing only “the balance carried (‘Saldovortrag’), the overview
of transactions (‘Lastschrifteinzug’), and the balance for the
month (‘Neuer Saldo’).”
In reply, Kung Fury disputed Creasun’s claims of missing
documents in the Commerzbank records. Relying on a second
declaration from Westgren—who described himself as
“conversant in German”—Kung Fury asserted Ma had
misinterpreted the September 2020 statement as showing no
transactions for the month. As Westgren explained, the
statement instead reflected a transaction occurred: “the August 4,
2020 balance of EUR 20,01 was paid on August 5, 2020
(‘Lastschrifteinzug’ means debit, not ‘overview of transactions’)
resulting in a balance for the month (‘Neuer Saldo’) of EUR 0,00.”
Kung Fury also argued Creasun’s claim that account statements,
pre-booked items, and statements showing the full account
transactions were missing was based on nothing more than the
conclusory assertion in Ma’s declaration. Finally, Kung Fury
9
dismissed the significance of Commerzbank’s producing only 680
pages when the bank had stated it possessed 1,188 statements,
emphasizing “ ‘statements’ is different than ‘pages’ ” and noting
some of the records contained multiple statements on single
pages. To support the latter point, Westgren stated he had
reviewed statements for one of Kung Fury’s accounts that
Commerzbank had provided and attached them to his
declaration. These statements, like those attached to Ma’s
declaration, are in German.
In June 2024, the trial court (Judge Anthony J. Mohr)
granted Kung Fury’s motion after a hearing.
During the hearing, Creasun argued Kung Fury’s
explanation that some of the pages contained multiple
statements was not supported by a certified English translation
of the records attached to Westgren’s reply declaration. Kung
Fury responded that a certified translation of the records was
unnecessary in light of the evidence showing it had requested the
relevant records from Commerzbank, which in turn confirmed it
had provided all records in its possession. Kung Fury argued
Creasun was “trying to identify discrepancies in a single
document, but that doesn’t change the fact that the bank
represented that it provided all the documents. We complied
with our obligation under the settlement agreement. [¶] There
isn’t really a single additional thing we can do to get them any
more documents. We’ve given them everything we have,
everything we have access to.”
The court noted some of the documents submitted with the
motion papers were in German, indicated its German was
“terrible,” and stated the parties should have submitted certified
translations of documents that were in German. While
10
acknowledging the case could “come[] back [from the Court of
Appeal], if nothing else because the record is deficient without
translation,” the court agreed with Kung Fury’s position that
translation of these documents ultimately was unnecessary to
resolving the motion in light of other evidence, including
Commerzbank’s letter confirming it had provided all records in
its possession.
A month later, the court (Judge Rolf M. Treu) entered an
order requiring Creasun to pay Kung Fury $365,000 for the
producer fees. When defendants failed to pay that amount, Kung
Fury sought entry of a judgment to enforce the order, which
Creasun contested. On July 30, 2024, the court (Judge Treu)
entered judgment for Kung Fury in the amount of $365,000.
Creasun appealed.
DISCUSSION
A. Creasun Failed To Accurately Cite the Record
Creasun’s opening brief does not contain a single accurate
record citation. It leaves blank all references to particular pages
of the clerk’s transcript, and instead generically refers to
pleadings filed in the trial court (including some that are not part
of the record on appeal).1 Kung Fury argues Creasun has thus
forfeited its appeal.
California Rules of Court, rule 8.204(a)(1)(C) provides that
an appellate brief must “[s]upport any reference to a matter in
1 Creasun attempted to file such an errata two days before
oral argument, when it was too late to be of use. Moreover,
Creasun also failed to accurately cite the record in its reply brief.
We also note that Creasun refers to a request for judicial notice
in its opening brief, but it did not file one.
11
the record by a citation to the volume and page number of the
record where the matter appears.” (See Professional Collection
Consultants v. Lauron (2017) 8 Cal.App.5th 958, 970 [“ ‘Any
statement in a brief concerning matters in the appellate record—
whether factual or procedural and no matter where in the brief
the reference to the record occurs—must be supported by a
citation to the record.’ ”].) “The purpose of this rule is to enable
appellate justices and staff attorneys to locate relevant portions
of the record expeditiously.” (Alki Partners, LP v. DB Fund
Services, LLC (2016) 4 Cal.App.5th 574, 590 (Alki Partners).)
To the extent a party’s argument is unsupported by
citations to the record, we may conclude the argument is
forfeited. (See WFG National Title Ins. Co. v. Wells Fargo Bank,
N.A. (2020) 51 Cal.App.5th 881, 894 [“Rather than scour the
record unguided, we may decide that the appellant has forfeited a
point urged on appeal when it is not supported by accurate
citations to the record.”]; Shenouda v. Veterinary Medical Bd.
(2018) 27 Cal.App.5th 500, 514 [an argument may be deemed
waived “ ‘ “[i]f a party fails to support an argument with the
necessary citations to the record” ’ ”]; Rybolt v. Riley (2018)
20 Cal.App.5th 864, 868 [appellate courts “ ‘may disregard any
factual contention not supported by a proper citation to the
record’ ”], italics omitted; Alki Partners, supra, 4 Cal.App.5th at
p. 589 [“An appellant who fails to cite accurately to the record
forfeits the issue or argument on appeal that is presented without
the record reference.”].)
We agree with Kung Fury that Creasun has forfeited its
challenges on appeal by failing to provide proper citations to the
record. (See Alki Partners, supra, 4 Cal.App.5th at p. 589.)
However, we exercise our authority under California Rules of
12
Court, rule 8.204(e)(2)(C) to consider the merits of Creasun’s
arguments, as best we are able.2
B. The Trial Court Properly Granted Kung Fury’s Second
Motion To Enforce the Settlement Agreement Under Section
664.6
1. Applicable law and standard of review
Section 664.6, subdivision (a), provides: “If parties to
pending litigation stipulate, in a writing signed by the parties
outside of the presence of the court or orally before the court, for
settlement of the case, or part thereof, the court, upon motion,
may enter judgment pursuant to the terms of the settlement. If
the parties to the settlement agreement or their counsel stipulate
in writing or orally before the court, the court may dismiss the
case as to the settling parties without prejudice and retain
jurisdiction over the parties to enforce the settlement until
performance in full of the terms of the settlement.” The statute
provides a summary procedure to enforce a settlement agreement
without a new lawsuit. (Madrigal v. Hyundai Motor America
(2025) 17 Cal.5th 592, 600, fn. 3; Hines v. Lukes (2008)
167 Cal.App.4th 1174, 1182; Weddington Productions, Inc. v.
Flick (1998) 60 Cal.App.4th 793, 809 (Weddington Productions).)
When hearing a motion to enforce a settlement agreement
under section 664.6, the court acts as the trier of fact. (Skulnick
2 Creasun erroneously suggests we lack authority to deem its
appeal forfeited due to its failure to cite to the record, because
California Rules of Court, rule 8.204(e)(2) does not list that
option. As the Advisory Committee comment to that rule states,
rule 8.204(e)(2) “does not purport to limit the inherent power of
the reviewing court to fashion other sanctions for such
noncompliance.”
13
v. Roberts Express, Inc. (1992) 2 Cal.App.4th 884, 889.) The court
may receive evidence, determine disputed facts, interpret (but not
add to) the terms of the agreement, and enter judgment upon
those terms. (Weddington Productions, supra, 60 Cal.App.4th at
p. 810; see In re Marriage of Assemi (1994) 7 Cal.4th 896, 905;
Khavarian Enterprises, Inc. v. Commline, Inc. (2013)
216 Cal.App.4th 310, 328-329.)
A trial court judgment is presumed correct, and when a
trial court “has made no specific findings of fact, it is presumed
that the court made such implied findings as will support the
judgment.” (Hall v. Municipal Court (1974) 10 Cal.3d 641, 643.)
“The trial court’s factual findings on a motion to enforce a
settlement under section 664.6 ‘are subject to limited appellate
review and will not be disturbed if supported by substantial
evidence.’ ” (Critzer v. Enos (2010) 187 Cal.App.4th 1242, 1253;
accord, Machado v. Myers (2019) 39 Cal.App.5th 779, 791.)
Under that standard, “ ‘and with our policy favoring settlements,
we resolve all evidentiary conflicts and draw all reasonable
inferences to support the trial court’s finding that these parties
entered into an enforceable settlement agreement and its order
enforcing that agreement.’ ” (J.B.B. Investment Partners, Ltd. v.
Fair (2014) 232 Cal.App.4th 974, 984.)
2. The order granting Kung Fury’s second motion to
enforce is supported by substantial evidence
Creasun contends insufficient evidence was presented that
Kung Fury performed its obligations under the settlement
agreement to produce the specified documents such that Creasun
became obligated to pay the producer fees. Whether a plaintiff
has at least substantially performed its obligations under a
contract is a question of fact subject to review for substantial
14
evidence. (Magic Carpet Ride LLC v. Rugger Investment Group,
L.L.C. (2019) 41 Cal.App.5th 357, 364; see also Brown v. Grimes
(2011) 192 Cal.App.4th 265, 277 [“Normally the question of
whether a breach of an obligation is a material breach, so as to
excuse performance by the other party, is a question of fact.”].)
Kung Fury presented evidence that, after entering the
settlement agreement, it timely provided Creasun the documents
specified in section 2 of the settlement agreement that it had in
its possession, including all bank and credit card statements from
Commerzbank to which Kung Fury had access. When Creasun
raised concerns about missing documents, Kung Fury provided
the one document that was actually missing (a video special
effects contract) and pointed out the rest of the “missing”
documents had already been provided, did not exist, or were not
specified under section 2. In addition, after the parties agreed to
also request bank and credit card statements directly from
Commerzbank, Kung Fury paid its share of the cost and drafted
correspondence to Commerzbank that Creasun approved. After
producing several rounds of records, Commerzbank represented
it had provided “the missing account statements and credit card
documents” and confirmed “no billing [was] created without
credit card transactions.” Commerzbank also confirmed, “The
documentation is now completed to the best of our knowledge and
belief.” Kung Fury presented sufficient evidence for the trial
court to conclude Kung Fury performed its document production
obligations under the settlement agreement.
Creasun contends the court erred in not crediting a
declaration from its financial expert, William Buckley. Buckley
stated in his declaration that after reviewing various documents
produced by the parties it was his “understanding” that records
15
were still missing or incomplete. However, the trial court was
responsible for determining disputed facts in resolving the
section 664.6 motion. (See Weddington Productions, supra,
60 Cal.App.4th at p. 810.) In conducting a review for substantial
evidence, “[w]e do not resolve or reweigh any conflicts in the
evidence.” (In re O.M. (2026) 120 Cal.App.5th 489, 509.)
Creasun also argues the trial court erred by considering
untranslated and thus inadmissible German-language documents
that Kung Fury put into the record to support its Code of Civil
Procedure section 664.6 motion.3 Generally, all documents must
be translated into English to be admitted as evidence. (See Code
Civ. Proc., § 185, subd. (a) [“Every written proceeding in a court
of justice in this state shall be in the English language, and
judicial proceedings shall be conducted, preserved, and published
in no other.”].) Evidence Code section 753, subdivision (a),
provides: “When the written characters in a writing offered in
evidence are incapable of being deciphered or understood directly,
a translator who can decipher the characters or understand the
language shall be sworn to decipher or translate the writing.”
California Rules of Court, rule 3.1110(g) further requires that
exhibits to a motion that are “written in a foreign language must
be accompanied by an English translation, certified under oath
by a qualified interpreter.”
3 In addition, Creasun suggests the trial court erred in
considering unreliable hearsay evidence but provides no analysis
or authority to support its claim. As a result, we do not further
consider this challenge. (Sandhu v. Board of Administration etc.
(2025) 108 Cal.App.5th 1048, 1080 [“ ‘A court need not consider
an issue where reasoned, substantial argument and citation to
supporting authorities are lacking.’ ”].)
16
As an initial matter, both sides submitted untranslated
Commerzbank documents in the proceedings on Kung Fury’s
motion. Westgren’s initial declaration supporting Kung Fury’s
motion included partly untranslated correspondence with
Commerzbank. Creasun then relied on untranslated
Commerzbank records through Ma’s declaration supporting its
opposition to Kung Fury’s motion. Kung Fury responded with a
second declaration from Westgren, in which he stated he had
reviewed and attached certain untranslated records that
Commerzbank had provided.
However, as the trial court determined, the contents of the
untranslated documents were not material to deciding whether
the settlement agreement should be enforced. Indeed, the court
stated it did not understand German and thus could not read the
relevant exhibits. The court instead agreed with Kung Fury’s
position that considering the documents was unnecessary for its
ruling in light of the other evidence presented regarding Kung
Fury’s satisfaction of its obligations.
As discussed, Kung Fury’s other admissible evidence was
sufficient to demonstrate it performed its obligations under the
settlement agreement. The contents of the untranslated
Commerzbank documents may be relevant to whether
Commerzbank produced all records in its possession, but that
issue is a red herring. Even if Commerzbank did not provide all
such records, substantial (admissible) evidence shows Kung Fury
satisfied its own obligations to pay for and request the records
from Commerzbank. Thus, even if the court had considered in
some fashion the Commerzbank documents that were in German,
any error would be harmless given other substantial evidence
shows Kung Fury performed its document production obligations
17
under the settlement agreement. (See Muzquiz v. City of
Emeryville (2000) 79 Cal.App.4th 1106, 1123 [“Evidentiary
rulings will be deemed harmless if the record demonstrates the
judgment was supported by the rest of the evidence properly
admitted.”]; see also Nazari v. Ayrapetyan (2009) 171 Cal.App.4th
690, 697 [“improperly admitted evidence only requires reversal or
modification when it is reasonably probable a result more
favorable to the complaining party would have been reached
absent the error”].)
In sum, substantial evidence supports the court’s finding
that Kung Fury complied with its document production
obligations under the settlement agreement such that Creasun’s
obligation to pay the producer fees was triggered.
C. Creasun Forfeited Its Challenge to Kung Fury’s Capacity
Creasun contends Kung Fury is barred from maintaining
this action as a foreign corporation that failed to register to
conduct business in California pursuant to Corporations Code
sections 2105 and 2203. Creasun forfeited this argument by not
raising it in the trial court.
To transact intrastate business in California, a foreign
corporation must obtain a “certificate of qualification” from the
Secretary of State. (Corp. Code, § 2105, subd. (a); see United
Medical Management Ltd. v. Gatto (1996) 49 Cal.App.4th 1732,
1736, 1741 (United Medical) [“The purpose of the certificate of
qualification is to facilitate service of process and to protect
against state tax evasion.”].) A nonqualified foreign corporation
may commence and defend against actions in California courts
(United Medical, at p. 1739), but it may not “maintain any action
or proceeding upon any intrastate business ... commenced prior to
compliance with [s]ection 2105” (Corp. Code, § 2203, subd. (c)).
18
A foreign corporation’s failure to qualify before filing suit
affects its capacity to sue. (Color-Vue, Inc. v. Abrams (1996)
44 Cal.App.4th 1599, 1603-1604 (Color-Vue) [distinguishing “ ‘the
capacity to sue, which is the right to come into court’ ” from “ ‘the
standing to sue, which is the right to relief in court’ ”].) A
defendant challenging a foreign corporation’s capacity bears the
burden of showing the action arose out of the corporation’s
transaction of intrastate business and the corporation filed suit
before qualifying to transact business in California. (United
Medical, supra, 49 Cal.App.4th at p. 1740; accord, Automotriz De
California etc. v. Resnick (1957) 47 Cal.2d 792, 794 [addressing
predecessor statute to Corp. Code, § 2203].) Once shown, the
court shall stay the action until the corporation complies with the
qualification requirement. (United Medical, at pp. 1740-1741
[“The objective of the lawsuit suspension enforcement mechanism
is to encourage qualification, rather than to penalize the failure
to qualify earlier.”].)
“A defense based on a party’s lack of capacity to sue can be
forfeited.” (Rubinstein v. Fakheri (2020) 49 Cal.App.5th 797,
806.) Such a defense is a plea in abatement, “ ‘ “which is not
favored in law, is to be strictly construed and must be supported
by facts warranting the abatement” at the time of the plea.’ ”
(The Rossdale Group, LLC v. Walton (2017) 12 Cal.App.5th 936,
942 (Rossdale Group); accord, Rubinstein, at p. 806.) The defense
“ ‘must be raised by [the] defendant at the earliest opportunity or
it is waived’ ” and should be raised “ ‘in the original answer or by
demurrer at the time of the answer.’ ” (Color-Vue, supra,
44 Cal.App.4th at p. 1604; accord, Rossdale Group, at p. 943.)
“ ‘It is a technical objection and must be pleaded specifically.
Thus an affirmative defense or demurrer which contains a
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general assertion that plaintiff has not stated a cause of action
does not suffice to raise a plea in abatement.’ ” (Color-Vue, at
p. 1604.) Once the defense is forfeited, “ ‘the court will be rarely
justified in permitting the defense to be made later.’ ” (Id. at
p. 1605 [citing as an exception “the unusual circumstance where
a corporation announces that it does not intend to pay its
delinquent taxes”].)
Creasun did not challenge Kung Fury’s capacity in its
demurrer to the operative complaint nor did it allege a lack of
capacity among the affirmative defenses in its answer. In fact,
Creasun did not raise the issue at all in the trial court. Creasun
argues forfeiture should not apply in this context because it
would allow a foreign corporation to “qualify briefly, commence
litigation, then later fall out of compliance, and yet remain
immune from an ‘abatement’ action demanding a stay to cure.”
Creasun does not suggest this occurred here. But even if it did,
“[w]here … a suspension or other event causing a lack of capacity
is claimed to have ‘occurred after the time to demur or answer
ha[s] passed, [the parties claiming a lack of capacity] should ...
move[ ] the court for leave to file an amended answer asserting
the plea.’ ” (Rossdale Group, supra, 12 Cal.App.5th at p. 943;
accord, Color–Vue, supra, 44 Cal.App.4th at p. 1604, fn. 5.)
Creasun did not take that action, nor does it otherwise assert
unusual circumstances warrant relief. Thus, Creasun forfeited
the defense.
Even if we exercised our discretion to consider the forfeited
argument, we would conclude it is without merit. As noted,
Creasun bears the burden of establishing a lack of capacity.
(United Medical, supra, 49 Cal.App.4th at p. 1740.) Despite this,
Creasun makes no effort to identify what evidence establishes
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this action arose out of Kung Fury’s transaction of intrastate
business and Kung Fury filed suit before qualifying to transact
business in California. Nor does Creasun show the statutes
governing corporate qualification even apply to Kung Fury, which
asserts on appeal—with no response elicited—it is a foreign
limited liability company and thus subject to a distinct
registration requirement. (See Corp. Code, § 17708.07
[registration requirement for foreign limited liability companies].)
Because Creasun failed to carry its burden of proof, its forfeited
argument would also fail on the merits.
DISPOSITION
The judgment is affirmed. Kung Fury is entitled to its
costs on appeal.
STONE, J.
We concur:
MARTINEZ, P. J.
FEUER, J.
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