Filed 8/4/26 Tilakamonkul v. Tilakamonkul CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
VICHIT TILAKAMONKUL et al., B334396
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC715362)
v.
VICHAI TILAKAMONKUL et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Theresa M. Traber, Judge. Affirmed.
Law Offices of Andrew D. Weiss and Andrew D. Weiss for
Defendants and Appellants.
Law Offices of James T. Stroud and James T. Stroud for
Plaintiffs and Respondents.
_________________________
Family members who operated a collection of California-
based Thai restaurants disagreed about who amongst them was
still an owner of their business enterprise and could lay claim to
its assets. The consensus was that two of seven brothers, Vichit
and Somsak Tilakamonkul, had been ousted. When Vichit and
Somsak sued, however, the trial court decreed that each of the
seven brothers, Vichit and Somsak included, owned an equal
share and had an equal interest in several real properties. The
trial court also declined to deprive Vichit and Somsak of their
interests under the doctrine of unclean hands. On appeal, there
is no challenge to the trial court’s initial finding of seven-way
ownership but, instead, a challenge to its rejection of an unclean
hands defense. We affirm.
I.
In 2018, when Vichit and Somsak felt they were being
unduly treated as non-owners of their family’s business, they
sought relief in court. Vichit sued first. He claimed to be in
partnership with his relatives and sought damages and an equal,
seven-way partition of partnership property. Somsak then filed a
similar, now consolidated, action.
The operative Second Amended Complaint in the
consolidated action named both Vichit and Somsak as plaintiffs
and named as defendants their five other brothers — Vichai,
Virut, Pramorte, Narlong, and Sumeth — as well as several
entities related to the family business. The complaint, as
relevant here, sought to quiet title to the alleged partnership’s
assets, including real properties known as Ransom and Mt.
Bigelow. The answers of four of the defendant brothers and of
the entities each raised the defense of unclean hands. Pramorte’s
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separate answer suggested he sided with Vichit and Somsak
insofar as they sought an equal division of the family business.
The trial court held a bench trial spanning more than a
week on the quiet title cause of action and other equitable
matters. By then, the parties had stipulated to a sale of the
contested real properties, so the issue at trial, as to those
properties, was who would receive what proceeds. The court
heard evidence about a $200,000 payment to Vichit in 2007.
Vichit claimed it was a loan; defendants claimed it was a buyout
that ousted him from the family business. The court also heard
evidence about Somsak’s wife allegedly embezzling over $1
million from one of the family’s corporate restaurant entities, RT
IV. Somsak claimed this resulted in a resolution short of
termination of his ownership interest; the defendants disagreed.
The court additionally heard evidence about how family-related
property was held and whether and to what extent family
members were acting as partners or acting through various
corporate forms.
Evidence regarding Vichit’s ownership status included tax
documents. Starting with the 2010 tax year, three years after
the supposed buyout, Vichit successfully requested to be left off
family business tax documents. Defendants believed this showed
relinquishment of ownership, but Vichit testified the tax returns
were reporting “phantom,” undistributed income on which he
could not afford taxes and which would disqualify him from
public benefits.
Defendants’ trial brief fleshed out their unclean hands
defense. They asserted the defense “disqualifie[d]” plaintiffs
“from seeking equitable relief.” Defendants pointed to Vichit’s
request to stop receiving tax documents that would have shown
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income to him from the family business. This, they said, was to
“defraud the State of California and receive public assistance.”
Somsak, argued defendants, had unclean hands because of his
wife’s theft of funds from “corporate bank accounts” of the family
business.
After trial, the court, in late 2022, issued a thirty-one-page
statement of decision.
The trial court first found Vichit and Somsak proved “by
clear and convincing evidence . . . that each Tilakamonkul
brother, including each Plaintiff, owns a one-seventh beneficial
interest in the Mt. Bigelow and Ransom properties.” The court
then found Vichit and Somsak had not been ousted from their
ownership interests in the family business, including these
properties. Vichit had not been bought out; the $200,000
payment in 2007 was a loan. As to Somsak, “ample evidence was
offered to substantiate Defendants’ contention that [his wife]
embezzled substantial funds from RT IV and that Defendants
were irate.” But while Somsak might have been terminated as
an employee of one of the family’s corporate entities in 2014, he
was still an owner. The court buttressed its conclusion by noting
a 2016 lawsuit that a family entity had filed against Somsak
after the alleged embezzlement and after he had claimed “sole
ownership” of the Ransom properties. The lawsuit’s complaint
acknowledged Somsak’s claim of “sole ownership,” which was
incompatible with defendants’ claim that Somsak had given up
his rights, and the lawsuit’s settlement resulted in a transfer of
the deed that “preserve[d] his arguments of joint ownership.”
The trial court also rejected defendants’ assertion that the
doctrine of unclean hands barred both plaintiffs’ claims. In an
earlier proposed decision, the trial court had given specific
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reasons for rejecting unclean hands as to Vichit but had not
similarly given specific reasons as to Somsak. Defendants
objected to the proposed decision’s unclean hands analysis, but
addressed only Vichit. Defendants argued nothing further as to
Somsak. The statement of decision ultimately reasoned unclean
hands could not apply to Vichit because his alleged misconduct —
his request to be excluded from certain family business tax
returns in 2010 — was unconnected to the parties’ dispute over
whether he had been bought out.
In a later, 2023 ruling that is neither mentioned nor
challenged on appeal, the trial court declined the individual
brothers’ request to offset awards coming to Vichit and Somsak
as a result of the 2007 loan or the alleged embezzlement. (See
generally Construction Protective Services, Inc. v. TIG Specialty
Ins. Co. (2002) 29 Cal.4th 189, 195 [discussing the separate
defense of offset].) As to the alleged embezzlement, the court
concluded the victim of the embezzlement was RT IV, a corporate
entity, not the individual brothers.
A judgment decreed Vichit, Somsak, and each of the
brothers should receive one-seventh of the proceeds from the sale
of the Ransom and Mt. Bigelow properties. Vichai, Virut,
Sumeth, Narlong, and one of the family entities, T-Team
Investment, LLC, appealed.
II.
Appellants argue the trial court erroneously declined to
apply the defense of unclean hands to bar the quiet title claims
that Vichit and Somsak brought as to the Ransom and Mt.
Bigelow properties.
One who has unclean hands cannot seek equity from the
courts. (Aguayo v. Amaro (2013) 213 Cal.App.4th 1102, 1110.)
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“The doctrine of unclean hands is a defense to an equitable
action, including an action to quiet title.” (Ibid.) “Not all
wrongful conduct constitutes unclean hands. Only if the
misconduct is directly related to the cause at issue can a
defendant invoke the doctrine.” (Ibid.) “ ‘Whether the defense
applies in particular circumstances depends on the analogous
case law, the nature of the misconduct, and the relationship of
the misconduct to the claimed injuries.’ ” (Ibid.) “Relief is not
denied because the plaintiff may have acted improperly in the
past or because such prior misconduct may indirectly affect the
problem before the court.” (Treager v. Friedman (1947) 79
Cal.App.2d 151, 173.)
We review legal questions regarding the application of
unclean hands de novo, but we review factual questions, such as
those regarding the nature of the misconduct and its relationship
to the claimed injuries, for substantial evidence. (Padideh v.
Moradi (2023) 89 Cal.App.5th 418, 437–438.) “Moreover, the
decision whether to apply the defense based on the facts
presented is a matter within the trial court’s discretion.” (Garcia
v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.)
We address the unclean hands defense as to each plaintiff.
A.
Unclean hands did not disqualify Vichit from seeking to
quiet title.
As to Vichit, appellants’ unclean hands theory arises from
Vichit, contrary to how an owner might act, asking his relatives
to exclude him from tax forms that would have shown income to
him from the family business. Appellants assert Vichit was
“defrauding the State of California in order to obtain public
assistance, or defrauding his brothers and the State and Federal
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tax authorities by requiring his brothers shoulder the tax burden
of the income earned by the family businesses.”
The trial court concluded Vichit’s alleged tax misconduct
was insufficiently related to his quiet title action. It did not
address, then, whether any tax misconduct occurred.
The trial court’s determination was supported and within
its discretion.
First, any harm to the State of California would not
necessarily preclude Vichit from seeking quiet title relief from his
family members. If “ ‘[the wrongdoer] is not guilty of inequitable
conduct toward the defendant in [the litigated] transaction, his
hands are as clean as the court can require.’ ” (Brown v. Grimes
(2011) 192 Cal.App.4th 265, 283 (Brown), italics added.) In
Brown, any “unclean hands emanating from [a] Brown-Ross
agreement did not directly affect or infect the relationship
between Grimes and Brown and, most importantly, was not
inequitable conduct towards Grimes.” (Ibid., citing Unilogic, Inc.
v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 620 [“ ‘[T]he
misconduct which brings the clean hands doctrine into operation
must relate directly to the transaction concerning which the
complaint is made, i.e., it must pertain to the very subject matter
involved and affect the equitable relations between the litigants,’ ”
(italics added)]; cf. Republic Molding Corp. v. B. W. Photo Utils.
(9th Cir. 1963) 319 F.2d 347, 350 [a “wrong . . . upon the public”
may be relevant to assessing whether unclean hands bars federal
claims of false advertising to the public].)
Second, appellants did not assert the brothers’ suffering of
inequity below and have forfeited the matter. Regardless,
Vichit’s request to his family to be removed from tax documents
was open and accepted. Unclean hands need not entirely defeat a
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claim when the supposed victims knew of and freely consented to
the supposed victimization. (See Brown, supra, 192 Cal.App.4th
at pp. 283–284 [“Grimes knew of Ross’s activities and that Ross
was to be compensated, and Grimes knew about the 90/10 fee
split between Ross and Brown before he received much of his
compensation. He was not adversely affected by the nature of the
Brown-Ross agreement”].) Additionally, if the tax scheme was
fraudulent, other family members likely knew of it and arguably
abetted it, and it would hardly be compulsory to give those family
members relief through the equitable doctrine of unclean hands.
Third, the tax arrangement did not arise until the 2010 tax
year, some three years distant from the alleged 2007 buyout and
the even more distant acquisition of property rights. The tax
arrangement, which the trial court viewed as not effecting or
reflecting Vichit’s ouster, could be reasonably seen, then, as
distinct from the ownership issue at the heart of the litigation.
Recall, appellants have not challenged the trial court’s
underlying finding that Vichit, apart from a potential unclean
hands defense, retained ownership.
B.
Unclean hands also did not disqualify Somsak from seeking
to quiet title.
As to Somsak, appellants’ unclean hands theory arises from
Somsak’s wife, not Somsak, allegedly embezzling funds. The trial
court did not specifically address Somsak and unclean hands in
its proposed statement of decision, nor does it appear from the
record that appellants asked the trial court to correct this
omission. As a result, we imply all findings needed to support
the rejection of unclean hands as to Somsak. (Slone v. El Centro
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Regional Medical Center (2024) 106 Cal.App.5th 1160, 1170–1171
(Slone).)
Somsak, through the marital community, might have
exposure for debts of his wife. (Fam. Code, § 910, subd. (a)
[“[T]he community estate is liable for a debt incurred by either
spouse before or during marriage, regardless of which spouse has
the management and control of the property and regardless of
whether one or both spouses are parties to the debt or to a
judgment for the debt”]; see In re Marriage of Bell (1996) 49
Cal.App.4th 300, 310 [when the community benefited, community
was liable for one spouse’s embezzlement despite other spouse’s
unawareness].) That does not necessarily mean, however,
Somsak cannot also pursue the affirmative quiet title claim he
raised here.
First, RT IV is Somsak’s wife’s creditor; the individual
brothers who share ownership of the real properties at issue are
not. RT IV, the trial court had found, was a distinct corporate
entity, not a stand in for the siblings or a partnership. Somsak
raises RT IV’s distinct corporate existence and its lack of
involvement with the real property at issue, but appellants offer
no response.
Second, it is not inexorably so that unclean hands bars an
innocent spouse’s suit against a guilty spouse’s creditor.
Appellants cite no authority holding, and do not explain why, the
unclean hands doctrine applies in that context. (See Los Angeles
Unified School Dist. v. Torres Construction Corp. (2020)
57 Cal.App.5th 480, 503 [an appellant must “ ‘ “disclose the
reasoning by which the appellant reached the conclusions
[appellant] wants us to adopt” ’ ”].) The trial court noted evidence
that at least the Ransom properties were viewed as the brothers’
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separate property. Appellants do not address the appropriate
characterization of the real property and any impact of that
characterization on the availability of unclean hands against
Somsak as an innocent spouse. (Cf. Fam. Code, § 913, subd.
(b)(1) [in general, “separate property of a married person is not
liable for a debt incurred by the person’s spouse before or during
marriage”]; id., subd. (b)(2) [“consent of a married person to an
encumbrance of community estate property to secure payment of
a debt incurred by the person’s spouse does not subject the
person’s separate property to liability for the debt unless the
person also incurred the debt”].)
Third, there is not only a mismatch between the creditor,
RT IV, and appellants and a mismatch between Somsak and his
wife, there is also a mismatch between the claimed embezzlement
and the antecedent claim of ownership in the real properties.
Whether an offset or separate cause of action might have
succeeded are not the issues before us; the question, as
appellants frame it, is whether Somsak is entirely barred from
claiming an interest in the real properties. Somsak’s wife’s
embezzlement of restaurant proceeds from RT IV does not appear
to “relate directly to the cause at issue” or “ ‘to the transaction’ ”
in Somsak’s quiet title action to establish real property
ownership. (Kendall-Jackson Winery, Ltd. v. Superior Court
(1999) 76 Cal.App.4th 970, 979; see also Aguayo v. Amaro, supra,
213 Cal.App.4th at p. 1110.) “Past improper conduct or prior
misconduct that only indirectly affects the problem before the
court does not suffice.” (Kendall-Jackson Winery, at p. 979.) On
this issue of relatedness, appellants, yet again, do not provide
reasoned discussion of authority to guide our review. “ ‘We are
not bound to develop appellants’ arguments for them.’ ” (United
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Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th
142, 153.)
Finally, we reiterate that appellants chose to remain silent
about Somsak’s alleged unclean hands when raising other issues
with the trial court’s proposed decision. Although the trial court
found ample evidence substantiated appellants’ claim of
embezzlement of funds from RT IV, it made no definitive findings
regarding whether embezzlement in fact occurred, the amount of
any theft, whether any theft resulted in a community debt,
whether the real property at issue was separate property of
Somsak or community property, or whether any remediation
might have occurred that would have put things right between
the family members ahead of this quiet title action. As noted,
appellants’ choice to not object regarding unclean hands and
Somsak means we imply any findings the record can support to
uphold the judgment.
Appellants’ briefing has hampered our review in this
regard. First, appellants discuss the alleged embezzlement in
cursory terms and do not tell us much about the rest of the
lengthy trial proceedings that might have put the evidence of
alleged embezzlement in context. (Slone, supra, 106 Cal.App.5th
at p. 1174 [a one-sided, incomplete recitation of facts does not
permit a substantial evidence review on appeal].) More than
that, the record citations to the reporter’s transcript are
frequently inaccurate and do not point to the material claimed.
This hinders the court as well as other parties to the appeal.
(Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 276–
277.) “The claimed existence of facts that are not supported by
citations to pages in the appellate record, or not appropriately
supported by citations, cannot be considered by this court.”
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(Mueller v. County of Los Angeles (2009) 176 Cal.App.4th 809,
816, fn. 5.)
The trial court, in any event, did make findings adjacent to
the embezzlement question that the record supports. When
concluding Somsak had joint ownership of the real properties, the
trial court found he had been fired only as an employee in
response to the alleged embezzlement. It also found that Somsak
had agreed to settle the 2016 court proceedings by relinquishing
a claim to “sole ownership” of the Ransom properties in favor of
joint ownership with his brothers. It otherwise noted evidence
that Somsak disputed the nature of the embezzlement and did
not agree to pay the asserted debt. These facts highlight the
complex, fluid nature of how the family held assets, disagreed,
reached compromises, and soldiered on. They do not indisputably
support unclean hands.
Ultimately, appellants had the burden to provide and cite
accurately to the trial record, make cogent legal arguments with
citations to authority, and affirmatively show error. (Slone,
supra, 106 Cal.App.5th 1160, 1172.) We cannot say appellants
met their burden to overturn the trial court’s rejection of unclean
hands on what is a deferential standard of review.
III.
We deny Vichit and Somsak’s previously filed motion to
dismiss the appeal.
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DISPOSITION
We affirm the judgment and award appellate costs to
respondents.
SCHERB, J.
We concur:
STRATTON, P. J.
WILEY, J.
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