Opinion
2d Civil No. B158976.
11-17-2003
ROBERT P. RICHARDS, SR. Plaintiff and Respondent, v. DANIEL L. BRIGGS, Defendant and Appellant.
Law Offices of John R. LaBrucherie and John R. LaBrucherie for Defendant and Appellant. Hill & Associates, Gary J. Hill and Ann K. Levine for Plaintiff and Respondent.
A construction company, R.P. Richards, Inc. (RPR), employed Daniel L. Briggs (appellant) as a project manager. While overseeing a project in Italy, appellant withheld funds belonging to RPR. Despite RPRs demands, appellant failed to return the money. RPR assigned its claim to Robert P. Richards, Sr. (respondent), who prevailed in an action against appellant. On appeal, appellant contends that respondent lacked standing to proceed against him. We disagree and affirm.
FACTS
R.P. Richards, Inc. (RPR) is a family-owned construction company. Respondents sons, Peter and Brian Richards, are on the board of directors. In 1998, RPR entered into an agreement with the United States Air Force. RPR agreed to design and build 150 housing units at the Aviano Air Force Base in Aviano, Italy. After construction was complete, RPR was to "leaseback" the units to the Air Force. Appellant was employed by RPR as the project manager and was based in Italy. While coordinating the project, appellant used dbas of USDB and US Design Build International.
To finance the project, respondent and RPR formed a joint domestic venture. They intended to purchase property in Italy at a price of $1,300,000. Respondent contributed $1,000,000 in exchange for 50 percent of the profits from the project. RPR was to contribute "the remaining funds" and was responsible for supervising the project.
The joint venture "purchased an Italian shell company," Primula, S.r.l. (Primula), as a vehicle to acquire and obtain title to the land. Respondent had a 98 percent interest in Primula and his son, Brian, had a 2 percent interest. Appellant was designated the "sole director," in accordance with Italian law. At RPRs direction, appellant opened a bank account in Primulas name at Banco Commericali Italy. Appellant had signatory authority on the account. The joint venture then forwarded the funds to appellant in Italy with directions to deposit them in the Primula bank account.
Due to the favorable exchange rate between the lira and the dollar, the Primula bank account accrued $124,000 in funds over a three-month period. As a result, the joint venture chose not to buy the land outright. Instead, it obtained a loan in lira and used the $1,300,000 to secure the loan. RPR subsequently began to experience financial problems and could not proceed with the project.
At the direction of Peter Richards, appellant closed the Primula account and paid off the loan. Peter also instructed appellant to purchase $123,181.40 in cashiers checks and place them in "the safe deposit box." Appellant complied, and RPR sold the project to another developer (Giannini). Appellant remained in Italy to finalize the sale and negotiate for employment with Giannini.
Subsequent communications between appellant and RPR were conducted by e-mail. After closing the bank account, appellant requested Peters assurance that appellant would receive "the out-of pocket expenses due to me (approximately $30,000) . . . and that you will not challenge my receipt of the exchange rate arbitrage (approximately $120,000) as a part of my administrative fee." Peter disputed appellants entitlement to the funds, stating, ". . . there is no way in my mind that you have all of this coming to you. When I come over to Italy to close the deal, I want to meet with you to resolve these issues."
Appellant responded, ". . . as I have told [the Italian attorney] and you in my emails previously, just tell me where to send the money. If you now prefer that Giannini pay this amount directly I will re-open negotiations with him for this amount. . . . I am prepared to walk away from this deal if I dont receive it from someone." The following day, Peter e-mailed appellant to reiterate an agreement they had made by telephone. Appellant was to deduct the amount of his expenses (approximately $34,000) from the $124,000 and send the balance of $90,000 to the Italian attorney. Appellant agreed to comply, but noted that he had expended $50,000 of his own money on expenses and that the "arbitrage" funds were "clearly earmarked for my fees if the deal [with Giannini] went through." Several days later, Peter requested that appellant wire $90,000 to RPR in California. Appellant failed to return the funds.
Respondent filed a complaint against appellant for "money had and received (common count)" and prayed for damages of $124,000. In a second amended complaint respondent alleged that RPR had assigned its interest in its claim to respondent. Appellant demurred on the ground that respondent was not a real party in interest and therefore lacked standing to sue. The trial court overruled the demurrer. Appellant cross-complained for damages of $942,973.99, alleging causes of action for quantum meruit and money had and received.
The matter proceeded to trial and the jury returned special verdicts, finding that 1) appellant dba USDB/U.S. Design Built International received $124,000; 2) the funds were for the use of respondent or his assignor, RPR; and 3) appellant was not entitled to retain these funds. On the cross-complaint, the jury found that RPR had become indebted to appellant in the amount of $34,000.
DISCUSSION
Appellant does not challenge the jurys findings or the propriety of the assignment. Instead, he argues that respondent lacked standing because RPR was not the real party in interest. He asserts that only Primula had standing to prosecute an action against him, because Primula "owned" the $124,000 in disputed funds.
"Every action must be prosecuted in the name of the real party in interest . . . ." (Code Civ. Proc., § 367; Gantman v. United Pacific Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.) The purpose of this rule is to ensure the res judicata effect of the judgment. It is intended to bar relitigation by another claimant to the same demand. (See, e.g., Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2003) ¶ 2:4, p. 2-2; Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1003, fn.2.)
Only parties with an interest in a dispute have standing to seek its adjudication. (Killian v. Millard (1991) 228 Cal.App.3d 1601, 1605.) The question of standing is not whether an individual has the capacity to sue, but whether he has a right to relief in court. (Color-Vue Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604.) For this reason, lack of standing can be raised at any time, even for the first time on appeal. (Ibid.) The right to relief depends upon the existence of a cause of action against the defendant. (Pillsbury v. Karmgard (1994) 22 Cal.App.4th 743, 757- 758; Killian, supra, at p. 1605; Powers v. Ashton (1975) 45 Cal.App.3d 783 .) When, as here, the facts are not in dispute, the appellate court may review the question of standing de novo. (McKee v. Orange Unified School Dist. (2003) 110 Cal.App.4th 1310, 1316 [standing to sue under the Brown Act].)
Respondent and RPR formed a joint venture and purchased Primula, in which respondent held a 98 percent interest. The joint venture deposited $1,300,000 in a bank account in Primulas name. RPR subsequently directed appellant to withdraw certain funds from the account and hold them for safekeeping. Appellant complied, but later refused to return the funds. Under these facts, RPR had a cause of action against appellant and was entitled to relief. RPR assigned its claim to respondent who therefore had standing to proceed against appellant. Contrary to appellants contention, there is no indication in the record that Primula has claimed entitlement to the funds.
Appellant next argues that respondent lacked standing because he was not "directly" injured. He reasons that any injury was suffered by RPR, a corporation, rather than respondent as an individual. Appellant relies on Vinci v. Waste Management, Inc. (1995) 36 Cal.App.4th 1811, in support of this proposition. Vinci concerned an employee who sued his employer for alleged monopolistic practices under the Cartwright Act. The court held that the employee lacked standing because it was the corporation, not the individual, who was injured by the alleged antitrust violations.
Vinci is inapplicable to the facts before us. Here, RPR assigned its claim to respondent. Once a claim has been assigned, the assignee becomes the true owner and may sue upon the claim. (See, e.g., Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2003) ¶ 2:16, p. 2-9.) The assignee has legal title to the claim and becomes the real party in interest. (Ibid.) Accordingly, we reject appellants argument.
The judgment is affirmed. Costs on appeal are awarded to respondent.
We concur: GILBERT, P.J., and PERREN, J. --------------- Notes: The jury did not make a finding that Primula was the owner of the funds.