Dao Trang Phap Hoa v. Vietnamese Unified Buddhist Ass'n of Utah

351 P.3d 106

2015 UT App 125

DAO TRANG PHAP HOA, Plaintiff, Counterclaim Defendant, and Appellee

v.VIETNAMESE UNIFIED BUDDHIST ASSOCIATION OF UTAH, Thuan Tran, Hoa Vo, and Chuc Phan, Defendants, Counterclaim Plaintiff, and Appellants.

Vietnamese Unified Buddhist Association of Utah, Third-party, Plaintiff and Appellant

v.Vietnamese–American Unified Buddhist Congress in the United States of America, Third-party, Defendant and Appellee.

No. 20130998–CA.

Court of Appeals of Utah.

May 21, 2015.

S. Grace Acosta, Salt Lake City, Attorney for Appellants Vietnamese Unified Buddhist Association of Utah, Hoa Vo, and Chuc Phan.

Terry M. Plant and Stewart B. Harman, Salt Lake City, Attorneys for Appellant Thuan Tran.

David L. Mortensen, Jill M. Pohlman, and Dallis N. Rohde, Salt Lake City, Attorneys for Appellees, Dao Trang Phap Hoa and Vietnamese–American, Unified Buddhist Congress in the United States of America.

Judge JOHN A. PEARCE authored this Opinion, in which Judges JAMES Z. DAVIS and J. FREDERIC VOROS JR. concurred.

Opinion

PEARCE, Judge:

¶ 1 This matter concerns the ownership of a Buddhist temple. The district court granted summary judgment to the entity that holds title to the temple on claims that the title owner held the temple in constructive trust for the members of an organization that formerly owned the temple. Those members appealed the grant of summary judgment. Because the district court did not err in determining that the members lacked standing to assert a constructive trust, we affirm.

BACKGROUND

¶ 2 In April of 1993, the Vietnamese Buddhist Alliance Society of Utah (the Society) filed articles of incorporation with the State of Utah. The Society started with approximately a dozen members and was formed as a non-profit religious entity. Thuan Tran, Hoa Vo, and Chuc Phan were appointed to its board of trustees. In 1994, the Society became a member of the Vietnamese–American Unified Buddhist Congress in the United States of America (the Congress).

¶ 3 In 1994, the Society purchased two undeveloped lots with plans to build a temple on them. In 1996, the Society decided not to build on the lots but to instead purchase an unused library and convert it into a temple. The Society acquired the building in October of 1996, and the purchase deed transferred title to the “Vietnamese/Buddhist Alliance Church.”¹ The former library was then consecrated as the Pho Quang Pagoda.

¶ 4 At some point in 1999, a group of “about 19 people” including Te Phan, an original member of the Society, alleged that Thuan Tran intended to deed the Pagoda to his heirs. To quell such rumors, Thuan Tran proposed that the Society deed the Pagoda to the Congress, apparently intending that the Congress would “hold it for [the Society].” Thuan Tran informed the board of the Society of his plan and allegedly claimed that the Congress would be the owner of the Pagoda “on paper only” and that the Society would retain control of the operation and maintenance of the Pagoda. However, the board's letter to the Congress stated that they “voluntarily immolate all the properties of Pho Quang [Pagoda] to [the Congress] without any binding conditions.”² A majority of the Society's members voted to transfer ownership of the Pagoda, and Thuan Tran, in his role as the president of the board of trustees, conveyed the Pagoda to the Congress by quitclaim in March 2000 without any express reservation of rights. None of the documents evidencing the transfer mention or even suggest that the parties intended Congress to hold the property in trust.

¶ 5 The Society last renewed its corporate registration with the Utah Department of Commerce on March 4, 1999, and its registration expired on June 26, 2001. Nevertheless, some members of the Society continued to hold meetings. At a November 20, 2005 meeting, those present voted to “change [the] corporate name.” However, on December 8, 2005, rather than amending the Society's articles of incorporation, Hoa Vo and two other people registered a new entity named the Vietnamese Unified Buddhist Association of Utah (the Association) with the Utah Department of Commerce. Some, but not all, of the Society's members became members of the Association.

¶ 6 In 2009, the Congress appointed Thich Tri Lang, a Buddhist monk, to manage the Pagoda. Thich Tri Lang was the president of Dao Trang Phap Hoa, a religious organization that was also a member of the Congress. In February of 2011, the Congress transferred ownership of the Pagoda to Dao Trang Phap Hoa and charged Thich Tri Lang with providing spiritual guidance to those seeking it at the temple. This transfer was memorialized in a quitclaim deed recorded on March 4, 2011.

¶ 7 On May 5, 2011, Dao Trang Phap Hoa filed a complaint seeking to evict the Association from the Pagoda. The complaint named as defendants the Association, Thuan Tran, Hoa Vo, and Chuc Phan (Defendants). The Association filed a counterclaim against Dao Trang Phap Hoa and a third-party complaint against the Congress, alleging that the Congress held the Pagoda in trust for the benefit of the Association. Both camps eventually filed motions for summary judgment.

¶ 8 The district court first considered whether there was a genuine issue of material fact as to the existence of a trust. It determined that there was no documentary evidence of a written trust. It next ruled that the Association could not show that an oral express trust existed, because there was no evidence “establish[ing] the Congress's agreement to hold [the Pagoda] in trust.” The district court also determined that the Association lacked standing to seek imposition of a constructive trust. Finally, the district court noted that the statute of limitations appeared to bar the Association's counterclaims.³ The district court granted summary judgment to the Congress and certified its decision as final for appeal pursuant to rule 54(b) of the Utah Rules of Civil Procedure.

ISSUES AND STANDARD OF REVIEW

¶ 9 Defendants contend (1) that the district court improperly engaged in factfinding regarding the existence of an oral express trust and (2) that the Association had standing to seek, and had introduced sufficient evidence to support, imposition of a constructive trust. On appeal from a district court's summary judgment ruling, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party and review the district court's legal conclusions and ultimate grant or denial of summary judgment for correctness. Giles v. Mineral Res. Int'l, Inc., 2014 UT App 259, ¶ 2, 338 P.3d 825.

ANALYSIS

I. Standing

¶ 10 We first address whether the Association had standing to seek imposition of a constructive trust. The district court determined that the Association and the Society were distinct legal entities:

Some of the members are the same, but not all, and indeed some members of the Society are not members of the Association. Likewise, the leadership of the organizations has not been identical. There was no consolidation of the organizations, and approximately four years lapsed between the Society's cessation of operations and the initiation of the Association. They have different articles of incorporation, identified by different names.

The district court then noted that Defendants had not identified “any transfer, merger, or assignment that would support the factual and legal conclusion that whatever the Congress owed to the Society, it now owes to the Association.”

¶ 11 On appeal, Defendants contend that they had no obligation to “introduce such evidence because [their] theory is that there was no transfer, merger, or assignment because the group[ ] simply changed its name.” They then cite a litany of evidence showing that the Society used multiple English names, including “Vietnamese Unified Buddhist Association of Utah,” and a single Vietnamese name, “Hôi Phât Giaó Viêt Nam Thô'ng Nhâ't Utah.” Defendants also point to the significantly overlapping (though not identical) membership of the two organizations as evidence suggesting that they were a single entity.

¶ 12 Defendants also refer to utility bills and bank statements addressed to a multitude of names, including those of the Society and the Association. Despite the disparate names, this correspondence was sent to a single address. Defendants argue that this evidence created a factual dispute as to whether the two organizations were in fact a single entity whose name had been changed.⁴

¶ 13 Defendants do not dispute that the legal documents show that the Society and the Association are two separate legal entities.⁵ Instead, they argue that by pointing to evidence that many of the members of the Society were also members of the Association and acted as if the two entities were one and the same, they created a genuine issue of material fact to be resolved at trial regarding whether the Association was simply the Society acting under a different name. Defendants do not, however, provide any case law or other authority supporting their argument that the district court was entitled to look past the corporate filings because some of the members of the original entity believed that the new organization was either a continuation of or a successor to the original. Cf. Fletcher Cyclopedia of the Law of Corporations § 2453 (2014) (“An amendment to change the corporate name follows the same procedural steps as any other amendment to the articles or certificate of incorporation.”).

¶ 14 The issuance of a certificate of incorporation creates a new corporation. See Vincent Drug Co. v. Utah State Tax Comm'n, 17 Utah 2d 202, 407 P.2d 683, 684 (1965) (noting that “a corporation begins to exist upon the issuance of the certificate of incorporation”), overruled on other grounds as recognized by American Vending Servs., Inc. v. Morse, 881 P.2d 917 (Utah Ct.App.1994). And “[i]t is a fundamental precept of corporate law that each corporation is a separate legal entity.” Kreisler v. Goldberg, 478 F.3d 209,...