Filed 11/20/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

PROFESSIONAL TAX APPEAL,

Plaintiff and Appellant,

v.

KENNEDY-WILSON 

HOLDINGS, INC., et al.,

Defendants and Respondents.

 B282702

 (Los Angeles County 

 Super. Ct. No. BC635476)

APPEAL from a judgment of the Superior Court of Los 

Angeles County. Michael J. Raphael, Judge. Affirmed in part; 

reversed in part and remanded.

Michael H. Lapidus for Plaintiff and Appellant.

Kulik Gottesman Siegel & Ware, Donald S. Gottesman and 

David A. Bernardoni for Defendants and Respondents.

* * * * * * * * * *
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This is an appeal from the sustaining of a demurrer 

without leave to amend. Plaintiff and appellant Professional Tax 

Appeal entered a contract with the owner of vacant land by which 

plaintiff agreed on a contingent fee basis to seek 2009 and 2010 

property tax reductions. The property tax appeals succeeded in 

reducing the assessed value of the vacant land by millions of 

dollars, with a reduction in taxes (and associated fees and 

penalties) of almost $140,000. Plaintiff was to receive 30 percent

of the reduction, or almost $42,000, when the property owner 

received the tax refund or when the refund was applied to pay

delinquent property taxes. 

Before the tax refund was paid, the property was acquired 

in a nonjudicial foreclosure sale by defendant and respondent KW 

Victory Land Loan, LLC (KW Victory Land), and an affiliated 

entity, defendant and respondent Kennedy-Wilson Holdings, Inc. 

(Kennedy-Wilson) (collectively defendants). Upon assuming 

ownership, defendants paid the delinquent property taxes owed 

on the property, in the reduced amount achieved by plaintiff’s 

successful tax appeals. 

Plaintiff filed this action against defendants for unjust 

enrichment and conversion. Plaintiff alleged it had no remedy at 

law against the original property owner after it lost the property 

in foreclosure, and that defendants had unjustly retained the full 

benefit of the reduction in taxes owed. Defendants demurred to 

the original complaint and the trial court sustained the demurrer

as to both causes of action without leave to amend.

We affirm the order sustaining defendants’ demurrer to the 

conversion cause of action. We reverse as to the claim for unjust 

enrichment, concluding the complaint states sufficient facts that

defendants knew or had reason to know of plaintiff’s right and 
3

interest in a percentage of the tax refund, they benefitted in the 

form of a reduced tax liability, and their retention of those

benefits without payment to plaintiff was unjust. 

FACTUAL AND PROCEDURAL BACKGROUND

On appeal from a judgment dismissing an action after the 

sustaining of a demurrer without leave to amend, our review is 

de novo. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 

966-967; accord, Aryeh v. Canon Business Solutions, Inc. (2013) 

55 Cal.4th 1185, 1191.) For the limited purpose of reviewing the 

propriety of the trial court’s ruling, we accept as true all well-pled 

factual allegations in the operative complaint, as well as any 

facts that may be reasonably implied or inferred from those 

expressly alleged. (Aubry, at pp. 966-967; accord, Schifando v. 

City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) “ ‘We also 

consider matters which may be judicially noticed.’ ” (First 

Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662

(First Nationwide).) We do not “however, assume the truth of 

contentions, deductions or conclusions of law.” (Aubry, at p. 967.) 

Our factual summary is drawn from the allegations of the 

operative complaint according to this well-established standard. 

Plaintiff is a California corporation that prosecutes 

property tax refund claims for commercial property owners. 

Plaintiff is paid for such services based on a contingent fee 

generally equal to 30 or 40 percent of the property tax refund 

obtained. Plaintiff’s contract with the property owner provides 

that its fee “is payable when a refund in the form of an actual 

refund check is received by the client from the county involved in 

the appeal or, if applicable, when the refund amount is applied 

directly by the county against a then delinquent property tax 

account for the property involved.” 
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Kennedy-Wilson is “a publicly traded, New York Stock 

Exchange listed corporation,” that is experienced and 

sophisticated in real estate transactions, and “describes itself to 

the public on its own internet website as a vertically integrated 

global real estate investment and services company with over 

$18.1 billion in assets under management.” 

KW Victory Land is a limited liability company and an 

“indirect subsidiary of Kennedy-Wilson doing business in the 

State of California.” 

In 2009, Christopher Alan was the controlling owner in 

Victory Glen Partners, LLC (Victory Glen) and Sir Francis Drake 

LP (SF Drake). Victory Glen owned five parcels of vacant land on 

Victory Boulevard in Los Angeles (vacant land). SF Drake was 

the owner of a nearby parcel on Victory Boulevard improved with 

a shopping center (shopping center). Mr. Alan, Victory Glen and 

SF Drake are not parties to this appeal, nor were they parties 

below. 

The original mortgage holder on both the vacant land and 

the shopping center was the same Irish financial institution, 

Anglo Irish Bank. Sometime after 2011, Anglo Irish Bank 

assigned to National Asset Loan Management Limited (National 

Asset) all of its right, title and interest in the secured debts 

encumbering both the shopping center and the vacant land. 

Neither Anglo Irish Bank nor National Asset are parties to this 

appeal. 

At some point after 2009, Mr. Alan caused SF Drake to hire 

plaintiff to prosecute a property tax refund claim as to the 

shopping center for the 2009 tax year. The appeal was heard by 

the Los Angeles County Board of Assessment Appeals (Board)

and was successfully resolved in favor of SF Drake. SF Drake 
5

paid plaintiff its 30 percent fee upon receipt of the tax refund 

check from the county.

Thereafter, Mr. Alan caused SF Drake to hire plaintiff to

prosecute another refund claim as to the shopping center for the 

2010 tax year, and also caused Victory Glen to hire plaintiff to 

prosecute property tax refund claims as to the vacant land for the 

2009 and 2010 tax years. Plaintiff eventually obtained proposed 

settlements on each of these claims from the Los Angeles County 

Assessor’s Office. The proposed settlements were adopted by the 

Board. 

After the Board adopts a proposed settlement of a tax 

refund claim, “the information regarding any change in the 

assessed valuation is ultimately enrolled in the Assessor’s 

records. The corrected valuation also is sent to the County 

Auditor’s Office where it is used by the Auditor to compute the 

revised tax,” plus any interest owed by the county to the property 

owner. 

The settlement obtained by plaintiff for Victory Glen for the 

2009 tax year reduced the assessed value of the vacant land by 

over $4 million. The resulting tax refund for the 2009 appeal was 

$58,324.88. The settlement of the 2010 tax year claim reduced 

the assessed value of the vacant land by over $6 million. The 

resulting tax refund for the 2010 appeal was $81,299.41. 

Pursuant to its contracts with Victory Glen, plaintiff was 

owed a 30 percent fee from the refunds obtained as to the vacant 

land in the following amounts: $17,497.46 for the 2009 appeal 

and $24,389.82 for the 2010 appeal. The fees were payable when 

“a refund in the form of an actual refund check” was received by 

the property owner or when the refund amount was applied 

directly to any “delinquent property tax account for the property 
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involved.” During this time period, plaintiff remained unaware of 

the assignment to National Asset of the secured debt as to the 

shopping center and the vacant land. 

Sometime in 2012, SF Drake experienced financial 

difficulties. The “onset of those financial problems” caused 

National Asset to obtain a court-ordered appointment of a 

receiver. The receiver hired an experienced project manager to 

assist in managing the shopping center during the receivership 

proceedings. SF Drake gave the receiver copies of the notices 

from the Board about the tax refunds obtained by plaintiff with 

respect to the shopping center. The project manager contacted

plaintiff on behalf of the receiver. 

Throughout 2013, Mr. Alan pursued discussions with 

various investors about purchasing the shopping center and the 

vacant land. At the request of the receiver’s project manager, 

Mr. Alan kept the receiver apprised of all sale discussions. By 

October, Mr. Alan had an interested investor, as well as a backup 

offer. However, National Asset, as the holder of the secured debt 

on the shopping center, rejected the proposed sale “ ‘because, 

among other things, the proceeds would have been insufficient to 

satisfy the secured debt.’ ” 

“National Asset would not have been able to conclude that 

the proceeds of the rejected sale Mr. Alan had been pursuing 

would have been inadequate to satisfy the secured debt unless 

National Asset knew the secured debt total, including delinquent 

secured property tax amounts.” 

Thereafter, an affiliate of Kennedy-Wilson (KW Victory 

Plaza), acting “at the direction of” Kennedy-Wilson, “acquired the 

delinquent note and trust deed” on the shopping center from 
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National Asset and bought the shopping center at a trustee’s sale 

on January 17, 2014. 

On January 24, 2014, KW Victory Land acquired title to 

the vacant land in a nonjudicial foreclosure sale. 

Defendants then “obtained written estimates of the 

delinquent property taxes and penalties due” on the vacant land. 

Defendants paid the amounts due and obtained certificates of 

redemption. The payment of delinquent taxes made by 

defendants on the vacant land “was the net amount due after the 

Tax Collector credited (i.e., applied) one hundred percent of the 

2009 and 2010 assessment appeal year Refunds.” 

A few weeks later, the receiver filed a motion for approval 

of the final account as to the shopping center receivership. 

Kennedy-Wilson was on the service list. After a hearing on the 

motion in April 2014, the court awarded plaintiff its claim for fees

for the services it rendered to SF Drake in prosecuting the tax 

refund claims for the shopping center. 

Plaintiff’s fees for successfully prosecuting the tax refund 

claims for the vacant land on behalf of Victory Glen remained 

unpaid. 

In its 2015 publicly released annual report, KennedyWilson reported its acquisition by foreclosure of a retail shopping 

center in Van Nuys, California, along with vacant land, 

recognizing a $3.7 million gain. 

As sophisticated real estate investors, defendants would 

have conducted a “thorough due diligence” as to the secured debt 

encumbering any land to be acquired. “[S]tandard due diligence 

for a promissory note purchase . . . would have involved very 

careful examination of real property taxes for [the vacant land] 
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because such taxes, if in default, acquire lien priority in 

California over outstanding secured mortgage debt.” 

Further, because industry practice provides that a trustee 

under a deed of trust orders a trustee’s sale guarantee “one 

hundred twenty-five days before the anticipated trustee’s sale 

date,” which describes all liens, encumbrances and other 

information pertinent to the foreclosure, defendants “were subject 

to inquiry notice to examine the trustee’s sale guarantee before 

ever buying the secured debt.” 

“[B]ecause a notice of default already had been filed in the 

records of the Los Angeles County Recorder” concerning the 

vacant land when defendants acquired the secured debt, 

defendants “either knew of that notice of default or were charged 

with constructive notice of it under California law.” 

Defendants were informed by the records obtained from 

National Asset, by conducting their own due diligence, or by the 

receiver’s project manager during the efforts to dispose jointly of 

the vacant land and the shopping center that the property tax 

valuations “had been contested by the property owner” using 

plaintiff “as its authorized representative.” 

Defendants were aware when they decided to purchase the 

secured debt on the vacant land that plaintiff had prosecuted the 

tax refund claims on behalf of Victory Glen on a contingent fee 

basis. 

Plaintiff succeeded in having the property taxes for the 

vacant land reassessed and reduced, a benefit that inured to the 

benefit of the property owner. Defendants accepted those 

benefits when they acquired ownership and paid the delinquent 

property taxes in an amount reduced by the county’s application 

of the entire refund amount to the balance owed. Defendants
9

benefitted by having the entirety of the refund amounts used to 

offset the amount of taxes they would have otherwise been 

obliged to pay as the new owners of the property. Defendants 

were unjustly enriched in the amount of plaintiff’s unpaid 

contingent fee of $41,887.28. 

After losing the vacant land to KW Victory Land in the 

foreclosure proceedings, Victory Glen lacked any assets and 

ceased doing business, denying plaintiff “any remedy at law to 

recover its fees.” 

Plaintiff filed this action against defendants on 

September 27, 2016, pleading causes of action for unjust 

enrichment and conversion. Defendants appeared by way of a 

demurrer, contending the complaint failed to state sufficient facts 

as to either cause of action. 

In opposing the demurrer, plaintiff filed a request for 

judicial notice of the certificates of redemption from the Los 

Angeles County Tax Collector for the vacant land obtained by 

defendant KW Victory Land in 2014. The certificates 

acknowledged that the payments made included tax 

delinquencies from the 2009 and 2010 tax years. The court 

granted plaintiff’s request for judicial notice. 

After an unreported hearing, the court sustained 

defendants’ demurrer without leave to amend, reasoning the 

complaint contained no facts that could establish the receipt and 

retention of the benefit conferred by plaintiff was unjust, or that 

defendants took those benefits with notice of plaintiff’s claim. A 

judgment of dismissal was entered March 24, 2017. 

This appeal followed. At defendants’ request, we permitted 

supplemental briefing after oral argument to allow the parties to 
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discuss section 25 of the Restatement Third of Restitution and 

Unjust Enrichment (2011) (hereafter section 25). 

DISCUSSION

Generally, one who is unjustly enriched at the expense of 

another is required to make restitution. (First Nationwide, 

supra, 11 Cal.App.4th at p. 1662; see also Rest.3d Restitution and 

Unjust Enrichment, supra, § 1.) The elements of a cause of 

action for unjust enrichment are simply stated as “receipt of a 

benefit and unjust retention of the benefit at the expense of 

another.” (Lectrodryer v. Seoulbank (2000) 77 Cal.App.4th 723, 

726; accord, First Nationwide, at pp. 1662-1663.) 

The complaint alleges sufficient facts showing a benefit 

conferred upon defendants by plaintiff. “The term ‘benefit’

‘denotes any form of advantage.’ ” (Ghirardo v. Antonioli (1996) 

14 Cal.4th 39, 51.) “[T]he benefit that is the basis of a restitution 

claim may take any form, direct or indirect. It may consist of 

services as well as property. A saved expenditure or a discharged 

obligation is no less beneficial to the recipient than a direct 

transfer.” (Rest.3d Restitution and Unjust Enrichment, supra, 

§ 1, com. d, p. 7.)

Here, plaintiff alleged it successfully prosecuted two 

property tax refund claims on behalf of Victory Glen that resulted 

in a reduction in the assessed value of the vacant land by millions 

of dollars for the 2009 and 2010 tax years. The reduction in 

assessed value resulted in refunds totaling $139,624.29. Under

plaintiff’s contract with Victory Glen, plaintiff was owed

30 percent of those funds (or $41,887.28) upon receipt by Victory 

Glen of a refund check from the county, or payment in that 

amount when the refund proceeds were applied by the county to 

reduce the amount of any delinquent taxes owed. 
11

Defendants do not meaningfully contest there are facts 

stating a benefit conferred. Rather, defendants, as they 

successfully argued below, contend there are insufficient facts 

showing that the retention of that benefit was unjust. We are not 

persuaded. 

Section 25 provides that where a “claimant renders to a 

third person a contractual performance for which the claimant 

does not receive the promised compensation, and the effect of the 

claimant’s uncompensated performance is to confer a benefit on 

the defendant, the claimant is entitled to restitution from the 

defendant as necessary to prevent unjust enrichment.” (Id., 

subd. (1), p. 368.) The lack of a contractual relationship between 

the restitution claimant and the defendant is not a bar.

In such circumstances, restitution is required “only if the 

following three conditions are met: [¶] (a) Liability in 

restitution may not subject the defendant to a forced exchange

. . . . This condition is likely to be satisfied if the benefit realized 

by the defendant [¶] . . . [¶] . . . saves the defendant an

otherwise necessary expense . . . . [¶] (b) Absent liability in 

restitution, the claimant will not be compensated for the 

performance in question, and the defendant will retain the 

benefit of the claimant’s performance free of any liability to pay 

for it. [¶] (c) Liability in restitution will not subject the 

defendant to an obligation from which it was understood by the 

parties that the defendant would be free.” (§ 25, subd. (2), p. 368, 

citation omitted.)

Plaintiff has alleged sufficient facts to establish these three 

elements. Defendants obtained the benefit of plaintiff’s services 

by paying less in delinquent taxes than they would have been 

required to pay upon acquiring the property. Due to plaintiff’s 
12

work in procuring the refund, defendants saved over $40,000 in 

delinquent taxes they otherwise would have had to pay. 

Plaintiff’s work saved them an otherwise necessary expense of 

assuming ownership of the property. Moreover, “it is not 

inequitable to require [defendants] to pay money” for those 

benefits despite the lack of a prior agreement. (§ 25, com. c,

p. 373.) Even if defendants are required to pay plaintiff its fee, 

they will still have saved $97,000 in property taxes that would 

have been owed had plaintiff not procured the refunds for the 

prior owner. Plaintiff has no remedy at law against the former 

owner because the foreclosure proceedings in which defendants 

acquired the property left the former owner with no assets. And, 

there are no facts showing any agreement between the parties 

that defendants would be free of any obligation to pay plaintiff.

At oral argument and in their supplemental brief, 

defendants take issue with our reliance on section 25, arguing 

that no California court has cited it as authority, and it would be 

inconsistent with California law to find section 25 imposes 

liability on defendant in this case. We find no merit in either 

argument. 

California courts have long relied on the American Law 

Institute’s Restatements for guidance. (Canfield v. Security-First 

Nat. Bank (1939) 13 Cal.2d 1, 30-31 [“Although it is true as urged 

by respondents that the restatement does not constitute a 

binding authority, considering the circumstances under which it 

has been drafted, and its purposes, in the absence of a contrary 

statute or decision in this state, it is entitled to great 

consideration as an augmentative authority.”].) The late 

Bernard E. Witkin described the Restatements as “the most 

commonly used, and certainly the most authoritative, of all 
13

nonjudicial sources of principles of law.” (Witkin, Manual on 

Appellate Court Opinions (1977) § 68, p. 111.)

California law on unjust enrichment is not narrowly and 

rigidly limited to quasi-contract principles, as defendants 

contend. “[T]he doctrine also recognizes an obligation imposed by 

law regardless of the intent of the parties. In these instances 

there need be no relationship that gives substance to an implied 

intent basic to the ‘contract’ concept, rather the obligation is 

imposed because good conscience dictates that under the 

circumstances the person benefited should make 

reimbursement.” (Kossian v. American Nat. Ins. Co. (1967) 254 

Cal.App.2d 647, 650 (Kossian).) 

In Kossian, the plaintiff contracted to perform cleanup and 

debris removal services for a property owner who had suffered 

damage due to a fire. The owner’s property insurance policies 

included coverage for such work. (Kossian, supra, 254 Cal.App.2d 

at p. 648.) The defendant was the beneficiary under a deed of 

trust on the property and had no knowledge of the contract 

between the plaintiff and the property owner. (Ibid.) After the 

plaintiff had fully performed under the contract, the property 

owner filed for bankruptcy without paying the plaintiff, and 

thereafter assigned his interest in the insurance policies to the 

defendant in accordance with the deed of trust. (Ibid.) The 

defendant submitted loss claims to the insurance company and 

eventually received payment that included “at least a part of the 

cost of debris removal and demolition.” (Ibid.) 

The defendant rejected the plaintiff’s request for payment 

for services rendered, arguing, like defendants here, that there 

was “no privity of relationship between it and [the] plaintiff, and 

no fraud or deceit [on its part] alleged or proved.” (Kossian, 
14

supra, 254 Cal.App.2d at p. 649.) The defendant contended it 

was therefore entitled to retain the benefit provided to the 

property by the plaintiff’s work, as well as the insurance 

proceeds. (Ibid.) 

Noting the lack of a California case directly on point, 

Kossian aptly explained that “[l]ack of precedent applicable to the 

facts peculiar to this case is not surprising[.] . . . [T]he authors of 

the Restatement recognize that the essential nature of equity 

cases concerned with problems of restitution makes definitive 

precedent unlikely.” (Kossian, supra, 254 Cal.App.2d at p. 650.) 

Relying on general equitable principles, Kossian reversed the 

summary judgment in favor of the defendant, holding that “[t]he 

question, simply stated, is whether in a jurisdiction that 

recognizes the equitable doctrine of unjust enrichment one party 

should be indemnified twice for the same loss, once in labor and 

materials and again in money, to the detriment (forfeiture) of the 

party who furnished the labor and materials. We conclude that 

the doctrine of unjust enrichment is applicable to the facts of this 

case, and that [the] plaintiff is entitled to reimbursement out of

the insurance proceeds.” (Id. at p. 651.) 

The result reached in Kossian embraces the equitable 

principle set forth in section 25. Both section 25 and Kossian

support the result we reach here. 

Finally, plaintiff’s complaint also stated facts that, if 

proven, are sufficient to defeat a claim that defendants were bona 

fide purchasers without notice of plaintiff’s claim. “[A] bona fide 

purchaser is generally not required to make restitution.” (First 

Nationwide, supra, 11 Cal.App.4th at p. 1663.) But, “[a]

transferee with knowledge of the circumstances surrounding the 

unjust enrichment may be obligated to make restitution.”
15

(County of Solano v. Vallejo Redevelopment Agency (1999) 75 

Cal.App.4th 1262, 1279.) 

For a defendant to be “ ‘without notice’ ” means to be 

“without notice of the facts giving rise to the restitution claim.” 

(Rest.3d Restitution and Unjust Enrichment, supra, § 69, 

subd. (1), p. 601.) “A person has notice of a fact if the person 

either knows the fact or has reason to know it. [¶] . . . A person 

has reason to know a fact if [¶] (a) the person has received an 

effective notification of the fact; [¶] (b) knowledge of the fact is 

imputed to the person by statute . . . or by other law (including 

principles of agency); or [¶] (c) other facts known to the person 

would make it reasonable to infer the existence of the fact, or 

prudent to conduct further injury that would reveal it.” (Id., 

subds. (2), (3), p. 601.) 

Plaintiff alleged numerous facts demonstrating that 

defendants knew or had reason to know of plaintiff’s claim for 

fees based on its work in procuring the property tax refunds for 

both the shopping center and the vacant land, and that plaintiff 

had worked on a contingent fee basis. Plaintiff adequately 

alleged that defendants were sophisticated real estate investors 

and that in the course of performing ordinary due diligence for 

the acquisition of commercial properties in foreclosure defendants 

would have discovered the facts related to plaintiff’s claim for 

restitution. Whether plaintiff can prove those facts is beyond the 

scope of this appeal. Plaintiff has pled sufficient facts to survive 

demurrer. 

As for the conversion cause of action, the demurrer was 

properly sustained. “ ‘Conversion is any act of dominion 

wrongfully exerted over another’s personal property in denial of 

or inconsistent with his rights therein.’ ” (Fischer v. Machado
16

(1996) 50 Cal.App.4th 1069, 1072.) There is no act of dominion 

by defendants alleged. According to plaintiff’s allegations, 

defendants never had any dominion or control over the tax 

refund. The county applied the refund to reduce the amount of 

the tax delinquency defendants had to pay upon assuming 

ownership of the property. Because plaintiff has not stated any 

facts that could be alleged to cure that defect, the demurrer was 

properly sustained to the conversion claim without leave to 

amend. 

DISPOSITION

The judgment of dismissal is reversed and set aside and the 

action is remanded to the superior court for further proceedings 

consistent with this opinion. 

The superior court is directed to issue an order vacating its 

ruling sustaining the demurrer as to the cause of action for 

unjust enrichment, issue a new order overruling the demurrer as 

to the unjust enrichment cause of action, and order defendants to 

answer. The court’s order sustaining the demurrer to the 

conversion cause of action is affirmed.

Plaintiff and appellant Professional Tax Appeal shall 

recover its costs of appeal. 

GRIMES, J.

WE CONCUR:

RUBIN, Acting P. J. DUNNING, J.*

* Judge of the Orange Superior Court, assigned by the Chief 

Justice pursuant to article VI, section 6 of the California 

Constitution.