Court Opinion

ID: 4030361
Source: CourtListenerOpinion
Date Created: 2016-08-31 21:03:04.901276+00
Date Added: 2024-06-11T14:34:53.230180
License: Public Domain

Filed 8/31/16 Levinson v. Sadovsky CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT

LEONARD LEVINSON,                                                    B261012

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC512391)
         v.

IRINA SADOVSKY,

         Defendant,

DAN SADOVSKY,

         Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Los Angeles County, Mark
Mooney, Judge. Affirmed in part; reversed in part.
         Treyzon & Associates, Federico Castelán Sayre, Boris Treyzon and Yolanda M.
Medina for Plaintiffs and Appellants.
         Lewis Brisbois Bisgaard & Smith, John Barber, Jeffry A. Miller, Arezoo Jamshidi
for Defendants and Respondents Dan Sadovsky and Kazak-Mars, Inc.
         The Kaufman Law Firm and Martin J. Kaufman for Defendants and Respondents
Dan Sadovsky, Kazak-Mars, Inc., and Optimas B-Sol, Inc.

                                                       ******
       Plaintiff and appellant Leonard Levinson was a shareholder in Five Star Rx, Inc.
(5-Star), a pharmacy in Ventura. He sued the pharmacist and majority shareholder Irina
Sadovsky, her husband Dan Sadovsky, and Dan’s companies—Kazak-Mars, Inc. (Kazak-
Mars) and Optimas B-Sol, Inc. (Optimas).1 Following a series of demurrers, the trial
court dismissed Dan and his companies but allowed the suit to go forward as to Irina.
This appeal is from the judgment of dismissal of Dan and his companies.
       In this appeal, Levinson ignores the one final judgment rule—a fundamental rule
of appellate practice. (In re Baycol Cases I & II (2011) 51 Cal. 4th 751, 756.) Because
no final judgment has been entered against Irina, we do not consider Levinson’s
arguments related to her. We conclude that Levinson stated a cause of action against Dan
and Kazak-Mars for conversion and reverse the judgment of dismissal as to them. We
affirm the judgment of dismissal as to Optimas.
                               FACTS AND PROCEDURE
       In his second amended complaint, Levinson alleged causes of action for breach of
contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty,
accounting, conversion, violations of Corporations Code section 1601 and 1603, and
declaratory relief. The trial court sustained the demurrers to all but the first two causes of
action. It entered a judgment dismissing Dan, Kazak-Mars, and Optimas.2         Litigation
against Irina continues.
       According to the second amended complaint, Irina owned 55 percent of 5-Star’s
stock, and Levinson owned the remaining 45 percent. Levinson was a director of 5-Star.
Irina was the sole registered pharmacist working for 5-Star. Dan was married to Irina.
Dan was not an officer or shareholder of 5-Star. Dan owned 100 percent of Kazak-Mars.

1     Because they share a surname, we refer to Dan and Irina Sadovsky by their first
names.
2      In the second amended complaint, Levinson referred to K-Mars Optical and
Optimus B-Sol. Levinson alleged that Dan claimed to be president and chief executive
officer of the two entities. In the judgment, the trial court referred to the entities as
Kazak-Mars, Inc., and Optimas B-Sol, Inc., which we also employ.

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       In the operative complaint, Levinson alleged that he was improperly terminated as
a director of 5-Star and he was improperly denied access to corporate documents.
Levinson alleged that there was a promissory note with his signature, but his signature
had been forged. Levinson further alleged that 5-Star had an unexplained inventory loss
resulting in the loss of “hundreds of thousands of dollars.” He alleged that Irina
confirmed the existence of 5-Star’s inventory loss at a May 6, 2013 meeting, but she was
unable to explain the reason for the loss.
       The breach of contract cause of action was based on the allegations that Levinson
was improperly terminated as a director of 5-Star. The breach of fiduciary duty cause of
action was based on Irina’s alleged failure to manage 5-Star and comply with the bylaws
of the corporation. Included within that cause of action were Irina’s alleged improper
termination of Levinson, her alleged forgery of Levinson’s signature, and her
concealment of an inventory shortage. Those causes of action were not dismissed, and
judgment was not entered against Irina. The declaratory relief cause of action was
alleged only against Irina and 5-Star and sought a judicial determination of whether Irina
had the right to terminate Levinson as a director.
       Levinson’s conversion cause of action was alleged against Irina and Dan.
Levinson alleged that they and Kazak-Mars converted medications between June 2012
and May 2013. (Because Levinson alleged Kazak-Mars participated in the conversion,
we generously assume he intended to include Kazak-Mars as a defendant, and
respondents make the same assumption.)
       Levinson makes no argument with respect to the remaining causes of action, and
we therefore need not describe them. Levinson has abandoned the remaining causes of
action on appeal and any claim of error has been forfeited. (Yee v. Cheung (2013) 220
Cal. App. 4th 184, 193, fn. 6.)
                                      DISCUSSION
       On appeal, Levinson argues that he was improperly terminated as a director of 5-
Star and the trial court improperly dismissed his declaratory relief cause of action. His
principal contention was that the procedures for removing a director were not followed

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and he did not consent to his removal. As we shall explain, the foregoing arguments are
not cognizable in this appeal.
         Levinson’s final argument is that the court erred in dismissing his cause of action
for conversion. This argument concerns the defendants who were dismissed and may be
considered on appeal. We conclude that Levinson stated a cause of action for conversion
against Dan and Kazak-Mars.
         “We review de novo an order sustaining a demurrer to determine whether the
complaint alleges facts sufficient to state a cause of action. [Citation.] We exercise our
independent judgment as to whether the complaint states a cause of action. [Citation]
‘ “A judgment of dismissal after a demurrer has been sustained without leave to amend
will be affirmed if proper on any grounds stated in the demurrer, whether or not the court
acted on that ground.” ’ ” (Yee v. Cheung, supra, 220 Cal.App.4th at p. 192.) “When a
demurrer is sustained without leave to amend, ‘we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can be, the trial court has
abused its discretion and we reverse; if not, there has been no abuse of discretion and we
affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the
plaintiff.’ ” (Id. at p. 193.)
1. The Judgment Concerns Only Defendants Dan, Optimas, and Kazak-Mars
         “Under the one final judgment rule, ‘ “an appeal may be taken only from the final
judgment in an entire action.” ’ [Citations.] ‘ “The theory [behind the rule] is that
piecemeal disposition and multiple appeals in a single action would be oppressive and
costly, and that a review of intermediate rulings should await the final disposition of the
case.” ’ [Citations.] [¶] The one final judgment rule is ‘a fundamental principle of
appellate practice’ [citation], recognized and enforced in this state since the 19th century
[citations].” (In re Baycol Cases I & II, supra, 51 Cal.4th at p. 756.) “ ‘A judgment that
disposes of fewer than all of the causes of action framed by the pleadings . . . is
necessarily “interlocutory” [citation], and not yet final, as to any parties between whom
another cause of action remains pending.’ ” (Kurwa v. Kislinger (2013) 57 Cal. 4th 1097,
1101.)

                                               4
       The great bulk of Levinson’s appellate brief concerns whether he was properly
terminated as a director of 5-Star. His arguments that his termination was improper are
not cognizable on appeal because they continue to be litigated against Irina. Under the
one final judgment rule, that issue and any intermediate rulings with respect to Irina must
await final disposition of the case. (In re Baycol Cases I & II, supra, 51 Cal.4th at
p. 756.)
       This appeal is from the judgment dismissing only Dan, Kazak-Mars and Optimas.
As to the dismissed defendants, the judgment is final and appealable because the
judgment left no issues to be considered as to those defendants. (Ram v. OneWest Bank,
FSB (2015) 234 Cal. App. 4th 1, 9.) On appeal, Levinson raises no argument concerning a
cause of action in which Optimas was named as a defendant. The trial court therefore
properly dismissed Optimas. With respect to Dan and Kazak-Mars, Levinson argues that
he asserted a cause of action for conversion sufficient to withstand demurrer, the issue we
now consider.
2. Conversion
       The trial court sustained the demurrer to the first amended complaint (the one
prior to the operative pleading) on the ground that Levinson did not identify any property
allegedly converted. The court permitted Levinson leave to amend that iteration of the
complaint. In the operative complaint, Levinson identified the property allegedly
converted as “Five Star’s inventory, specifically medications in the time period of June
2012 through May of 2013.” (Underscoring omitted.)
       On appeal, the parties dispute whether the allegations in the second amended
complaint are sufficient to state a cause of action against Dan and Kazak-Mars. (We do
not consider any argument with respect to Irina because litigation against her is ongoing.)
We conclude Levinson has stated a cause of action.
       “ ‘ “Conversion is the wrongful exercise of dominion over the property of another.
The elements of a conversion are the plaintiff’s ownership or right to possession of the
property at the time of the conversion; the defendant’s conversion by a wrongful act or
disposition of property rights; and damages.” ’ ” (Plummer v. Day/Eisenberg, LLP

                                             5
(2010) 184 Cal. App. 4th 38, 45.) “ ‘The basis of a conversion action “ ‘rests upon the
unwarranted interference by defendant with the dominion over the property of the
plaintiff from which injury to the latter results.’ ” ’ ” (Welco Elctronics, Inc. v. Mora
(2014) 223 Cal. App. 4th 202, 208.)
       The allegations in the second amended complaint are sufficient with respect to
Dan and Kazak-Mars to withstand demurrer. 5-Star owned or had the right to possession
of the medication which Levinson alleged that Dan and Kazak-Mars took for their own
use. While respondents argue that a plaintiff must specify the property taken, in his
second amended complaint, Levinson specified that the medications were taken from the
pharmacy in a specific time period. The general allegations indicate that Irina further
identified the inventory loss at a shareholder meeting.
       Respondents cite numerous cases holding that “money cannot be the subject of a
conversion action unless a specific sum capable of identification is involved.” (Software
Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal. App. 4th 472, 485; see
PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150
Cal. App. 4th 384, 396 [“actions for the conversion of money have not been permitted
when the amount of money involved is not a definite sum”]; Vu v. California Commerce
Club, Inc. (1997) 58 Cal. App. 4th 229, 235 [“generalized claim for money not actionable
as conversion”].) The principle is not applicable here because Levinson did not allege
the conversion of money. He alleged a conversion of medication from 5-Star’s inventory
in a definite time period. Levinson was not required to allege the specific type of
medication taken as the general allegations provided information that it was the
medication missing in the inventory as described by Irina at a May 6, 2013 meeting.
Even with money, “it is not necessary that each coin or bill be earmarked.” (Weiss v.
Marcus (1975) 51 Cal. App. 3d 590, 599.)
       Finally, although respondents correctly point out that Levinson did not allege
Dan’s or Kazak-Mar’s specific role in the conversion, respondents cite no authority that
such specificity is required at this early stage of the proceedings. The allegations that the
defendants asserted dominion and control over the medications belonging to 5-Star are

                                              6
sufficient to allege conversion without stating how such dominion and control was
asserted. (Shaw v. Palmer (1924) 65 Cal. App. 441, 449 [“If a party converts the personal
property of another, it matters not by what means the conversion is effected . . . .”].)
Because Levinson alleged a cause of action for conversion against Dan and Kazak-Mars,
the trial court erred in dismissing them from the lawsuit.
                                      DISPOSITION
       The judgment dismissing Dan and Kazak-Mars is reversed, and the court is
directed to enter a new order overruling the demurrer as to Levinson’s conversion cause
of action only. The judgment of dismissal of Optimas is affirmed. The parties shall bear
their own costs on appeal.

                                                  FLIER, J.
WE CONCUR:

       RUBIN, Acting P. J.

       GRIMES, J.

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