Court Opinion

ID: 2655516
Source: CourtListenerOpinion
Date Created: 2014-03-04 23:03:54.549995+00
Date Added: 2024-06-11T12:32:08.331054
License: Public Domain

Filed 3/4/14 Vondjidis v. Hewlett Packard Co. CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                      SIXTH APPELLATE DISTRICT

ALEXANDER VONDJIDIS,                                                 H037081
                                                                    (Santa Clara County
           Plaintiff and Appellant,                                  Super. Ct. No. CV815388)

           v.

HEWLETT PACKARD COMPANY,

           Defendant and Respondent.

           Appellant Alexander Vondjidis challenges the trial court’s order denying his
motion for class certification of his action against respondent Hewlett Packard Corp.
(HP) alleging that HP had improperly transferred HP stock to the State of California (the
State) under California’s Unclaimed Property Law (UPL) (Code Civ. Proc., § 1300 et
       1
seq.). The UPL provides that stock “escheats to this state if” the owner of the stock has
not, for a specified number of years, claimed a dividend or “corresponded in writing
[with the corporation] . . . or otherwise indicated an interest” in the stock, and the
corporation “does not know the location of the owner at the end of the [specified]

1
      Subsequent statutory references are to the Code of Civil Procedure unless
otherwise specified.
        2
period.” (§ 1516, subd. (b).) The trial court’s denial of Vondjidis’s motion was based
on its finding that the primary issues in the case involved “highly individualized
inquiries.” We affirm the order.

                                      I. Background
       Vondjidis was an HP employee in its Athens, Greece office from 1974 to 1978.
He purchased HP stock through HP’s employee stock purchase plan. HP used the office
address for all of its employee-shareholders in its shareholder records unless the
employee-shareholder asked HP to use a home address. Therefore, HP used the address
of its Athens, Greece office, rather than Vondjidis’s home address, as the address for
Vondjidis’s shares in HP’s shareholder records. Vondjidis’s home address was in HP’s
personnel records. The Athens, Greece office closed in the early 1980’s. Since HP’s
shareholder records did not have Vondjidis’s home address, he ceased to receive any
shareholder mailings. HP identified Vondjidis as a “lost” shareholder in 1980’s. In 1993
Vondjidis’s shares in HP were transferred to the State under the UPL.
       In 2003, Vondjidis filed this action against HP. He alleged that he was one of a
group of HP shareholders “who reside primarily in Europe and other countries” whose
shares were transferred to the State by HP. Vondjidis claimed that HP had failed to give
notice to these shareholders prior to transfer despite the fact that HP had access to
information that would have permitted it to do so. His class allegations described the
class as “all shareholders whose interests were damaged by defendants’ improper

2
       The length of the specified period has been steadily declining since 1968, when it
was 20 years, and has been three years since 1990. The period was changed from 20
years to seven years in 1975; it was reduced to five years in 1988 and to three years in
1990. (Stats. 1968, ch. 356, p. 745, § 16 [20 years]; Stats. 1975, ch. 578, p. 1179, § 1.5
[seven years]; Stats. 1988, ch. 286, § 6 [five years]; Stats. 1990, ch. 450, § 8 [three
years].)

                                              2
actions.” He alleged that there were numerous issues “common to the members of the
class which predominate over questions which may affect individual members . . . .”
According to Vondjidis’s complaint, these common issues included HP’s failure to notify
the class member shareholders, HP’s knowledge of the locations of the class member
shareholders, and the “extent of damages” suffered by the class member shareholders.
       In February 2011, Vondjidis filed a motion for class certification seeking
certification of a class consisting of two subclasses. One subclass was all persons whose
shares were transferred by HP to the State prior to 1995 without UPL compliance. The
other subclass was all persons whose shares were transferred by HP to the State after
                                                              3
1995 in violation of the UPL and without required notice. In support of his motion,
Vondjidis submitted declarations from his attorneys asserting, without elaboration, that
“[c]ommon issues of fact and law predominate because defendant HP has specific and
particular legal requirements to provide notice to all members of the class before
                                                                  4
transferring their stock investments to the State of California.” They claimed that
Vondjidis was “typical of the class because he was entitled to notice,” “did not receive
this notice,” and his shares were transferred to the State.
       In his points and authorities, Vondjidis argued that HP’s “conduct was uniformly
directed to all shareholders whose stock was transferred in violation of the UPL and
federal and state securities laws without notice.” He asserted that “the injured
shareholders’ shares were transferred in [a] single block and sold on the same dates.”
HP’s “standardized failure to follow the statutes and to notify any affected shareholders
before or at the time of transfer of their shares to the Controller, assures uniformity in

3
      The notice requirement was added to the UPL in 1994. (Stats. 1993, ch. 692, § 4;
§ 1516, subd. (d).)
4
        As we have already noted, the notice requirement was not added to the statute
until after Vondjidis’s HP stock was transferred to the State. (See footnote 3.)

                                              3
conduct toward the Class of shareholders.” More specifically, Vondjidis claimed that the
common fact was HP’s “systematic failure to verify whether the shareholders of stock
were truly ‘lost’ and ‘unknown,’ before transferring their shares to the Controller” and
failing to notify these shareholders that their stock was going to be transferred to the
State. He also claimed that it was a common fact that HP failed to execute the
                                                       5
declaration required by section 1530, subdivision (c). Vondjidis asserted that the
common issue of law was whether HP had “unlawfully transferred their shares in HP
without notice and without an effort to verify their status as ‘lost’ and ‘unknown’ within
the meaning of the UPL.”
       HP opposed the motion and argued that Vondjidis had failed to establish that
common issues predominated. It submitted evidence that in 1993 it had ensured that
“[d]ue diligence” was performed before shares were transferred to the State. HP did not
maintain an internal list of shareholders and their addresses. HP utilized a “transfer
agent” to manage its shareholder information. Harris Trust (Harris) was HP’s transfer
agent in 1993, and Harris’s duties included maintaining the names and addresses of HP’s
             6
shareholders. Harris would identify a shareholder as “lost” if three mailings went out to
the shareholder’s “latest address” and were returned “with unknown address on it.”
Harris prepared a list of “lost shareholders” and sent a copy of the list to HP. HP would
identify those on the list who were “non U.S. employee[s]” and distribute “to each
[foreign HP] division” a list of those on the list of “lost shareholders” who were from that
division to determine if the division had “the latest last known address” for the HP
employee-shareholder. When those divisions responded, the updated addresses would be

5
       Section 1530 mandates the filing of an annual report with the Controller’s office
by the entity that has transferred unclaimed property to the State. (§ 1530, subds. (b),
(d).)
6
       Harris is sometimes referred to in the record as Harris Bank.

                                              4
sent to Harris, and the shareholder records would be updated with the new addresses. If
an HP shareholder on the list of “lost shareholders” had a social security number, Harris
would obtain an updated address from a databank by “matching social security
number[s].” After it had been verified that the only shareholders on the “lost”
shareholders list were those for which HP and Harris could not locate a current address,
Harris sent “final due diligence letters” to the last known addresses for the “lost”
shareholders. It was only after all of these steps had been completed that HP’s
escheatment vendor, which in 1993 was State Street, would be instructed to transfer the
shares of “lost shareholders” to the State.
       The trial court held a hearing on Vondjidis’s class certification motion and took
the matter under submission. It thereafter issued an extensive written order finding that
Vondjidis had failed to establish a community of interest because individual issues
predominated. As to the proposed pre-1995 subclass, the court found that the primary
issues would be (1) whether the shareholder claimed a dividend, communicated in
writing with HP, or otherwise indicated an interest in dividends or shares during the three
years prior to escheat, and (2) whether HP knew of the shareholder’s location or knew
that the address it was using for the shareholder was inaccurate. The post-1995 subclass
would have the additional issue of whether the shareholder was given pre-transfer notice
by HP. The court concluded that these issues involved “highly individualized inquiries.”
It rejected Vondjidis’s claim that the common predominant issues were HP’s due
diligence, its use of agents to find lost shareholders, and its alleged failure to file section
1530 reports. The court reasoned that Vondjidis’s proposed predominant issues were
either irrelevant or would necessarily evaporate because HP had produced considerable
evidence that it had utilized procedures that were aimed at locating lost shareholders.
       After the court had taken the matter under submission, Vondjidis sent the court a
letter advising the court that the State’s unclaimed property Web site showed that a
person with the same name as the trial court judge had held stock in an unrelated

                                               5
corporation that had been transferred to the State many years ago. The letter did not ask
the judge to recuse himself. The judge ruled that there was no request before him and
that there was no basis for disqualifying him.
       Vondjidis timely filed a notice of appeal from the order denying his motion for
class certification.

                                        II. Discussion
                          A. Standards For Class Certification
       “ ‘The certification question is “essentially a procedural one that does not ask
whether an action is legally or factually meritorious.” ’ ” (Brinker Restaurant Corp. v.
Superior Court (2012) 53 Cal.4th 1004, 1023 (Brinker).) “Presented with a class
certification motion, a trial court must examine the plaintiff’s theory of recovery, assess
the nature of the legal and factual disputes likely to be presented, and decide whether
individual or common issues predominate. To the extent the propriety of certification
depends upon disputed threshold legal or factual questions, a court may, and indeed must,
resolve them.” (Brinker, at p. 1025.)
       “As the focus in a certification dispute is on what type of questions—common or
individual—are likely to arise in the action, rather than on the merits of the case
[citations], in determining whether there is substantial evidence to support a trial court’s
certification order, we consider whether the theory of recovery advanced by the
proponents of certification is, as an analytical matter, likely to prove amenable to class
treatment. [Citations.] ‘Reviewing courts consistently look to the allegations of the
complaint and the declarations of attorneys representing the plaintiff class to resolve this
question.’ ” (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 327.)
       “The party advocating class treatment must demonstrate the existence of an
ascertainable and sufficiently numerous class, a well-defined community of interest, and
substantial benefits from certification that render proceeding as a class superior to the

                                              6
alternatives. [Citations.] ‘In turn, the “community of interest requirement embodies
three factors: (1) predominant common questions of law or fact; (2) class representatives
with claims or defenses typical of the class; and (3) class representatives who can
adequately represent the class.” ’ ” (Brinker, supra, 53 Cal.4th at p. 1021.)
       “The ‘ultimate question’ the element of predominance presents is whether ‘the
issues which may be jointly tried, when compared with those requiring separate
adjudication, are so numerous or substantial that the maintenance of a class action would
be advantageous to the judicial process and to the litigants.’ . . . A court must examine
the allegations of the complaint and supporting declarations [citation] and consider
whether the legal and factual issues they present are such that their resolution in a single
class proceeding would be both desirable and feasible. [fn. omitted] ‘As a general rule if
the defendant’s liability can be determined by facts common to all members of the class,
a class will be certified even if the members must individually prove their damages.’ ”
(Brinker, supra, 53 Cal.4th at pp. 1021-1022.) “[The court] must determine whether the
elements necessary to establish liability are susceptible of common proof or, if not,
whether there are ways to manage effectively proof of any elements that may require
individualized evidence.” (Brinker, at p. 1024.)

                                  B. Standard of Review
       “ ‘The decision [whether] to certify a class rests squarely within the discretion of
the trial court, and we afford that decision great deference on appeal, reversing only for a
manifest abuse of discretion: “Because trial courts are ideally situated to evaluate the
efficiencies and practicalities of permitting group action, they are afforded great
discretion in granting or denying certification.” [Citation.] A certification order
generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it
rests on improper criteria, or (3) it rests on erroneous legal assumptions. [Citations.]’
[Citations.] Predominance is a factual question; accordingly, the trial court’s finding that

                                              7
common issues predominate generally is reviewed for substantial evidence. [Citation.]
We must ‘[p]resum[e] in favor of the certification order . . . the existence of every fact the
trial court could reasonably deduce from the record . . . .’ ” (Brinker, supra, 53 Cal.4th at
p. 1022.)
       “The appeal of an order denying class certification presents an exception to the
general rule that a reviewing court will look to the trial court’s result, not its rationale. If
the trial court failed to follow the correct legal analysis when deciding whether to certify
a class action, ‘an appellate court is required to reverse an order denying class
certification . . . , “even though there may be substantial evidence to support the court’s
order.” ’ [Citations.] In other words, we review only the reasons given by the trial court
for denial of class certification, and ignore any other grounds that might support denial.”
(Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828-829; accord Jaimez
v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1297-1298.)

                                C. Vondjidis’s Contentions
       Vondjidis claims that the trial court made a legal error when it allegedly found
“that HP followed the UPL.” He claims that the trial court “applied improper criteria and
erroneous assumptions” in identifying the primary issues and determining that individual
issues predominate. And he suggests that it has already been determined by this court
and the California Supreme Court that “the UPL does not apply” here.
       Vondjidis mistakenly asserts that this court and the California Supreme Court
previously ruled that HP is not entitled to immunity under the UPL. Vondjidis’s prior
appeal was a challenge to a summary judgment for HP that was premised on the UPL’s
immunity provisions (§§ 1321, 1532, subd. (d)). This court held that immunity under the
UPL requires compliance with the UPL. There were triable issues of fact as to whether
HP had complied with section 1516 because there was evidence that HP was aware of
Vondjidis’s home address at the time that he was found to be a “lost shareholder” and his

                                               8
stock transferred to the State. The California Supreme Court took no action in
Vondjidis’s prior appeal other than to grant and thereafter dismiss review of this court’s
            7
decision.
       Vondjidis nevertheless argues that “in [this court’s] published decision [in the
prior appeal], Dr. Vondjidis showed that HP failed to apply the proper criteria to his stock
when it transferred the shares to the Controller.” (Italics added.) He asserts that he
“already proved [in the first appeal] that there was no ‘general policy’ in place to provide
notice to him and presumably the other shareholders; in fact, just the opposite was true.”
(Italics added.) And he claims that the trial court “neglected to follow” our decision in
the prior appeal. These assertions are founded on a false premise. This court’s decision
in Vondjidis’s first appeal resolved no factual issues; this court merely found that UPL
compliance was required to gain immunity and that there was a triable issue of fact as to
whether HP had complied with section 1516 as to Vondjidis’s stock. This case was
remanded to the superior court, and, as yet, no factual issues have been adjudicated. The
trial court, in ruling on Vondjidis’s class certification motion, did not find that UPL
compliance was not required or that there were no triable issues of fact as to HP’s
compliance with section 1516 in connection with Vondjidis’s stock, so it did not fail to
follow our prior decision.
       Vondjidis maintains that the primary issue common to the class is whether HP
complied with the “steps” required by the UPL before identifying a shareholder as lost.
He maintains that HP’s “conduct was uniformly directed at” the entire class. While there

7
       Vondjidis’s prior appeal resulted in a published opinion by this court, but that
opinion ceased to be published after the decision was granted review by the California
Supreme Court on a grant and hold basis. After the lead case, Azure Limited v. I-Flow
Corp. (2009) 46 Cal.4th 1323, was decided, the California Supreme Court dismissed and
remanded Vondjidis’s prior appeal. Hence, Vondjidis’s prior appeal was not decided by
the California Supreme Court, and the opinion of this court does not remain published.

                                              9
was evidence that HP had mistakenly designated Vondjidis as lost when it knew of his
location, Vondjidis leaps from this evidence of a single mistake to the conclusion that
there was a classwide HP practice of declaring shareholders lost despite HP’s awareness
of their location.
       Vondjidis bore the burden on his class certification motion of supporting his
motion with some basis for a belief that there was a classwide practice, rather than an
individual error, so as to demonstrate that this was a common issue rather than an
individual issue. Instead of shouldering this burden, he merely points to the absence of
evidence. Vondjidis produced absolutely no evidence in support of his motion
suggesting that HP had a classwide practice of misidentifying shareholders as lost despite
its knowledge of their locations. His complaint simply alleged that HP knew the
locations of class members, and his attorneys’ declarations did nothing more than assert
that HP had a classwide duty to comply with the UPL. These vague assertions did little
to demonstrate that there actually was a common issue. We also reject Vondjidis’s
reliance on the simple fact that the transfers of HP stock were done in large batches for
groups of lost shareholders on a yearly basis, as required by the UPL, since the issues
involved in this case concerned HP’s pre-transfer compliance with the UPL.
       HP’s opposition, on the other hand, provided a wealth of evidence that it had
engaged in a process involving itself, its transfer agent, and its escheatment vendor,
designed to comply with section 1516 by locating any shareholders believed to be lost
before their shares were transferred to the State. While HP was unable to explain how it
had misidentified Vondjidis as lost despite its knowledge of his location, HP’s evidence
rebutted Vondjidis’s unsupported speculation that HP’s actions regarding Vondjidis’s
stock were typical of HP’s actions regarding other shareholders identified as lost. Indeed,
HP produced evidence that it had a system in place that was specifically aimed at
checking whether HP’s personnel system contained an address for an employee-

                                             10
shareholder who was thought to be lost due to the fact that HP had used an HP office
address as the address for the employee-shareholder’s stock.
       Throughout his brief, Vondjidis suggests that the trial court was required to grant
                                                                                       8
his motion unless HP established that “it complied with the UPL in every respect.” Not
so. HP was not the moving party, so it bore no burden. (Brinker, supra, 53 Cal.4th at
p. 1022 [burden is on party seeking class certification].) Vondjidis was the party moving
for class certification, and he bore the burden of demonstrating that common issues
predominated. Furthermore, the resolution of the class certification motion did not
require the trial court to determine whether HP did or did not comply with the UPL. The
trial court was required to determine only whether common issues predominated.
       Vondjidis contends that the common issue was whether HP made “an effort to
verify” that the shareholders were actually “lost” before transferring their stock to the
State. Vondjidis failed to make any showing that this was a common issue rather than an
individualized one. HP’s evidence showed that it had set up procedures aimed at
avoiding misclassifying shareholders as lost, and this evidence suggested that HP’s
misidentification of Vondjidis as lost was not due to a classwide practice but to an
individualized error. Again, Vondjidis simply leaps from HP’s misidentification of him
as lost to the conclusion that it must have made such mistakes as to a large class of lost
shareholders. He brought in no evidence to support his assumption, and HP’s evidence
strongly suggested otherwise. Vondjidis asserts that he “already proved” in the prior
appeal that HP did not have any procedures in place designed to notify lost shareholders

8
       For instance, Vondjidis takes issue with HP’s failure to produce copies of its
section 1530 reports. HP had no burden to meet on this motion. Nor is it clear how these
reports would have demonstrated that HP was aware of the locations of an entire class of
shareholders designated as lost. He also complains that HP did not produce evidence of
shareholder communications during the three-year “dormancy” period. HP had no such
burden.

                                             11
prior to the transfer of shares to the State. As we have already noted, the prior appeal did
not resolve any factual issues. Vondjidis never “proved” in the prior appeal that HP
lacked appropriate procedures for notifying lost shareholders nor did he do so in support
of his class certification motion. He asserted as much but presented no evidence. As the
trial court noted, “HP did not have to prove that individual notice was accomplished . . . .
The issue was whether Plaintiff’s case was subject to common proof . . . .” HP’s
evidence that it had an appropriate procedure in place for avoiding misidentification of
shareholders as lost tended to rebut the commonality of issues concerning HP’s
compliance with section 1516.
       Vondjidis contends that the trial court improperly “Held” that HP was permitted to
have a policy of using office addresses for its employee-shareholders. (Boldface
omitted.) While the trial court discussed in its order HP’s policy of using office
addresses for employee-shareholders, it did not grant HP permission to do so, which was
not an issue before the court. The court merely acknowledged that HP had also produced
evidence that it had a practice of checking its personnel systems for another address when
an employee-shareholder was thought to possibly be lost. This analysis was relevant to
the commonality of the issues, not a resolution of the propriety of HP’s practice.
       Vondjidis claims that the trial court “Erred When It Refused To Consider The
Potential Conflict.” (Boldface omitted.) Vondjidis’s post-submission letter did not ask
the judge to disqualify himself. The judge did “Consider” the letter and concluded that
there was no basis for a finding that he was disqualified in this matter because the
information in the letter did not indicate that the judge had a financial interest in the
subject matter of this proceeding. (Boldface omitted.) (Code Civ. Proc., § 170.1,
subd. (a)(3)(A).) On appeal, Vondjidis does not actually claim that the trial court judge
was required to disqualify himself. We reject his contention as lacking any foundation.
       The trial court’s findings were supported by the evidence, and those findings in
turn supported the court’s conclusion that individual issues predominate in this case. The

                                              12
court did not utilize improper criteria or make any legal errors in reaching this
conclusion. Accordingly, the trial court did not abuse its discretion in denying
Vondjidis’s motion for class certification.

                                      III. Disposition
       The order is affirmed.

                                           _______________________________
                                           Mihara, J.

WE CONCUR:

_____________________________
Premo, Acting P. J.

_____________________________
Grover, J.

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