IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

BAK FESTIVALS, INC., Court of Appeal

Non-party and Appellant No. A166329
v. Alameda County Superior
Court Case No.
MAG WELLNESS, INC., RG21110007
Defendant and Respondent

APPEAL FROM THE SUPERIOR COURT OF

ALAMEDA COUNTY CASE NO. RG21110007
THE HONORABLE NOEL WISE, DEPARTMENT 514
___________________________________________________________

APPELLANT’S OPENING BRIEF

___________________________________________________________

Attorney: Stephen H. Kim

State Bar No.: 198891
115 Cayuga Street
Salinas, CA 93901-2626
Tel: (831) 221-5022
Email: skim@stephenkim.com

Attorney for Appellant BAK Festivals, Inc.

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 INITIAL CERTIFICATE OF INTERESTED ENTITIES
OR PERSONS

(California Rules of Court, Rule 8.208)

The interested entities or persons required to be listed under rule 8.208(e)(2) are as

follows:

Sunset Living Trust, Trustee Mustafa Walid Bitar (Shareholder);

Tesuque Fund, LLC, designated individual Gavin Kogan (Shareholder);

Dawn Living Trust, Trustee Omar Bitar (Shareholder);

Kakel LLC, designated individual Kasra Ajir (Shareholder); and,

DJD Investment Holdings LLC, designated individual Darren Dykstra

(Shareholder).

Dated: September 19, 2023

/s/ Stephen H. Kim

By: _____________________________
Stephen H. Kim

Attorney for Appellant BAK Festivals, Inc.

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 TABLE OF CONTENTS
CERTIFICATE OF INTERESTED ENTITIES OR PERSONS ................................. 2

TABLE OF CONTENTS ................................................................................................. 3

TABLE OF AUTHORITIES ........................................................................................... 4

INTRODUCTION............................................................................................................. 5

STATEMENT OF APPEALABILITY ........................................................................... 6

STATEMENT OF THE CASE AND FACTS ................................................................ 7

The Parties ............................................................................................................. 7

Chronology of Pertinent Events .......................................................................... 7

ARGUMENT ................................................................................................................... 13

I. The Appropriate Standard of Review is De Novo............................................ 13

II. The Trial Court’s Denial of Grupo’s Motion to Vacate is Void for Lack of
Personal Jurisdiction Over Grupo and Should Be Reversed.......................... 13

A. Grupo Cannot Be Summarily Deprived Of The Disputed Cash Held In Its

Possession Under A Claim Of Ownership In the Underlying Action To
Which Grupo Is A Non-party Stranger. ......................................................... 13

B. The 8/10/22 Order Is Void on Its Face… ........................................................ 15

1. Examination of the Judgment Roll Reveals that Grupo Was Not Served With
Summons And Was Not Named In the Underlying Suit. .............................. 15

2. Nor Did The Trial Court Obtain Personal Jurisdiction Over Grupo in the
Underlying Action Based on Grupo Making a General Appearance. ........... 16

C. The Court’s Lack of Personal Jurisdiction is Fundamental Rendering Its

8/10/22 Order Void Ab Initio. .......................................................................... 17

CONCLUSION ............................................................................................................... 18

CERTIFICATE OF WORD COUNT ........................................................................... 19

CERTIFICATE OF SERVICE ..................................................................................... 20

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 TABLE OF AUTHORITIES

Page(s)
CASES

Carlson v. Eassa (1997) 54 Cal.App.4th 684 ............................................................6

Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127 ..............................................17

In re D.R. (2019) 39 Cal.App.5th 583 .....................................................................16

Kabran v. Sharp Mem'l Hosp.(2017) 2 Cal. 5th 330 ..............................................17

Miller v. Superior Ct. of Los Angeles Cty. (1923), 63 Cal. App. 1 .........................14

People v. Davis (1904) 143 Cal. 673 ......................................................................15

Shisler v. Sanfer Sports Cars, Inc. (2008) 167 Cal.App.4th 1 .............................6, 13

Stuparich Manufacturing Co. v. Superior Court of San Francisco

(1899) 123 Cal. 290 ..........................................................................................13, 14

STATUTES

Cal. Code of Civil Procedure

§ 410.50(a) .........................................................................................................16

§ 418.11 .............................................................................................................17

§ 670(a). ...........................................................................................................16

RULES

Cal. Rules of Court, rule 8.104(a)(1)(A)...............................................................6, 7

California Rules of Court 3.1204(a)(1) and (b)(1)....................................................9

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 INTRODUCTION

Appellant, BAK Festivals, Inc. d/b/a Grupo Flor (hereinafter, “Appellant”

or “Grupo”), having never been served with summons, is a third-party stranger to

the underlying action. Despite this, the Alameda Superior Court ordered

Appellant to submit to a summary proceeding within the underlying action to

determine Grupo’s rightful ownership in $68,000.00 cash which Grupo held in its

possession under a claim of right. Grupo refused to participate in the summary

proceeding. On April 5, 2022, Judge Delbert Gee issued an order decreeing that

the $68,000.00 held by Grupo was the property of Mag Wellness, Inc. (hereinafter

“Mag Wellness” or “Respondent”), the defendant in the underlying action, and

ordering Grupo to turn the $68,000.00 in cash over to the court-appointed receiver

(the “4/5/22 Order”).

On June 22, 2023, Grupo filed a motion to vacate the 4/5/22 Order as void

for want of jurisdiction pursuant to Civil Procedure Code Section 473(d) (the

“Motion to Vacate”). On August 10, 2022, the trial court issued its order denying

the Motion to Vacate (the “8/10/22 Order”). This Court should reverse the

8/10/22 Order as it is itself void and appealable as it gives effect to a void

judgment.

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 STATEMENT OF APPEALABILITY

After holding an evidentiary hearing in which Grupo refused to participate

on April 5, 2022, the trial court entered a Minute Order finding that the $68,000.00

cash held by Grupo is the property of Mag Wellness and ordering Grupo to turn

over the $68,000.00 to the court-appointed receiver. (Clerk’s Transcript On

Appeal, hereafter “CT,” 2CT526-527). On April 6, 2022, the clerk served notice

of entry of the 4/5/22 Order. (2CT531-538).

On June 22, 2022, BAK filed and served notice of its Motion to Vacate

2/7/22 and 4/5/22 Orders as Void [CCP §473(d)] (the “Motion to Vacate”)

requesting that the trial court vacate the 4/5/22 Order as void for want of personal

jurisdiction over BAK. (4CT882-899). The trial court issued its order denying the

Motion to Vacate on August 10, 2022, and notice of said order was mailed out by

the court clerk on August 11, 2022 (the “8/10/22 Order”). (5CT1173-1175). An

order denying a motion to vacate a void judgment is appealable. See, Shisler v.

Sanfer Sports Cars, Inc. (2008) 167 Cal.App.4th 1, 5. “In such a case, the order

denying the motion to vacate is itself void and appealable because it gives effect to

a void judgment.” Carlson v. Eassa (1997) 54 Cal.App.4th 684, 691.

BAK’s notice of appeal, filed on October 6, 2022 was timely filed. (See,

5CT1179-1182). The earliest date on which it may have been due is the 60th day

following the clerk’s service of the notice of entry of the 8/10/22 Order. (Cal.

6
Rules of Court, rule 8.104(a)(1)(A). The 60th day following the clerk’s service of

the 8/10/22 Order was October 10, 2022.

Thus, BAK’s notice of appeal was timely.

STATEMENT OF THE CASE AND FACTS

Parties

Appellant, BAK FESTIVALS, INC. d/b/a Grupo Flor (the “Petitioner” or

“Grupo”), is a non-party stranger to a breach of contract action now pending in the

Superior court of Alameda County, entitled Podell v. Mag Wellness, Inc., et al.,

Case No. RG21110007 (the “Receivership Action”).

Mag Wellness, Inc. is the defendant in the Receivership Action.

Chronology of Pertinent Events

On November 25, 2020, Mag Wellness Inc. (“Magnolia”) entered into a

Management Services Agreement (the “MSA”) with Grupo which provided for the

general management and administration of Magnolia’s business, including

operation of its retail cannabis dispensary located at 161 Adeline Street, Oakland,

California 94607 (the “Dispensary”). (1CT125-135).

By its terms, the MSA terminated on May 24, 2021. See, Id. at p. 130,

paragraph 8.4. Grupo had ceased operation of the dispensary as of May 20, 2021

and on that day transported the cash remaining on the Dispensary premises (the

7
“Disputed Cash”) to its facility in Salinas, California. (2CT350). Grupo has

asserted ownership and control over the Disputed Cash since that time. (1CT137).

On August 16, 2021, the Receivership Action was initiated by Steven

Podell against Mag Wellness, Inc. (1CT13).

On October 6, 2021, the Trial Court entered a stipulated order appointing

Kevin Singer (the “Receiver”) the receiver over Mag Wellness, Inc., the defendant

in the Receivership Action. (1CT66-83)

On October 14, 2020, the Receiver demanded that Grupo turn over the

Disputed Cash that he asserted belonged to Mag Wellness, Inc. via an email from

a Scott Yahraus to Grupo’s general counsel Kendra Clark. (1CT118-119).

On October 25, 2021, Grupo’s General Counsel Kendra Clark (“Ms.

Clark”) sent an email in response to the Receiver’s demand asserting Grupo’s

ownership of the funds and refusing to turn over the Disputed Cash to the

Receiver. (1CT137)

In a separate email to Ms. Clark, on November 9, 2021, Receiver’s counsel

sent notice that the Receiver was filing an ex parte application requesting an order

to show cause why Grupo should not immediately turn over the Disputed Cash

(the “Application”). (1CT149). The email notice did not state a time or place for

the hearing on the Application, rather it informed Ms. Clark that “this Application

will be heard on the papers without a formal hearing. To the extent that you

8
intend to oppose the ex parte application, I am informed that briefs may be

electronically filed.” See, Id.

Corporate Counsel for Grupo recognized that Receiver’s counsel failed to

comply with California Rules of Court 3.1204(a)(1) and (b)(1) (requiring that

notice of an ex parte application state with specificity the date, time, and place for

the presentation of the application). Without knowledge of when or where the

Application was to be heard, and out of an abundance of caution not wishing to

submit Grupo to the Respondent Court’s jurisdiction in this matter, Grupo

declined to submit a brief opposing the Order to Show Cause called for in the

Application.

On November 22, 2021, the Trial Court issued its Order Authorizing

Receiver Kevin Singer to Retain Counsel; Setting Receiver’s Bond Amount; and

Order To Show Cause Directing BAK Festivals, Inc. DBA Grupo Flor To Appear

and Show Cause Why It Should Not Immediately Turn Over Receivership Funds

To Receiver (the “Order to Show Cause”) directing Grupo to appear and show

cause why the Court should not order Grupo to immediately turn over the

Disputed Cash to the Receiver. 1CT256260). The Order to Show Cause also

contained the following declaration regarding jurisdiction (the “Jurisdiction

Paragraph”):

This Order to Show Cause and the supporting Application of the Receiver
shall be served pursuant to California law on Grupo on or before December
10, 2021, with mailing to Grupo via its agent for service of process and it

9
 [sic] attorney being equivalent to personal service, and with such service
providing this Court with jurisdiction over Grupo.

Id. at 257, ln. 14-17.

On December 28, 2021, Grupo filed its Response to Order to Show Cause,

Declaration of John Richardson (“Grupo’s Response”). (2CT345351). Grupo’s

Response explicitly stated that Grupo was making a special appearance solely to

object to the Trial Court’s exercise of jurisdiction arguing that it lacked

jurisdiction to utilize its contempt powers to order Grupo, a stranger to the

Receivership Action, to surrender to the Receiver any property which Grupo

claimed to own. See, Id. at 345, ln.17-21. Grupo objected to the assertion of

jurisdiction contained in the Jurisdiction Paragraph, arguing that an order to show

cause does not suffice to replace a Summons, and an appearance at a hearing at

which ex parte relief is sought is not a general appearance. See, Id. at 348, ln. 15-

18.

On December 31, 2021, the Receiver filed Receiver Kevin Singer’s Reply

In Support of Order to Show Cause Re Former Manager’s Failure To Return

Receivership Funds (the “Receiver’s Reply”). (2CT352-359).

An Order to Show Cause Hearing was held via bluejeans video conference

call on January 24, 2022 (the “OSC Hearing”), at which time Judge Dilbert Gee

took the matter under submission and asked the Receiver to submit a proposed

10
order. (2CT366). On January 27, Receiver’s counsel submitted a proposed order

as requested. (2CT368-373)

On February 7, 2022, Judge Gee signed an Order Directing BAK Festivals,

Inc. DBA Grupo Flor To Turn Over Receivership Funds to Receiver (the “Turn-

Over Order”). (2CT374-380). The Turn-Over Order:

a. Ordered Grupo to turn over the Disputed Cash to the Receiver within

seven (7) days after entry of the Turn-Over Order (2CT374:27-28);

b. Ordered that an “evidentiary hearing” shall be held on March 21,

2022 at 1:30pm in Department 514 of the Respondent Court “for a

final determination of ownership of the [Disputed] Cash.”

(2CT375:4-6).

c. Provided that Grupo and the Receiver may simultaneously file

declarations and points and authorities establishing any asserted

ownership interest in the Disputed Cash no later than February 28,

2022 and that responsive authorities or declarations must be

simultaneously submitted by the Receiver and Grupo no later than

March 14, 2022. (2CT375:6-11).

On February 9, 2022, Receiver’s counsel served Grupo with notice of entry

of the Turn-Over Order. (2CT381-387).

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 On February 17, 2022, Grupo filed and served an ex-parte motion to stay

the Turn-Over Order (the “Stay Motion”) pending an anticipated petition for writ

of prohibition challenging the Turn-Over Order. (2CT388-400).

On February 22, 2022, the Receiver filed an opposition to the Stay Motion

and a supporting declaration. (2CT415-420).

On April 5, 2022, the trial court held its evidentiary hearing in which Grupo

did not participate and issued the 4/5/22 Order. (2CT534)

The 4/5/22 Order states:

“[T]he Court orders and decrees that the $68,000 taken by Grupo from the

safe of Mag Wellness Inc. is the property of Mag Wellness Inc., and shall be

turned over to and held by Receiver Kevin Singer …” (2CT534).

On June 22, 2022, Grupo filed its Motion to Vacate 2/7/22 and 4/5/22

Orders as Void [CCP§473(d) (the “Motion to Vacate”). (4CT882-899).

On August 10, 2022, the trial court issued its order denying the Motion to

Vacate. (5CT1173-1175).

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 ARGUMENT

I. The Appropriate Standard of Review is De Novo.

The question of a trial court’s jurisdiction is a pure question of law and is

subject to independent review on appeal. Shisler v. Sanfer Sports Cars, Inc.

(2008) 167 Cal.App.4th 1, 6.

II. The Trial Court’s Denial of Grupo’s Motion to Vacate is Void for Lack of

Personal Jurisdiction Over Grupo and Should Be Reversed.

A. Grupo Cannot Be Summarily Deprived Of The Disputed Cash Held In Its

Possession Under A Claim Of Ownership In the Underlying Action To
Which Grupo Is A Non-party Stranger.

The issue of whether the Trial Court had the authority to direct Grupo to

surrender the Disputed Cash, to which it has had possession, ownership and

control for months prior to the Receiver being appointed in this case, to the

Receiver has been long settled in California. In 1899, the California Supreme

Court in Stuparich Manufacturing Co. v. Superior Court of San Francisco (123

Cal. 290) stated:

A person in possession of personal property under a claim of ownership

cannot be summarily deprived thereof by an order of court based upon the
affidavits of an adverse claimant, but he has the right to have his title
determined in an appropriate action by the verdict of a jury or the findings
of a court upon issues framed for that purpose. [Citations omitted] The
petitioner herein was not a party to the action in the superior court,
and that court had no jurisdiction over it, or over its property, or to

13
 direct it to surrender to the receiver any property which it claimed to
own.
…
As soon as it was made to appear to the superior court that the
property was claimed by a stranger to the action, the court should have
denied the application of the receiver. It could have authorized the
receiver to institute an action for its recovery, but it could not direct him to
take the property from the possession of the petitioner.

Stuparich, (1899) 123 Cal. 290, 292 [emphasis added].

A contempt proceeding is not the proper venue in which to decide the

ownership interest of a stranger to the action. In Miller v. Superior Court of Los

Angeles City, the court made clear that in a situation, such as this, where a third-

party to the action has taken possession of personal property under a claim of right

prior to the receiver being appointed. It stated:

In the present instance, then, it is clear that the sheriff … had taken
possession of boiler No. 3 before there was any receiver. The receiver,
being subsequent in time as to his right or claim, is not in position to
attack the validity of that possession; nor can the court do so by
contempt proceedings in the receivership cases. If, at the time when the
receiver qualified and attempted to take possession of the property in
question, this boiler had passed to the actual possession of the [third-party
to the receiver action] … , clearly it would have been beyond the power of
the court by its mere order to compel such party in possession to surrender
the property to the receiver. Its only power would have been power to
authorize its receiver to sue for possession of that property.

Miller v. Superior Ct. of Los Angeles Cty. (1923), 63 Cal. App. 1, 9, [citations

omitted][emphasis added].

14
 B. The 8/10/22 Order Is Void on Its Face.

A judgment or order is void on its face when its invalidity appears from an

examination of the judgment roll. See, People v. Davis (1904) 143 Cal. 673, 676.

1. Examination of the Judgment Roll Reveals that Grupo Was Not Served
With Summons And Was Not Named In the Underlying Suit.

The 4/5/22 Order is akin to a judgment obtained by default against Grupo

in a separate case, as 1) the matter is entirely collateral to the instant dispute

between the actual parties to the instant action (See, 1CT13-17); 2) Grupo refused

to participate in the evidentiary hearing called for in the Turn-Over Order (See,

2CT534) and 3) the Court decided Grupo’s ownership interest in the Disputed

Cash in its absence by default. See, Id. Thus, the contents of the judgment roll for

purposes of the Turn-Over Order and Final Order would be:

a) The Summons (1CT17);

b) Proof of Service of the Summons (not found in the Clerk’s Transcript on

Appeal);

c) The Complaint (1CT13);

d) The Request for Entry of Default with a memorandum indorsed thereon

that the default of the defendant in not answering was entered (not found in

the Clerk’s Transcript on Appeal); and,

e) A copy of the Judgment (See, 2CT534).

15
See, CAL. CIV. PROC. CODE §670(a). Thus a review of the judgment roll reveals

that personal jurisdiction over Grupo was not established by service of process.

2. Nor Did The Trial Court Obtain Personal Jurisdiction Over Grupo in the
Underlying Action Based on Grupo Making a General Appearance.

California Civil Procedure Code Section 410.50(a) provides:

Except as otherwise provided by statute, the court in which an action is

pending has jurisdiction over a party from the time summons is served on
him as provided by Chapter 4 (commencing with Section 413.10). A
general appearance by a party is equivalent to personal service of summons
on such party.

Cal. Civ. Proc. §410.50(a).

Grupo did not made a general appearance in the underlying action.

Although Grupo specially appeared through its counsel in filing its Response to

Order to Show Cause (2CT345), in filing its Stay Motion (2CT388), in filing its

Motion to Vacate (4CT882), and in attending the hearing on the Motion to Vacate

(5CT1171), none of these special appearances can be considered a general

appearance for purposes of submitting to the personal jurisdiction of this Court.

Every special appearance made by Grupo in the underlying action was

specifically and explicitly to object to the trial court’s exercise of jurisdiction over

Grupo. The criteria for determining whether an appearance is special or general in

nature is based on the “character of the relief sought.” See, In re D.R. (2019) 39

Cal.App.5th 583, 593. “What is determinative is whether [the] defendant takes a

16
part in the particular action which in some manner recognizes the authority of the

court to proceed.” Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1147.

Grupo has never recognized the trial court’s authority to proceed as it has

continually objected to the trial court’s exercise of jurisdiction. (See, 2CT345,

2CT388, 5CT1171).

Additionally, appearances made in ex-parte proceedings such as those

involving Grupo in this case are deemed special appearances by statute.

California Civil Procedure Code Section 418.11 states:

An appearance at a hearing at which ex parte relief is sought, or an

appearance at a hearing for which an ex parte application for a provisional
remedy is made, is not a general appearance and does not constitute a
waiver of the right to make a motion under Section 418.10.

Cal. Civ. Proc. §418.11.

C. The Court’s Lack of Personal Jurisdiction is Fundamental Rendering Its

8/10/22 Order Void Ab Initio.

The California Supreme Court has stated:

A lack of fundamental jurisdiction is “ ‘ “an entire absence of power to hear

or determine the case, an absence of authority over the subject matter or the
parties. [Citation.] ...” [¶] ... [F]undamental jurisdiction cannot be conferred
by waiver, estoppel, or consent. Rather, an act beyond a court's jurisdiction
in the fundamental sense is null and void’ ab initio.

Kabran v. Sharp Mem'l Hosp.(2017) 2 Cal. 5th 330, 339. In the instant case the
trial court lacked authority over Grupo, a non-party to the underlying action, and
hence lacked fundamental jurisdiction to issue both the Turn-Over Order and the
4/5/22 Order. As a result, both orders are null and void and should have been
vacated upon Grupo’s Motion to Vacate.

17
 CONCLUSION

The Trial Court lacked fundamental jurisdiction over Grupo rendering its

8/10/22 Order void. This Court should reverse the 8/10/22 Order and direct the

trial court to grant Grupo’s Motion to Vacate.

Dated: September 19, 2023 Respectfully submitted,

/s/ Stephen Kim__________

Stephen H. Kim
Attorney for Appellant BAK Festivals,
Inc. d/b/a Grupo Flor

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 CERTIFICATE OF WORD COUNT

I certify that the text of this combined brief, including footnotes, consists of
3,516 words as counted Microsoft Word word processing program used to
generate this brief.

Dated: September 19, 2023 Respectfully submitted,

/s/ Stephen Kim

_______________________________
Stephen H. Kim

Attorney for Appellant BAK Festivals, Inc.

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 CERTIFICATE OF SERVICE

I, the undersigned, under penalty of perjury, certify and declare:

That I am a citizen of the United States, over 18 years of age, a resident of
the County where the herein described service took place, and not a party to the
within action.
That my business address is 115 Cayuga Street, Salinas, CA 93901. That
on behalf of BAK Festivals, Inc. I served the foregoing document:

APPELLANT’S OPENING BRIEF

On September 20, 2023, on the following persons in this action, by electronically

serving via TrueFiling, except where indicated otherwise:

Via First-class Mail and email

Clerk of the Alameda Superior Court
Attn: Honorable Noel Wise
Hayward Hall of Justice
24405 Amador Street
Hayward, CA 94544
dept514@alameda.courts.ca.gov

Attorneys for Defendant and Respondent Mag Wellness, Inc.

Sonia Singh
Blake Corby Alsbrook
Ervin Cohen & Jessup LLP
9401 Wilshire Blvd., Ninth Floor
Beverly Hills, CA 90212-2974
ssingh@ecjlaw.com
balsbrook@ecjlaw.com

Via First-class Mail

Plaintiff Steven Podell
1304 Lincoln Avenue
Pacific Grove, CA 93950

Executed on September 20, 2023, at Salinas, California.

/s/ Stephen H. Kim__________________

Stephen H. Kim

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