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,               B282702

      Plaintiff and Appellant,         (Los Angeles County
                                        Super. Ct. No. BC635476)
                 v.

KENNEDY-WILSON
HOLDINGS, INC., et al.,

    Defendants and Respondents.




      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.

                             **********
       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




                                2
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.”




                                  3
      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




                                 4
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




                                 5
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




                                6
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, Kennedy-
Wilson 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]




                                 7
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




                                8
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




                                 9
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.




                                 10
        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




                                  11
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




                                12
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,




                                13
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.”




                                  14
(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




                                15
(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.




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