Mohsen v. Wells Fargo Shareowner Services CA6

Filed 5/28/21 Mohsen v. Wells Fargo Shareowner Services CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

AMR MOHSEN, H045652 (Santa Clara County Plaintiff and Appellant, Super. Ct. No. 1-14-CV-272395)

v.

WELLS FARGO SHAREOWNER SERVICES et al.,

Defendants and Respondents.

Plaintiff Amr Mohsen appeals from a judgment of dismissal entered after the trial court sustained the demurrer of defendants Wells Fargo Bank Shareowner Services (Wells Fargo), Microsemi Corporation (Microsemi), and certain named individuals1 to his first amended complaint. He contends that the trial court erred by dismissing without leave to amend his cause of action for professional negligence and breach of fiduciary duties. We affirm. I. BACKGROUND Plaintiff was the co-founder of Actel Corporation (Actel), and was its Chairman, President, and CEO during its first few years of operation. Plaintiff alleged that prior to Actel’s initial public offering, plaintiff gifted 25,000 shares of Actel to his children. The shares were held by a trust, Star Trust, of which plaintiff was trustee and sole beneficiary.

1 The individual defendants are employees and officers at Wells Fargo and Microsemi. For purposes of our analysis, we will refer only to the corporate entities.

In 2005, plaintiff individually filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. In October 2013, the trustee of plaintiff’s bankruptcy estate filed a complaint for turnover and declaratory relief. The complaint stated that in July 2013, Wells Fargo, which had been retained by Microsemi in connection with its purchase of Actel, had contacted the trustee. Wells Fargo advised the trustee that it “had learned of [plaintiff’s] bankruptcy proceeding and was concerned that [plaintiff] was trying to conceal assets” from the trustee. When plaintiff filed for bankruptcy, he did not identify the 25,000 shares of Actel stock as part of his bankruptcy estate. When asked about the shares, plaintiff initially told the trustee “that ‘he does not understand how these shares came about, how they were acquired and the history of their ownership.’ ” Based on the foregoing, the trustee believed that plaintiff was “secreting the shares from the [bankruptcy] estate” and requested that the bankruptcy court order the shares to be turned over to the trustee. Plaintiff opposed the request, asserting that he had “transferred the Actel shares to his children in 1993 but that the name changes and issuance of the new stock certificates were never consummated.” On cross motions for summary judgment, the bankruptcy court rejected plaintiff’s assertions and determined that the Actel shares were property of the bankruptcy estate and must be turned over to the trustee. The bankruptcy court noted that while plaintiff’s allegations would ordinarily raise an issue of material fact, even if plaintiff could prove “he attempted to transfer the shares, the transfer would be void” because the alleged transfer was never perfected. Under applicable law, “a transfer of personal property is void if not accompanied by an immediate delivery followed by an actual and continuous change of possession[.]” The bankruptcy court found no applicable exception to this rule. Accordingly, the bankruptcy court ordered plaintiff to turn over the shares to the trustee.