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Court of Appeal, Second District, Division 7, California.

Tad IMUTA, et al., Plaintiffs and Respondents, v. Takaaki NAKANO, et al., Defendants and Appellants;

Morio Masaki, Cross–Complainant and Appellant. Harumi NAGAI, et al., Plaintiffs and Appellants, v. Tad IMUTA, et al., Defendants and Respondents.

No. B070113.

Decided: November 27, 1996

Jeffrey F. Sax and Allan E. Willion for Respondents. Jones, Day, Reavis & Pogue, Elwood Lui and Laura M. Matz, Brandon & Hilton and David L. Brandon, Los Angeles, for Appellants.



The parties to this bloodbath 1 between warring factions of a religious order are so numerous and the entities, boards and offices so complex that the foregoing glossary and list of dramatis personae are provided for ease of reference.

The proceedings below involve two consolidated cases, one brought by Imuta, Ajiki, Kogure, the LA Church and SKK (“the Imuta suit,” being Case No. C 630297), and the other brought by Nagai, Turner, Maekawa, Reinig and Kayima (“the Nagai suit,” being Case No. C 643515).

Appellants are Imuta suit defendants Nakano, Hirata, Shimbo, Genshika, Hatakeyama, Saito, Takeda, Suzuki, Yoshimoto and Wada;  Masaki (both a defendant and a cross-complainant in the Imuta suit);  and Nagai, Turner, Maekawa, Reinig and Kamiya, being defendants in the Imuta suit as well as all of the plaintiffs in the Nagai suit.

The LA Church was founded in 1965.   It has various “centers” throughout the United States.   Since 1983, its governing body has been the NAC. The NAC meets once or twice a year.   The LA Church's Executive Committee meets more often.   The LA Church's organic relationship to SKK (or lack thereof) is an issue over which the briefs disagree;  however, a resolution of that issue is not essential to a determination of this case.

SKK has a world-wide membership.   It has been plagued with internal dissension since at least 1984.   In that year it suffered a schism that divided its membership into two main factions, called “Saiken” and “Shinsei.” 2  Saiken and Shinsei disagree about a number of fundamental religious questions.   The leader of the Saiken faction at the time was Nakano.   All of the defendants in the Imuta suit who resided in Japan belonged to the Saiken faction, and all of the other defendants in that suit support Saiken positions on religious matters and matters of church leadership.   The leader of the Shinsei faction was Matsumoto.   The Plaintiffs in the Imuta suit allied themselves with Shinsei, at least on matters of church leadership.

In April of 1986, Nakano and certain other members of the SKK Executive Board purported to terminate Matsumoto's capacity as Representative Director and to elect Nakano in his place.   The validity of these actions was hotly contested by Matsumoto and was ultimately challenged in the courts of Japan.

The schism in SKK spread to the LA Center of the LA Church in 1986.   In June of 1986, Nakano purported to promote Masaki to the position of executive minister of the LA Church.   Masaki was a leader of the LA Center and had previously expressed his loyalty to the beliefs of Saiken.   Imuta, who was Masaki's immediate superior, head minister of the LA Church and chairman of both the NAC and the LA Church's Executive Committee, refused to recognize Nakano's promotion of Masaki and others.

In October of 1986, Nakano requested the Executive Committee of the LA Church to supply SKK with its finance reports and minutes of meetings, allegedly in light of members' concerns that LA Church funds had been misused.   The Executive Committee refused to respond to the request.   In November of 1986, the Saiken faction sent a notice to Imuta, requesting him to come to Japan with financial records of the LA Church.   Imuta refused to comply.   In December of 1986, the Saiken faction sent a second notice to Imuta.   Imuta refused to go.

In response, Nakano sent Hirata to Los Angeles in December of 1986.   The other Imuta suit defendants who resided in Japan (all of whom were followers of Saiken) came over with Hirata or shortly thereafter.   On the morning of December 19, 1986, Hirata, Masaki, Genshika and several of the other Imuta suit defendants delivered to Imuta and Ajiki notices from Nakano's personnel department in Japan dismissing Imuta and Ajiki from their positions.   Notice of Kogure's dismissal was also given.   Nakano appointed Masaki in Imuta's place as president and head minister of the LA Church and Genshika as vice president of the LA Church.   Thereafter, according to respondents, Masaki and Genshika, pursuant to a conspiracy with the rest of the appellants, engaged in various nefarious activities including, among others, misappropriating funds, mailings lists and the logo of the LA Church and issuing newsletters in the name of the LA Church.

On December 26, 1986, Imuta, Kogure and Ajiki filed the Imuta suit.   The LA Church was subsequently added as a plaintiff.   As ultimately amended in November of 1989, the Imuta suit sought (among other things) declaratory relief as well as compensatory and punitive damages on various theories, including (among others) breach of fiduciary duty, intentional interference with contract relations, intentional interference with prospective business advantage, intentional infliction of emotional distress, and unfair competition.   In January of 1987 Masaki filed a cross-complaint in the Imuta suit, seeking compensatory and punitive damages and a declaration declaring (among other things) that Masaki controlled the LA Church.   In April of 1987, Nagai and four other members of the LA Church filed the Nagai suit, seeking relief similar to that sought by the Masaki cross-complaint in the Imuta suit.   The Imuta and Nagai suits were consolidated.   Kogure was ultimately dismissed from the litigation pursuant to a settlement.

The trial of the declaratory relief and unfair competition claims was by the court, sitting without a jury.   The trial of the remaining claims was by jury.   The jury's special verdict specifically and separately found for the LA Church on each of the three theories of liability submitted to it concerning that party, namely, breach of fiduciary duty, intentional interference with contract relations and intentional interference with prospective economic advantage;  and specifically and separately found for Imuta and Ajiki on each of the three theories of liability submitted to it concerning those two individuals, namely, breach of fiduciary duty, intentional interference with contract relations and intentional infliction of emotional distress.   Without specifying on which of the various theories of liability the jury's determination of the amounts of damages was founded, the special verdict awarded compensatory damages to the LA Church of $1.6 million, to Imuta of $350,000 and to Ajiki of $350,000;  and punitive damages of $700,000 to the LA Church and $500,000 each to Imuta and Ajiki.

The court awarded $800,000 to the LA Church as compensatory damages for unfair competition.3  The court also issued a declaration stating, in relevant part:

1. That Nakano was never the Representative Director or Acting Representative Director of SKK;

2. That SKK did not remove the individual Imuta case plaintiffs from their offices in the LA Church and replace them with Masaki, Genshika and one Kato;

3. That the defendants in the Imuta suit had no power to remove and appoint, or act, for SKK;

4. That Matsumoto was the only person registered with the Japanese Government between May of 1985 and November 6, 1989 as Representative Director or Acting Representative Director of SKK;

5. That Imuta and Kogure were not relieved of their positions in the LA Church and could continue to act as officers;  and

6. That the NAC acted properly in removing Masaki and Genshika from their positions with the LA Church.4

This appeal followed.   Subsequent to the filing of the notice of appeal, Nakano has appeared through separate counsel and has briefed the appeal separately.   All of the other appellants (the “Hirata appellants”) are represented by a single group of counsel and have joined together in briefing the appeal.



On this appeal Nakano challenges only the damage awards against him.   The other appellants challenge not only those awards but also the trial court's declarations enumerated above.   Some of the assignments of error are asserted by all appellants;  some are asserted only by the appellants other than Nakano.

Three threshold contentions are asserted:

1. That the trial court was constitutionally devoid of power to decide the disputes presented herein because they were ecclesiastical disputes.

2. That the appellants' statements and actions were privileged under the First Amendment.

3. That deciding the disputes presented herein violated the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. Sections 200bb–2000bb–4.

In addition, appellants contend that the evidence does not support either the award of compensatory damages or the award of punitive damages;  and that the punitive damage award is excessive and so excessive that it violates appellants' due process.   We shall examine each of these contentions:


 In California, the civil courts may constitutionally decide which rival faction controls a church, provided that issues of religion are not decided.   In Korean United Presbyterian Church v. Presbytery of the Pacific (1991) 230 Cal.App.3d 480, 501–502, 281 Cal.Rptr. 396 (disapproved on other grounds by Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 743 n. 11, 29 Cal.Rptr.2d 804, 872 P.2d 143), this division specifically held that the courts of this state not only may, but must, decide the identity of the faction entitled to control a church, but that where an ecclesiastical body has acted the court must defer to that decision.  (Accord, e.g., Presbytery of Riverside v. Community Church of Palm Springs (1979) 89 Cal.App.3d 910, 152 Cal.Rptr. 854;  Horsman v. Allen (1900) 129 Cal. 131, 61 P. 796;  Wheelock v. First Presbyterian Church (1897) 119 Cal. 477, 51 P. 841.)

The Hirata appellants rely heavily on a series of decisions of the United States Supreme Court establishing that the civil courts' jurisdiction to determine disputes involving church leadership is limited:  Kedroff v. St. Nicholas Cathedral (1952) 344 U.S. 94, 73 S.Ct. 143, 97 L.Ed. 120 (“Kedroff ”);  Kreshik v. St. Nicholas Cathedral (1960) 363 U.S. 190, 80 S.Ct. 1037, 4 L.Ed.2d 1140 (“Kreshik ”);  Presbyterian Church in the United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church (1969) 393 U.S. 440, 89 S.Ct. 601, 21 L.Ed.2d 658 (“Hull ”);  Maryland and Virginia Eldership of the Churches of God v. Church of God at Sharpsburg, Inc. (1970) 396 U.S. 367, 90 S.Ct. 499, 24 L.Ed.2d 582 (“Sharpsburg ”);  and Serbian Eastern Orthodox Diocese for the United States v. Milivojevich (1976) 426 U.S. 696, 96 S.Ct. 2372, 49 L.Ed.2d 151 (“Milivojevich ”).   Each of these cases differs in material respects from the case at bar:

Kedroff is, in essence, a case inhibiting legislative authority with respect to church property.   It declared unconstitutional a New York statute transferring control of church property from one faction to another.   By itself, it seems to have little or no precedential value on the issue of the extent of judicial power to intervene in church disputes.   However, by reason of Kreshik, closer scrutiny of Kedroff is warranted:

Kreshik involved the same litigation as was the subject of Kedroff.   Upon remand by the Supreme Court in Kedroff, the New York Court of Appeals reached the same conclusion as it had earlier reached in Kedroff, based not upon the statute found unconstitutional in Kedroff but upon a common-law ground, namely, that by reason of the domination of the Patriarch of the mother church by the secular authority in the U.S.S.R., the Patriarch's appointee could not under the common law of New York validly exercise the right to occupy the church property involved in the dispute.   In a brief per curiam decision the Supreme Court reversed, stating that its ruling in Kedroff applied whether the challenged State action was through the legislative branch (as in Kedroff ) or the judicial branch (as in Kreshik ).  (See Hull, supra, 393 U.S. at 448–449, 89 S.Ct. at 605–606.)   Accordingly, it becomes necessary to scrutinize Kedroff more closely in order to ascertain its implications concerning limitations on judicial action.

Kedroff involved a situation different from the one at bar.   In Kedroff it was undisputed that there was a hierarchical relationship between the mother church and the New York churches 6 and that the mother church had definitively made a decision on the issue in question:  who was entitled to control the property in dispute.   The essence of Kedroff is that the legislature cannot (and the essence of Kreshik is that courts cannot) overturn a decision of a church decision-making body on matters of “ecclesiastical cognizance”—questions of discipline, faith, or ecclesiastical rule, custom, or law.

In Hull, the Supreme Court was confronted with a dispute concerning ownership of church property in Georgia.   Georgia law subjected local church property to an implied trust in favor of the parent church so long as the parent church adheres to the tenets of faith and practice existing at the time the local church affiliated with it.   The jury was instructed to determine whether the challenged actions of the parent church had amounted to “a fundamental or substantial abandonment of the original tenets and doctrines of the [parent church], so that the new tenets and doctrines are utterly variant from the purposes for which the [parent church] was founded.”   Upon a jury verdict for the local churches, the trial court declared that the implied trust had terminated and enjoined the parent church from interfering with the use of the property in question by the local churches.   The Supreme Court reversed, holding that a civil court has no jurisdiction to determine a church property dispute where the resolution of the dispute depends upon the interpretation and significance the civil court assigns to aspects of church doctrine.   The principle enunciated in Hull does not prevent a civil court from deciding disputes involving churches if those disputes do not involve determining questions of church doctrine—“ecclesiastical” or “religious” questions.  (See Hull, supra, 393 U.S. at 445, 449, 89 S.Ct. at 604, 606.)

Sharpsburg reaffirmed the last-mentioned principle articulated in Hull. In a per curiam decision, the Supreme Court ordered the appeal from a Maryland court's decision resolving a church property dispute dismissed for want of a substantial federal question because “the Maryland court's resolution of the dispute involved no inquiry into religious doctrine.”  (396 U.S. at 368, 90 S.Ct. at 500.)

Milivojevich stands for the proposition that, at least in the absence of fraud or collusion,7 civil courts are bound by—and cannot review—the decisions of the highest judicial bodies of a religious organization “on matters of discipline, faith, internal organization, or ecclesiastical rule, custom or law.”  (426 U.S. at 713, 96 S.Ct. at 2382 ff.)  (Emphasis added.)

Accordingly, we must determine whether the trial court's determinations in the case at bar involved questions of religion and whether the trial court gave proper deference to any determination of an ecclesiastical issue by an ecclesiastical body.

 Taking the last question first, so far as the record on this appeal reflects, only the Spiritual Leader, the Board of Directors, the Representative Director, and the Board of Executive Directors could conceivably be characterized as “ecclesiastical bodies” of SKK. There was no evidence before the trial court that the Spiritual Leader or the Board of Directors made any decision on any issue before that court.

Nakano certainly made decisions on issues before the trial court, but the validity of those decisions as definitive decisions of SKK depends entirely upon whether Nakano was SKK's Representative Director (or Acting Representative Director) at the time—one of the very issues before the trial court.   We must first determine whether the trial court was correct in holding that he was not validly elected as Representative Director.   If he was, the issue of civil court jurisdiction to review his actions becomes moot.   His actions are challenged only on the basis that his election was invalid;  and if it was not, the judgment herein is wrong.   If his election was invalid, however, no significance should be afforded under Kreshik and Milivojevich to his decisions.

The only decision of the Board of Executive Directors upon which any appellant relies is that Board's action of April 16, 1986 removing Matsumoto and electing Nakano as Representative Director to serve out Matsumoto's term.   Assuming that that Board can be characterized as acting as a “judicatory” when it took that action (and Milivojevich seems to require such a characterization), the validity of that action is the key to whether cases such as Kreshik and Milivojevich apply to the case at bar.   If that action was valid, under those cases the trial court here was powerless to reach many of the conclusions reflected by the judgment because a church judicatory had already in substance determined that Nakano was SKK's Representative Director.   If that action was invalid, the trial court was free, under cases such as Sharpsburg, to reach those conclusions so long as it could do so without deciding any religious question.   But did the trial court have the power to decide whether the April 16, 1986 action of the Board of Executive Directors was valid?   We hold that it did:

At first blush, Milivojevich would seem to dictate a contrary result.   As is plainly articulated in the dissenting opinion of then Justice Rehnquist in Milivojevich, 426 U.S. at 726–735, 96 S.Ct. at 2388–2392, the majority opinion in that case rebuffed the efforts of the respondents to demonstrate that the decision of the mother church's Holy Assembly was reached in proceedings not in accordance with internal church procedures (i.e., the mother church's constitution and its penal code).   The majority opinion declared:

“For civil courts to analyze whether the ecclesiastical actions of a church judicatory [complied with church laws and regulations] must inherently entail inquiry into the procedures that canon or ecclesiastical law supposedly requires the church adjudicatory to follow, or else into the substantive criteria by which they are supposedly to decide the ecclesiastical question.   But this is exactly the inquiry that the First Amendment prohibits;  recognition of such an exception would undermine the general rule that religious controversies are not the proper subject of civil court inquiry, and that a civil court must accept the ecclesiastical decisions of church tribunals as it finds them.”  (Milivojevich, supra, 426 U.S. at 713, 96 S.Ct. at 2382.)

What then permitted the trial court here to determine that the April 16, 1986 action of the Executive Board of Directors was invalid and not binding on the court?   The February 24, 1988 decision of the Japanese District Court holding that action invalid:

On April 23, 1986, Nakano filed suit against SKK in District Court in Japan, requesting recognition of his status under the action of the Board of Executive Directors taken on April 16, one week earlier.   On February 24, 1988, the Japanese District Court issued a decision holding that Matsumoto had not validly been removed as Representative Director and that Nakano therefore had not validly been elected as Matsumoto's successor.   That decision became final on January 11, 1989, after Nakano's appeal therefrom was withdrawn, his suit (technically, his “petition”) was dismissed by the Tokyo Court of Appeal on December 27, 1988, and he did not seek review of that dismissal by the Japanese Supreme Court.8

Accordingly, unlike the situation confronting the court in Milivojevich, in performing the task of determining whether the proper procedure was followed by the ecclesiastical judicatory here, it was not necessary for the trial court to involve itself in inquiring “into the procedures that canon or ecclesiastical law supposedly requires the church adjudicatory to follow, or else into the substantive criteria by which [the trial court was] supposedly to decide the ecclesiastical question.”  (Ibid.) These inquiries had already been made by a Japanese court whose jurisdiction to make these inquiries has not been challenged;  and the Japanese court's decision—the result of those inquiries—has become final and binding.

We do not understand Milivojevich as disenfranchising a civil court from ignoring an act of an ecclesiastical judicatory where another court—particularly a foreign court not shown to have lacked jurisdiction to decide the matter—has rendered a final decision determining that act to be invalid.

 Now to the other question:  Did the trial court's determinations involve questions of religion, thereby running afoul of cases such as Hull? We hold that the trial court's determinations did not involve questions of religion.   The essential religious question dividing SKK and the persons interested therein was which of the three credos—Saiken, Shinsei or Goji—is correct.   The trial court went nowhere near that question—or any other religious question—in reaching the determinations embodied in the March 15, 1991 judgment.   That judgment was based on considerations entirely apart from religious ones.   As in Sharpsburg, the trial court's resolution of the dispute here “involved no inquiry into religious doctrine.”  (Sharpsburg, supra, 396 U.S. at 368, 90 S.Ct. at 500.)

Accordingly, the trial court had the power and duty to decide the disputes it did decide.


Consistent with their other departures from the procedural niceties of appellate practice, the contention of the Hirata appellants that the conduct for which they were held liable was privileged under the first amendment is unaccompanied by any citation to the record identifying the evidence of that conduct and even virtually unaccompanied by any specific description of the conduct.9  Again without condoning such conduct, we have made an independent examination of the entire record, and the conclusions expressed in this opinion are based upon that examination.

The thrust of the Hirata appellants' argument is that under cases such as New York Times v. Sullivan (1964) 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, respondents were required to show that appellants' statements that constituted tortious conduct were false and, by clear and convincing evidence, were either known to be false or made with reckless disregard of their falsity.

 At one extreme, if respondents were seeking damages for the tort of defamation, the Sullivan test would certainly apply;  but Respondents are not.   At the other extreme, with respect to most other tort actions, so long as the tort law does not inhibit religious belief but only religiously motivated conduct (see Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1112, 252 Cal.Rptr. 122, 762 P.2d 46 ff.), the test is the “compelling interest” one described in Point III, infra.   As is discussed there, the state does have a compelling interest in proscribing conduct of the sort giving rise to the judgments below, and there is no less restrictive method for proscribing that conduct than imposing post-conduct liability for damages.10  However, there is a middle ground:  With respect to torts other than defamation, if the essence of the tort is false communicative conduct, the Sullivan test apparently applies.   For example, in Hustler Magazine v. Falwell (1988) 485 U.S. 46, 108 S.Ct. 876, 99 L.Ed.2d 41, the Supreme Court held the Sullivan test applicable to the tort of intentional infliction of emotional distress where the infliction of emotional distress was allegedly caused by publication of false statements about the plaintiff.  (See also Noonan v. Rousselot (1966) 239 Cal.App.2d 447, 450, 48 Cal.Rptr. 817,) declaring that “it is clear that if defendants' utterances are protected by the First Amendment, the power of this state to penalize them does not depend on the name given to the wrong.. ‘․ [a] state cannot foreclose the exercise of constitutional rights by mere labels.’  (N.A.A.C.P. v. Button, 371 U.S. 415, 429, 83 S.Ct. 328, 336, 9 L.Ed.2d 405․)”

 Applying the last-mentioned principle to the case at bar, the misappropriation of the mailing lists of the LA Church, for example, does not have as its essence false communicative conduct.   However, certain other conduct of Respondents does:  defamatory statements, for example.   Characterizing the latter conduct as a tort or torts other than defamation does not render the Sullivan test inapplicable.11  (Ibid. See also Higgins v. Maher (1989) 210 Cal.App.3d 1168, 258 Cal.Rptr. 757.)   We conclude that some of the respondents' conduct should have been judged by the Sullivan test.

For the reasons set forth in Points VI, A, 1, VI, B, 1, and VI, D, infra, we hold that none of the compensatory damages claims of Imuta and Ajiki have merit other than possibly the ones for intentional infliction of emotional distress.   Also, the Sullivan test has no application to the portion of the judgment herein granting declaratory relief.   Therefore, as to Imuta and Ajiki we shall consider the Hirata appellants' contention concerning the Sullivan test only to the extent that it impacts on the judgment for damages for intentional infliction of emotional distress.   Also, in Point VI, B, 2 of this opinion we indicate that we shall reverse the portion of the judgment awarding compensatory damages to the LA Church and direct the trial court not to consider the LA Church's claim for damages for intentional interference with contract relations upon remand.   We shall therefore not consider the Hirata appellants' contention concerning the Sullivan test to the extent that it relates to the LA Church's claim for damages for intentional interference with contract relations.   Finally, appellants do not contend that there was insufficient evidence to support a finding that such of the torts appellants were found to have committed as involved communicative conduct involved false statements that were made with knowledge of their falsity or reckless disregard of that falsity.   Accordingly, the Hirata appellants' contention concerning the Sullivan test of course does not apply to the unfair competition damages awarded by the trial judge, because that award involved no potentially inadequate or erroneous jury instructions.   Therefore, we need consider the Sullivan test contention only with respect to the jury's awards of damages (a) in favor of Imuta and Ajiki for intentional infliction of emotional distress and (b) in favor of the LA Church for breach of fiduciary duty and intentional interference with prospective economic advantage.

 The trial court's instructions to the jury did not specifically inform the jury of the Sullivan test concerning any of appellants' conduct.   Fundamentally, it appears that appellants did not raise the potential applicability of that test before the jury reached its verdicts and raise it on appeal as an afterthought.   We have not been cited to nor have we found any instructions proffered by any of the appellants that would have placed the Sullivan test before the jury.12  Under such circumstances, appellants cannot complain of the omission.  “In a civil case, each of the parties must propose complete and comprehensive instructions in accordance with his theory of the litigation;  if the parties do not do so, the court has no duty to instruct on its own motion.”  (Agarwal v. Johnson (1979) 25 Cal.3d 932, 950–51, 160 Cal.Rptr. 141, 603 P.2d 58, quoting Downing v. Barrett Mobile Home Transport, Inc. (1974) 38 Cal.App.3d 519, 523, 113 Cal.Rptr. 277.) 13

Continental Airlines v. McDonnell Douglas Corp. (1989) 216 Cal.App.3d 388, 264 Cal.Rptr. 779, held that a party need not propose a proper instruction in order to complain on appeal about erroneous instructions proposed by the party's adversary where the error is more than merely an error of overgenerality.   For two reasons, we conclude that Continental Airlines does not warrant reversal for failure to instruct on the Sullivan test:

 1. Continental Airlines was based upon Code of Civil Procedure section 647, which automatically gives a party an exception to instructions that are given.   Here, however, appellants submitted seven pages of specific objections on January 8, 1991 and eight pages of objections on January 22, 1991, specifying the respects in which they contended that the court's instructions were deficient.   The absence of an instruction placing the Sullivan test before the jury was not one of the specified deficiencies.   The jury did not return its verdict on liability and compensatory damages until January 23, 1991.   In the interests of fairness to respondents and to the trial judge, we hold that by specifying their objections to the instructions that were given, appellants waived the benefit of Section 647 as to objections not specified.

2. Moreover:

(a) At least with respect to the breach of fiduciary duty tort, the error in omitting reference to the Sullivan test was invited.   Appellants themselves proposed a jury instruction on the elements of that tort which omitted any reference to the Sullivan test.   The trial court used much of the substance of that instruction.   Under such circumstances, appellants cannot complain of the omission concerning the breach of fiduciary duty tort.  “Under the doctrine of invited error, ‘if instructions are given by the court at the request of the opposing party, or on its own motion, the complaining party cannot attack them if he himself proposed similar instructions.’ ”  (Smith v. Americania Motor Lodge (1974) 39 Cal.App.3d 1, 7, 113 Cal.Rptr. 771, quoting from 4 Witkin, Cal. Procedure (2d ed.1971), Trial, section 243, p. 3057 [now at 7 Witkin, Cal. Procedure (3d ed.1985), Trial, section 296, p. 297].)

(b) In addition:

(i) While appellants apparently submitted no instructions concerning the tort of intentional interference with prospective economic advantage, appellants did propose instructions concerning the elements of the similar 14 tort of intentional interference with contract relations;  and those instructions omitted any reference to the Sullivan test.

(ii) The issue of whether communicative conduct supporting the intentional interference with prospective economic advantage tort met the Sullivan test was not within the scope of the pleadings concerning that tort.   Respondents' operative Complaint herein (the Fourth Amended Complaint) alleged facts sufficient to support a cause of action for intentional interference with prospective business advantage.   Those facts were met with a general denial and fifty-one affirmative defenses—almost entirely consisting of allegations in the form of conclusions of law.   Notwithstanding their large number, not a single one of those affirmative defenses alleged that the communicative conduct of appellants was true or that the falsity of such conduct was unknown to appellants or that such conduct was not engaged in with a reckless disregard for its falsity.   For that matter, not a single one of those defenses alleged that any of the conduct of appellants was justified or privileged under the First Amendment.   The closest any of those affirmative defenses came to the First Amendment was a series of affirmative defenses alleging that various of the Fourth Amended Complaint's causes of action “[present] religious issues, the resolution of which by a court, is precluded by the First Amendment.”   These affirmative defenses do not amount to an assertion that appellants' conduct did not satisfy the requirements of the Sullivan test—again, that the communicative conduct of appellants was true or that the falsity of such conduct was unknown to appellants or that such conduct was not engaged in with a reckless disregard for its falsity.   Instead, as legal conclusions, they asserted that the court had no jurisdiction even to apply the Sullivan test.

 If appellants wished the Sullivan test to be applied by the trier of fact, they had the responsibility of asserting as an affirmative defense that their communicative conduct did not satisfy the requirements of that test—that such conduct was justified because the information they communicated was true or that its falsity was unknown to them or that their conduct was not engaged in with a reckless disregard for whether or not that information was true.   The defense of justification or privilege in actions based on the tort of intentional interference with prospective economic advantage must be specially pleaded.  (Gold v. Los Angeles Democratic League (1975) 49 Cal.App.3d 365, 376, 122 Cal.Rptr. 732;  Arnold (A.F.) & Co. v. Pacific Professional Ins. (1972) 27 Cal.App.3d 710, 714–717, 104 Cal.Rptr. 96.)   In Gold v. Los Angeles Democratic League, supra, the defendants contended that no cause of action was stated for intentional interference with prospective business advantage because their alleged misrepresentation was justified as an exercise of free speech, guaranteed by the First Amendment.   The Gold court responded:  “ ‘Justification is an affirmative defense and may not be considered as supporting the trial court's action in sustaining a demurrer unless it appears on the face of the complaint.’  (Herron v. State Farm Mutual Ins. Co. (1961) 56 Cal.2d 202, 207, 14 Cal.Rptr. 294, 363 P.2d 310.)”  (Gold v. Los Angeles Democratic League, supra, 49 Cal.App.3d at 376, 122 Cal.Rptr. 732.)(Emphasis added.) 15

For the reasons set forth in the preceding paragraphs of this opinion, we conclude that appellants cannot now complain of the absence of any reference to the Sullivan test in the instructions concerning the tort of intentional interference with prospective economic advantage.

As a related contention, appellants other than Nakano assert that it was error for the trial court to refuse proffered instructions that appellants are not liable in tort if the tortious activity “occurred in furtherance of [appellants'] religious beliefs, practices, or in furtherance of [appellants'] administrative duties within the religion․”  If the basis for claiming the existence of a “religious privilege” is the argument referred to in the preceding paragraphs of this Point II, we have disposed of that argument in those paragraphs—and, in any event, the proffered instructions were clearly overstated.   If there is some other authority for claiming that a “religious privilege” exists, we are not cited to it and we are unaware of it.   Accordingly, we reject that claim of instructional error.



A. Did the Award of Punitive Damages Violate the First Amendment?

No—if compensatory damages can be recovered (and they can—see Point II, supra), then we perceive no reason why punitive damages cannot.

B. Was There Sufficient Evidence of Appellants' Financial Condition to Support the Punitive Damages Award?

 On August 15, 1991, after the trial court's judgment herein, the Supreme Court decided Adams v. Murakami (1991) 54 Cal.3d 105, 284 Cal.Rptr. 318, 813 P.2d 1348.   The Adams case held that a plaintiff must present evidence of a defendant's financial condition as a prerequisite to an award of punitive damages.   In Douglas v. Ostermeier (1991) 1 Cal.App.4th 729, 2 Cal.Rptr.2d 594, this Division held the Adams rule to be retroactively applicable to cases not final at the time Adams was decided.   However, in reaching that conclusion we recognized that the issue of the amount of punitive damages would have to be retried in a limited number of cases (1) which were not final when Adams was decided and (2) in which sufficient evidence of the defendant's financial condition was not introduced (usually because of a failure to anticipate the absolute mandate of Adams ).  (Id. at 746–748, 2 Cal.Rptr.2d 594.)   In Washington v. Farlice (1991) 1 Cal.App.4th 766, 775–777, 2 Cal.Rptr.2d 607, decided by us the day after we decided the Douglas case, we so held.   Pursuant to Douglas and Washington, this is a case in which the issue of the amount of punitive damages must be retried.

As to all appellants other than Masaki, the only evidence received at trial that arguably demonstrated their financial condition was evidence that appellants' legal bills amounted to $4,730,512.16, of which $4,064,324.70 had been paid.   Concerning that evidence, appellants argue that:

1. Because there was no evidence that appellants (rather than SKK) paid those bills, that evidence sheds no light whatsoever on appellants' financial condition.

2. Even if the evidence had indicated that appellants had paid those bills in the past, that would be no indication as to appellants' financial condition at the time of trial—the relevant inquiry with respect to punitive damages.

Because we agree with the first of said contentions, we need not reach the second.   Evidence of someone's ability to pay enormous attorneys fees does not indicate personal affluence on the part of appellants or otherwise constitute sufficient probative evidence of their financial condition where there was no evidence that the “someone” was one or more of appellants.

As to Masaki, upon examination by defendants he testified to a modest annual salary ($35,000) and a modest amount of savings ($2,000).   Accordingly, the record supports the substantial punitive damage award against Masaki to even a lesser extent than with respect to the other appellants.   In addition, there was no evidence of Masaki's expenses or liabilities, so that his total financial condition was not before the trial court.

It is appropriate that we empower the trial court to revisit the issue of the amount of punitive damages.   Respondents were inhibited from discovering the financial condition of all appellants other than Masaki by an order of the trial court drastically limiting pre-trial foreign discovery.   Upon remand the trial court should revisit that order in light of the necessity for discovery to meet the requirements of Adams.   And even as to Masaki, respondents should have a further opportunity to establish his complete financial condition at trial in view of the intervening decision in Adams.   We therefore shall reverse the judgment insofar as it awards punitive damages and remand the issue of the amount of punitive damages for retrial in accordance with the views expressed herein.  (Washington v. Farlice, supra.)

C. Was the Punitive Damages Award Excessive as a Matter of Law?

In view of the fact that we order a retrial of the amount of punitive damages (see Point VII, B, supra ), it is not necessary for us to consider appellants' contention that the punitive damages award contained in the judgment was excessive as a matter of law.



That portion of the judgment awarding monetary damages and interest is reversed and the cause is remanded to the trial court for (1) retrial of the causes of action of Imuta and Ajiki for intentional infliction of emotional distress and (2) retrial of the LA Church's causes of action for (a) breach of fiduciary or confidential relationship, (b) intentional interference with prospective economic advantage, and (c) unfair competition;  and (3) entry of judgment in favor of appellants on the monetary claims of respondents Imuta and Ajiki.

In all other respects the judgment is affirmed.

The order denying motion for judgment notwithstanding the verdict is dismissed as moot.

The sanction orders are affirmed.

Appellant Nakano shall recover his costs on appeal from respondents.   Respondents shall recover their costs on appeal from appellants Nagai, Turner, Maekawa, Reinig and Kamiya.   In all other respects, each party shall bear that party's own costs on appeal.



1.   The attorneys' fees and costs paid by one set of parties to this case exceeded $4,000,000 even before the appellate stage!

2.   There was a third faction, called “Goji,” composed of a very small percentage of SKK's followers.   The Goji faction was not involved in the cases at bar.

3.   The damage awards were against all appellants other than Nagai, Turner, Maekawa, Reinig and Kamiya (the plaintiffs in the Nagai suit, hereinafter sometimes referred to as “the Nagai plaintiffs”).

4.   Given the ardor with which this case has been litigated by all parties, it may be important for us to note, and we do note, that SKK was not a party to this case when it went to judgment;  and therefore it would seem (although we do not now decide) that none of the judgment's declarations are binding upon SKK. (But see 7 Witkin, Cal. Procedure (3d ed.1985), Judgment, section 283, pp. 721–722 (“substantial identity” doctrine);  sections 287–289, pp. 723–726 (“privity” doctrine).)

FOOTNOTE.   See footnote *, ante.

6.   As noted at page 81, supra, whether a hierarchical relationship existed between SKK and the LA Church is in dispute but is not essential to a determination of this case.

7.   In dictum, Gonzalez v. Roman Catholic Archbishop of Manila (1929) 280 U.S. 1, 16, 50 S.Ct. 5, 7–8, 74 L.Ed. 131, first raised the potential for a “fraud, collusion or arbitrariness” exception to the doctrine that civil courts will not second-guess a decision of an ecclesiastical judicial body.  (See Milivojevich, supra, 426 U.S. at 711–712, 96 S.Ct. at 2381–2382.)  Milivojevich expressly rejected the “arbitrariness” portion of the Gonzalez potential exception.  (Id. at 713, 96 S.Ct. at 2382 ff.)

8.   The Hirata appellants contend that the dismissal of Nakano's petition by the Tokyo Court of Appeal had the effect of vacating the District Court's decision.   In its October 31, 1990 Statement of Decision herein, the trial court disagreed.   As is discussed in detail in Point IV, A, 3, infra, we conclude that there was substantial evidence to support the trial court's decision on this non-ecclesiastical matter.

9.   These defects are particularly egregious in appellants' opening briefs.   They exist to a lesser extent in the only reply brief filed herein—that of the Hirata appellants.

10.   We do not discuss the tort of intentional interference with contract relations at this juncture because we conclude in Point VI, infra, that there was no substantial evidence below to support recovery based upon that tort.

11.   In Molko v. Holy Spirit Assn., supra, 46 Cal.3d 1092, 252 Cal.Rptr. 122, 762 P.2d 46, the Court reversed a summary judgment in favor of defendants on plaintiffs' claims for fraud and emotional distress.   Molko does not mention the Sullivan test.   That test does not appear to have been relevant to a disposition of the fraud claim in Molko because the plaintiffs submitted evidence of falsity and knowledge of falsity in support of that claim, thereby satisfying the Sullivan test.   And presumably the reason that the Sullivan test was not mentioned in connection with the intentional infliction of emotional distress claim was because that claim was essentially based on “the same conduct that supports [plaintiffs'] fraud actions—i.e., misrepresentation and concealment․”  (Molko v. Holy Spirit Assn.,supra, 46 Cal.3d at 1120, 252 Cal.Rptr. 122, 762 P.2d 46.)

12.   We note that the “religious privilege” instructions discussed in the last paragraph of this Point II did not purport to embody the Sullivan test.

13.   There is some authority supporting the existence of a duty to instruct sua sponte on the issue of the proper measure of damages.  (See Pepper v. Underwood (1975) 48 Cal.App.3d 698, 708–709, 122 Cal.Rptr. 343, disapproved on other grounds by Stout v. Turney (1978) 22 Cal.3d 718, 730, 150 Cal.Rptr. 637, 586 P.2d 1228;  Thomas v. Buttress & McClellan, Inc. (1956) 141 Cal.App.2d 812, 819–820, 297 P.2d 768.)   However, the Sullivan test does not relate to that issue.

14.   The tort of interference with contract “is merely a species of the broader tort of interference with prospective economic advantage.”   (Buckaloo v. Johnson (1975) 14 Cal.3d 815, 823, 122 Cal.Rptr. 745, 537 P.2d 865.)

15.   The concurring and dissenting opinion in Gold asserted that the First Amendment issue in that case did appear on the face of the complaint.   However, the question on demurrer of whether a complaint states a cause of action where it reflects a First Amendment issue on its face is a question different from whether a defendant can require the jury to be instructed on matter which must be pleaded as an affirmative defense merely because the complaint sets forth facts which reflect that issue.

FOOTNOTE.  See footnote *, ante.

FOOTNOTE.   See footnote *, ante.

GOLD, Associate Justice.** FN** Assigned by the Chairperson of the Judicial Council.

LILLIE, P.J., and JOHNSON, J., concur.