Filed 9/10/26 Kung Fury 2 Europe UG v. Creasun Entertainment CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION SEVEN
KUNG FURY 2 EUROPE UG, B340299
Plaintiff and Respondent, (Los Angeles County Super. Ct. No. 20STCV35479)
v.
CREASUN ENTERTAINMENT USA, INC. et al.
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los Angeles County, Anthony J. Mohr, Judge. Affirmed.
Law Office of Albert Robles and Albert Robles for Defendants and Appellants.
Kinsella Holley Iser Kump Steinsapir and Nicholas Soltman for Plaintiff and Respondent.
__________________________
Creasun Entertainment USA, Inc. and its principal Minglu Ma (collectively, Creasun) appeal from a judgment in favor of Kung Fury 2 Europe UG (Kung Fury) after the trial court granted Kung Fury’s motion to enforce the parties’ settlement agreement under Code of Civil Procedure section 664.6 (section 664.6). Creasun argues Kung Fury presented insufficient evidence to show it had performed its own obligations under the settlement agreement. Creasun also contends Kung Fury does not have legal capacity to maintain an action as a nonqualified foreign corporation. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The underlying action arises from a financing dispute involving the Germany-based production of a feature film, Kung Fury 2. Creasun was the film’s principal financier, and Kung Fury was its lead producer.
In September 2020, Kung Fury filed suit against Creasun, alleging causes of action for breach of contract and fraud. Creasun filed a cross-complaint against Kung Fury and the film’s individual producers Philip Westgren and Alex Lebovici, alleging causes of action for breach of contract, negligent misrepresentation, fraudulent inducement, Corporations Code violations, and declaratory relief.
In May 2023, on the eve of trial, the parties settled the action. This appeal arises out of their written settlement agreement.
A. The Settlement Agreement Under the settlement agreement, each side dismissed all claims with prejudice and released the other from all liabilities.
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The parties also agreed the trial court would retain jurisdiction pursuant to section 664.6.
Relevant here, the settlement agreement set forth a threestep process for transferring production of the film from Kung Fury, Westgren, and Lebovici to Creasun.
First, under section 2, within 30 days of the settlement agreement’s execution, Kung Fury was to provide to Creasun: (1) “a closing bible with the closing documents listing all of the contracts relating to the Film”; (2) “all documents in [Kung Fury’s] possession, custody and control documenting all prior expenditures and income received by the production relating to the Film within its possession, custody and control (including, but not limited to, accounting general ledger and trial balance, and supported by all invoices, agreements, cost reports, cash flow records)”; (3) “all bank statements for all accounts for KF2 Europe UG, and KF2 Europe Production UG, all bank wire records for all bank accounts of KF2 Europe UG, KF2 Europe Production UG, in all cases originals, or if originals are not available, copies”; (4) “any contracts, agreements, etc. signed with third parties related to the film”; and (5) “all documentation relating to the WGA and SAG agreements.” Section 2 further provided that “[i]f there are any documents that Creasun contends that [Kung Fury] did not provide, then Creasun shall provide written notice to [Kung Fury], and [Kung Fury] shall have the opportunity to cure within ten (10) days of notice. Should [Kung Fury] provide additional documents following a notice to cure, Creasun shall have an additional fifteen (15) days to review and approve such information prior to any obligation to pay producer fees pursuant to section 3 below.”
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Second, under section 3, within 30 days of Kung Fury providing the documents required under section 2, Creasun was to pay Westgren and Lebovici’s outstanding producer fees of $365,000.
Third, under section 5, upon its payment of the producer fees, Creasun was to take over production of the film in accordance with separate film production agreements.
B. Performance on the Settlement Agreement and Kung Fury’s First Motion To Enforce Before the parties executed the settlement agreement, Kung Fury had already provided Creasun with most of the documents specified in section 2 in connection with the closing of the financing of the film, discovery during the litigation, and earlier settlement discussions. Further, with the help of an accountant who had worked on the film, Kung Fury identified, compiled, and electronically provided new copies of those and other responsive documents to Creasun in May 2023, within 30 days of the settlement agreement’s execution.
Creasun raised concerns on multiple occasions that Kung Fury had not provided various required documents. In almost every instance, Kung Fury confirmed the described documents had already been provided, did not exist, or fell outside the scope of its settlement agreement obligations. In one instance, Kung Fury provided a missing document—a contract with a video special effects company that did some early work on the film. In another instance, Creasun flagged a discrepancy in a trial balance that indicated it had paid more money than it had. While noting it had no obligation under the settlement agreement to do so, Kung Fury provided Creasun with corrected trial balances.
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In July 2023, Creasun asked Kung Fury to request bank statements from Kung Fury’s Germany-based bank, Commerzbank. Kung Fury responded by noting that, although copies of such statements had already been provided, it had reached out to Commerzbank, which said it would cost 14,844 euros to obtain the requested records directly from the bank. As the parties disputed who should be responsible for paying this amount, in August 2023, Creasun informed Kung Fury it had “located zero credit card statements despite fully inventorying [Kung Fury’s] production.” In response, Kung Fury pointed Creasun to the previously produced credit card statements and noted statements were not generated in months with no charges.
Later that month, Kung Fury notified Creasun that Creasun was in breach of its obligation to pay the producer fees under section 3 of the settlement agreement. Nevertheless, Kung Fury offered to pay half of the cost to obtain the Commerzbank records in exchange for Creasun’s payment of the producer fees. Kung Fury subsequently offered to split the cost without any conditions in an effort to “simplify things and avoid burdening [the court] with a motion to enforce the settlement agreement.” Creasun responded that it would share the cost of obtaining the records but would only pay the producer fees upon receiving the records and “indicating its satisfaction with the production.” Kung Fury objected to Creasun’s suggestion it was only obliged to pay if the records were to its “satisfaction.” Kung Fury proposed that Creasun agree to unconditionally pay the producer fees within three days after the records were received. Creasun considered this proposal unacceptable.
In October 2023, Kung Fury moved to enforce the settlement agreement, arguing it had complied with its
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obligations to produce documents and Creasun had failed to pay the producer fees. Creasun opposed the motion and asked the court to order Kung Fury “to proceed with the parties’ agreement to share costs equally in order to order the Commerzbank records with no alterations to the parties’ rights under the settlement agreement.” At the motion hearing, the parties agreed (1) Kung Fury would withdraw its motion, (2) the parties would split the costs of obtaining the Commerzbank records, and (3) all other obligations of the parties would remain according to the settlement agreement. As a result, the court deemed Kung Fury’s motion withdrawn and moot.
C. Performance on the Amended Settlement Agreement In December 2023, the parties signed a stipulation amending the settlement agreement. Under the stipulation, Kung Fury was to transfer the required payment to Commerzbank and “concurrently send Commerzbank correspondence ... in English and German requesting that it provide physical copies of all records relating to the eight bank accounts and two credit cards with Commerzbank from their opening dates, including all ‘account statements and Pre-booked items’ (‘Kontoauszüge und Vormerkposten’), and all statements showing the full ‘account transactions’ (‘Kontoumsätze’).” Kung Fury was to request that Commerzbank send the records to a third-party document service company, which would then provide a copy of the records to Creasun and the originals to Kung Fury. The stipulation stated the terms of the settlement agreement were otherwise to remain in full effect.
Creasun approved Kung Fury’s proposed correspondence (in English and German) before Kung Fury sent the correspondence to Commerzbank on December 26, 2023. Kung
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Fury sent Commerzbank payment for the records in January 2024.
Commerzbank produced three tranches of records in February, March, and April 2024. In response to the second tranche, Creasun’s German counsel reached out to Commerzbank and expressed concern that the records were incomplete because, among other things, there were certain months for which no credit card statements were included.
In a cover letter to the third tranche of records, Commerzbank stated: “Attached you will find the missing account statements and credit card documents. We would like to point out that no billing will be created without credit card transactions. The documentation is now completed to the best of our knowledge and belief.”
Upon receiving the third tranche, Kung Fury followed up with Creasun, seeking confirmation that Creasun would comply with its obligation under the settlement agreement to pay the producer fees within 30 days. Creasun did not provide such confirmation and instead contended Commerzbank records were still missing.
D. Kung Fury’s Second Motion To Enforce In April 2024, Kung Fury again moved to enforce the settlement agreement. Kung Fury argued it had complied with its document production obligations under the settlement agreement and Creasun had breached its obligation to pay the producer fees. Kung Fury submitted a declaration from Westgren, who stated Kung Fury had provided Creasun with each of the five categories of documents Kung Fury was required to provide under section 2 of the settlement agreement. Kung Fury also presented evidence showing it had complied with the
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requirement added in the amended settlement agreement to request bank and credit card statements from Commerzbank and to pay half the cost to obtain them. Kung Fury argued it had done everything it was required to do to trigger Creasun’s obligation to pay the producer fees. Kung Fury asserted Creasun’s contention that Commerzank records were still missing was baseless, and “[e]ven if Commerzbank has not provided all the requested documents …, this does not relieve [Creasum] of their obligation to pay. [Kung Fury’s] obligations are limited in relevant part to requesting that Commerzbank provide bank and credit card statements for the film…. [Kung Fury] cannot control whether Commerzbank, a third-party financial institution, provides all the requested documents.”
In opposition, Creasun argued “the documents produced by Commerzbank ... are manifestly incomplete” and Kung Fury still “ha[d] not materially satisfied its obligations to provide documentation” pursuant to section 2 of the settlement agreement. Creasun asserted it still had not received “all ‘account statements and pre-booked items’ (‘Kontauszuge und Vormerkposten’), and all statements showing the full ‘account transactions’ (‘Kontoumsatze’).” Creasun also argued there were “missing credit card statements for various months for two credit card accounts belonging to” Kung Fury. Finally, Creasun emphasized that Commerzbank had represented it had 1,188 statements for eight accounts but ultimately produced only 680 pages of records.
Creasun supported its opposition with a declaration from Ma. Ma asserted “Commerzbank’s partial document production does not include the account transactions which are key to understanding how [Kung Fury] used millions of dollars which
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remain unaccounted for.” She added that, to date, “Creasun has still not received all ‘account statements and pre-booked items’ (‘Kontauszuge und Vormerkposten’), and all statements showing the full ‘account transactions’ (‘Kontoumsatze’).” Ma attached to her declaration the credit card statements that had been received and claimed there were still missing statements for numerous months during the relevant period. Ma disputed Commerzbank’s explanation that statements were not created for months in which no transactions took place by pointing to a particular credit card statement from September 2020 that she contended showed no transactions for the month. Specifically, Ma described the September 2020 statement—which, like the rest of the attached statements, was entirely in German language—as showing only “the balance carried (‘Saldovortrag’), the overview of transactions (‘Lastschrifteinzug’), and the balance for the month (‘Neuer Saldo’).”
In reply, Kung Fury disputed Creasun’s claims of missing documents in the Commerzbank records. Relying on a second declaration from Westgren—who described himself as “conversant in German”—Kung Fury asserted Ma had misinterpreted the September 2020 statement as showing no transactions for the month. As Westgren explained, the statement instead reflected a transaction occurred: “the August 4, 2020 balance of EUR 20,01 was paid on August 5, 2020 (‘Lastschrifteinzug’ means debit, not ‘overview of transactions’) resulting in a balance for the month (‘Neuer Saldo’) of EUR 0,00.” Kung Fury also argued Creasun’s claim that account statements, pre-booked items, and statements showing the full account transactions were missing was based on nothing more than the conclusory assertion in Ma’s declaration. Finally, Kung Fury
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dismissed the significance of Commerzbank’s producing only 680 pages when the bank had stated it possessed 1,188 statements, emphasizing “ ‘statements’ is different than ‘pages’ ” and noting some of the records contained multiple statements on single pages. To support the latter point, Westgren stated he had reviewed statements for one of Kung Fury’s accounts that Commerzbank had provided and attached them to his declaration. These statements, like those attached to Ma’s declaration, are in German.
In June 2024, the trial court (Judge Anthony J. Mohr)
granted Kung Fury’s motion after a hearing.
During the hearing, Creasun argued Kung Fury’s explanation that some of the pages contained multiple statements was not supported by a certified English translation of the records attached to Westgren’s reply declaration. Kung Fury responded that a certified translation of the records was unnecessary in light of the evidence showing it had requested the relevant records from Commerzbank, which in turn confirmed it had provided all records in its possession. Kung Fury argued Creasun was “trying to identify discrepancies in a single document, but that doesn’t change the fact that the bank represented that it provided all the documents. We complied with our obligation under the settlement agreement. [¶] There isn’t really a single additional thing we can do to get them any more documents. We’ve given them everything we have, everything we have access to.”
The court noted some of the documents submitted with the motion papers were in German, indicated its German was “terrible,” and stated the parties should have submitted certified translations of documents that were in German. While
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acknowledging the case could “come[] back [from the Court of Appeal], if nothing else because the record is deficient without translation,” the court agreed with Kung Fury’s position that translation of these documents ultimately was unnecessary to resolving the motion in light of other evidence, including Commerzbank’s letter confirming it had provided all records in its possession.
A month later, the court (Judge Rolf M. Treu) entered an order requiring Creasun to pay Kung Fury $365,000 for the producer fees. When defendants failed to pay that amount, Kung Fury sought entry of a judgment to enforce the order, which Creasun contested. On July 30, 2024, the court (Judge Treu) entered judgment for Kung Fury in the amount of $365,000.
Creasun appealed.
DISCUSSION
A. Creasun Failed To Accurately Cite the Record Creasun’s opening brief does not contain a single accurate record citation. It leaves blank all references to particular pages of the clerk’s transcript, and instead generically refers to pleadings filed in the trial court (including some that are not part of the record on appeal).1 Kung Fury argues Creasun has thus forfeited its appeal.
California Rules of Court, rule 8.204(a)(1)(C) provides that an appellate brief must “[s]upport any reference to a matter in
1 Creasun attempted to file such an errata two days before oral argument, when it was too late to be of use. Moreover, Creasun also failed to accurately cite the record in its reply brief. We also note that Creasun refers to a request for judicial notice in its opening brief, but it did not file one.
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the record by a citation to the volume and page number of the record where the matter appears.” (See Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 970 [“ ‘Any statement in a brief concerning matters in the appellate record— whether factual or procedural and no matter where in the brief the reference to the record occurs—must be supported by a citation to the record.’ ”].) “The purpose of this rule is to enable appellate justices and staff attorneys to locate relevant portions of the record expeditiously.” (Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 590 (Alki Partners).)
To the extent a party’s argument is unsupported by citations to the record, we may conclude the argument is forfeited. (See WFG National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020) 51 Cal.App.5th 881, 894 [“Rather than scour the record unguided, we may decide that the appellant has forfeited a point urged on appeal when it is not supported by accurate citations to the record.”]; Shenouda v. Veterinary Medical Bd. (2018) 27 Cal.App.5th 500, 514 [an argument may be deemed waived “ ‘ “[i]f a party fails to support an argument with the necessary citations to the record” ’ ”]; Rybolt v. Riley (2018) 20 Cal.App.5th 864, 868 [appellate courts “ ‘may disregard any factual contention not supported by a proper citation to the record’ ”], italics omitted; Alki Partners, supra, 4 Cal.App.5th at p. 589 [“An appellant who fails to cite accurately to the record forfeits the issue or argument on appeal that is presented without the record reference.”].)
We agree with Kung Fury that Creasun has forfeited its challenges on appeal by failing to provide proper citations to the record. (See Alki Partners, supra, 4 Cal.App.5th at p. 589.) However, we exercise our authority under California Rules of
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Court, rule 8.204(e)(2)(C) to consider the merits of Creasun’s arguments, as best we are able.2
B. The Trial Court Properly Granted Kung Fury’s Second Motion To Enforce the Settlement Agreement Under Section 664.6 1. Applicable law and standard of review Section 664.6, subdivision (a), provides: “If parties to pending litigation stipulate, in a writing signed by the parties outside of the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If the parties to the settlement agreement or their counsel stipulate in writing or orally before the court, the court may dismiss the case as to the settling parties without prejudice and retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” The statute provides a summary procedure to enforce a settlement agreement without a new lawsuit. (Madrigal v. Hyundai Motor America (2025) 17 Cal.5th 592, 600, fn. 3; Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182; Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 809 (Weddington Productions).)
When hearing a motion to enforce a settlement agreement under section 664.6, the court acts as the trier of fact. (Skulnick
2 Creasun erroneously suggests we lack authority to deem its appeal forfeited due to its failure to cite to the record, because California Rules of Court, rule 8.204(e)(2) does not list that option. As the Advisory Committee comment to that rule states, rule 8.204(e)(2) “does not purport to limit the inherent power of the reviewing court to fashion other sanctions for such noncompliance.”
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v. Roberts Express, Inc. (1992) 2 Cal.App.4th 884, 889.) The court may receive evidence, determine disputed facts, interpret (but not add to) the terms of the agreement, and enter judgment upon those terms. (Weddington Productions, supra, 60 Cal.App.4th at p. 810; see In re Marriage of Assemi (1994) 7 Cal.4th 896, 905; Khavarian Enterprises, Inc. v. Commline, Inc. (2013) 216 Cal.App.4th 310, 328-329.)
A trial court judgment is presumed correct, and when a trial court “has made no specific findings of fact, it is presumed that the court made such implied findings as will support the judgment.” (Hall v. Municipal Court (1974) 10 Cal.3d 641, 643.) “The trial court’s factual findings on a motion to enforce a settlement under section 664.6 ‘are subject to limited appellate review and will not be disturbed if supported by substantial evidence.’ ” (Critzer v. Enos (2010) 187 Cal.App.4th 1242, 1253; accord, Machado v. Myers (2019) 39 Cal.App.5th 779, 791.) Under that standard, “ ‘and with our policy favoring settlements, we resolve all evidentiary conflicts and draw all reasonable inferences to support the trial court’s finding that these parties entered into an enforceable settlement agreement and its order enforcing that agreement.’ ” (J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 984.)
2. The order granting Kung Fury’s second motion to enforce is supported by substantial evidence Creasun contends insufficient evidence was presented that Kung Fury performed its obligations under the settlement agreement to produce the specified documents such that Creasun became obligated to pay the producer fees. Whether a plaintiff has at least substantially performed its obligations under a contract is a question of fact subject to review for substantial
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evidence. (Magic Carpet Ride LLC v. Rugger Investment Group, L.L.C. (2019) 41 Cal.App.5th 357, 364; see also Brown v. Grimes (2011) 192 Cal.App.4th 265, 277 [“Normally the question of whether a breach of an obligation is a material breach, so as to excuse performance by the other party, is a question of fact.”].)
Kung Fury presented evidence that, after entering the settlement agreement, it timely provided Creasun the documents specified in section 2 of the settlement agreement that it had in its possession, including all bank and credit card statements from Commerzbank to which Kung Fury had access. When Creasun raised concerns about missing documents, Kung Fury provided the one document that was actually missing (a video special effects contract) and pointed out the rest of the “missing” documents had already been provided, did not exist, or were not specified under section 2. In addition, after the parties agreed to also request bank and credit card statements directly from Commerzbank, Kung Fury paid its share of the cost and drafted correspondence to Commerzbank that Creasun approved. After producing several rounds of records, Commerzbank represented it had provided “the missing account statements and credit card documents” and confirmed “no billing [was] created without credit card transactions.” Commerzbank also confirmed, “The documentation is now completed to the best of our knowledge and belief.” Kung Fury presented sufficient evidence for the trial court to conclude Kung Fury performed its document production obligations under the settlement agreement.
Creasun contends the court erred in not crediting a declaration from its financial expert, William Buckley. Buckley stated in his declaration that after reviewing various documents produced by the parties it was his “understanding” that records
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were still missing or incomplete. However, the trial court was responsible for determining disputed facts in resolving the section 664.6 motion. (See Weddington Productions, supra, 60 Cal.App.4th at p. 810.) In conducting a review for substantial evidence, “[w]e do not resolve or reweigh any conflicts in the evidence.” (In re O.M. (2026) 120 Cal.App.5th 489, 509.)
Creasun also argues the trial court erred by considering untranslated and thus inadmissible German-language documents that Kung Fury put into the record to support its Code of Civil Procedure section 664.6 motion.3 Generally, all documents must be translated into English to be admitted as evidence. (See Code Civ. Proc., § 185, subd. (a) [“Every written proceeding in a court of justice in this state shall be in the English language, and judicial proceedings shall be conducted, preserved, and published in no other.”].) Evidence Code section 753, subdivision (a), provides: “When the written characters in a writing offered in evidence are incapable of being deciphered or understood directly, a translator who can decipher the characters or understand the language shall be sworn to decipher or translate the writing.” California Rules of Court, rule 3.1110(g) further requires that exhibits to a motion that are “written in a foreign language must be accompanied by an English translation, certified under oath by a qualified interpreter.”
3 In addition, Creasun suggests the trial court erred in considering unreliable hearsay evidence but provides no analysis or authority to support its claim. As a result, we do not further consider this challenge. (Sandhu v. Board of Administration etc. (2025) 108 Cal.App.5th 1048, 1080 [“ ‘A court need not consider an issue where reasoned, substantial argument and citation to supporting authorities are lacking.’ ”].)
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As an initial matter, both sides submitted untranslated Commerzbank documents in the proceedings on Kung Fury’s motion. Westgren’s initial declaration supporting Kung Fury’s motion included partly untranslated correspondence with Commerzbank. Creasun then relied on untranslated Commerzbank records through Ma’s declaration supporting its opposition to Kung Fury’s motion. Kung Fury responded with a second declaration from Westgren, in which he stated he had reviewed and attached certain untranslated records that Commerzbank had provided.
However, as the trial court determined, the contents of the untranslated documents were not material to deciding whether the settlement agreement should be enforced. Indeed, the court stated it did not understand German and thus could not read the relevant exhibits. The court instead agreed with Kung Fury’s position that considering the documents was unnecessary for its ruling in light of the other evidence presented regarding Kung Fury’s satisfaction of its obligations.
As discussed, Kung Fury’s other admissible evidence was sufficient to demonstrate it performed its obligations under the settlement agreement. The contents of the untranslated Commerzbank documents may be relevant to whether Commerzbank produced all records in its possession, but that issue is a red herring. Even if Commerzbank did not provide all such records, substantial (admissible) evidence shows Kung Fury satisfied its own obligations to pay for and request the records from Commerzbank. Thus, even if the court had considered in some fashion the Commerzbank documents that were in German, any error would be harmless given other substantial evidence shows Kung Fury performed its document production obligations
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under the settlement agreement. (See Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1123 [“Evidentiary rulings will be deemed harmless if the record demonstrates the judgment was supported by the rest of the evidence properly admitted.”]; see also Nazari v. Ayrapetyan (2009) 171 Cal.App.4th 690, 697 [“improperly admitted evidence only requires reversal or modification when it is reasonably probable a result more favorable to the complaining party would have been reached absent the error”].)
In sum, substantial evidence supports the court’s finding that Kung Fury complied with its document production obligations under the settlement agreement such that Creasun’s obligation to pay the producer fees was triggered.
C. Creasun Forfeited Its Challenge to Kung Fury’s Capacity Creasun contends Kung Fury is barred from maintaining this action as a foreign corporation that failed to register to conduct business in California pursuant to Corporations Code sections 2105 and 2203. Creasun forfeited this argument by not raising it in the trial court.
To transact intrastate business in California, a foreign corporation must obtain a “certificate of qualification” from the Secretary of State. (Corp. Code, § 2105, subd. (a); see United Medical Management Ltd. v. Gatto (1996) 49 Cal.App.4th 1732, 1736, 1741 (United Medical) [“The purpose of the certificate of qualification is to facilitate service of process and to protect against state tax evasion.”].) A nonqualified foreign corporation may commence and defend against actions in California courts (United Medical, at p. 1739), but it may not “maintain any action or proceeding upon any intrastate business ... commenced prior to compliance with [s]ection 2105” (Corp. Code, § 2203, subd. (c)).
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A foreign corporation’s failure to qualify before filing suit affects its capacity to sue. (Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1603-1604 (Color-Vue) [distinguishing “ ‘the capacity to sue, which is the right to come into court’ ” from “ ‘the standing to sue, which is the right to relief in court’ ”].) A defendant challenging a foreign corporation’s capacity bears the burden of showing the action arose out of the corporation’s transaction of intrastate business and the corporation filed suit before qualifying to transact business in California. (United Medical, supra, 49 Cal.App.4th at p. 1740; accord, Automotriz De California etc. v. Resnick (1957) 47 Cal.2d 792, 794 [addressing predecessor statute to Corp. Code, § 2203].) Once shown, the court shall stay the action until the corporation complies with the qualification requirement. (United Medical, at pp. 1740-1741 [“The objective of the lawsuit suspension enforcement mechanism is to encourage qualification, rather than to penalize the failure to qualify earlier.”].)
“A defense based on a party’s lack of capacity to sue can be forfeited.” (Rubinstein v. Fakheri (2020) 49 Cal.App.5th 797, 806.) Such a defense is a plea in abatement, “ ‘ “which is not favored in law, is to be strictly construed and must be supported by facts warranting the abatement” at the time of the plea.’ ” (The Rossdale Group, LLC v. Walton (2017) 12 Cal.App.5th 936, 942 (Rossdale Group); accord, Rubinstein, at p. 806.) The defense “ ‘must be raised by [the] defendant at the earliest opportunity or it is waived’ ” and should be raised “ ‘in the original answer or by demurrer at the time of the answer.’ ” (Color-Vue, supra, 44 Cal.App.4th at p. 1604; accord, Rossdale Group, at p. 943.) “ ‘It is a technical objection and must be pleaded specifically. Thus an affirmative defense or demurrer which contains a
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general assertion that plaintiff has not stated a cause of action does not suffice to raise a plea in abatement.’ ” (Color-Vue, at p. 1604.) Once the defense is forfeited, “ ‘the court will be rarely justified in permitting the defense to be made later.’ ” (Id. at p. 1605 [citing as an exception “the unusual circumstance where a corporation announces that it does not intend to pay its delinquent taxes”].)
Creasun did not challenge Kung Fury’s capacity in its demurrer to the operative complaint nor did it allege a lack of capacity among the affirmative defenses in its answer. In fact, Creasun did not raise the issue at all in the trial court. Creasun argues forfeiture should not apply in this context because it would allow a foreign corporation to “qualify briefly, commence litigation, then later fall out of compliance, and yet remain immune from an ‘abatement’ action demanding a stay to cure.” Creasun does not suggest this occurred here. But even if it did, “[w]here … a suspension or other event causing a lack of capacity is claimed to have ‘occurred after the time to demur or answer ha[s] passed, [the parties claiming a lack of capacity] should ... move[ ] the court for leave to file an amended answer asserting the plea.’ ” (Rossdale Group, supra, 12 Cal.App.5th at p. 943; accord, Color–Vue, supra, 44 Cal.App.4th at p. 1604, fn. 5.) Creasun did not take that action, nor does it otherwise assert unusual circumstances warrant relief. Thus, Creasun forfeited the defense.
Even if we exercised our discretion to consider the forfeited argument, we would conclude it is without merit. As noted, Creasun bears the burden of establishing a lack of capacity. (United Medical, supra, 49 Cal.App.4th at p. 1740.) Despite this, Creasun makes no effort to identify what evidence establishes
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this action arose out of Kung Fury’s transaction of intrastate business and Kung Fury filed suit before qualifying to transact business in California. Nor does Creasun show the statutes governing corporate qualification even apply to Kung Fury, which asserts on appeal—with no response elicited—it is a foreign limited liability company and thus subject to a distinct registration requirement. (See Corp. Code, § 17708.07 [registration requirement for foreign limited liability companies].) Because Creasun failed to carry its burden of proof, its forfeited argument would also fail on the merits.
DISPOSITION
The judgment is affirmed. Kung Fury is entitled to its costs on appeal.
STONE, J.
We concur:
MARTINEZ, P. J.
FEUER, J.