Veyna v. Orange County Nursery, Inc.
Filed January 15, 2009
Fourth District, Div. Three
Cite as 2009 SOS 309

Writ of Supersedeas Denied, Temporary Stay Dissolved

The case stemmed from a complaint filed by minority shareholders of Orange County Nursery, Inc. (the moving parties), which opposed the involuntary dissolution of the corporation. (Corp. Code, section 1800, subd. (b).) The corporation (the purchasing party), through its president, Robert Veyna, elected to buy out the moving parties in order to avoid dissolution. (Corp. Code, section 2000.)

On November 2008, the trial court reviewed the independent appraisal report and entered a decree fixing the fair value of the moving party’s shares. The trial court also ordered that unless the purchasing party made payment for the shares in cash by December 15, 2008, judgment would be entered winding up and dissolving the corporation.

The purchasing party (corporation) filed a notice of appeal December 5, 2008. Three days later it filed the instant petition for writ of supersedeas in which it asks the appeals court to stay the trial court decree pending resolution of the appeal.

The corporation made two distinct arguments, namely:

• that once an appeal is perfected the decree’s requirement that payment be made for the shares, in this case by December 15, is automatically stayed until the reviewing court, at the end of the appeal, fixes the fair value of the shares and specifies when payment must be made.


• that if the payment requirement is not automatically stayed then this court should exercise its discretion to issue a stay here because it would be unfair to force the purchasing party to purchase the shares now in order to maintain the appeal when it cannot know the fair value of the shares until after the appeal is decided.

Further, the corporation made assurance in a declaration in support of the supersedeas petition that “if the result of the appeal is favorable, it is the company’s present intention to elect to purchase the minority shares and the company is confident it will have financial resources to do so.”

During appeal, the Fourth District court of appeals denied the petition for writ of supersedeas and dissolved the temporary stay previously issued. It held that the trial court’s alternate decree—and specifically its requirement that the purchasing party make payment for the moving parties’ shares by December 15 or see dissolution of the corporation—is not automatically stayed simply by perfecting the appeal.

The appeals court held that the decision is based on long-established Supreme Court precedent that judgments in special proceedings and self-executing orders are not automatically stayed by the filing of a notice of appeal.

Further, the court also declined to exercise our discretionary authority to issue supersedeas on the ground that any such request must be made in the first instance in the trial court, which has not yet been done.