Judge: Andrew E. Cooper, Case: 24CHCV02471, Date: 2025-02-24 Tentative Ruling

Case Number: 24CHCV02471    Hearing Date: February 24, 2025    Dept: F51

Dept. F-51¿ 

Date: 2/24/25

Case #24CHCV02471

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER

Demurrer Filed: 10/11/24

MOVING PARTY: Defendant/Cross-Complainant Nathan Schwab (“Defendant”)

RESPONDING PARTY: Plaintiff/Cross-Defendant Julia Schwab (“Plaintiff”)

NOTICE: OK

RELIEF REQUESTED: Defendant demurs against the third through sixth causes of action in Plaintiff’s first amended complaint (“FAC”).

TENTATIVE RULING: The demurrer is overruled as to Plaintiff’s third and fourth causes of action and sustained as to Plaintiff’s fifth and sixth causes of action with 30 days leave to amend.

BACKGROUND

This is an action involving an allegedly unlawful agreement between Plaintiff and Defendant, her father, in which Plaintiff was to pay Defendant $400.00 per month in exchange for Defendant naming Plaintiff as a death beneficiary of Defendant’s pension benefits. (FAC ¶¶ 1, 55–72.)

On 7/8/24, Plaintiff filed her original complaint, alleging the following causes of action against Defendant: (1) Declaratory Judgment; (2) Rescission; (3) Money Had and Received; (4) Conversion; (5) Intentional Infliction of Emotional Distress; and (6) Negligent Infliction of Emotional Distress. On 9/30/24, Plaintiff filed her FAC, alleging the same causes of action against Defendant.

On 10/29/24, Defendant filed the instant demurrer. On 2/725, Plaintiff filed her opposition. On 2/14/25, Defendant filed his reply.

ANALYSIS

As a general matter, a party may respond to a pleading against it by demurrer on the basis of any single or combination of eight enumerated grounds, including that “the pleading does not state facts sufficient to constitute a cause of action” and is uncertain, meaning “ambiguous and unintelligible.” (Code Civ. Proc., § 430.10, subds. (e) and (f).) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿

“A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) 

Here, Defendant demurs to Plaintiff’s third through sixth causes of action on the basis that they are factually deficient.

A.    Meet and Confer

Before filing its demurrer, “the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc. § 430.41, subd. (a).) The demurring party must file and serve a meet and confer declaration stating either: “(A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer;” or “(B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith.” (Id. at subd. (a)(3).)

Here, Defendant’s counsel declares that on 10/16/24, she sent Plaintiff’s counsel a meet and confer letter discussing the issues raised in the instant demurrer but received no response. (Decl. of Kassandra N. Velasquez ¶ 8.) Therefore, the Court finds that counsel has satisfied the preliminary meet and confer requirements of Code of Civil Procedure section 430.41, subdivision (a).

B.     Money Had and Received

Plaintiff’s third cause of action alleges Money Had and Received against Defendant. A cause of action for money had and received is stated if it is alleged the defendant is indebted to the plaintiff in a certain sum for money had and received by the defendant for the use of the plaintiff.” (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460 [citations and quotations omitted].) “The claim is viable wherever one person has received money which belongs to another, and which in equity and good conscience should be paid over to the latter…. the plaintiff must prove that the defendant received money intended to be used for the benefit of [the plaintiff], that the money was not used for the plaintiff’s benefit, and that the defendant has not given the money to the plaintiff.” (Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454.)

Here, Plaintiff alleges that “On or about January 2024, Defendant became indebted to Plaintiff in the sum of $28,000 for money had and received by Defendants for the use and benefit of Plaintiff.” (FAC ¶ 86.) “Neither the whole nor any part of this sum has been paid and there is now due, owing, and unpaid the sum of $28,000, with interest thereon at the legal rate from January 1, 2024.” (Id. at ¶ 87.)

Defendant argues that “while it is true that Defendant received money from Plaintiff, it was not for her benefit. It was Plaintiff’s portion of the consideration for the parties’ contract.” (Dem. 6:14–15.) “Plaintiff cannot prove that the money was not used for this benefit.” (Id. at 6:21–22.)

As Plaintiff argues in opposition, “Defendant’s argument that this claim fails because the payments were consideration for a contract ignores the FAC’s well-pleaded facts alleging there was no valid agreement.” (Pl.’s Opp. 10:8–9.) A party to a contract may rescind it where the contract is unlawful, was the result of mistake, duress, menace, fraud, or undue influence, or will prejudice the public interest if permitted to stand, or if there was a failure of consideration. (Civ. Code, §§ 1566, 1689, subd. (b).) Here, Plaintiff has alleged a cause of action for Rescission of the purported agreement based on Defendant’s undue influence. (FAC ¶¶ 80–84.) The Court notes that Defendant does not demur against Plaintiff’s second cause of action.

Based on the foregoing, the Court finds that Plaintiff has alleged facts sufficient to constitute a cause of action for Money Had and Received. Accordingly, the demurrer is overruled as to Plaintiff’s third cause of action.

C.    Conversion

Plaintiff’s fourth cause of action alleges Conversion against Defendant. “Conversion is generally described as the wrongful exercise of dominion over the personal property of another.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.)

Here, Plaintiff alleges that “the funds Plaintiff paid to Defendant were for an alleged [sic] agreement that is rescinded and void. Defendant had no right to retain or use those funds for any other purpose.” (FAC ¶ 89.) “As a proximate result of Defendant’s conversion of Plaintiff’s funds, Plaintiff has suffered damages for loss of their funds in an amount that Plaintiff are informed and believe totals $28,000.” (Id. at ¶ 91.)

Defendant argues that “Plaintiff consented to this agreement, which is confirmed both in writing and through her actions. She therefore cannot successfully bring a claim for conversion.” (Dem. 7:15–16.) Plaintiff argues in opposition that “this argument fails because the FAC plainly alleges Plaintiff’s consent was obtained through undue influence and misrepresentation.” (Pl.’s Opp. 10:22–23.) “The FAC’s detailed allegations of Defendant’s coercive conduct and misrepresentations are more than sufficient to plead that Plaintiff’s apparent consent was invalid.” (Id. at 11:9–11.)

“Undue influence consists: (1) In the use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him; (2) In taking an unfair advantage of another’s weakness of mind; or, (3) In taking a grossly oppressive and unfair advantage of another’s necessities or distress.” (Civ. Code § 1575.) “Undue influence is a contract defense based on the notion of coercive persuasion. Its hallmark is high pressure that works on mental, moral, or emotional weakness, and it is sometimes referred to as overpersuasion.” (In re Marriage of Starr (2010) 189 Cal.App.4th 277, 284.)

Here, the Court agrees with Plaintiff that “the FAC alleges specific facts showing how Defendant systematically exploited his position of trust and authority to overcome Plaintiff’s free will” in agreeing to the purported contract. (Pl.’s Opp. 4:8–9.) “The FAC amply alleges that Defendant’s long-standing pattern of control and manipulation prevented Plaintiff from seeking outside counsel or asserting her independence.” (Id. at 4:17–19; FAC ¶¶ 14–73.)

Based on the foregoing, the Court finds that Plaintiff has alleged facts sufficient to constitute a cause of action for Conversion. Accordingly, the demurrer is overruled as to Plaintiff’s fourth cause of action.

D.    Intentional Infliction of Emotional Distress

Plaintiff’s fifth cause of action alleges Intentional Infliction of Emotional Distress against Defendant. “The elements of a prima facie case for the tort of intentional infliction of emotional distress are: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct. Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Wilson v. Hynek (2012) 207 Cal.App.4th 999, 1009.) A mere allegation that a plaintiff suffered severe emotional distress, without facts indicating the nature or extent of any mental suffering incurred as a result of the defendant’s alleged outrageous conduct, does not state a cause of action for intentional infliction of emotional distress. (Pitman v. City of Oakland (1988) 197 Cal.App.3d 1037, 1047–1048.)

Here, Defendant argues that “Plaintiff goes into detail about how her emotional distress began as a child with a poor relationship with her father. The alleged emotional distress she suffered as a child is far beyond the two-year statute of limitations for this type of claim.” (Dem. 9:1–4, citing Code Civ. Proc. § 335.1.) Defendant further argues that “the ‘outrageous conduct’ alleged by Plaintiff in her FAC is directly related to Defendant’s attempts to protect his economic interests and assert his legal rights under the agreement he entered into.” (Id. at 8:18–20.) Finally, Defendant argues that “damages for mental suffering are not recoverable where the nature of the dispute is economic.” (Id. at 8:22–23.)

Plaintiff argues in opposition that “the FAC has specific allegations of continued outrageous conduct and emotional distress within any relevant statutory period.” (Pl.’s Opp. 12:3–4.) Plaintiff further argues that Defendant’s alleged conduct “represents a calculated pattern of psychological abuse that any reasonable person would consider ‘so extreme as to exceed all bounds of that usually tolerated in a civilized community.’” (Id. at 12:12–14.) Plaintiff also argues that “the allegations in the FAC are not merely an economic dispute - it is a case about a father’s exploitation and abuse of his daughter, using financial coercion as one of many tools of control.” (Id. at 13:17–19.)

“In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20.) Under Rattagan, the central issue in applicability of the economic loss doctrine is: Is there an actionable tort independent of the parties’ contractual rights and obligations, exposing the plaintiff to a risk of harm beyond the parties’ reasonable contemplation when they entered into the contract? (17 Cal.5th at 23.)

Here, the Court finds that Plaintiff has alleged conduct actionable in tort, within the statute of limitations, and outside of the rights and obligations contemplated under the purported agreement for Plaintiff to pay Defendant $400.00 monthly in exchange for 50% of Defendant’s death pension benefits. (See, e.g., FAC ¶¶ 38–54.) Nevertheless, upon review of the FAC, the Court finds that Plaintiff has not alleged the nature and extent of the severe emotional distress she suffered as a result of Defendant’s conduct. (Pitman, 197 Cal.App.3d at 1047–1048.)

Based on the foregoing, the Court finds that Plaintiff has not alleged facts sufficient to constitute a cause of action for Intentional Infliction of Emotional Distress. Accordingly, the demurrer is sustained as to Plaintiff’s fifth cause of action.

E.     Negligent Infliction of Emotional Distress

Plaintiff’s sixth cause of action alleges Negligent Infliction of Emotional Distress against Defendant. “The negligent causing of emotional distress is not an independent tort, but the tort of negligence. The traditional elements of duty, breach of duty, causation, and damages apply. Whether a defendant owes a duty of care is a question of law.” (Spates v. Dameron Hosp. Ass’n (2003) 114 Cal.App.4th 208, 213.) In “bystander” cases, “liability is premised upon a defendant’s violation of a duty not to negligently cause emotional distress to people who observe conduct which causes harm to another.” (Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1073.) In “direct victim” cases, there exists a duty to avoid negligently causing emotional distress to plaintiffs only in the following situations: (1) near-miss accidents where plaintiff was personally at risk; (2) claims against health care providers; (3) claims against environmental polluters; and (4) claims against mortuaries that mishandle human remains. (Cal. Prac. Guide Civ. Pro. Trial Claims and Def. Ch. 2(V)-B.)

Here, Defendant argues that this cause of action fails because “the FAC does not allege any of the situations highlighted above that must be present in order for this cause of action to be sufficiently alleged.” (Dem. 9:20–21.) Plaintiff argues in opposition that she has sufficiently alleged that “a special relationship existed between Plaintiff and Defendant as father and daughter,” and “this relationship created duties of care, including duties not to exploit or emotionally abuse one’s child.” (Pl.’s Opp. 13:5–9, citing FAC ¶ 14.)

However, the Court agrees with Defendant that Plaintiff fails to allege a special relationship sufficient for a cause of action for Negligent Infliction of Emotional Distress under any of the situations listed above. Based on the foregoing, the Court finds that Plaintiff has not alleged facts sufficient to constitute a cause of action for Negligent Infliction of Emotional Distress. Accordingly, the demurrer is sustained as to Plaintiff’s sixth cause of action.

F.     Leave To Amend

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

Here, the Court notes that this is the first demurrer brought against Plaintiff’s operative pleading, and that Plaintiff seeks leave to amend in the event that the Court sustains the demurrer. (Pl.’s Opp. 14:10–11, 14:23–15:7.) Accordingly, under the Court’s liberal policy of granting leave to amend, the Court grants Plaintiff 30 days leave to amend the FAC to cure the defects set forth above.

CONCLUSION

The demurrer is overruled as to Plaintiff’s third and fourth causes of action and sustained as to Plaintiff’s fifth and sixth causes of action with 30 days leave to amend.