Judge: Anne Richardson, Case: 21STCV45077, Date: 2023-02-16 Tentative Ruling

Case Number: 21STCV45077    Hearing Date: February 16, 2023    Dept: 40

CROSS-DEFENDANT STEPHANIE YUN’S DEMURRER AND MOTION TO STRIKE

MOVING PARTY:              Cross-Defendant Stephanie Yun.

OPPOSITION:                      Cross-Complainants Caroline Kyung Lee, Freeman Wang, and Your Home Sold Guaranteed Reality Inc.

Plaintiffs (the “Yun Plaintiffs”) brought this action against their realtors. Defendants Caroline Kyung Lee, Freeman Wang, and Your Home Sold Guaranteed Reality Inc. (“Lee, et al.”) cross-complained against the Yun Plaintiffs’ daughter, Stephanie Yun (“Stephanie”), on grounds Stephanie was also responsible for the harm suffered by the Yun Plaintiffs. After the Court sustained Stephanie’s demurrer to Lee, et al.’s original cross-complaint, Lee, et al. filed a first amended cross-complaint (“FACC”), filed October 11, 2022.

On December 16, 2022, Stephanie demurred and moved to strike portions of Lee, et al.’s FACC. On February 2, 2023, Lee, et al. filed oppositions. On February 9, 2023, Stephanie filed a consolidated reply.

After review, the Court OVERRULES Stephanie’s demurrer to the first cause of action for equitable indemnity and third cause of action for declaratory relief because Lee, et al.’s FACC pleads that Stephanie is equitably responsible for at least some of the Yun Plaintiffs’ alleged injury.

The Court SUSTAINS Stephanie’s demurrer to the second cause of action for equitable contribution because Stephanie and Lee, et al. are not co-obligors to the Yun Plaintiffs and this cause of action is duplicative. Leave to amend is denied.

The Court STRIKES ¶ 13, Page 4, lines 14-17 of the FACC and the references to equitable contribution in ¶¶ 2 and 3 of the Prayer for Relief on page 14 of the FACC, lines 3 and 10, and DENIES the remainder of Stephanie’s motion to strike.

CROSS-DEFENDANT CAROLINE KYUNG LEE’S DEMURRER AND MOTION TO  

STRIKE

MOVING PARTY:              Cross-Defendant Caroline Kyung Lee.

OPPOSITION:                      Cross-Complainant Stephanie Yun.

The Yun Plaintiffs brought this action against their realtors. Defendants Lee, et al. cross-complained against Stephanie. On July 26, 2022, Stephanie then cross-complained against Lee, based on distinct facts that, during Lee’s representation of Stephanie’s parents (the Yun Plaintiffs), Lee wrongfully disclosed Stephanie’s confidential information to the Yuns.

On October 7, 2022, Lee demurred and moved to strike portions of Stephanie’s cross-complaint. On January 17, 2023, Stephanie filed an opposition to Lee’s motion to strike, and on February 8, 2023, Stephanie filed an opposition to Lee’s demurrer. No reply has been filed as of February 14, 2023.

After review, the Court SUSTAINS Lee’s demurrer to all three causes of action because Stephanie’s complaint does not plead a serious invasion of privacy, public disclosure, or injury. Leave to amend is granted.

Lee’s motion to strike is therefore MOOT.

Background Allegations

On December 10, 2021, Plaintiffs Suk Young Yun and Myung Ja Yun (the “Yun Plaintiffs”) brought this action against their realtors, Defendants Caroline Kyung Lee, Freeman Wang, and Your Home Sold Guaranteed Reality Inc. (“Lee, et al.”). The Yun Plaintiffs’ second amended complaint (“SAC”), filed on October 11, 2022, asserts causes of action for: (1) breach of fiduciary duty; (2) fraud; (3) negligence; (4) conversion; (5) trespass to real property; (6) conversion; (7) tort of another; (8) intentional infliction of emotional distress; (9) negligent infliction of emotional distress; and (10) unfair competition. Among other things, the Yun Plaintiffs allege that Lee, et al. failed to secure a lockbox outside the Yun home, which allowed unknown burglars to steal $100,000 worth of the Yun Plaintiffs’ personal property.

The Court will hear Lee et al.’s demurrer to the Yun Plaintiffs’ SAC on February 21, 2023.

On March 29, 2022, Lee, et al. cross-complained against the daughter of the Yun Plaintiffs, Stephanie Yun (“Stephanie”). On September 20, 2022, the Court sustained Stephanie’s demurrer in its entirety. On October 11, 2022, Lee, et al. filed a first amended cross-complaint (“FACC”), asserting causes of action for: (1) equitable indemnity; (2) equitable contribution; and (3) declaratory relief. Lee, et al.’s FACC alleges Stephanie caused the Yun Plaintiffs’ injuries by breaching her duty as power of attorney over her parents and sharing the lockbox code with unnamed Roe defendants.

Stephanie now demurs and moves to strike portions of Lee, et al.’s FACC.

On July 26, 2022, Stephanie cross-complained against Caroline Lee individually (“Lee”), asserting causes of action for: (1) invasion of privacy; (2) public disclosure of private facts; and (3) negligence. Stephanie’s cross-complaint alleges Lee disclosed Stephanie’s personal information to Stephanie’s parents—the Yun Plaintiffs—when Lee served as their realtor.

Lee now demurs and moves to strike portions of Stephanie’s cross-complaint.

Judicial Notice

Stephanie requests the Court take judicial notice of six items:

1. The Yun Plaintiffs’ SAC.

2. Lee, et al.’s FACC

3. Stephanie’s cross-complaint.

4. Lee’s verified responses to Plaintiff Suk Young Yun’s Form Interrogatories, Set One.

5. Lee’s verified supplemental responses to Plaintiff Suk Young Yun’s Requests for Admission, Set One.

6. Lee’s verified supplemental responses to Plaintiff Suk Young Yun’s Special Interrogatories, Set One.

Lee requests the Court take judicial notice of three items:

1. The Yun Plaintiffs’ first amended complaint.

2. Lee, et al.’s original cross-complaint.

3. Stephanie’s cross-complaint.

“Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code § 450.) Judicial notice may be taken of records of any court of this state. (Id., § 452(d)(1).)

Stephanie’s requests 1-3 are GRANTED because they are court records in this action.

Stephanie’s requests 4-6 are DENIED because there is no basis for the Court to take judicial notice of discovery responses.

Lee’s requests 1-3 are GRANTED because they are court records in this action.

Motions

1. Cross-Defendant Stephanie Yun’s Demurrer to Caroline Kyung Lee, Freeman Wang, and Your

Home Sold Guaranteed Realty Inc.’s First Amended Cross-Complaint:

Legal Standard

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds…The pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc. § 430.10.)

Analysis

Lee, et al.’s FACC asserts causes of action for: (1) equitable indemnity; (2) equitable contribution; and (3) declaratory relief. Stephanie demurs on grounds that each cause of action fails to state facts sufficient to constitute a cause of action and is uncertain.

            Uncertainty

A demurrer to a pleading lies where the pleading is uncertain, ambiguous, or unintelligible. (Code Civ. Proc. § 430.10(f).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Here, the Court simply notes that the causes of action in the FACC are sufficiently pled to apprise Stephanie and the Court of the issues therein. The Court therefore denies Stephanie’s demurrer on uncertainty grounds and will proceed to consider whether each cause of action states facts sufficient to constitute a cause of action.

            First Cause of Action: Equitable Indemnity

“Equitable indemnity, which ‘requires no contractual relationship,’ ‘is premised on a joint legal obligation to another for damages’; it is ‘subject to allocation of fault principles and comparative equitable apportionment of loss.’ [Citation.] ‘The elements of a cause of action for [equitable] indemnity are (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is ... equitably responsible.’ [Citation.]” (C.W. Howe Partners Inc. v. Mooradian (2019) 43 Cal.App.5th 688, 700.)

Here, Stephanie points out that the primary basis Lee, et al. offer for her liability is that she hindered or delayed the sales transaction of the Yun Plaintiffs’ home, but the FACC does not explain how any of the purported delays led to the burglary of Plaintiffs’ home. According to Stephanie, the FACC therefore does not establish a legal connection holding her at fault for the Yun Plaintiffs’ damage.

The Yun Plaintiffs, however, allege injury beyond just the burglary. As Lee, et al. point out in their opposition to this demurrer, the Yun Plaintiffs claim emotional and physical distress related to disputes and delays regarding the closing of the real estate transaction (SAC, ¶ 22), and damages related to disputes and delays related to the “Finder’s Fee” demanded by Mark Zimny (Id., ¶ 29). Lee, et al.’s FACC pleads that these injuries were the fault of Stephanie—primarily due to her breach of power of attorney duties to her parents—and thus Stephanie is equitably responsible. (FACC, ¶¶ 47-51.)

In addition, unlike Lee, et al.’s original cross-complaint, the FACC alleges Stephanie caused the burglary. (Id., ¶¶ 57-58.) Stephanie argues these allegations are conclusory and inconsistent with Lee, et al.’s prior pleadings. Even so, Lee, et al. have provided an alternative basis for Stephanie to be liable for equitable indemnity—namely, her interference with the sale of the Yun Property and her breach of power of attorney duties to her parents. Whereas Lee et al.’s original complaint merely stated conclusions, the FACC alleges facts indicating that Stephanie may be partially responsible for the Yun Plaintiffs’ injury.

For these reasons, Lee, et al. have pled a cause of action for equitable indemnity. Stephanie’s demurrer to the first cause of action in the FACC is therefore OVERRULED.

            Second Cause of Action: Equitable Contribution

“Equitable contribution is the right to recover from a co-obligor who shares a liability with the party seeking contribution. [] Thus, to state a cause of action for equitable contribution, the co-obligor must share the same liability and same risk as the party seeking reimbursement.” (The Travelers Indemnity Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 352, citations omitted.)

Here, the FACC does not allege Stephanie and Lee, et al. shared a liability with the Yun Plaintiffs. Rather, the FACC alleges Stephanie owed a unique duty to the Yun Plaintiffs—her alleged duty as power of attorney. (FACC, ¶ 47.) The FACC does not allege that Lee, et al. shared that liability or risk with Stephanie, and thus equitable contribution does not apply.

Lee, et al. argue in their opposition to this demurrer that the FACC alleges both Stephanie and Lee, et al, shared a “duty to act solely in the interest of [Plaintiffs], and to avoid conflicts of interest.” (FACC, ¶ 20). However, just because the parties’ alleged duties shared characteristics does not mean the parties shared the same liability. Equitable contribution is a doctrine most commonly found among co-insurers, and Stephanie’s and Lee, et al.’s relationship to the Yun Plaintiffs bears no such resemblance. (See, e.g., Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1067 [“In contrast, equitable contribution is the right to recover from a co-obligor that shares liability with the party seeking contribution, as when multiple insurers insure the same loss and one insurer has paid more than its share to the insured.”].)

Furthermore, the factual allegations underlying the cause of action for equitable contribution are the same as those underlying the cause of action for equitable indemnity. Redundant and duplicative causes of action are impermissible. (See, e.g., Award Metals, Inc. v. Superior Court (1991) 228 Cal. App. 3d 1128, 1135 ["But stating them in two causes of action, as real party has done, is merely duplicative pleading which adds nothing to the complaint by way of fact or theory. For that reason, the demurrer should have been sustained as to this cause of action."].)

Accordingly, Stephanie’s demurrer to the second cause of action in the FACC for equitable contribution is SUSTAINED.

            Third Cause of Action: Declaratory Relief

The only argument Stephanie offers against Lee, et al.’s cause of action for declaratory relief is that it must fail because the other two causes of action in the FACC fail. As noted above, however, the Court overrules Stephanie’s demurrer to the first cause of action for equitable indemnity. The Court therefore OVERRULES Stephanie’s demurrer to the third cause of action for declaratory relief.

            Additional Arguments: The Litigation Privilege and Stephanie as Party to Contract

Stephanie offers two final arguments for why her demurrer should be sustained in its entirety: The litigation privilege, and her status as a party to the Yun Property sales contract. Both lack merit.

The litigation privilege protects publications or broadcasts made in judicial or legislative proceedings. (See Civ. Code § 47(b).) Stephanie’s statements, as alleged by the FACC, are threats of litigation, not settlement negotiations or statements made in a judicial proceeding, and thus they are not protected.

As for Stephanie’s status as a party to the Yun Property sales contract, through her power of attorney over her parents, Lee, et al. do not assert a cause of action for contractual interference. Stephanie’s alleged interference with the Yun Property sales contract is merely one of several ways the FACC pleads Stephanie is liable for equitable indemnity.

Cross-Defendant Stephanie Yun’s Motion to Strike Portions of Caroline Kyung Lee, Freeman

Wang, and Your Home Sold Guaranteed Realty Inc.’s First Amended Cross-Complaint

Legal Standard

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc. § 436.)

“The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc. § 437(a).)

Analysis

As a threshold matter, Stephanie moves to strike almost every paragraph in the FACC. The individual requests, however, are not numbered which makes it very difficult for the Court to reference each of Stephanie’s respective requests. The Court will therefore respond to each of Stephanie’s general arguments in turn.

Stephanie first argues Lee, et al. failed to meet and confer. As an important sidenote, the Court admonishes all parties in this action to seek an alternative resolution to this dispute. However, “[a] determination by the court that the meet and confer process was insufficient shall not be grounds to grant or deny the motion to strike.” (Code Civ. Proc. § 435.5(a)(4).)

Second, Stephanie argues Lee’s verified discovery responses are inconsistent with allegations in the FACC. Discovery responses are evidence. The Court only considers the face of the pleading and matters which can be judicially noticed on demurrers and motions to strike. (See E-Fab, Inc., supra, 153 Cal.App.4th at 1315.)

Third, Stephanie argues the Court should strike specific portions of the FACC that are immaterial and irrelevant to the causes of action. In support of this argument, Stephanie contends that any allegations in the FACC that she hindered the sale of the Yun Property are immaterial and irrelevant. As noted above, these allegations are neither immaterial nor irrelevant on their face. In sustaining Stephanie’s demurrer to Lee, et al.’s original cross-complaint, the Court found that Lee, et al. failed to plead evidentiary averments in the original cross-complaint. (See 9/20/22 Order, pgs. 17-18.) Whereas in the original cross-complaint Lee, et al. only pled ultimate facts, the FACC includes specific factual allegations regarding how and why Stephanie is liable for equitable indemnity. As a result, the additional allegations are relevant.

Fourth, Stephanie argues that certain allegations in the FACC violate her right of privacy. This argument is not clear. As noted, threats of litigation are not protected. Moreover, Stephanie and Lee, et al. were never in an attorney-client relationship—Lee et al. owes Stephanie no duty of confidentiality in that regard either.

Finally, Stephanie moves to strike the prayers for relief in the FACC. The Court STRIKES the references to equitable contribution in paragraphs 2 and 3 of the Prayer for Relief on page 14 of the FACC, lines 3 and 10. References to relief for equitable indemnity properly remain. As for paragraph 4 of the Prayer for Relief, the Court notes that prevailing parties are generally entitled to their costs, but not attorneys fees. (See Code Civ. Proc. § 1021.)

Based on its own discretion to strike irrelevant or improper matter, the Court STRIKES the following paragraph from Lee, et al.’s FACC:

¶ 13, Page 4, lines 14-17 – “CAROLINE KYUNG LEE had reservations about entering into an agreement regarding a "finder's fee" with Mark J. Zimny because of his prior history; on April 18, 2015, Zimny was convicted by a federal jury of five counts of wire fraud, five counts of unlawful money laundering, two counts of filing false federal tax returns, and one count of bank fraud.”

The remainder of Stephanie’s motion to strike is DENIED.

2. Cross-Defendant Caroline Kyung Lee’s Demurrer to Stephanie Yun’s Cross-Complaint

Legal Standard

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds…The pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc. § 430.10.)

Analysis

Stephanie’s cross-complaint asserts causes of action for: (1) invasion of privacy; (2) public disclosure of private facts; and (3) negligence. Lee demurs on grounds that each cause of action fails to state facts sufficient to constitute a cause of action.

            First Cause of Action: Invasion of Privacy

"A plaintiff alleging an invasion of privacy in violation of the state constitutional right to privacy must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy." (Hill v. Nat'l Collegiate Athletic Ass'n (1994) 7 Cal.4th 1, 39-40.) "Actionable invasions of privacy must be sufficiently serious in their nature, scope, and actual or potential impact to constitute an egregious breach of the social norms underlying the privacy right." (Id. at 37.)

Here, Stephanie’s cross-complaint fails to plead the third element—a serious invasion of privacy. Stephanie alleges Lee acquired Stephanie’s financial and property records while serving as her realtor, and then disclosed those records to the Yun Plaintiffs. (Stephanie Cross-Complaint, ¶¶ 11-13.) The Yun Plaintiffs, however, are Stephanie’s parents, and Stephanie’s cross-complaint does not plead any further invasions of privacy. In other words, Stephanie merely alleges that Lee disclosed her financial and property records to her parents—after Lee served as a realtor to both Stephanie and her parents. This does not facially amount to a serious invasion of privacy.

In addition, Stephanie’s cross-complaint is devoid of any specifics. The cross-complaint includes the legal conclusion that Lee “disclosed the private and protected financial information of Cross-Complainant” in “violation of Cross-Complainant’s constitutional, statutory, and common law rights of privacy” with the “express purpose of chilling pending litigation.” (Id., ¶¶ 20, 22.) But these conclusions are not supported by any real factual allegations beyond Lee disclosing some of Stephanie’s personal information to her parents.

Lee’s demurrer to the first cause of action in Stephanie’s cross-complaint for invasion of privacy is therefore SUSTAINED.

            Second Cause of Action: Public Disclosure of Private Facts

To state a cause of action for public disclosure of private facts, a plaintiff must allege: "(1) public disclosure (2) of a private fact (3) which would be offensive and objectionable to the reasonable person and (4) which is not of legitimate public concern." (Nelson v. Tucker Ellis, LLP (2020) 48 Cal.App.5th 827, 843.) "Except in cases of physical intrusion, the tort must be accompanied by publicity in the sense of communication to the public in general or to a large number of persons as distinguished from one individual or a few." (Schwartz v. Thiele (1966) 242 Cal.App.2d 799, 805.)

Stephanie’s second cause of action suffers from the same flaw as her first—the cross-complaint only alleges that Lee disclosed Stephanie’s private information to her parents. (Stephanie Cross-Complaint, ¶¶ 11, 15.) This does not amount to a “public disclosure.”

In her opposition to this demurrer, Stephanie offers a lengthy common-law history and policy analysis of privacy-related torts. Stephanie’s opposition concludes that invasion of privacy torts and related negligence claims are not easily defined, and thus cannot be resolved on demurrer—that “the factual issues surrounding ‘personal humiliation, and mental anguish and suffering’ must be adjudicated before a jury.” (Opposition, pg. 6, lines 4-7.) The Court disagrees. The Court may accept well-pleaded facts as true at the demurrer stage, but a plaintiff or cross-complainant still needs to establish each element of a cause of action.

Lee’s demurrer to the second cause of action in Stephanie’s cross-complaint for disclosure of private facts is likewise SUSTAINED.

            Third Cause of Action: Negligence

To state a claim for negligence, a plaintiff must allege: (1) “the existence of a legal duty of care,” (2) “breach of that duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)

Here, Stephanie has pled duty and breach. However, for similar reasons as above, Stephanie has not established a resulting injury. The cross-complaint alleges Stephanie has suffered “severe emotional distress, mental suffering, and invasion of her rights to privacy.” (Stephanie Cross-Complaint, ¶ 56.) But an explanation of how the disclosure of Stephanie’s personal information to her parents caused such severe trauma is not given. The cross-complaint also claims Stephanie’s damages include “an unfavorable outcome with a dispute involving Lee and her prior duties as Cross-Complainant’s real estate broker, and damage to her fiduciary relationship with her principals…” (Id. ¶ 55.) These are, again, conclusory with no specific injury spelled out. Moreover, the phrase “damage to her fiduciary relationship with her principals” apparently refers to Lee having shared Stephanie’s personal information with Stephanie’s parents. Considering Stephanie serves as power of attorney over her parents and brought this action against Lee, et al. on behalf of her parents, her alleged injury lacks specificity of harm.

Accordingly, Lee’s demurrer to the third cause of action in Stephanie’s cross-complaint for negligence is SUSTAINED.

Cross-Defendant Caroline Kyung Lee’s Motion to Strike Portions of Stephanie Yun’s

Cross-Complaint

The Court sustains Lee’s demurrer to Stephanie’s cross-complaint in its entirety. Lee’s motion to strike is therefore MOOT.