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

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

DEMURRER AND MOTION TO STRIKE

Plaintiffs Suk Young Yun and Myung Ja Yun (the “Yun Plaintiffs”) brought this action against Defendants Caroline Kyung Lee, Freeman Wang, and Your Home Sold Guaranteed Reality Inc. (“Defendants”). The Yun Plaintiffs allege that—while acting as their realtor for the sale of a property (“Subject Property”)—Defendants engaged in various actions amounting to breaches of fiduciary duty, conversion, and trespass.

Defendant Your Home Sold Guaranteed Reality Inc. (“YHSG”) demurs to the fifth and sixth causes of action in the SAC. All Defendants demur to the seventh cause of action in the SAC.

After review, the Court OVERRULES YHSG’s demurrer to the fifth cause of action for trespass to real property and sixth cause of action for conversion because the SAC pleads that Lee and Wang were acting as agents of YHSG in the course of their employment and YHSG ratified their conduct and/or had advanced knowledge of their unfitness; and

the Court SUSTAINS, without leave to amend, Defendants’ demurrer to the seventh cause of action for tort of another because the SAC fails to sufficiently plead facts amounting to this tort.

Defendants also move to strike portions of the SAC.

Defendants’ motion to strike references to attorney’s fees is GRANTED, without leave to amend, because the only grounds for attorney’s fees in the SAC—the cause of action for tort of another—does not survive Demurrer and thus there are no grounds to support attorney’s fees.

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. (collectively, “Defendants”). Defendants demurred and moved to strike portions of the FAC. On September 20, 2022, the Court granted the demurrer in part, sustained the demurrer in part, and granted the motion to strike attorney’s fees.

The Yun Plaintiffs filed a second amended complaint (“SAC”) on October 11, 2022, asserting 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. The Yun Plaintiffs allege, among other things, that Defendants failed to secure a lockbox outside the Yun home which allowed unknown burglars to steal $100,000 worth of the Yun Plaintiffs’ personal property.

On November 14, 2022, Defendants demurred to the SAC. Specifically, YHSG demurs to the fifth cause of action for trespass to real property and sixth cause of action for conversion, and Defendants collectively demur to the seventh cause of action for tort of another. Defendants also move to strike portions of the SAC referencing attorney’s fees. On February 8, 2023, the Yun Plaintiffs filed oppositions, and on February 14, 2023, Defendants filed replies.

Judicial Notice

Defendants requests the Court take judicial notice of two items:

1. The Yun Plaintiffs’ FAC.

2. The Yun Plaintiffs’ SAC.

Judicial notice may be taken of records of any court of this state. (Evid. Code § 452(d)(1).)

The requests are GRANTED.

Motion

Defendants’ Demurrer to the SAC

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.)

“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.) When considering demurrers, courts read the allegations liberally and in context.  (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not the contentions, deductions or conclusions of fact or law.” (Farmers Ins. Exch. v. Zerin (1997) 53 Cal. App. 4th 445, 451.) 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.)

If the demurrer is sustained, plaintiff “has the burden of proving the possibility of cure by amendment.” (Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 173, citing Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 78-79). Leave to amend must be allowed where there is a reasonable possibility of successfully stating a cause of action. (Schulz v. Neovi Data Corp. (2007) 152 Cal.App.4th 86, 92.)

Analysis

The Yun Plaintiffs’ SAC 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. YHSG demurs to the fifth cause of action for trespass to real property and sixth cause of action for conversion on grounds they fail to state facts sufficient to constitute a cause of action. Defendants collectively demur to the seventh cause of action for tort of another on grounds it fails to state facts sufficient to constitute a cause of action.

            Fifth and Sixth Causes of Action: Trespass to Real Property and Conversion

YHSG demurs, arguing that the SAC does not adequately allege that Defendants Lee and Wang were acting in the scope of their employment when they committed the alleged trespass and conversion. According to YHSG, the SAC offers conclusory statements in an attempt to overcome deficiencies the Court identified in the FAC.

In opposition, the Yun Plaintiffs argue the SAC alleges that YHSG ratified Lee and Wang’s conduct, and the SAC alleges that Lee was an agent working for YHSG. Alternatively, the Yun Plaintiffs argue that YHSG remains liable even if Lee was acting outside the scope of her employment.

In reply, YHSG first notes the opposition papers were filed late. YHSG then reiterates that the allegations in the SAC that Lee and Wang were acting in the scope of their employment are conclusory in nature, and the SAC admits Lee was motivated by personal animus.

An allegation of agency is itself an ultimate fact that need not be further explained or supported by other factual allegations. (See Skopp v. Weaver (1976) 16 Cal.3d 432, 439; Kiseskey v. Carpenters’ Trust for So. California (1983) 144 Cal.App.3d 222, 230 [“The general allegation of agency is one of ultimate fact, sufficient against a demurrer”].)

“[T]he employer’s liability extends beyond his actual or possible control of the employee to include risks inherent in or created by the enterprise.” (Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962, 968) “The fact that an employee is not engaged in the ultimate object of his employment at the time of his wrongful act does not preclude attribution of liability to an employer…[T]he proper inquiry is not whether the wrongful act itself was authorized but whether it was committed in the course of a series of acts of the agent which were authorized by the principal.” (Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 219, internal citations omitted.) “Tortious conduct that violates an employee’s official duties or disregards the employer’s express orders may nonetheless be within the scope of employment. So may acts that do not benefit the employer, or are willful or malicious in nature.” (Id., 54 Cal.3d at 209, internal citations omitted.)

Here, the SAC alleges YHSG ratified the conduct of Lee and Wang. (SAC, ¶ 72.) The SAC alleges Lee and Wang were agents of YHSG. (Ibid.) The SAC alleges Lee and Wang were acting on behalf of WHSG when they converted the Yun Plaintiffs’ property (Id., ¶ 78.) Finally, the SAC alleges YHSG had “advanced knowledge of the unfitness of such employees and continued to employ them in conscious disregard of the rights and safety of Plaintiffs and the general public.” (Id., ¶ 73.)

The allegations in the SAC may be conclusory in nature, but case law holds that agency can be pled with ultimate facts. (See Skopp, supra, 16 Cal.3d at 439; Kiseskey, supra, 144 Cal.App.3d at 230.) Unlike the FAC, the SAC specifically alleges agency and ratification. Generally speaking, the SAC pleads that Lee and Wang were acting in their capacity as real estate agents of YHSG when they committed the alleged acts, and at the demurrer stage that is good enough.

YHSG offers no other basis for their demurrer. YHSG’s demurrer to the fifth and sixth causes of action in the SAC is therefore OVERRULED.

            Seventh Cause of Action: Tort of Another

Defendants collectively demur, arguing that the SAC does not allege any new facts to support the cause of action for tort of another. Instead, the Yun Plaintiffs have merely split their conversion cause of action into two separate causes of action in a failed attempt to justify their demand for attorney’s fees.

In opposition, the Yun Plaintiffs argue their tort of another cause of action survives because the SAC alleges third-party thieves committed theft as a result of Defendants’ negligence and fraud.

In reply, Defendants reiterate the tort of another doctrine was not intended to apply to one of several joint tortfeasors in order to justify additional attorney fee damages, and insist the Yun Plaintiffs have done nothing to rectify the deficiencies of the FAC other than split their conversion claims into two causes of action.

“The tort of another doctrine holds that ‘[a] person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.’” (Mega RV Corporation v. HWH Corporation (2014) 225 Cal.App.4th 1318, 1337, quoting Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618, 620.) “The tort of another doctrine is not really an exception to the American rule, but simply ‘an application of the usual measure of tort damages.’” (Ibid., quoting Sooy v. Peter (1990) 220 Cal.App.3d 1305, 1310.) “The tort of another doctrine does not allow a party to recover the fees and costs involved in litigating directly with a negligent defendant.” (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 80.) This doctrine “does not apply to the situation where a plaintiff has been damaged by the joint negligence of codefendants.” (Ibid., citing Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34, 57).)

Here, the SAC does not adequately plead a cause of action for tort of another. Put simply, the SAC does not allege that this action is being brought against a non-tortfeasor for a third-party’s actions. To the contrary, the cause of action for tort of another in the SAC alleges that the “tortious conduct of LEE, WANG, and YHSG (“Defendants”) have forced Plaintiffs to incur the expense of pursuing this action against DOES 1-50, and each and all of them.” (SAC, ¶ 85.) DOES 1-50 are not third-parties—they are unidentified defendants in this action.

Defendants’ demurrer to the seventh cause of action in the SAC for tort of another is SUSTAINED, without leave.

Defendants’ Motion to Strike Portions of the SAC

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

Defendants move to strike the following portions of the SAC:

1. Page 16, line 9-10, paragraph 68: “attorneys’ fees incurred for filing this lawsuit for recovery of the property or value of the property (Cal. Civ. Code section 3336).”

2. Page 18, line 27 to Page 19, line 1, paragraph 83: “attorneys’ fees incurred for filing this lawsuit for recovery of the property or value of the property (Cal. Civ. Code section 3336).”

3. Page 22, line 18, Prayer for Relief Item 5: “For reasonable attorneys’ fees and costs of suit.”

The Court has sustained Defendants’ demurrer to the cause of action for tort of another. There no longer is a basis for attorney’s fees in the SAC. The motion to strike is therefore GRANTED.

Conclusion

The Court OVERRULES YHSG’s demurrer to the fifth cause of action in the SAC for trespass to real property and the sixth cause of action in the SAC for conversion.

The Court SUSTAINS Defendants’ collective demurrer to the seventh cause of action in the SAC for tort of another.

The Court STRIKES strike the following portions of the SAC:

1. Page 16, line 9-10, paragraph 68: “attorneys’ fees incurred for filing this lawsuit for recovery of the property or value of the property (Cal. Civ. Code section 3336).”

2. Page 18, line 27 to Page 19, line 1, paragraph 83: ““attorneys’ fees incurred for filing this lawsuit for recovery of the property or value of the property (Cal. Civ. Code section 3336).”

3. Page 22, line 18, Prayer for Relief Item 5: “For reasonable attorneys’ fees and costs of suit.”

Defendants are ordered to file their responsive pleading within 30 days.