Judge Audra Mori, Case 21STCV12216 2023-01-26 Tentative Ruling

Plaintiff Elizabeth Carder (“Plaintiff”) filed this action against defendants Robert H. Flavell, Robert H. Flaveli; R H Flaveli,[1] Robert H. Flavell and Myrna B. Flavell Family Trust Agreement, Myrna B. Flavell Trust Dated 1984, Myrna B. Flavell, Jeanine A. Flavell, and Jeanine Flavell Living Trust for injuries Plaintiff sustained when she allegedly tripped and fell on steps on defendants’ property what were “not built to code and presented a dangerous condition.” (Compl. at p. 4.) Additionally, Plaintiff alleges that as a result of the alleged negligence, defendants made an “off record transfer” of the subject property with an actual intent to hinder, delay and defraud Plaintiff. The Complaint alleges causes of action for (1) premises liability, (2) negligence, and (3) fraudulent conveyance. The fraudulent conveyance claim includes a prayer for punitive damages.

Defendant Myrna B. Flavell Trust Dated 1984 (“Defendant”) now demurs to the complaint arguing that the complaint is defective because Robert H. Flavell and Myrna B. Flavell are deceased and Plaintiff has not sued the successor trustee, Scott Flavell. Defendant contends there is thus a misjoinder of parties because the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement is a not a legal entity that can be sued. Further, as to the third cause of action, Defendant contends that it fails to state sufficient facts to constitute a claim. In addition, Defendant moves to strike conclusory allegations and the prayer for punitive damages in the fraudulent conveyance claim.

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint). (CCP §§ 422.10, 589; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Donabedian, 116 Cal.App.4th at 994.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at 994.) No other extrinsic evidence can be considered. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862 [disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287] [error to consider contents of release not part of court record].)

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-72.) The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint; or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”]).

A demurrer can only be sustained when it disposes of an entire cause of action. (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.)

Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred to for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (CCP § 430.41(a).)

Defendant has fulfilled this requirement prior to filing the demurrer. (Demurrer Nicolaisen Decl. ¶¶ 3-6.)

Defendant requests judicial notice be taken of the following records from the Los Angeles County Recorder’s Office: (1) Grant Deed recorded November 24, 1965 to the real property at 12054 Moorpark Street, Studio City, CA 91604 (“the subject property”) with title held by Robert Flavell and Myrna B. Flavell, husband and wife as joint tenants, (Request for Judicial Notice (“RJN”) Exh. A); (2) Quitclaim Deed recorded March 13, 1986 by Robert Flavell and Myrna B. Flavell on the subject property with title held by Robert H. Flavell and Myrna B. Flavell, as Trustees Under the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement Dated October 9, 1984, (RJN Exh. B); (3) Affidavit of Death of Co-Trustee, with Death Certificate, on the subject property recorded April 16, 2018 for Robert H. Flavell, (RJN Exh. C); (4) Affidavit of Death of Co-Trustee (with Death Certificate) recorded August 7, 2020 on the subject property for Myrna B. Flavell – identifying Scott H. Flavell as the sole Trustee following the death of both Co-Trustees, (RJN Exh. D); (5) Grant Deed recorded December 7, 2020 on the subject property by Scott H. Flavell, Trustee of the Robert H. Flavell and Myrna B. Flavell Family Trust Dated October 9, 1984, as Amended to Jeanine A. Flavell, a single woman, (RJN Exh. E); and (6) Grant Deed recorded December 7, 2020 on the subject property by Jeanine A. Flavell, a single woman to Jeanine Flavell Living Trust Dated September 16, 2020, Jeanine Flavell, Trustee, (RJN Exh. F).

The requests are unopposed and granted. (Evid. Code §452(c); Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194 [“A recorded deed is an official act of the executive branch, of which this court may take judicial notice.”].)

A party may demur to a complaint on the ground that there is a defect or misjoinder of parties. (CCP § 430.10(d).) Here, Defendant demurs and asserts that the misnaming of parties must be corrected by Plaintiff.

A trust cannot sue or be sued or hold title to property. (Portico Management Group, LLC v. Harrison (2011) 202 Cal.App.4th 464, 473.) “[A] trust is not a person but rather a fiduciary relationship with respect to property. [Citations.] Legal title to property owned by a trust is held by the trustee.... A ... trust ... is simply a collection of assets and liabilities.” (Id. [internal quotations omitted].) “A trust itself cannot sue or be sued. [Citation.] ‘As a general rule, the trustee is the real party in interest with standing to sue and defend on the trust's behalf. [Citations.]’” (Id.)

“[I]t is the trustee or trustees who hold title to the assets that make up the trust estate and who enter into contracts necessary to the management of the estate, subject to fiduciary obligations to manage and use the assets for the benefit of the trust beneficiary.” (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 521.) Moreover, in order to enforce a judgment against trust property, a judgment must be entered against those who hold title to such property- the trustees. (Portico Management Group, 202 Cal.App.4th at 474.)

Here, Defendant contends the demurrer should be sustained as because Plaintiff cannot sue a Trust Agreement and instead must sue the current or successor trustee in their capacity on behalf of the trust. Defendant is correct that a trust is not a legal entity, and thus, a trustee must be named in the complaint in a representative capacity. (See Greenspan, 191 Cal.App.4th 522.) Plaintiff cannot sue the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement itself, and the complaint does not name any defendant in their capacity as trustee of the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement.

Defendant’s demurrer to the complaint is sustained as to the first and second causes of action against the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement with 20 days leave to amend so that Plaintiff may correct the pleadings to name a trustee.

Generally, a “fraudulent conveyance is a transfer by the debtor of property to a third person undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim.” (Kirkeby v. Superior Court of Orange County (2004) 33 Cal.4th 642, 648; quoting Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 13.) To plead a fraudulent transfer claim, a plaintiff must establish: 1) transfer made or obligation incurred by a debtor; 2) with actual intent to hinder, delay, or defraud any creditor of debtor; 3) without receiving a reasonably equivalent value in exchange for the transfer or obligation: a) debtor was engaged or was about to engage in a business or a transaction for which remaining assets were unreasonably small in relation to the business or transaction; or b) intended to incur, or believed or reasonably should have believed that debtor would incur, debts beyond ability to pay as they became due; and 4) injury to the creditor. (Civ. Code §§ 3439.04(a), 3439.05.)

A transfer can be invalid either because of actual fraud, (Civ. Code § 3439.04(a)), or constructive fraud, (Civ. Code § 3439.04(b), 3439.05). “Whether a transfer is made with fraudulent intent and whether a transferee acted in good faith and gave reasonably equivalent value within the meaning of [Civil Code] section 3439.08, subdivision (a), are questions of fact.” (Nautilus, Inc. v. Yang, (2017) 11 Cal. App. 5th 33, 40; see Kirkeby, supra, (2004) 33 Cal.4th 642, 651.)

“[I]n California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] Thus the policy of liberal construction of the pleadings … will not ordinarily be invoked to sustain a pleading defective in any material respect. [Citation.] [¶] This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered. (Citation omitted.).” (See Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal. 4th 979, 993.)

Here, the fraudulent conveyance claim alleges that defendants possess an ownership interest in the subject property and that as a result of their alleged negligence, defendants undertook to make an off-record transfer of the property to defendant Does 90 to 100. The complaint pleads that defendants did not receive equivalent value in exchange for the transfer, that defendants knew their liabilities were beyond their ability to pay, and that defendants were insolvent because of the transfer. (Compl. at p. 6.)

The complaint, on its face, does not allege any facts with particularity regarding the alleged fraudulent conveyance by any defendants. The complaint pleads only general and conclusory allegations against all defendants. There is no specificity, for example, as to who engaged in the acts, what their particular actions were, or when the actions took place. The general and conclusory allegations do not sufficiently support a claim for fraudulent conveyance.

Based on the foregoing, the demurrer is sustained as to third cause of action for fraudulent conveyance against the Robert H. Flavell and Myrna B. Flavell Family Trust Agreement. Defendant has requested that the demurrer be granted without leave to amend. The burden is on Plaintiff to show in what manner she can amend the complaint, and how that amendment will change the legal effect of the pleading. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349; Hendy v. Losse (1991) 54 Cal.3d 723, 742.) In this case, Plaintiff does not oppose the demurrer or otherwise make any showing as to how the fraudulent conveyance claim can be cured.

Defendant’s demurrer is sustained as to third cause of action for fraudulent conveyance without leave to amend.

Defendant further moves to strike the prayer for punitive damages in the fraudulent conveyance cause of action.

California law authorizes a party’s motion to strike matter from an opposing party’s pleading if it is irrelevant, false, or improper. (CCP §§ 435; 436(a).) Motions may also target pleadings or parts of pleadings which are not filed or drawn in conformity with applicable laws, rules or orders. (CCP § 436(b).) A motion to strike is used to address defects that appear on the face of a pleading or from judicially noticed matter but that are not grounds for a demurrer. (Pierson v Sharp Memorial Hospital (1989) 216 Cal.App.3d 340, 342; see also City & County of San Francisco v Strahlendorf (1992) 7 Cal.App.4th 1911, 1913 (motion may not be based on a party's declaration or factual representations made by counsel in the motion papers).) In particular, a motion to strike can be used to attack the entire pleading or any part thereof – in other words, a motion may target single words or phrases, unlike demurrers. (Warren v. Atchison, Topeka & Santa Fe Railway Co. (1971) 19 Cal.App.3d 24, 40.) The Code of Civil Procedure also authorizes the Court to act on its own initiative to strike matters, empowering the Court to enter orders striking matter “at any time in its discretion, and upon terms it deems proper.” (CCP § 436.)

Civil Code § 3294(a) states, “[i]n an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. Finally, “fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the party of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civil Code §3294.)

Conclusory allegations are not sufficient to support a claim for punitive damages. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)

Here, as analyzed above, the allegations in the fraudulent conveyance are merely conclusory. There are no specific facts suggesting malice, fraud, or oppression by Defendant, and thus, the allegations are insufficient to support a claim for punitive damages against Defendant.

The motion to strike the prayer for punitive damages is granted. Defendant has requested that the allegations be stricken without leave to amend. Plaintiff does not oppose the motion, and thus, fails to show the complaint can successfully be amended to state a claim for punitive damages.

Hon. Audra Mori

Judge of the Superior Court

[1] The Plaintiff names various Defendants in the Complaint as “Flavells” or “Flavelis.”