Judge: Blaine K. Bowman, Case: 37-2023-00011081-CU-OR-NC, Date: 2023-09-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

SOUTH BUILDING TENTATIVE RULINGS - August 30, 2023

09/01/2023  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Other Real Property Demurrer / Motion to Strike 37-2023-00011081-CU-OR-NC IVICEVIC VS. CARPENTER [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 06/13/2023

The hearing on this matter is ADVANCED to Friday, September 1, 2023 at 9:00 a.m. in Department N-31.

The Demurrer to Complaint brought by defendants Alma and David Carpenter, both individually and as Trustees of the Carpenter Family Trust dated February 19, 2019 (collectively, the Carpenters or Defendants) is SUSTAINED with leave to amend. The time to amend, and the time to answer or otherwise plead if an amended complaint is not filed, shall be as set forth in California Rules of Court, rule 1320.

Background This is a lot line dispute between owners of residential property located in Fallbrook, California. The plaintiffs are Richard Ivicevic, individually and as Co-Trustee of the Richard Ivicevic and Lisa Ivicevic Family Trust dated November 3, 1993 and Lisa Ivicevic, also as Co-Trustee of the Richard Ivicevic and Lisa Ivicevic Family Trust dated November 3, 1993 (collectively, the Ivicevics or Plaintiff).

Plaintiffs allege that they bought their home in or around March of 2014. They further allege that the Carpenters purchased the adjacent home in 2019. Plaintiffs allege that there is a structure that is wholly on their property (referenced herein the Ivicevic Property) that the Carpenters 'have used... for storage for various equipment, without the consent or approval of Plaintiffs.' (Complaint, ¶ 15.) They further allege that: --there is a large structure that is located on both properties, constituting an encroachment on Plaintiff's property, --the Carpenters have dumped debris onto Plaintiff's property, and --the Carpenters have occupied and controlled Plaintiff's property 'by frequently entering the Property without consent of Plaintiff, parking vehicles and equipment on the Ivicevic Property, and openly treating and/or operating the Ivicevic Property as their own while obstructing Plaintiffs' access to their own property...' As a result of these actions, Plaintiffs are now suing for: (1) trespass (2) nuisance Calendar No.: Event ID:  TENTATIVE RULINGS

2985855 CASE NUMBER: CASE TITLE:  IVICEVIC VS. CARPENTER [IMAGED]  37-2023-00011081-CU-OR-NC (3) quiet title (4) violation of Penal Code § 496(a) (5) preliminary injunction (6) declaratory relief The Carpenters now demur, but only to the Fourth Cause of Action for Violation of Penal Code § 496(a).

The demurrer is brought on grounds of failure to state a cause of action (Code of Civil Procedure § 430.10(e)), but on two different theories that: (1) the Penal Code at issue pertains to receipt of stolen property, not encroachment over a lot line, and (2) even if the Penal Code did apply to encroachment on land, such claims are time-barred.

Merits of Demurrer – Whether Penal Code § 496(a) Applies to Real Property Encroachment Generally, Penal Code § 496 is a statute making it a crime to receive stolen property.

(a) Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be stolen or obtained, shall be punished by imprisonment...

(Penal Code § 496(a).) Plaintiff's allegation on this issue is that the Carpenters' conduct amounted to 'withholding portions of the Ivicevic Property from Plaintiffs, as prohibited by Penal Code [§] 496(a).' (Complaint, ¶ 42.) As best the Court can make out, Plaintiffs' theory appears to be that when the Carpenters purchased their property in 2019 (presumably from the previous owner) they 'bought or received' stolen property in the form of a section of the Ivicevic Property. It probably goes without saying that the receipt of stolen property crime is rarely – if ever – used against land, since real property does not actually get moved or hidden. It is impossible to, in a sense, abscond with a parcel of land. '[I]t is apparent that the statute, as enacted, broadly allows anyone injured by the sale of knowingly stolen property to bring a civil action against the seller, in order to reduce thefts by eliminating the market for stolen goods.' Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 18, disapproved on other grounds by Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310 (emphasis changed). While there is such a thing as a 'real estate market' the intent of the statute aimed at preventing the creation of 'markets' for stolen goods by criminalizing the buying or receiving of stolen goods does not seem well-applied to the scenario of a sale of real estate. Said another way, in a traditional case of receipt of stolen property there is an underlying criminal act by a person who does the stealing, followed by a subsequent criminal act of someone who knowingly does the 'buying' or 'receiving.' Applied to this case, that would mean that the seller who sold the Carpenters their home purported to initially 'steal' the relevant portion of Plaintiffs' property so that he could turn around and falsely sell that parcel to the Carpenters in the real estate marketplace.

The cases provided by Plaintiffs are in accord because they deal with personal property. Specifically, the case of 24953 Mulholland v. Todd Ruhalter (Los Angeles Superior Court, Case No. 20STCV18491 (2021)) 2021 Cal.Super. LEXIS 65795, the 'Background' of the ruling references that Ruhalter 'entered decedent's property... and stole some of his personal belongings.' (Emphasis added.) Likewise, in the case of Ketchum v. Pennacchi (Conta Costa Superior Court, Case No. MSC18-00124), the discussion of 'Conversion/Theft' references 'stolen coins' and a 'Ferrari.' Notably, Plaintiffs' own briefing refers to what happened as conversion. (Opposition, p. 4:8-11 ('...the statute of limitations cannot begin to toll once again until Plaintiffs can appreciate that Defendants are once again attempting to obstruct access to and unlawfully convert Plaintiffs property, as is clearly alleged in the Complaint.') (emphasis added).) Somewhat critically in this case, 'it is generally acknowledged that conversion is a tort that may be committed only with relation to personal property and not real property.' Munger v. Moore (1970) 11 Cal.App.3d 1, 7 (citations omitted) (emphasis added).

It appears that what Plaintiffs are relying upon is the word 'withhold' as it appears in Penal Code § 496(a). Plaintiff argue that by using the storage unit that is on their land, the Carpenters are Calendar No.: Event ID:  TENTATIVE RULINGS

2985855 CASE NUMBER: CASE TITLE:  IVICEVIC VS. CARPENTER [IMAGED]  37-2023-00011081-CU-OR-NC 'withholding' access to the land by Plaintiffs. The allegations, however, do not describe any facts that amount to 'withholding' – though they do recite that particular word as a term of art. The allegations as they read describe a situation in which the Carpenters are using real property that is not theirs, but there is no allegation that they are fencing out Plaintiffs or threatening Plaintiffs in some way to deny Plaintiffs access to the land in question. Indeed, the allegation is that the Carpenters are 'encroaching' by maintaining and using a structure on the premises.

The manner in which Plaintiffs appear to be using a civil action for violation of Penal Code § 496 appears to be inconsistent with the actual statute. Indeed, the Carpenters make a strong legal point that under the facts alleged, virtually any lot line dispute could easily become a matter of criminal magnitude – provided the encroaching party 'knew' that he or she was encroaching. In the complaint at issue, it is alleged that the Carpenters 'knew' they were encroaching, but there are no facts alleged describing how they knew this purported fact. The specific allegation reads: 'Defendants, and each of them, knew or reasonably should have known that the Ivicevic Property was owned by Plaintiffs a[t] the time of the withholding and obstruction as alleged herein.' (Complaint, ¶ 43.) There are no allegations describing the basis of why or how the Carpenters 'should have known' or how they found out that the property in question did not belong to them. In fact, to the contrary, it is alleged that the Carpenters have made 'verbal declarations that the Ivicevic Property is somehow owned by [the Carpenters].' (Complaint, ¶ 13.) Ultimately, the use of Penal Code § 496 appears to be misplaced in this case. However, the Carpenters' demurrer on this basis was a scant page largely referencing whether or not 'theft' had been alleged.

Then, in reply, the Carpenters bring more significant argument about whether or not their actions constitute 'stealing' and the specific requirements for applying Penal Code § 496. While not wholly improper or necessarily raising new material, the structure of the briefing makes it such that Plaintiffs had little opportunity to challenge and discuss the heart of this issue regarding the applicability of Penal Code § 496 to the facts at hand. Indeed, in attempting to address it in their opposition brief, Plaintiffs indicate: 'Defendants do not develop this contention into a full argument nor apply this idea to the principle of Demurrer... and therefore it is not clear that Defendants are seeking to dismiss any claim on this ground. Regardless, Plaintiffs will briefly address this argument.' (Opposition, p. 5:13-17.) In light of this posture, as well as the strong policy favoring leave to amend under California law, the Court will sustain the demurrer with leave to amend on grounds that Penal Code § 496 does not apply to the facts as alleged.

While leave to amend is being granted, caution should be taken in the event that Plaintiffs avail themselves of the opportunity to amend. The authorities from both parties on this issue appear to be somewhat sparse, suggesting that the application and use to which Plaintiffs appear to be bending and stretching Penal Code § 496 to fit the facts of this case (notably because the statute provides for treble damages and attorney fees) do not appear to be meritorious uses. While the final decision on that issue will be left to another day if an amendment is brought, the Court would merely remind the complaining party that by presenting a claim a litigant is representing that '[t]he claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.' (Code of Civil Procedure § 128.7(b)(2).) Perhaps application of a Penal Code section designed to curb 'markets' in stolen goods does apply, or should be modified to apply, to knowing theft of real property, but without stronger authority or allegations to demonstrate both how access to the property was being 'withheld' and how Plaintiffs 'knew' that they did not own it, the theory does not strike the Court as a strong or meritorious one.

Merits of Demurrer – Whether Plaintiffs' Claims Are Time-Barred Much of the parties' arguments focus on the applicable statute of limitations, with the parties distinguishing between a one-year statute of limitations being applicable to the claim for treble damages, and with a three-year statute of limitations being applicable to the claim that conversion or theft occurred. The Carpenters' position is that they bought the home in 2019 such that if the focus of their actions is on the 'buying' or 'receiving' of the allegedly 'stolen' property, then the applicable time to sue Calendar No.: Event ID:  TENTATIVE RULINGS

2985855 CASE NUMBER: CASE TITLE:  IVICEVIC VS. CARPENTER [IMAGED]  37-2023-00011081-CU-OR-NC has lapsed. Plaintiffs counter, however, that their focus is not on the 'buying' or the 'receiving' of the allegedly 'stolen' property – their focus is on the withholding of access.

As set forth above, the act of withholding is not clearly alleged. But, even if it was, Plaintiffs' position is that the withholding is ongoing such that the statute of limitations never began to run, or, conversely, that the withholding is made up of numerous instances where Plaintiffs cross over and use the storage unit that is on Plaintiffs' land. This is an odd argument. If the Carpenters are converting the property at issue and withholding access, it is odd to argue that they engage in some sort of 'withhold and release' scenario where they use the property for a time, leave it, but then return and re-start the clock on a whole new use. It is less akin to 'withholding' and more akin to borrowing.

In any event, the statute of limitations aspects of this case cannot be resolved as easily until the actual allegations themselves are firmed-up in terms of stating an actual violation of Penal Code § 496(a), which is the issue discussed at length above. Because the demurrer can be sustained on that ground, and because the lack of clarity resulting from that issue makes engagement with and analysis of the statute of limitations issue nebulous and evasive, the Court declines to engage in a substantive analysis of the statute of limitations issue unless and until the preliminary failure of the cause of action (as alleged) can be resolved.

Calendar No.: Event ID:  TENTATIVE RULINGS

2985855