Judge Bruce G. Iwasaki, Case Number: 23STCV09687, Date: 2023-11-03 Tentative Ruling

Tentative Ruling: The Demurrer to the First Amended Complaint is sustained in its entirety. Plaintiff shall have leave to amend with respect to the first, second, and sixth causes of action; Plaintiff shall have leave to amend the third, fourth, and fifth causes of action as remedies.

This is an action for quiet title. Plaintiffs Norman and Maisie Markland (Plaintiffs) allege that they entered into an agreement wherein Eunice Miller (Eunice) (Defendant Delory Miller’s mother) and Defendant Delroy Miller agreed that the Plaintiffs would give Eunice the money for the down payment to purchase real property (a residential home) located at 1502 West 85th Street, Los Angeles, California (Property) and money for all expenses related to the property; in exchange, Defendant Delroy would take legal title on the Property until Plaintiffs became legal residents of the United States. At that time, Defendant Delroy would transfer legal title of the Property to the Plaintiffs.

Defendant Delroy Miller now demurs to each of the six causes of action in the First Amended Complaint. Plaintiff opposes the demurrer.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

Defendant demurs to the FAC on the grounds that the FAC is barred by the statute of limitations, laches, the statute of frauds, and Plaintiffs have failed to state a claim.

Defendant first argues that Plaintiffs have failed to allege any causes of action and rely solely on non-cognizable remedies. This Court will address the arguments to each cause of action.

With respect to the injunctive relief cause of action, this argument is correct.

It is well settled that injunctive relief is an equitable remedy, not a cause of action. (Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168 [“Injunctive relief is a remedy and not, in itself, a cause of action, and a cause of action must exist before injunctive relief may be granted.”]; Venice Coalition to Preserve Unique Community Character v. City of Los Angeles (2019) 31 Cal.App.5th 42, 54 [“An injunction is a remedy, not a cause of action.”]; Wong v. Jing (2010) 189 Cal.App.4th 1354, 1360, fn. 2 [same; anti-SLAPP appeal].)

Thus, the demurrer to this cause of action is well taken. The law is less clear as to the remaining causes of actions.

Defendant argues this claim is a remedy, not a cause of action, fails to state a claim and is barred by the statute of limitations.

The case law is not entirely settled on whether a constructive trust is treated as a cause of action or remedy.

For example, certain case authority suggests a constructive trust “is not an independent cause of action but merely a type of remedy for some categories of underlying wrong. [Citation.]” (Glue–Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3.) As an equitable remedy, a claim for a constructive trust has no separate viability if the plaintiff's other causes of action are barred. (Ibid.; see also Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990 [“A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.”].)

However, in Higgins v. Higgins (2017) 11 Cal.App.5th 648, the Court of Appeal explained “[t]o the extent Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn.3, 98 Cal.Rptr.2d 661, suggests no cause of action for constructive trust exists, the suggestion would be inconsistent with the weight of authority.” (Id. at 659, fn. 2 [citing see, e.g., Flores v. Arroyo (1961) 56 Cal.2d 492, 494–495, [complaint stated a cause of action to declare a constructive trust]; Day v. Greene (1963) 59 Cal.2d 404, 411 [statute of limitations applicable to action to impose a constructive trust is determined by the nature of the underlying substantive right, not the form of the action or the remedy sought]; Olson v. Toy (1996) 46 Cal.App.4th 818, 823 [claim for constructive trust is effectively an action for possession of property].)

However, even if the Court were to treat this claim as a cause of action, it fails under the statute of limitations.

A constructive trust is an equitable remedy to compel restoration of property by one who is not justly entitled to it. (Day v. Greene (1963) 59 Cal.2d 404, 411; Allen v. Meyers (1936) 5 Cal.2d 311, 313-314; Meister v. Mensinger (2014) 230 Cal.App.4th 381, 396, 399.)

The general principles for the imposition of a constructive trust are set forth in Civil Code sections 2223 and 2224. (Higgins v. Higgins (2017) 11 Cal.App.5th 648, 659-660.) Civil Code section 2223 provides: “One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” Civil Code section 2224 provides, “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.”

“Since ‘[a] constructive trust is not a substantive device but merely a remedy to compel a person not justly entitled to property to transfer it to another who is entitled thereto’ [citation], an action seeking to establish a constructive trust is subject to the limitation period of the underlying substantive right.’ [Citations.]” (Davies v. Krasna (1975) 14 Cal.3d 502, 515.)

The statute of limitations for a constructive trust action is three years if based on fraud or mistake, or four years if it falls within the catchall provision of the statute. (Code Civ. Proc., §§ 338, subd. (d), 343.) Both provisions begin the statute running when the wronged party discovers or should have discovered the fraud, mistake or breach of fiduciary duty. (Calkins v. Calkins (1923) 63 Cal.App. 292, 302; Truesdail v. Lewis (1941) 45 Cal.App.2d 718, 723.)

“In the case of an involuntary [constructive] trust the statute of limitations begins to run ... from the time when the wrongful or fraudulent acts are performed by the trustee, except that the statute is tolled as to the [equitable] owner of the property until he actually acquires knowledge of the wrongful acts, or, by the exercise of reasonable care, until he is charged with such notice. [Citation.]” (Truesdail v. Lewis (1941) 45 Cal.App.2d 718, 723; see also Bainbridge v. Stoner (1940) 16 Cal.2d 423, 429 [cause of action to impose constructive trust arose when defendant wrongfully acquired property, “and the statute commenced to run against the [plaintiffs] at least as soon as they knew, or should have known, what he had done”].)

“In 2012, the Marklands received their green cards. Sometime thereafter, they contacted Delroy Miller about transferring the property. Delroy avoided them and claimed a series of delays, saying that he was “waiting on the tax man” before he could transfer title to the Home. The Marklands repeatedly followed up with Delroy, but each attempt was met with new excuses. At no point did Delroy make an unequivocal statement that he would not make the transfer. He continued to say he would honor the agreement at a later date. Although the delay in transferring title weighed heavily on the Marklands, they continued to believe in good faith that Delroy intended to transfer the Home, and that the delays were the result of his attempting to appease his wife, who opposed the transfer.” (FAC ¶ 27.)

Notwithstanding these allegations, the FAC alleges that it was not until 2021 when Plaintiffs “discover[ed] that Delroy had transferred the [Property] into the MillerWright Family Trust that the [Plaintiffs] began to suspect he would not honor their agreement.” (FAC ¶¶ 6, 27-29.)

Here, the allegations demonstrate that Plaintiffs made a demand for the Property in or around 2012. The Complaint was not filed until 2022. These allegations either definitively demonstrate a breach of trust with regard to the constructive trust or must be treated as allegations suggesting that Plaintiffs should have been on notice of their underlying claims at some point after 2012. Further, these allegations are insufficient to demonstrate delayed discovery of the breach or accrual of the claim; instead, the allegations suggest that Plaintiffs should have been on notice of their underlying claims at some point after 2012.

Thus, the demurrer to this cause of action is sustained on statute of limitations grounds.

Defendant argues this claim is a remedy, not a cause of action, fails to state a claim and is barred by the statute of limitations.

Like the constructive trust claim, the law suggests that a resulting trust is merely an equitable remedy. (Marvin v. Marvin (1976) 18 Cal.3d 660, 665 [resulting trust is an equitable remedy]; Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 76 [resulting trust is a remedy, not a cause of action].)

However, even if the Court were to treat the claim as a cognizable cause of action – as opposed to a remedy – the claim fails for the same reasons as the constructive trust claim.

“Ordinarily a resulting trust arises in favor of the payor of the purchase price of the property where the purchase price, or a part thereof, is paid by one person and the title is taken in the name of another.” (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238 [citing Viner v. Untrecht (1945) 26 Cal.2d 261, 269 and Elliott v. Wood (1949) 95 Cal.App.2d 314, 317.) “The trust arises because it is the natural presumption in such a case that it was their intention that the ostensible purchaser should acquire and hold the property for the one with whose means it was acquired.” (Lezinsky v. Mason Malt W.D. Co. (1921) 185 Cal. 240, 251; Laing v. Laubach (1965) 233 Cal.App.2d 511, 517.)

This is a classic case of a resulting trust. The FAC alleges that Plaintiffs furnished the downpayment and mortgage payments for the Property, but Defendant took legal title until Plaintiffs became legal residents, at which point the parties agreed the Property would transfer to Plaintiffs. (FAC ¶¶ 2-3.)

Moreover, where the elements of a resulting trust are present, the fact that the transferee and payor of the purchase price made an oral agreement that the former was to hold the property in trust for the latter, which was unenforceable under the statute of frauds, does not prevent a resulting trust from arising. (Viner v. Untrecht, supra, 26 Cal.2d 261, 270.)

“The applicable statute of limitations on an action to establish a resulting trust is the four-year statute found in Code of Civil Procedure section 343. (Estate of Yool (2007) 151 Cal.App.4^th 867, 875.) The statute of limitations does not run on a beneficiary of a resulting trust until he has actual knowledge of repudiation or breach of trust.” (Martin, supra, 145 Cal.App.3d at p. 240; see Berniker v. Berniker (1947) 30 Cal.2d 439, 447-448 [“In the absence of a repudiation by the trustee, the statute of limitations does not begin to run against a voluntary resulting trust.”]; Estate of Yool, supra, 151 Cal.App.4th at 875 [same].)

Thus, for the same reasons, as the constructive trust, the statute of limitations appears to bar the claim here. The demurrer is sustained as to the fourth cause of action for this reason.

Defendant argues this claim is a remedy, not a cause of action, and is barred by the statute of limitations.

Generally, California requires a person to make restitution if he or she is unjustly enriched at the expense of another. (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662.) “The fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it.” (Id. at p. 1663.)

However, the Court of Appeal, in the Second District and elsewhere, has repeatedly stated that “[t]here is no cause of action in California labeled ‘unjust enrichment.’” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 477 [Second District]; see American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1481 [Second District] [“the restitutionary remedies of unjust enrichment and disgorgement are available for aiding and abetting breach of fiduciary duty.”]; Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 911 [Second District] [“[Unjust enrichment] is a general principle underlying various doctrines and remedies, including quasi-contract.”]; De Havilland v. FX Networks, LLC (2018) 21 Cal.App.5^th 845, 870 [Second District] [unjust enrichment is not a cause of action; it is just a restitution claim]; Durell v. Sharp Healthcare (2010) 183 Cal.App.4^th 1350, 1370 [there “is no cause of action in California for unjust enrichment”]; Castillo v. Toll Bros., Inc. (2011) 197 Cal.App.4^th 1172, 1210 [“California does not recognize unjust enrichment as a separate cause of action”].)

Here, however, the unjust enrichment remedy sought is not adequately encompassed as a remedy sought in Plaintiff’s other causes of action. That is, a constructive trust acts as the remedy to the unjust enrichment claim; a constructive trust is an equitable remedy for unjust enrichment (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990), not a theory of recovery for breach of contract. “The concept of constructive trust is, however, . . . [citation] to prevent unjust enrichment and enforce restitution [Citation.]” (Haskel Engineering & Supply Co. v. Hartford Acc. & Indem. Co. (1978) 78 Cal.App.3d 371, 375 [describing a constructive trust as a “remedy designed solely to prevent unjust enrichment”])

As a result of Court’s determination that the constructive trust and resulting trust claims are remedies and not causes of action, the unjust enrichment adds a substantive claim to Plaintiffs’ FAC. (FAC ¶¶ 37-60; see Jogani v. Superior Court, supra, 165 Cal.App.4th at 911 [unjust enrichment claim based on same allegations as common count claim was duplicative and subsumed by common count claim].) Further, a claim for unjust enrichment lies where, even in the absence of an oral contract, the plaintiff has “nonetheless ... conferred a benefit on the defendant which the defendant has knowingly accepted under circumstances that make it inequitable for the defendant to retain the benefit without paying for its value. [Citation.]” (Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 938.) Unjust enrichment is not subject to strict pleading requirements, but instead describes “ ‘ “a failure to make restitution under circumstances where it is equitable to do so.” ’ ” (Id. at p. 939.) The spirit behind the law of unjust enrichment “ ‘is to apply the law “outside of the box” and fill in the cracks where common civil law and statutes fail to achieve “justice.” ’ [Citation.]” (Ibid.)

Under the particular circumstances here, the Court will treat the unjust enrichment claim as a cognizable cause of action.

The FAC adequately states a claim for unjust enrichment. Plaintiffs paid for the Property and its expenses, but Defendants received the benefit of title to this Property. (FAC ¶¶ 15-32.)

Nonetheless, the unjust enrichment claim suffers from the same statute of limitations problems as the prior claims.

The statute of limitations for a claim for unjust enrichment depends on the underlying theory on which recovery is sought. (Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 348.) Here, the claim arises from an oral agreement, which is a two year period. (Code Civ. Proc., § 339.) Further, the statute of limitations for claim for unjust enrichment is subject to the delayed discovery rule. (Id., 350 [“We must determine when Bank actually, or reasonably should have, discovered its mistake that resulted in the unjust enrichment of Dintino”].) Under this rule, “[a] limitations period ... accrues no later than the time the plaintiff learns the facts essential to a particular cause of action. [Citations.]” (Bernson v. Browning–Ferris Industries (1994) 7 Cal.4th 926, 941.)

For the reasons discussed above, Plaintiffs’ FAC fails to allege facts showing delayed discovery until 2021. (FAC ¶¶ 6, 27-29.) The demurrer to this cause of action is sustained.

A quiet title cause of action generally has two elements: (1) “the plaintiff is the owner and in possession of the land,” and (2) “the defendant claims an interest therein adverse to [the plaintiff].” (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 740; see West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 802–803; Code Civ. Proc., § 761.020.)

Defendant demurs on the grounds that Plaintiffs are not the legal owners and therefore cannot assert a claim against him as the legal owner. (See G.R. Holcomb Estate Co. v. Burke (1935) 4 Cal.2d 289, 297–299.) However, the FAC alleges that Defendant Miller “acquired only bare legal title which [he] held as constructive trustee for [Plaintiffs], who, based on the equities, held superior title. (Warren v. Merrill (2006) 143 Cal.App.4th 96, 114.) Thus, this argument fails.

“[Q]uiet title actions have special rules for when the limitations period begins to run.” (Salazar v. Thomas (2015) 236 Cal.App.4th 467, 477, 186 Cal.Rptr.3d 689 (Salazar).) “ ‘ “[A]s a general rule, the statute of limitations [for a quiet title action] does not run against one in possession of land.” ’ [Citation.] Part of the rationale for this special rule for quiet title actions is an unwillingness to convert a statute of limitations into a statute that works a forfeiture of property rights on the person holding the most obvious and important property right–namely, possession.” (Ibid.)

Further, under well-established law, “A vendee who has fully performed his part of a contract of sale is the beneficiary of a trust in the legal title, which is held for him by the vendor; and the statute of limitations does not run against a cause of action specifically to enforce the contract until such trust is clearly and unequivocally repudiated by the vendor.” (Kidd v. Kidd (1964) 61 Cal.2d 479, 481.) A repudiation requires more than the vendor's refusal to convey title to the property; where the vendee is in actual possession of the property, no repudiation by the vendor is effective unless it includes the vendor's actual taking possession of the property. (Kidd, supra, at p. 481; Peixouto v. Peixouto (1919) 40 Cal.App. 782, 788 [statute of limitations will not commence to run “so long as the purchaser is in possession”]; see also Muktarian v. Barmby (1965) 63 Cal.2d 558, 560 [“no statute of limitations runs against a plaintiff seeking to quiet title while he is in possession of the property” (fn. omitted, emphasis added) ]; Smith v. Matthews (1889) 81 Cal. 120, 121 [right of purchasers and their successors to have quiet title was not and could not be barred while they “remained in the actual possession of the land, claiming to be the owners thereof, and the actual owners, as against the defendant, of all interest therein except the mere naked title”]; see Ankoanda v. Walker–Smith (1996) 44 Cal.App.4th 610, 616–617 [dictum acknowledging rule].)

Nonetheless, Plaintiffs are required to plead certain statutory elements pursuant to Code of Civil Procedure section 761.02.0; the FAC fails to identify the date as of which the determination is sought and the FAC is unverified. Thus, the demurrer is sustained on this basis.

To state a claim for declaratory relief, the plaintiff must allege facts showing there is a dispute between the parties concerning their legal rights, constituting an “actual controversy” within the meaning of the declaratory relief statute. (Code Civ. Proc., § 1060; Artus v Gramercy Towers Condominium Assn. (2018) 19 Cal.App.5th 923, 930.)

A claim for declaratory relief fails when it is “ ‘ “wholly derivative” of other failed claims.’ ” (Smyth v. Berman (2019) 31 Cal.App.5th 183, 191-192 quoting Ball v. FleetBoston Financial Corp. (2008) 164 Cal.App.4th 794, 800.) Here, Plaintiffs’ claim for declaratory relief fails as dependent on and derivative of their insufficient quiet title cause of action. (FAC ¶¶ 65-69.)

As result of the Court’s sustaining the demurrer to all the other causes of action, this derivative claim also fails. (FAC ¶¶65-69.)

To prevail, the defendant must show (1) unreasonable delay; and (2) “ ‘ “either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from the delay.” [Citation.]’ ” (Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 282.) “[T]he affirmative defense of laches requires unreasonable delay in bringing suit ‘plus either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from the delay.’ ” (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624.)

It is true that “[o]n undisputed facts, the applicability of laches may be decided as a matter of law.” (Committee to Save the Beverly Highlands Homes Assn. v. Beverly Highlands Homes Assn. (2001) 92 Cal.App.4th 1247, 1266; see Isakoolian v. Issacoulian (1966) 246 Cal.App.2d 225, 229, [laches “may be raised and determined by a general demurrer”]; Arnold, supra, 45 Cal.App.2d at pp. 530-534 [upholding demurrer under laches doctrine based on judicially noticed materials].) However, the application of this doctrine is generally a factual question.

Here, the facts as pleaded do not obviate the possibility of discovery shedding material light on the applicable circumstances contributing to the delay in Plaintiffs bringing this action. Based on the totality of Plaintiffs’ allegations (which are assumed to be true), the application of the doctrine of laches and whether such delay was reasonable is far too factual a question to resolve at the demurrer stage. (See City of Oakland v. Public Employees' Retirement System (2002) 95 Cal.App.4th 29, 52 [“Laches in almost all cases raises factual issues regarding the cause of an asserted delay and the prejudice, vel non, therefrom”].)

Moreover, prejudice is never presumed; rather it must be affirmatively demonstrated by the defendant in order to sustain her burden of proof and the production of evidence on the issue. (Miller v. Eisenhower Medical Center, supra, at p. 624.) Here, there is no allegation in the FAC demonstrating prejudice to Defendant from the delay.

Finally, Defendant also raises a statute of fraud argument. The entirety of Defendant’s argument is:

“The so called transaction alleged in the pleadings would clearly come under the Statue of Frauds. (Civil Code S 1624). Due the fact there is no writing and the requirements of Civil Code S 1624 are not met, the alleged transaction is not enforceable and the entire complaint must be dismissed with prejudice. Further we cannot rely on the alleged words of a third party (Mother) from 25 years ago.” (Dem., 6:13-16.)

This argument is entirely undeveloped with respect to both the facts and the law. Thus, this argument has been waived for the purposes of this demurrer.