Judge Bruce G. Iwasaki, Case Number: 23STCV09687, Date: 2024-11-08 Tentative Ruling

Tentative Ruling: The Demurrer to the Third Amended Complaint is overruled as to the first, second, third, and fifth causes of action; the demurrer is sustained with leave to amend as to the fourth cause of action.

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 Miller would take legal title on the Property until Plaintiffs became legal residents of the United States. At that time, Defendant Delroy Miller would transfer legal title of the Property to the Plaintiffs.

Defendant Delroy Miller demurred to each of the six causes of action in the First Amended Complaint. The Court sustained the demurrer in its entirety with leave to amend.

On December 1, 2023, Plaintiffs filed a Second Amended Complaint alleging causes of action for (1.) quiet title, (2.) unjust enrichment, and (3.) declaratory relief.

Defendant Delroy Miller demurred to each cause of action in the Second Amended Complaint. Plaintiffs opposed the demurrer. The Court overruled the demurrer.

On August 16, 2024, this Court granted Plaintiff leave to file a Third Amended Complaint, adding causes of action for intentional interference with prospective economic advantage against new Defendant Crystal Wright and a cause of action for financial elder abuse against Defendants Crystal Wright (Wright) and Delroy Miller (Delroy).

Now, Defendants Wright and Delroy (Defendants) demur to the TAC in its entirety. Plaintiffs oppose the demurrer.

Defendants’ request for judicial notice of Items 1-4 is granted. (Evid. Code, § 452, subd. (d).) The request for judicial notice of Exhibit A is denied as irrelevant.

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.)

Defendants demur to the TAC on the grounds that the TAC fails to state a claim and is barred by the statute of limitations, laches, and the statute of frauds.

With respect to this cause of action, Defendants again largely repeat the arguments made on demurrer to the FAC and SAC, including Defendants’ unsuccessful arguments. Essentially, Defendants contend that this claim is barred by the two-year statute of limitations for an oral contract. For the reasons discussed in the court’s previous ruling on the demurrer, this statute of limitations 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.) “ ‘ “[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].)

Here, the TAC alleges actions suggesting repudiation sometime around June 2021. (TAC ¶¶ 7-8, 31-32.) The Complaint was filed on May 1, 2023. Thus, the statute of limitations has not run on this claim. (See e.g., Novak v. Novak (1967) 249 Cal.App.2d 438, 443.)

Further, Defendants argue that the quiet title claim also fails because “Crystal Wright is not in possession.” (Dem., 10:6.) 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 Crystal Wright’s possession is not an element of this cause of action. Rather, the law requires only that Plaintiffs allege that Defendants are claiming an adverse interest in the real property. The TAC sufficiently alleges that Defendant Crystal Wright is claiming an adverse interest in Plaintiffs’ real property. (TAC ¶ 7.)

“The elements of an unjust enrichment claim are the ‘receipt of a benefit and [the] unjust retention of the benefit at the expense of another.’ ” (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.)

The TAC alleges that Defendant Wright wrongfully blocked the transfer of title of the real property by wrongfully asserting a claim to 50% of the proceeds from the property’s transfer. (TAC ¶ 31.) That is, the complaint alleges that Defendants have benefited by unjustly retaining title to the Plaintiffs’ real property and refusing to transfer it to Plaintiffs. (TAC ¶¶ 31-32.) These allegations are sufficient to state a claim for unjust enrichment.

Defendants also demur to the third cause of action, arguing that the declaratory relief claim fails because there is no written instrument and Defendant Crystal Wright “is aware that she is not entitled to any proceeds arising from any transfer of the Home.” (Dem., 15:17-18.)

First, a claim under Code of Civil Procedure does not require a written instrument. (Code Civ. Proc., § 1060.) Section 1060, governing declaratory relief, provides: “Any person interested under a written instrument ... or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property ... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.” (Italics added.)

Second, Defendants appear to argue that there is no controversy because Defendant Wright is not on the title to the real property and knows she is not entitled to any proceeds. This argument ignores the allegation that Defendant Wright is unwilling to transfer the real property to Plaintiffs without payment to which she is not entitled. (TAC ¶¶ 7, 31-32.) The pleadings sufficiently allege a controversy between the parties.

Fourth Cause of Action for Intentional Interference with Economic Prospective:

Defendant Crystal Wright also demurs to the fourth cause of action on the grounds that this cause of action fails to state a claim.

Defendant Wright’s argument here is vague and undeveloped. Defendant argues that Paragraphs 51 through 55 are too conclusory. Defendant Wright also suggests that – as an attorney and the spouse of Defendant Miller – she cannot be liable under this cause of action as a matter of law. No legal authority is cited for this proposition.

The elements of the tort include “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153, 1164–1165.)

To meet the third element, a plaintiff must demonstrate intentional acts by the defendant, that are wrongful apart from the interference itself, designed to disrupt the relationship; this element requires a showing that the defendant “engaged in conduct that was wrongful by some legal measure other than the fact of interference itself.” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393; see also S Products, Inc. v. Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168.) Thus, to establish a claim for interference with prospective economic advantage, a plaintiff must show that the defendant engaged in conduct that is “independently wrongful ..., that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply Co., supra, 29 Cal.4th at 1158–1159.) An act is not made independently wrongful merely because of improper motives. (Korea Supply Co., supra, 29 Cal.4th at p. 1158.)

The TAC alleges that Wright intentionally acted in a wrongful manner by misrepresenting her ownership interest in the property, falsely claiming that she co-owned it and that Defendant Miller could not transfer title without her consent, as well as asserting her entitlement to 50% of any sale proceeds. (TAC ¶ 31.) These allegations are not conclusions of fact or law, but are well pled ultimate facts. As such these allegations are sufficient. (Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524, 528 [findings that all the facts alleged in the complaint are true]; Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6 [accepting all properly pleaded material facts but not contentions, deductions, or conclusions of fact or law].)

However, Defendant Wright’s ownership claim is not independently wrongful. While Plaintiffs may disagree with Defendant Wright’s assertion and even allege that Defendant Wright knows the claim to be false, Plaintiffs identify no “constitutional, statutory, regulatory, common law, or other determinable legal standard” that makes such acts legally wrongful.

Thus, the demurrer to the fourth cause of action is sustained, with leave to amend.

The elements of a cause of action for financial elder abuse are set forth in Welfare and Institutions Code section 15610.30, subdivision (a), which provides in part: “ ‘Financial abuse’ of an elder or dependent adult occurs when a person or entity does any of the following: [¶] (1) Takes, secretes, appropriates, or retains real or personal property of an elder ... to a wrongful use or with intent to defraud, or both[;] [and] [¶] (2) Assists in taking, secreting, appropriating, or retaining real or personal property of an elder ... for a wrongful use or with intent to defraud, or both.” “For purposes of this section, a person or entity takes, secretes, appropriates, obtains, or retains real or personal property when an elder or dependent adult is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult.” (Id., subd. (c).)

As a preliminary matter, the TAC alleges “Plaintiffs are elders as defined by California Welfare and Institutions Code section 15610.27 and were elders at the time Defendants Delroy Miller and Crystal Wright committed financial abuse of an elder under California Welfare and Institutions Code section 15610.30.” (TAC ¶ 57.)

The pleadings further allege that Defendants secretly transferred title to Plaintiffs’ real property to the Miller-Wright Family Trust in 2019 and Defendant Miller later refused to transfer title in June 2021 after Defendant Wright asserted her co-ownership interest. (TAC ¶¶ 31-32.) These allegations sufficiently pled Defendants’ wrongful retention of an interest in the property and allege that such actions were done in a manner designed to defraud Plaintiffs of their expected interest in the home.

Finally, Defendants again reassert the defense of laches, statute of frauds, and sham pleadings. Defendants make no substantively new argument.[1] For these reasons, the court again rejects these arguments made on demurrer.

Defendants also argue that the claims against Defendant Wright are untimely because they do not relate back to the filing of the original complaint.

In determining whether the claims in an amended pleading relate back to the original complaint, California courts consider whether the two sets of claims: (1) rest on the same general set of facts, (2) involve the same injury, and (3) refer to the same instrumentality. (Brumley v. FDCC California, Inc. (2007) 156 Cal.App.4th 312, 323 [citing Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 409].)

Applying this framework, the Court finds that Plaintiffs’ financial elder abuse claim in the TAC relates back to the claims alleged in the original complaint. The financial elder abuse claim in the TAC is premised on the same facts and implicate the identical conduct by Defendant Miller as alleged in the original complaint. Even the allegations involving Defendant Wright arise from the same set of substantive allegations and involve the same injury at issue in the Complaint.

Accordingly, the financial elder abuse claim in the TAC relates back to the claims alleged in the original complaint.

The demurrer to the Third Amended Complaint is overruled as to the first, second, third, and fifth causes of action. The demurrer is sustained as to the fourth cause of action; Plaintiff shall have leave to amend. An amended complaint shall be filed and served on or before December 6, 2024.

[1] The statute of frauds argument in the demurrer to the TAC is only slightly more developed than it has been in the past. However, Defendants’ reply omits any discussion of this defense in response to Plaintiffs’ opposition argument that this defense has already been rejected by the Court at the demurrer stage. In any event, contrary to the demurrer argument, Plaintiffs are not seeking to enforce an oral agreement for the “sale of real property.” (Civ. Code, § 1624.)