Judge: Cherol J. Nellon, Case: 224STCV05044, Date: 2024-11-17 Tentative Ruling
Case Number: 224STCV05044 Hearing Date: November 17, 2024 Dept: 14
#6
Case Background
This is an action for quiet title, cancellation of
instruments, accounting, declaratory relief, intentional misrepresentation,
conversion, and intentional interference with expected inheritance. Plaintiff
alleges that the subject property located at 400 N. La Brea was purchased by
Decedents, Ernst and Menora Hacker, and Plaintiff Adi Hacker as joint tenants.
After Menora Hacker passed away, Ernst Hacker married two more times. Defendant
Niza Hacker is Ernst’s third wife. Niza and her attorney, Kira Masteller, misrepresented
to Ernst that the subject property was part of a trust and induced him to
transfer 50% of the property from Plaintiff to himself as trustee of the Ernst
Hacker Survivor’s Trust. Ernst recorded a second deed transferring 100% of the
property to himself as trustee. These deeds were wild deeds because Plaintiff
and Ernst shared the title and Ernst had never transferred his interest in the
property to the trust. After Ernst passed, Niza continued to unlawfully collect
rental income from the subject property.
On February 26, 2024, Plaintiff Adi Hacker, an
individual and trustee of the Adi and Isabel Hacker Family Trust, filed his
Complaint against Niza Hacker, individually and as trustee to the Ernst Hacker
Survivor’s Trust (Survivor Trust), and Wells Fargo Bank.
On April 4, 2024, Plaintiffs filed a First Amended
Complaint.
On August 7, 2024, Defendant Niza Hacker filed this
demurrer.
On August 12, 2024, Plaintiff dismissed Wells Fargo
Bank from this action.
On October 4, 2024, Plaintiff filed an opposition to
the demurrer.
On October 10, 2024, Defendant filed a reply.
Instant Pleading
Defendant demurs to Plaintiff’s FAC.
Decision
The demurrer filed by Defendant Niza Hacker is
OVERRULED. Defendant is to file an Answer within 20 days of this order.
Judicial Notice
Defendant requests judicial notice of grant deeds
executed by Ernst Hacker transferring title to various properties to the Ernst
Hacker Survivor’s Trust. The Court will only take judicial notice of the grant
deed attached as Exhibit 9 to the request for judicial notice because it
concerns the subject property and is thus the only grant deed relevant to this
motion. The request is denied as to the first 8 exhibits.
Discussion
Defendant demurs to the FAC on the grounds that (1)
Plaintiff lacks standing to quiet title, (2) Plaintiff’s first through fifth
causes of action are time-barred, (3) Plaintiff’s sixth cause of action must be
dismissed because money cannot be converted, (4) Plaintiff fails to plead fraud
with specificity or certainty, (5) Plaintiff’s cause of action for declaratory
relief is incidental to the first cause of action, and (6) Plaintiff failed to
plead the seventh cause of action for intentional interference with expected
inheritance.
Plaintiff disputes whether this demurrer was filed
within 30 days after service of the FAC under Code. Civ. Proc., section
430.40(a). However, the parties stipulated to an extension of time to file a
response to the FAC, extending the time to respond to August 9, 2024. The
demurrer was timely filed on August 7, 2024.
1.
Plaintiff’s standing to bring a cause of action to
quiet title
“A quiet title action is a statutory action that
seeks to declare the rights of the parties in realty.” (Civ. Code, section
760.020;¿Western Aggregates, Inc. v. County of Yuba¿(2002) 101
Cal.App.4th 278, 305, 130 Cal.Rptr.2d 436.) “‘“The object of the action is to
finally settle and determine, as between the parties, all conflicting claims to
the property in controversy, and to decree to each such interest or estate
therein as he may be entitled to.”’” (Western Aggregates, supra, at p.
305, 130 Cal.Rptr.2d 436.)
To
maintain an action for quiet title, a plaintiff must allege:
“(a) A
description of the property that is the subject of the action. In the case of
tangible personal property, the description shall include its usual location.
In the case of real property, the description shall include both its legal
description and its street address or common designation, if any.
(b) The
title of the plaintiff as to which a determination under this chapter is sought
and the basis of the title. If the title is based upon adverse possession, the
complaint shall allege the specific facts constituting the adverse possession.
(c) The
adverse claims to the title of the plaintiff against which a determination is
sought.
(d) The
date as of which the determination is sought. If the determination is sought as
of a date other than the date the complaint is filed, the complaint shall
include a statement of the reasons why a determination as of that date is
sought.
(e) A
prayer for the determination of the title of the plaintiff against the adverse
claims.” (Code Civ. Proc., section 761.020.)
Here, Defendant first argues that Plaintiff lacks
standing to quiet title because Ernst severed his joint tenancy with Plaintiff by
executing a grant deed conveying the subject property to himself as trustee of
the Survivor Trust.
Civ. Code, section 683.2(a)(1) provides that a joint
tenant may sever a joint tenancy in real property as to a joint tenant’s
interest without the joinder or consent of the other joint tenants by
“execution and delivery of a deed that conveys legal title to the joint
tenant's interest to a third person, whether or not pursuant to an agreement
that requires the third person to reconvey legal title to the joint tenant.”
Here, the grant deed states Ernst Hacker, as Trustee of
the Hacker Family Trust (Family Trust) granted title to the subject property to
himself as Trustee of the Survivor Trust. (RJN, Exh. 9.)
The FAC alleges that the transfer was not valid because
Plaintiff and Ernst held title as joint tenants at the time of the transfer,
not the Family Trust. (FAC ¶20.) The grant deed confirms that Ernst made the
transfer in his capacity as trustee of the Family Trust. Ernst, as trustee of
the Family Trust, had no right to transfer the subject property. Accepting the facts
alleged as true, the grant deed transferring the trust was invalid and failed
to convey legal title to a third person. Therefore, the facts alleged show the
joint tenancy was not severed, and Plaintiff maintains standing to bring a
cause of action to quiet title. The demurrer is OVERRULED on this ground.
2.
Statute of limitations
Defendant next argues that Plaintiff’s first through
fifth causes of action are time-barred because the statute of limitations for a
quiet title action is 5 years and the subject property was transferred to the
Survivor Trust in 2016.
“The Legislature has not established a specific statute
of limitations for actions to quiet title.” (Salazar v. Thomas (2015)
236 Cal.App.4th 467, 476, citing Muktarian v. Barmby (1965) 63 Cal.2d
558, 560.) The statute of limitations for the underlying theory of relief
controls the applicable period of limitations in quiet title actions. (Id.)
“Generally, the most likely time limits for a quiet title action
are the five-year limitations period for adverse possession, the four-year
limitations period for the cancellation of an instrument, or the
three-year limitations period for claims based on fraud and mistake.” (Id.)
Here, Plaintiff asserts causes of action for cancellation
of instruments and fraud. Thus, the applicable statute of limitations for the
quiet title cause of action is three years or four years. As will be discussed
below, the limitations period did not begin to accrue until after Ernst
Hacker’s death.
Defendant argues that the applicable statute of
limitations is five years under Code Civ. Proc., section 318, which governs
actions for recovery of real property. However, a plaintiff remains possessed
of land through their own occupancy or the occupancy of their tenants. (Salazar,
supra, 236 Cal.App.4th at p.479.) Here, Plaintiff was in possession of the
property because it was occupied by his tenants. (FAC ¶25.) Therefore, this is
not an action for recovery of real property.
The next issue is when the cause of action for quiet
title began to accrue.
In general, a statute of limitations for a quiet title
action does not run against one in possession land. (Salazar, supra, 236
Cal.App.4th at p. 477.) A statute of limitations does not run against one in
possession of the property even if the plaintiff is aware of a potential
adverse claim. (Reuter v. Macal (2020) 57 Cal.App.5th 571, 578 (Reuter).)
“An outstanding adverse claim, which amounts only to a
cloud upon the title, is a continuing cause of action, and is not barred by
lapse of time, until the hostile claim is asserted in some manner to jeopardize
the superior title…Each day’s assertion of such adverse claim gives a renewed
cause of action to quiet title until such action is brought.” (Salazar,
supra, 236 Cal.App.4th 467 at p. 476, quoting Secret Valley Land Co. v.
Perry (1921) 187 Cal. 420, 426-427.)
Reuter is instructive here. In Reuter, a
plaintiff conveyed a joint interest in a condominium to his romantic partner. (Reuter,
supra, 57 Cal.App.5th at pp.573-574.) After the relationship ended, the
plaintiff filed an action to quiet title. (Id.) The court in Reuter found
that although the plaintiff knew about the defendant’s adverse interest in the
property, there was no reason for the plaintiff to incur the expense or
inconvenience of litigation because the defendant never asserted the adverse
claim of title against him. (Id. at p.578.) The statute of limitations
could not have begun to run against him while he was in undisturbed possession
of the condominium. (Id.)
Here, the statute of limitations has not begun to
accrue because Ernst did not assert the adverse claim of title against him. It
was not until after Ernst died in August 2021 that Niza refused to relinquish
possession and control of rental income from the subject property. (FAC ¶¶24,
25.) It is reasonable to infer that Niza asserted the adverse claim of title against
Plaintiff because Niza exercised her claim of title to obtain the rental income
generated by the subject property. Therefore, the limitations period did not
accrue until sometime after August 2021.
Defendant argues that the cause of action for fraud is
time-barred because the alleged misrepresentation Defendant made took place
around 2016 when Defendant misrepresented to Ernst that the subject property
was part of the Family Trust. (FAC ¶20.) Defendant argues that Plaintiff should
have known of the alleged fraud by 2018 at the latest when a second deed was
recorded. However, the FAC does not state Plaintiff knew of the misrepresentations
when they were made in 2016 or in 2018 when the second deed was recorded. Likewise,
there are no facts that Plaintiff should have known that a second deed had been
recorded or that the transfer was induced through fraud. It is reasonable to
infer that Plaintiff should have known of the fraud in August 2021, when Niza
obtained the subject property’s rental income, because Plaintiff would have
discovered the circumstances surrounding the transfer. Therefore, the facts
pled show Plaintiff discovered the alleged fraud around August 2021.
This action was filed in February 2024, well within the
3-year or 4-year limitations period for the quiet title cause of action and the
cause of action for fraud. Therefore, Plaintiff’s claims are not time-barred.
Defendant’s demurrer is OVERRULED on this ground.
3.
Conversion
Defendant next argues that the sixth cause of action
should be dismissed because money cannot be converted.
To plead a cause of action for
conversion, one must allege (1) the plaintiff’s ownership or right to
possession of personal property; (2) defendant’s disposition of the property
inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont
Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.)
“‘Conversion
is any act of dominion wrongfully exerted over another’s personal property in
denial of or inconsistent with his rights therein.’” (Enterprise Leasing
Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 747 (quoting Messerall v. Fulwider (1988) 199 Cal.App.3d 1324, 1329).) “‘It
is not necessary that there be a manual taking of the property; it is only
necessary to show an assumption of control or ownership over the property, or
that the alleged converter has applied the property to his own use.’” (Id.)
Here, Defendant, citing PCO,
Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shaprio, LLP
(2007) 150 Cal. App. 4th 384, 395, argue that a generalized claim for money is
not actionable as conversion. “While it is true that
money cannot be the subject of an action for conversion unless a specific sum
capable of identification is involved…it is not necessary that each coin or
bill be earmarked.” (PCO, Inc., supra, 150 Cal. App. 4th
at p. 397, quoting Haigler v. Donnelly (1941) 18 Cal.2d 674, 681.) PCO,
Inc. does not stand to bar all causes of action for conversion of money.
Rather, a claim for conversion must concern a specific sum, rather than a
generalized claim for money.
Here, the FAC states Defendant converted “the rental
income from the subject property, which represents a specific sum, identifiable
and capable of ascertainment.” (FAC ¶25.) The total rental income which Niza
claimed after she refused to allow Plaintiff to collect the money is a specific
sum capable of identification. Therefore, Plaintiff may bring a cause of action
for conversion as to the rental income. The demurrer is OVERRULED on this
ground.
4.
Fraud
Defendant next argues that the cause of action
for fraud lacks specificity and is uncertain.
A claim for fraud must plead all the
following elements: (1) misrepresentation; (2) knowledge of falsity; (3) intent
to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Odorizzi
v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 128; Wilhelm v.
Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324,
1332.)
Fraud causes of actions must be pled with
specificity in order to give notice to the defendant and to furnish him or her
with definite charges. (Committee on Children's Television, Inc. v. General
Foods Corp. (1983) 35 Cal. 3d 197, 216, superseded by amendments to the
Unfair Competition Law contained in Proposition 64 on unrelated grounds.)
“(a) General pleading of the legal conclusion of ‘fraud’ is insufficient; the
facts constituting the fraud must be alleged. (b) Every element of the
cause of action for fraud must be alleged in the proper manner (i.e., factually
and specifically), and the policy of liberal construction of the pleadings …
will not ordinarily be invoked to sustain a pleading defective in any material
respect.” (Ibid.)
The
specificity standard is less stringent “when ‘it appears from the nature of
the allegations that the defendant must necessarily possess full information concerning the facts of
the controversy.’” (Committee on Children’s Television, Inc. v. General
Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other
grounds as stated in Californians for Disability Rights v. Mervyn's, LLC
(2006) 39 Cal.4th 223, 227, quoting Bradley v. Hartford
Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 825.)
Here, Defendant argues that the FAC fails to
state how the alleged misrepresentations were made to Ernst. Defendant also
argues that the misrepresentations could not have been fraudulent because the alleged
fraud took place after Ernst had already transferred the subject property.
The FAC alleges that Niza represented to
Plaintiff through her counsel that the subject property had been transferred to
the Survivor Trust and that Plaintiff had no interest in the property. (FAC
¶57.) Niza knew the representation was false and continued to demand 50% of the
rental income. (FAC ¶58.) Plaintiff reasonably relied on these
misrepresentations and could not borrow against, sell, or upgrade the property.
(FAC ¶59.)
Contrary to Defendant’s arguments, Plaintiff does
not allege the representations made to Ernst were fraudulent, but that the representations
made to Plaintiff were fraudulent. The FAC states what misrepresentations were
made, to whom they were made, and who made them. Although the FAC lacks some
details such as when or how Defendant made the misrepresentations, Defendant
necessarily possesses full information about the misrepresentations because she
made the misrepresentations. Thus, the specificity standard is relaxed. Because
the FAC sufficiently apprises Defendant of the conduct Plaintiff alleges was
fraudulent, the Court finds the FAC pleads a cause of action for fraud with
sufficient specificity. The demurrer is OVERRULED as to this cause of action.
5. Declaratory relief
Defendant next demurs to the cause of
action for declaratory relief.
A demurrer is generally not an
appropriate means to test the merits of a declaratory relief action unless the
issues are solely ones of law. (Arroyo v. Regents of University of
California (1975) 48 Cal.App.3d 793, 797.) “A demurrer is not the appropriate vehicle to challenge a
portion of a cause of action demanding an improper remedy.” (Caliber
Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 384-85; see PH
II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682-83.) “The
appropriate procedural device for challenging a portion of a cause of action
seeking an improper remedy is a motion to strike.” (Caliber Bodyworks, Inc.,
supra, 134 Cal.App.4th at 385.)
Here, a cause of action for declaratory relief cannot be
challenged via a demurrer. Defendant did not move to strike this cause of
action. Therefore, the demurrer is OVERRULED as to this cause of action.
6.
Intentional interference with expected inheritance
Defendant finally argues that the FAC does not plead a
cause of action for Intentional Interference with Expected Inheritance (IIEI). Defendant
argues that (1) Plaintiff failed to plead causation or an independently
tortious means and (2) Plaintiff failed to demonstrate that he does not have an
adequate remedy in probate court.
The tort of intentional interference with
expected inheritance was “developed to provide a remedy when…the plaintiff had
no independent tort action because the underlying tort was directed at the
testator…[and] the plaintiff had no adequate remedy in probate.” (Beckwith
v. Dahl (2012) 205 Cal.App.4th 1039, 1058. (Beckwith).) “To state a
claim for [intentional interference with expected inheritance], a plaintiff
must allege five distinct elements…First, the plaintiff must plead [s]he had an
expectancy of an inheritance…Second, as in other interference torts, the
complaint must allege causation…Third, the plaintiff must plead intent, i.e.,
that the defendant had knowledge of the plaintiff's expectancy of inheritance
and took deliberate action to interfere with it…Fourth, the complaint must
allege that the interference was conducted by independently tortious means,
i.e., the underlying conduct must be wrong for some reason other than the fact
of the interference. …Finally, the plaintiff must plead [s]he was damaged by
the defendant's interference.” (Id. at p. 1057.)
A plaintiff may not pursue a remedy in tort, such
as IIEI, where a remedy is available in probate to resolve a dispute over the
disposition of an estate. (Munn v. Briggs (2010) 185 Cal.App.4th 578,
591.)
Here, as discussed above, Plaintiff’s FAC adequately
states a cause of action for fraud. The FAC alleges that Defendant
misrepresented to Plaintiff that he had no interest in the subject property. Because
the FAC alleges a cause of action for fraud, the FAC alleges Defendant engaged
in independent tortious conduct.
Finally, Plaintiff has no probate remedy. Plaintiff expected
to have a 100% interest in the subject property as the sole tenant remaining in
the joint tenancy. This dispute does not concern the administration of Ernst’s
estate because it concerns whether the grant deed transferring the property to
the Survivor Trust was valid. If the transfer was invalid, Plaintiff would have
had 100% interest in the property. If the transfer was valid, the property
would remain in the Survivor Trust. In either scenario, the property is not
affected by the administration of Ernst’s estate, leaving Plaintiff with no way
to seek a remedy in probate. Therefore, the demurrer to this cause of action is
OVERRULED.
Conclusion