Judge: Daniel M. Crowley, Case: 24STCV16929, Date: 2025-02-08 Tentative Ruling

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Case Number: 24STCV16929    Hearing Date: February 8, 2025    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendant Gary Engel’s demurrer to Plaintiff Roberta Mark Engel’s complaint is sustained without leave to amend as to the 1st, 2nd, and 3rd causes of action.

Defendant Gary Engel (“Gary”) (“Defendant”) demurs to Plaintiff Roberta Mark Engel’s (“Roberta”) (“Plaintiff”) 1st, 2nd, and 3rd causes of action in her first amended complaint (“FAC”).  (Notice of Demurrer, pgs. I-II; C.C.P. §§430.10 et seq.)[1]

Request for Judicial Notice                

Defendant’s 11/22/24 request for judicial notice of (1) the December 10, 2012, Request for Order (“December 2012 RFO”) in Case No. PD055181, which includes a December 7, 2012, Declaration of Roberta (“Plaintiff’s

December 2012 Declaration”) (D-RJN, Exh. 1); (2) A declaration executed by Plaintiff on July 29, 2013, in Case No. PD 055181 (“Plaintiff’s July 2013 Declaration”) (D-RJN, Exh. 2); (3) Judgment of Dissolution entered December 17, 2013, in Case No. PD055181 by the Hon. Lloyd C. Loomis (“2013 Judgment of Dissolution”) (D-RJN, Exh. 3); (4) a declaration executed by Plaintiff on February 21, 2019, in Case No. PD 055181 (“Plaintiff’s February 2019 Declaration) (D-RJN Exh. 4); (5) the February 22, 2019, Request for Order (“February 2019 RFO”) in Case No. PD055181 (D-RJN, Exh. 5); (6) a declaration executed by Plaintiff on April 17, 2019, in Case No. PD 055181 (“Plaintiff’s April 2019 Declaration) (D-RJN, Exh. 6); (7) the Stipulated Findings and Order After Hearing dated April 24, 2019, in Case No. PD055181 (“2019 Stipulated Findings and Order”) (D-RJN, Exh. 7); (8) U.S. Patent No. 5,278,756 (“‘756 Patent”), entitled “Method and Apparatus for Generating Cephalometric Images,” naming Marc S. Lemchen and Gary A. Engel as inventors, Date of Patent: Jan. 11, 1994, identifying “Assignee” as “Dolphin Imaging Systems, Valencia, Calif.” (D-RJN, Exh. 8); (9) printout from the Assignment Database Records maintained by the U.S. Patent Office for

the ‘756 Patent (D-RJN, Exh. 9); and (10) a printout from the Google Patents website for the ‘756 Patent, is granted; however, the Court does not take judicial notice of the truth of the matters asserted.

          Defendant’s 11/22/24 request for judicial notice of the amended complaint is denied because this Court does not need to take judicial notice of filings on the instant docket.

Background

Plaintiff filed her initial Complaint on July 9, 2024.  Plaintiff filed the operative FAC on October 21, 2024, alleging three causes of action: (1) fraud; (2) breach of fiduciary duties; and (3) intentional infliction of emotional distress.

Defendant filed his demurrer on November 22, 2024.  Plaintiff filed her opposition on January 24, 2025.  On January 31, 2025, Defendant filed his reply.

Summary of Demurrer

Defendant demurs to Plaintiff’s three causes of action on the basis they are all barred by the applicable statute of limitations.  (Demurrer, pgs. III-IV.)  Defendant demurs to the 1st and 2nd causes of action on the basis they fail to state facts sufficient to constitute causes of action, are barred by res judicata, are barred by Civil Code §47(b), were released in the 2013 judgment of dissolution, and are tort claims that cannot be asserted.  (Demurrer, pgs. III-VII; C.C.P. §430.10(e).)  Defendant demurs to the 3rd cause of action on the basis it is barred by Civil Code §47(b) and was released in the 2013 judgment of dissolution.  (Demurrer, pg. VIII.)

          Meet and Confer

Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.  (C.C.P. §430.41(a), emphasis added.)  A declaration must be filed with a demurrer regarding the results of the meet and confer process.  (C.C.P. §430.41(a)(3).)

Defendant’s counsel submitted declaration stating that November 21, 2024, he met and conferred with Plaintiff’s counsel, and no agreement was reached, in compliance with C.C.P. §430.41(a).  (Decl. of Morrow ¶¶2, 8.)  Accordingly, the Court will consider the instant demurrer.

Legal Standard

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  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.  (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].)  For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law.  (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

          Statute of Limitations

          Fraud & Breach of Fiduciary Duties (1st & 2nd COAs)

“[T]he elements of an action for fraud and deceit based on a concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.”  (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.)

“‘The breach of fiduciary duty can be based upon either negligence or fraud depending on the circumstances. It has been referred to as a species of tort distinct from causes of action for professional negligence [citation] and from fraud [citation].’ ‘The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.’” (Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1093-1094, internal citations omitted.)

Plaintiff alleges that by the time her marriage with Defendant was terminated in 2013, Plaintiff had stipulated to the judgment of dissolution of marriage.  (FAC ¶20.)  Plaintiff alleges that in entering into that stipulated judgment, in documents filed in the Los Angeles County Superior Court, Defendant, with the assistance of Defendants Does 1 through 5, represented to Plaintiff, in writing as well as orally, that he had fully disclosed to Plaintiff and the court all of the marital community’s assets and all of his own separate property, and their respective estimates of value and Plaintiff  had relied upon Defendant Engel’s representations in exchange for the stipulated judgment of dissolution of marriage.  (FAC ¶20.) 

Plaintiff alleges that notwithstanding his express, written representation that he had fully disclosed to Plaintiff all of the assets and liabilities of the community and, contrary to those express representations.  (FAC ¶21.)  Plaintiff alleges Defendant actively concealed from Plaintiff the scope of his baseball card business and its profits, he concealed from Plaintiff his business purchasing and selling real estate and, most important, Defendant concealed from Plaintiff his development of the Invention and the Patent, from their beginning and throughout the duration of the marriage.  (FAC ¶21.)  

Plaintiff alleges Defendant’s representations, in writing and orally, in 2013, made by Defendant in conjunction with DOES 1-5 in Los Angeles, California, in writing, that he had supposedly fully and honestly disclosed to Plaintiff, and to the court, all of the assets belonging to the marital estate were false and known to Defendants to be false when those representations were made.  (FAC ¶22.)  Plaintiff alleges specifically, and despite his representations to the contrary, Defendant had not disclosed to Plaintiff, but rather, he had deliberately concealed from Plaintiff, and from the court, the existence and value of the Invention and Patent, and he had created during the marriage.  (FAC ¶22.)  

Plaintiff alleges on information and belief that Defendant made the false written and oral representations alleged above with the intention of inducing Plaintiff to rely upon those representations and eschew her own independent investigation into Defendant’s assets.  (FAC ¶23.)  Plaintiff alleges that she justifiably relied upon Defendants’ false representations, mistakenly believing that Defendant would not be so brazen as to commit a fraud upon the court.  (FAC ¶23.)  Plaintiff alleges that she was wrong; Defendant was more than prepared to defraud, not only Plaintiff, but the court in particular, and he has acted, and continues to act, in conformity with his plan to conceal from Plaintiff the valuable tangible properties and intangible intellectual property that Defendant had accumulated during the marriage.  (FAC ¶23.) 

Plaintiff alleges Defendants successfully kept secret Defendant’s participation in the creation and assignments of the Invention and Patent until in or about late 2023, when, as alleged above, Plaintiff learned of the Invention, its significance as having the potential for being a very valuable asset and that Defendant had purposefully concealed the Invention, the Patent, as well as other material facts.  (FAC ¶24.)

Plaintiff alleges that as a direct and legal cause of the fraud by Defendant and Does 1 through 5, Plaintiff has sustained damages consisting of the loss of her half of the community property interest in the Invention and the profits and royalties it has generated since the date of its first exploitation by Dolphin, Inc., Dolphin, LLC and, most recently, by Patterson, in an amount to be determined at time of trial, but believed to be in excess of $20,000,000.  (FAC ¶25.)

Plaintiff’s 1st and 2nd causes of action for extrinsic fraud and for breach of fiduciary duty are barred by the one-year statute of limitations set out in Family Code §§2122(a) and (f).

Here, Plaintiff knew, as of February 21, 2019, of the facts that she currently alleges constitute failure to comply with applicable disclosure requirements, or fraud.  Specifically, a declaration executed by Plaintiff on February 21, 2019, in Case No. PD 055181 (“Plaintiff Roberta Engel’s 2019 Declaration) states the following:

“During our marriage in 1985, [Gary Engel] and Marc Lemchen cofounded a business and created new technology. This business is known as Dolphin Imaging Systems . . .. ”  (D-RJN, Exh. 4 at pg. 2 ¶4.)

“It was only recently, October 29, 2018, I heard more information about Dolphin and Dolphin Imaging LLC (“Dolphin LLC”). I started to do online research and was able to find more information than ever provided by Respondent.”  (D-RJN, Exh. 4 at pg. 3 ¶8.)

“[Gary Engel] helped to co-author domestic and international patents . . . . [Gary Engel’s] intellectual property helped all areas of the dental specialty practice.”  (D-RJN, Exh. 4 at pg. 3 ¶8.)

“Dolphin LLC operated until 2009 when it was acquired by Patterson as a standalone subsidiary with Mr. Wang as Subsidiary President as stated in the online article, ‘Patterson Acquires Dolphin.’…”  (D-RJN, Exh. 4 at pg. 3 ¶10.)

“[Gary Engel] likely received substantial income due to the software and patents Respondent helped develop and the company being sold to Patterson.” (D-RJN, Exh. 4 at pg. 5 ¶17.)

Plaintiff’s declarations demonstrate that in 2019, Plaintiff knew that Defendant had invented an invention on which a patent had been granted, and that the patent was held in 2019 by Patterson.  As such, Plaintiff possessed the requisite knowledge in 2019 to have brought her claims then.  Plaintiff’s initial Complaint in this action, filed on July 9, 2024, is more than five years too late, and is barred by Family Code §§2022(a) and (f).

Accordingly, Defendant’s demurrer to Plaintiff’s 1st and 2nd causes of action is sustained without leave to amend.

          Intentional Infliction of Emotional Distress (3rd COA)

“A cause of action for intentional infliction of emotional distress exists when there is ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant's outrageous conduct.’ A defendant’s conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’ And the defendant’s conduct must be ‘intended to inflict injury or engaged in with the realization that injury will result.’”  (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.)

Because intentional infliction of emotional distress is an injury to the person, the applicable statute of limitations is two years.  (Wassman v. South Orange County Community (2018) 24 Cal.App.5th 825, 852-853; C.C.P. §335.1.)  A cause of action for intentional infliction of emotional distress accrues, and the statute of limitations begins to run, once the plaintiff suffers severe emotional distress as a result of outrageous conduct on the part of the defendant.  (Cantu v. Resolution Trust Corp. (1992), 4 Cal.App.4th 857, 889; Murphy v. Allstate Insurance Co. (1978) 83 Cal.App.3d 38, 50-51.)

Plaintiff alleges that in or about January 2022, she was diagnosed with PTSD at Mason General Hospital in Washington state.  (FAC ¶50.) Plaintiff alleges her formerly repressed memories of the extensive abuse by Defendant, of her being kidnaped and held hostage and attempted murder, have returned to the surface with a vengeance.  (FAC ¶50.)  Plaintiff alleges she finally realized in 2023 that her life with Defendant was far from normal. FAC ¶50.)  Plaintiff alleges that according to her physiologist, after being diagnosed with PTSD, her trauma began in the beginning of the marriage and continues post marriage.  (FAC ¶50.)  Plaintiff alleges that she has been advised that her memories of that abuse will most likely remain forever.  (FAC ¶50.)

Plaintiff’s cause of action for intentional infliction of emotional distress is barred by the statute of limitations because Plaintiff knew or should have known about the conduct as far back as nine years ago, which was the time for Plaintiff to have made such allegations in a complaint.  A December 10, 2012, Request for Order (“December 2012 RFO”) includes Plaintiff’s sworn declaration that “[Defendant] has a nonrecent history of violent behavior toward me. During our marriage he has hit me numerous times. In the past, he has threatened me…”  (D-RJN, Exh. 1 at DEF 003722 ¶11.)  In Plaintiff’s July 2013 Declaration, Plaintiff declared on July 29, 2013, that “[s]ome years ago I was the victim of a violent incident in which an employee of Gary’s business came to our house and attempted to kill me or kidnap me for ransom.”  (D-RJN, Exh. 2 at pg. 1 ¶5.)  Plaintiff declared, “[t]hroughout our marriage, Gary often abused me both physically and verbally, including hitting and slapping me, shaking me, and pushing me so hard I fell down . . ..”  (D-RJN, Exh. 2 at pg. 1 ¶6.)  “Gary also repeatedly threatened to hit me and ‘punish’ me so I would do what he wanted, saying things such as, ‘If you do not listen to me, I will hit you.’ ‘I will punish you so you will do what I want.’ ‘You need to do what I say for your own good.’ ‘If you cry, I will hit you.’ ‘You are stupid.’ ‘You cause me to be frustrated, therefore I hit you.’ ‘You never listen to me. I know best.’ ‘I am going to hit you. You better not push my buttons.’” (D-RJN, Exh. 2 at pgs. 1-2 ¶7.)

Plaintiff’s allegation in the FAC that the reemergence of repressed memories of the abuse she allegedly suffered at the hands of Defendant is not sufficient to state a cause of action for intentional infliction of emotional distress separate and apart from the conduct that is barred by the applicable statute of limitations.  (See FAC ¶50.)  Plaintiff fails to allege any conduct that is actionable within the applicable statute of limitations for intentional infliction of emotional distress.

Accordingly, Defendant’s demurrer to the 3rd cause of action is sustained without leave to amend.

Conclusion

Defendant’s demurrer to Plaintiff’s 1st, 2nd, and 3rd causes of action in her FAC is sustained without leave to amend.

Moving Party to give notice.

Dated:  February _____, 2025