Judge: Daniel S. Murphy, Case: 24STCV34519, Date: 2025-04-02 Tentative Ruling

Case Number: 24STCV34519    Hearing Date: April 2, 2025    Dept: 32

BACKGROUND

            On December 30, 2024, Plaintiff Mark Gorbonos filed this action against Defendants Ilya Gorbonos, Julia Leytes, STRS, Inc., Angelica Cherpakova, and Royal Hills Realty, Inc. Plaintiff filed the operative First Amended Complaint on January 13, 2025, adding Defendant 2031 Ivar LLC. The FAC asserts causes of action for (1) fraud, (2) conversion, (3) violation of Penal Code section 496, (4-5) breach of fiduciary duty, and (6) quiet title.

            Plaintiff alleges that he relied on Defendants to assist with his properties and businesses because he traveled often and had limited English proficiency. (FAC ¶ 16.) Plaintiff’s son (Defendant Ilya Gorbonos) and his wife (Defendant Julia Leytes) were entrusted with managing Plaintiff’s properties, but allegedly conspired with the other Defendants to defraud Plaintiff. (Id., ¶¶ 17-23.) Defendants allegedly misappropriated funds, encumbered the properties, caused defaults and foreclosure sales, transferred the properties to themselves, or manipulated Plaintiff into paying companies owned by Defendant Gorbonos. (Ibid.) 

            On March 3, 2025, Defendant 2031 Ivar LLC (Ivar) filed the instant demurrer to the FAC. Plaintiff filed his opposition on March 19, 2025. Ivar filed its reply on March 26, 2025.  

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court finds that Defendant has satisfied the meet and confer requirement. (See Arad Decl.)

DISCUSSION

I. Fraud

“The elements of fraud that will give rise to a tort action for deceit are: ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made. (Lazar, supra, 12 Cal.4th at p. 645.) In the case of a corporate defendant, the plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Ibid.)

            Here, the FAC lacks the requisite specificity. Plaintiff fails to plead the specific statements made to him, who made them, how they were made, and when they were made. Plaintiff also alleges fraud against corporate defendants without specifying the persons who made the statements, their authority to speak, what they said, or when they said it. Plaintiff fails to allege how the statements were false, how he relied on them, and how he was damaged by them. The complaint references general dishonest conduct that, while potentially wrongful, does not amount to fraud. (See FAC ¶ 29.)

To the extent that the claim is based on concealment, the FAC does not specifically allege which material facts were concealed, nor does it allege the basis of Ivar’s duty to disclose. (See Hahn, supra, 147 Cal.App.4th at p. 745 [“To state a cause of action for fraudulent concealment, the defendant must have been under a duty to disclose some fact to the plaintiff”].) Thus, the fraud claim has not been adequately pled.  

            The demurrer is SUSTAINED as to the first cause of action.

II. Conversion

            The elements of conversion are: (1) the plaintiff’s ownership or right to possession of the personal property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208.)

Here, the primary allegations pertaining to Ivar relate to the 2031 Ivar Property. According to the FAC, Plaintiff purchased the 2031 Ivar Property and then transferred the property into the Gorbonos Family Trust. (FAC ¶ 21(b), (e).) The Trust was set up for the benefit of Plaintiff, and Defendant Gorbonos was the administrator. (Id., ¶ 21(e).) Without Plaintiff’s knowledge or consent, Defendant Gorbonos allegedly transferred the property to his company, Ivar, without compensation to the Trust. (Id., ¶ 21(f).) This is not an actionable conversion. “The tort of conversion applies to personal property, not real property.” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1295.)

            However, the conversion claim is also based on the taking of Plaintiff’s money from his bank accounts and credit cards. (See FAC ¶¶ 24-26.) The FAC alleges that Defendant Gorbonos transferred some of the money to his companies, which includes Ivar. (Ibid.) Gorbonos allegedly acted as Ivar’s agent. (Id., ¶ 10.) For pleading purposes, this sufficiently demonstrates that Ivar committed conversion. These transfers allegedly occurred from December 2023 to August 2024, within the statute of limitations. (Id., ¶ 24.)

The demurrer is OVERRULED as to the second cause of action. 

III. Quiet Title

Ivar argues that the quiet title claim is time-barred. However, the discovery rule “postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “In order to rely on the discovery rule for delayed accrual of a cause of action, “[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’” (Id. at p. 808, quoting McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160.)

Here, the FAC alleges that Plaintiff did not discover the transfer of the 2031 Ivar Property at the time it occurred because it was made without his knowledge. (FAC ¶ 21(f).) Plaintiff allegedly discovered the transfer in September 2024 whilst investigating loans and encumbrances against the property. (Id., ¶ 21(k).) This sufficiently establishes delayed discovery for pleading purposes. Thus, the quiet title claim is not time-barred.

The demurrer is OVERRULED as to the sixth cause of action.

IV. Real Party in Interest

            Ivar argues that Plaintiff is not the real party in interest because he transferred the 2031 Ivar Property to the Trust. (See FAC ¶ 21(e).) However, “it is well established that where a trustee has committed a breach of trust, the trust beneficiaries may prosecute an action against third persons who, for their own financial gain or advantage, induced the trustee to commit the breach of trust; actively participated with, aided or abetted the trustee in that breach; or received and retained trust property from the trustee in knowing breach of trust.” (Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1340-41.)

            Defendant Gorbonos allegedly breached his duties as trustee of the Trust and allegedly transferred the 2031 Ivar Property to his company, Ivar. Thus, Ivar arguably “participated with, aided or abetted the trustee in that breach; or received and retained trust property from the trustee in knowing breach of trust.” (See Harnedy, supra, 110 Cal.App.4th at pp. 1340-41.) It may be reasonably inferred that this harmed Plaintiff, a beneficiary of the trust. (See FAC ¶ 21(e).) Accordingly, Plaintiff may maintain claims against Ivar. 

CONCLUSION