Judge Elaine Lu, Case 21STCV01065 2022-12-13 Tentative Ruling

On November 15, 2019, Plaintiff Gregory Holderbach (“Plaintiff”) filed the instant breach of contract action against Defendant James D. Addis, as the Administrator of the Estate of John J. Addis. The complaint asserted six causes of action: (1) Breach of Oral Contract, (2) Breach of Implied-in-Fact Contract, (3) Quantum Meruit, (4) Constructive Trust, (5) Declaratory Relief, and (6) Breach of Agreement to Make a Will, Devise or other Instrument.

On August 4, 2022, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants James D. Addis, as the Administrator of the Estate of John J. Addis, as Trustee of the Addis Family Legacy Trust, and individually (“James”) [1], James Dustin Addis a/k/a Dustin Addis (“Dustin”), and Eleanor Addis (“Eleanor”) (collectively “Defendants”). The FAC asserts eight causes of action for (1) Breach of Oral Contract, (2) Breach of Implied-in-Fact Contract, (3) Quantum Meruit, (4) Constructive Trust, (5) Declaratory Relief, (6) Breach of Agreement to Make a Will, Devise or other Instrument, (7) Intentional Interference with Contract Relations, and (8) Intentional Interference with Expected Inheritance.

On October 4, 2022, Defendant James in his individual capacity filed a demurrer to the seventh and eighth causes of action which are solely alleged against James in his individual capacity. On November 30, 2022, Plaintiff filed an opposition. On December 6, 2022, Defendant James filed a reply.

Plaintiff and Decedent met in 1998 and cohabitated full-time as a romantic couple until shortly before Decedent passing away on April 7, 2020. (FAC ¶ 12.) “At the time [Plaintiff] and [Decedent] began cohabitating in 1998, [Decedent] entered into an express oral agreement with [Plaintiff] (the ‘Agreement’). Pursuant to the Agreement, [Plaintiff] and [Decedent] agreed that [Plaintiff] would care for [Decedent], provide homemaking services, and live as romantic life partners. In exchange, [Decedent] repeatedly assured [Plaintiff] that upon [Decedent]’s passing, [Plaintiff] would inherit all of [Decedent]’s property including but not limited to his condominium, retirement accounts, and investment accounts. Throughout the years, [Decedent] consistently reassured [Plaintiff] that he would take all reasonable steps to ensure that [Plaintiff] would inherit all of [Decedent]’s property and that [Plaintiff] would ‘certainly be taken care of 100%’ upon his passing. [Decedent] specifically promised [Plaintiff] that in the event anything happened to him, [Plaintiff] would ‘have nothing to worry about’ and that be he had ‘set something up’ such that ‘all’ of [Decedent]’s assets would go to [Plaintiff]. [Decedent] also told [Plaintiff] that he was ‘loaded,’ and that [Plaintiff] would be ‘set for life.’” (FAC ¶ 13.) “[Decedent] further promised that he would be responsible for earning income and supporting [Plaintiff] financially during their joint lifetimes and that [Plaintiff] would no longer need to seek out employment.” (FAC ¶ 14.)

“Thereafter, for twenty-three (23) years, [Decedent] and [Plaintiff] cohabitated and lived as life partners.” (FAC ¶ 15, Exhs. 1-2.) Plaintiff and Decedent “held each other out as loving and committed life partners and spouses to their friends.” (FAC ¶ 17, Exh. 3.) However, Decedent “was not comfortable sharing his sexual orientation with colleagues at his workplace because he feared it could jeopardize his career as a show director for Walt Disney Company.” (FAC ¶ 18.) Decedent was also not comfortable sharing his sexual orientation with his family. (FAC ¶ 19.) “Throughout the twenty-three (23) years that [Decedent] and [Plaintiff] lived together, James visited [Decedent] less than a handful of times. [Decedent] would only see James during family reunions.” (FAC ¶ 20.)

In November 2018, Decedent was diagnosed with prostate cancer. (FAC ¶ 22.) During this time, Plaintiff took care of Decedent and assisted in bring Decedent to doctor’s visits and providing care for Decedent. (FAC ¶ 23.) In June 2019, Decedent’s cancer spread to his brain requiring surgery right before Defendant James pressured Decedent to sign additional documents. (FAC ¶ 24.)

“In or about August or September of 2019, less than a year before [Decedent]’s passing, and after [Decedent] had brain surgery, [Plaintiff] saved [Decedent]’s life by transferring him to the ER after [Decedent] suffered a sudden blood clot in his lungs. Soon thereafter, [Plaintiff] sent a text message to James, expressing grave concern over [Decedent]’s rapidly deteriorating health.” (FAC ¶ 25.) “In response, James immediately capitalized on [Decedent]’s mental and physical deterioration. [Plaintiff] is informed and believes that James flew from Illinois and demanded [Decedent] sign an Advanced Health Care Directive naming James as [Decedent]’s agent for medical decisions, while [Decedent] was a patient in the Intensive Care Unit (‘ICU’). [Plaintiff] is informed and believes that at that time, James pressured [Decedent] into signing other documents as well. At the time [Decedent] signed the documents presented to him by James, he was still very ill and under the influence of multiple pain medications and narcotics, which almost certainly affected his capacity, cognition, and vision. That same week, while [Decedent] was still in the ICU, James, and his son Dustin, ransacked [Decedent] and [Plaintiff]’s home on more than one occasion and confiscated large boxes of personal, financial and intimate documents including letters and cards exchanged over the years between [Plaintiff] and [Decedent].” (FAC ¶ 26.)

Defendant James confiscated Decedent’s jewelry and valuable memorabilia and attempted to have Plaintiff and Decedent’s mail transferred from California to Illinois against their wishes. (FAC ¶¶ 27-28, Exh. 5.) After Decedent returned home, Defendant James hired a private nurse to care for Decedent and to provide updates only to Defendant James -- not Plaintiff. (FAC ¶ 29.) Defendant James moved Decedent into assisted living and got rid of Decedent’s cell phone to further restrict Plaintiff’s access to Decedent against Decedent’s wishes. (FAC ¶¶ 30-31.)

“In or about January or February of 2020, John told Gregory that James had asked him to sign a Power of Attorney (the “POA”) while John was in the rehab facility so that James could assist John with paying his bills and expenses. John told Gregory that he only signed the POA because he knew Gregory did not like to be in charge of paying their bills and managing their finances. John further explained to Gregory that the POA was intended to have James help John set up a living trust in California for the benefit of Gregory, and as a means for John to transfer his assets to Gregory at death.” (FAC ¶ 32.) “[D]espite John’s instruction for him to do so, James never took steps to help John prepare his Trust for the benefit of Gregory, as John had requested.” (FAC ¶ 34.)

“Also, in or around February 2020, James told Gregory that John had not prepared a trust or will and that, as such, John’s assets would go into probate upon John’s passing. James told Gregory that he would therefore need to move out of the Property1 , which had been Gregory’s home for the past twenty-three (23) years, “temporarily so that it would be easier and faster and less messy during probate.” James offered Gregory $10,000 to move out temporarily, to rent a place until Gregory could move back to the Property. James also said that everything would have to move quickly while he was “still POA.” James informed Gregory that upon being named Administrator of John’s Estate, he would return the Property back to Gregory along with all of John’s money. He also promised that he would buy Gregory’s leased car for Gregory.” (FAC ¶ 35.) On February 22, 2022, Defendant James served Plaintiff with a 60-day notice to vacate which Decedent disapproved of. (FAC ¶¶ 36-37, Exh. 6.)

Defendant James then forbade Decedent from visiting Plaintiff and arranged for two private nurses to monitor Decedent. (FAC ¶ 38.) On April 7, 2020, Decedent passed away. (FAC ¶ 40.) Due to Defendant James’ actions, Decedent “died alone in a nursing facility, without the comfort of his life partner at his side, contrary to his express wishes.” (FAC ¶ 41.)

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. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

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 “give the complaint a reasonable interpretation, and read it in context.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.) “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.)

Code of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer¿in person or by telephone¿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.” The parties are to meet and confer at least five days before the date the responsive pleading is due and if they are unable to meet the demurring party shall be granted an automatic 30-day extension. (CCP § 430.41(a)(2).) The demurring party must also file and serve a declaration detailing the meet and confer efforts. (Id.¿at (a)(3).)¿ If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading. (Id.¿at (a).)

Here, Defendant James has fulfilled the meet and confer requirements. (Shulman Decl. ¶ 2.)

Defendant James demurrers to the seventh and eighth causes of action for Intentional Interference with Contract Relations and for Intentional Interference with Expected Inheritance.

The Seventh and Eighth Causes of Action are not barred by Former Probate Code section 150

Defendant James contends that the seventh and eighth causes of action are barred under the former Probate Code section 150.

Under former Probate Code section 150, “(a) A contract to make a will or devise ... if made after December 31, 1984, can be established only by one of the following: [¶] (1) Provisions of a will stating material provisions of the contract. [¶] (2) An express reference in a will to a contract and extrinsic evidence proving the terms of the contract. [¶] (3) A writing signed by the decedent evidencing the contract...” (Former Prob. Code, § 150(a).) This was replaced in 2001 with Probate Code section 21700. However, “[Former Probate Code] section 150 does not preclude the application of equitable estoppel principles to enforce an oral agreement made post-1984 to make or not to revoke a will.” (Estate of Housley (1997) 56 Cal.App.4th 342, 352.) “[E]quitable estoppel may apply to avoid the statutes of fraud and to make an oral agreement enforceable if (a) the promisee detrimentally relied on the agreement and would suffer an unconscionable injury if the oral agreement were not enforced or (b) the promisor would receive unjust enrichment if allowed to retain the benefit of the promisee's performance without abiding by the promisor's obligations under the oral agreement.” (Id. at p.359.)
Here, the FAC alleges that in 1998, Plaintiff entered into an express oral agreement with Decedent to make a will or devise. (FAC ¶ 13.) Accordingly, former Probate Code section 150 would apply because the current Probate Code applies only to agreements to make a will or devise made after January 1, 2001. (See Prob. Code, § 21700(a), [“A contract to make a will or devise or other instrument, or not to revoke a will or devise or other instrument, or to die intestate, if made after the effective date of this statute…”], [italics added].)

Defendant James contends that the 1998 agreement is unenforceable, and therefore the seventh and eighth causes of action fail. A valid contract is required for a claim of tortious interference with contract. (Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1196 [“The elements of an action for tortious interference are ‘ “(1) a valid contract between plaintiff and a third party;…”’”].) However, there is no such requirement for a claim of interference with expected inheritance. Rather, “the plaintiff must plead he had an expectancy of an inheritance. It is not necessary to allege that ‘one is in fact named as a beneficiary in the will or that one has been devised the particular property at issue. [Citation.] That requirement would defeat the purpose of an expectancy claim. ... It is only the expectation that one will receive some interest that gives rise to a cause of action. [Citations.]’” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1057.) Accordingly, former Probate Code section 150 could potentially apply only to the seventh cause of action.

As to the seventh cause of action, the FAC sufficiently alleges equitable estoppel. The FAC alleges that Plaintiff detrimentally relied on Decedent’s oral promise to devise a will in 1998. Specifically, the FAC alleges that “[i]n reliance on the Agreement, and [Decedent]’s constant reassurances, [Plaintiff] held himself out as [Decedent]’s spouse, cohabitated with [Decedent] for twenty-three (23) years, maintained [Decedent]’s home, and refrained from seeking steady employment. [Plaintiff] trusted [Decedent], and dedicated his life to being [Decedent]’s dutiful spouse, as set forth herein. When [Decedent] became ill, [Plaintiff] supported him, cared for him, administered his medications, and regularly performed other duties of a spouse, including home maintenance. [Plaintiff] likewise relied on [Decedent] for financial support from 1998 onward, in accordance with the Agreement.” (FAC ¶ 89.) This is sufficient to allege that Plaintiff “detrimentally relied on the agreement and would suffer an unconscionable injury if the oral agreement were not enforced”. (Estate of Housley (1997) 56 Cal.App.4th 342, 352.) Accordingly, former Probate section 150 does not – at least at the pleading stage – bar the seventh cause of action. Therefore, Defendant James’s demurrer based on former Probate section 150 is OVERRULED.

Defendant James also contends that the seventh cause of action fails because (1) Defendant James had no duty to create and execute an estate plan for Decedent, (2) there are no facts that Defendant James’s conduct was designed to and did disrupt the contractual relationship, and (3) there are no allegations that Defendant James caused damage to Plaintiff.

“Tortious interference with contractual relations requires ‘(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.’ [Citations.] It is generally not necessary that the defendant's conduct be wrongful apart from the interference with the contract itself. [Citation]. This general rule is subject to certain exceptions discussed below.” (Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141 [Finding that at will employment contracts are exempt to the general rule].) “One may not intentionally interfere with the contractual relations of another without justification.” (Cal-Medicon v. Los Angeles County Medical Assn. (1971) 20 Cal.App.3d 148, 152.)

As to the first contention, Defendant James relies on Probate Code section 4265 and Cal-Medicon v. Los Angeles County Medical Assn. (1971) 20 Cal.App.3d 148. Under Probate Code section 4265, “[a] power of attorney may not authorize an attorney-in-fact to make, publish, declare, amend, or revoke the principal's will.” (Prob. Code, § 4265.) Defendant James relies on Cal-Medicon for the proposition that “[a]lthough justification is usually a matter of affirmative defense, the complaint may reveal justification on its face.” (Cal-Medicon, supra, 20 Cal.App.3d at p.152; see Demurrer at p.9:12-14.) Defendant James contends that because Probate Code section 4265 prohibits a power of attorney from making a will, Defendant James was justified in not creating or executing an estate plan. The Court disagrees.

Probate Code section 4265 applies only to wills. (Schubert v. Reynolds (2002) 95 Cal.App.4th 100, 106 [Pursuant to Probate Code section 4265 “in the context of a will, the Legislature has established an absolute prohibition against the attorney-in-fact selecting the beneficiaries.”].) However, the FAC does not allege that Defendant James refused to execute a will. Instead, Plaintiff alleges that Defendant James refused to execute estate planning documents per Decedent’s instructions. (FAC ¶ 99.) Estate planning extends beyond merely wills. For example, a power of attorney can be authorized to create a trust or change beneficiaries in a trust. (Prob. Code, § 4264(a),(f).) The FAC alleges this authorization. (FAC ¶ 99.) Moreover, while the granting of such authority “does not in itself require or permit the exercise of the power[,] [t]he exercise of authority by an attorney-in-fact is subject to the attorney-in-fact’s fiduciary duties.” (Prob. Code, § 4266.) “One such fiduciary duty is laid down in section 4232, subdivision (a): ‘An attorney-in-fact has a duty to act solely in the interest of the principal and to avoid conflicts of interest.’ It is further well-established common law that an agent is dutybound to give the principal his or her undivided allegiance and to exercise toward the principal the utmost good faith and loyalty.” (Gomez v. Smith (2020) 54 Cal.App.5th 1016, 1035.)

Thus, as alleged here, though Defendant James was not necessarily required to exercise the authority granted to him to create an estate plan in favor of Plaintiff, Defendant James was required by his fiduciary duties to do so. Here, Defendant James was not free to subject his own judgment in favor of Decedent’s especially where this judgment in not acting was in direct contravention of Decedent’s wishes, (FAC ¶ 99), and was born out of Defendant James’ own self-interest to gain Decedent’s assets. (FAC ¶ 45.)

As to the second contention, the FAC clearly alleges that Defendant James disrupted the contractual relationship. The FAC alleges that Defendant James isolated Decedent, syphoned assets, and evicted Plaintiff. (FAC ¶¶ 29-44, 55, 99.) This clearly alleges intentional acts designed to induce a breach or disruption of the contractual relationship.

As to the third contention, the FAC similarly alleges that Defendant James caused Plaintiff harm. Specifically, the FAC alleges that due to Defendant James conduct, Plaintiff received nothing from Decedent’s estate. (FAC ¶¶ 44, 45, 59, 101.)

Accordingly, Defendant James’ demurrer to the seventh cause of action is OVERRULED.

Defendant James contends that the eighth cause of action fails because (1) there is an adequate Probate Remedy and (2) there is no independently tortious conduct alleged.

“To state a claim for IIEI [intentional interference with expected inheritance], a plaintiff must allege five distinct elements. [Citation] First, the plaintiff must plead he had an expectancy of an inheritance. … Second, as in other interference torts, the complaint must allege causation. … Third, the plaintiff must plead intent, … 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. [Citation.] Finally, the plaintiff must plead he was damaged by the defendant's interference. [Citation.]” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1057.) However, a plaintiff cannot recover for IIEI if an adequate probate remedy exists. (Beckwith, supra, 205 Cal.App.4th at p.1058, [“the tort of IIEI developed to provide a remedy when both of these avenues failed, i.e., when the plaintiff had no independent tort action because the underlying tort was directed at the testator and when the plaintiff had no adequate remedy in probate.”]; Munn v. Briggs (2010) 185 Cal.App.4th 578, 587 [“when a party has an adequate remedy in probate, the party generally will be precluded from recovering in tort for interference with an expectancy.”].)

Here, there are no facts alleged in the FAC or of which the Court has been requested to take judicial notice that show that Plaintiff has an adequate Probate remedy. Plaintiff does not allege that he is a beneficiary in a prior will or that Plaintiff would have inherited due to intestate succession. Absent such allegations, there would be no basis for Plaintiff to have standing and thus to have an adequate probate remedy.

Further, the FAC does sufficiently allege independently tortious actions by Defendant James. “[A]n IIEI defendant must direct the independently tortious conduct at someone other than the plaintiff. The cases firmly indicate a requirement that ‘[t]he fraud, duress, undue influence, or other independent tortious conduct required for this tort is directed at the testator. The beneficiary is not directly defrauded or unduly influenced; the testator is.’” (Beckwith, supra, 205 Cal.App.4th at pp.1057–1058.) Here, there are ample allegations to support such a claim. Defendant James was a fiduciary to Decedent, thus isolating Decedent against his wishes, syphoned assets, and evicted Plaintiff against Decedent’s wishes would be breach of fiduciary duty – i.e., independently tortious act. (FAC ¶¶ 29-44, 55, 99.)

Accordingly, Defendant James demurrer to the eighth cause of action is OVERRULED.

Based on the foregoing, Defendant James D. Addis’ demurrer to the first amended complaint is OVERRULED.

Defendant James D. Addis is to file an answer within thirty (30) days of notice of this order.

Moving Party is to provide notice of this order and file proof of service of such.

[1] As multiple parties have the same last name the Court refers to the parties by first name. The court intends no disrespect to any of the parties in doing so.

Superior Court of California

County of Los Angeles

Department 26