Judge: Frank M. Tavelman, Case: 22BBCV00813, Date: 2023-05-19 Tentative Ruling

SUBMITTING ON THE TENTATIVE
Generally, the Court will post tentative rulings prior to a hearing; however, the Court does not always do so.  If the parties wish to avoid a court appearance and submit on the tentative ruling, then all counsel must confer and agree to do so.   Each counsel must then contact the Court and advise they have spoken to opposing counsel and will submit on the tentative.  All counsel seeking to submit on a tentative must call Dept A no later than 8:45 a.m. on the hearing day or in lieu may indicate the party is submitting during calendar check-in. Notice of the ruling must be served as indicated in the tentative. If any party declines to submit on the tentative ruling, then all parties should appear at the hearing in person or remotely.
 

Case Number: 22BBCV00813    Hearing Date: October 30, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER TO CROSS-COMPLAINT

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

On October 20, 2022, Kelly Walsh Sweeny (“Sweeny”) brought this action against Richard M. Foster (“Foster”) for declaratory relief. Sweeny seeks a declaration that settlement proceeds held by her, as survivor of Robert J. Walsh, are not subject to the attorney lien claimed by Foster.  

On January 25, 2023, Foster filed a Cross-Complaint containing a single cause of action for breach of contract. On May 19, 2023, the Court sustained Sweeny’s demurrer to the Cross-Complaint with leave to amend, finding it lacked factual allegations to constitute its cause of action.

Sweeny now demurs to the First Amended Cross-Complaint (“FACC”) on grounds Foster fails to allege sufficient facts to sustain his cause of action.

This matter was originally scheduled for hearing on October 6, 2023. At the hearing, counsel for Foster represented that he never received notice of the demurrer. As such, the Court continued the matter so that Foster could file his opposition and Sweeny could file her reply. The matter now comes on for hearing and the Court, having reviewed the subsequent submissions, rules as follows:

JUDICIAL NOTICE:

Sweeny requests the Court take notice of a ruling on a Petition for Instructions re Distribution of Trust Assets and the Order After Hearing on Petition for Instructions re Distribution of Trusts Assets, in the California Superior County of Los Angeles Case No. 19STP8002.

Pursuant to Evidence Code § 452(c), the Court may take judicial notice of records of any court in the state of California. However, while courts may take judicial notice of court records, the truth of matters asserted in such documents is not subject to judicial notice. (Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482.) “[W]hile the existence of any document in a court file may be judicially noticed, the truth of the matters asserted in those documents, including the factual findings of the judge who was sitting as the trier of fact, is not entitled to notice.” (Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 121.) 

Sweeny wishes to judicially notice this ruling for the factual findings of Judge Gus T. May. The factual findings of a judge in a previous court record are not judicially noticeable. As such, the Court grants Sweeny’s request only insofar as it acknowledges the ruling in the probate matter exists. The Court does not take notice of the factual findings in that ruling.

The Court reiterates its position from the previous demurrer that Sweeny cannot utilize the ruling for res judicata purposes. It is true that even though a factual finding in a prior judicial decision may not establish the truth of that fact for purposes of judicial notice, the finding itself may be a proper subject of judicial notice if it has a res judicata effect in a subsequent action. (Hawkins supra, 246 Cal.App.4th 1387, at 1392.) However, the petition Sweeny wishes to judicially notice does not include her as a party and concerns only the distribution among her late husband’s children. As such, there is no res judicata effect to the ruling.

ANALYSIS: 

I.                LEGAL STANDARD 

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (C.C.P. § 430.30(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Ibid.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.  App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  (Blank, supra, 39 Cal. 3d at p. 318.)

Pursuant to C.C.P. §§ 430.10(e) and (f), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain, ambiguous and/or unintelligible. It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082.)

II.              MEET & CONFER

C.C.P. §§ 430.41(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the demurrer. Upon review the Court finds the meet and confer requirements were met. (Goldman Decl.)

III.            MERITS

Timeline

In clarification of the issues on demurrer, the Court finds it would be helpful to provide a timeline of events as they are stated in the FACC and Sweeny’s moving papers. The timeline is as follows:

·       June 4, 1999, Walsh retained Foster to represent him in the matter of Walsh v. Walker, LASC case number LC045254. (Exh. B.)

·       April 12, 2002, judgement was rendered in favor of Walsh and against Walker in the sum of $1.9 million (hereinafter the “Walker Judgment”). (Exh. A.)

·       At some point thereafter, a lien was attached to Walker’s home, but no other collection of the judgment occurred.

·       Oct 21, 2004, Walsh and Sweeny divorced as per judgment in LASC case number BD 360 422. As part of this judgment, Sweeny was assigned 50% of the judgment against Walker. (Exh. C.)

·       March 10, 2006, the Acknowledgement of Partition and Assignment of the Walker Judgment for 50% was officially transferred to Ms. Sweeney. (Exh. D.)

·       September 23, 2011, the judgment against Walsh was renewed on Walsh and Sweeny’s behalf by Foster.

·       September 2, 2018, Walsh died.

·       October 17, 2019, Melissa Walsh, Deanna Sims, Stephanie Walsh, and Patrick Walsh (Walsh Beneficiaries) reached a settlement agreement with the Kilborn Trust in settlement of their portion of the Walker judgment (hereinafter known as the “Heir Settlement”).

·       February 20, 2020, an order approving the Heir Settlement was entered in LASC case number 19STP800299.

·       April 7, 2021, Sweeny applied to renew the judgment (She claims it was renewed as to Sweeny only).

·       September 2021, Walker’s home was sold. Sweeny accepts $450,000 in settlement of the judgment lien on Walker’s home.

·       October 3, 2022, an order re: distribution of trust asset was entered which actualized the Heir Settlement. The order states any claims/liens of Foster were invalid for being time barred under C.C.P. § 366.2.

Breach of Contract

To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)

The Court previously sustained Sweeny’s demurrer because it found the Cross-Complaint did not attach any contract between Foster and Sweeny, nor did it allege facts which would attach liability to Sweeny for the agreement between Foster and Walsh. The FACC still fails to allege appropriate theory of liability even after attaching the order in which Walsh assigned 50% of his interest in the Walker Judgment to Sweeny as a condition of their divorce.  (Exhs. C & D.) The assignment reads as follows:

Respondent shall assign to Petitioner her one-half of the judgment in regards to the matter of Walsh v. Walker, subject to the Respondent's reimbursement of the attorney fees and costs paid by the Respondent, to obtain and protect the judgment.

(FAC, Exh. C p. 7.)

In attaching this order, Foster clearly alleges half of the legal entitlement to the Walker judgment is now in possession of Sweeny; however, the assignment of an interest in a judgment does not concomitantly assign obligations under a contract. Foster also alleges Sweeny took this 50% subject to the attorneys’ fees and costs owed by Walsh, but that does not necessarily mean that Sweeny is liable for breach of contract. Sweeny demurs solely on the basis of failure to allege sufficient facts attesting to her contractual liability. Foster has still not pled such facts to justify this cause of action.   Walker argues in their opposition that there may be liability under a theory of quasi-contract; however that is not the same cause of action as breach of contract.

Foster also attaches the contract between himself and Walsh as Exhibit B. The contract appears to have been executed in 1999 and the sole client designated is Robert J. Walsh. The contract also appears to entitle Foster to 45% of the gross recovery in the matter. (Exh. B. ¶4(a).)   As discussed in the Demurrer, Cross-defendant is not a signatory to the contract.  The Court agrees.

Together Exhibits B, C, and D are insufficient to allege the legal effect of a contractual relationship between Foster and Sweeny. Foster held an interest in the Walker judgment, 50% of which was thereafter assigned to Sweeny. Foster alleges Sweeny accepted $450,000 in settlement of her portion of the Walker Judgment without consulting Foster. Foster also alleges Sweeny is now attempting to bar him from his legal entitlement to a portion of the settlement proceeds as established in the original retainer agreement. Nevertheless, this does not arise to a breach of contract to an agreement which cross-defendant is not a party. 

Collateral Estoppel

The Court finds Sweeny’s arguments that Foster is collaterally estopped from pursuing his claim to be unpersuasive. Sweeny argues the judgment approving the Heir Settlement completely bars any attempt of Foster to pursue his portion of the judgment. The language of the judgement is as follows:

Any and all claims/liens of attorney Richard Foster to the Settlement Amount, as described in the subject Petition, are invalid, and/or untimely and/or bared under CCP § 366.2.

(RJI p. 4.)

The Court disagrees that this language is insufficient at the pleading stage for Foster’s claim to Sweeny’s portion of the Walker Judgment. Sweeny was not a party to the petition and the probate court was never rendering any opinion as to Sweeny’s 50% interest. The order makes it clear the claims of Foster are barred as to the Settlement Amount as described in the petition, that being the $225,000 recovered by the Walsh Beneficiaries. (RJI p. 9.) The settlement of the Walsh Beneficiaries and the settlement obtained by Sweeny are two separate things, the latter of which was not involved in the probate court’s decision.   Furthermore, Sweeny, the cross-defendant, acquired her right to the judgment prior to the death.   Her interest was never before Judge May.

Sweeny further argues that C.C.P. § 366.2 precludes recovery by Foster by matter of statute.  C.C.P. § 366.2(a) provides:

If a person against whom an action may be brought on a liability of the person, whether arising in contract, tort, or otherwise, and whether accrued or not accrued, dies before the expiration of the applicable limitations period, and the cause of action survives, an action may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply.

The Court finds C.C.P. § 366.2 does not apply to Sweeny’s portion of the judgment. Sweeny was assigned her portion of the judgment while Walsh was living, at which point she came to own a 50% interest in the judgment. The FACC alleges its cause of action against Sweeny in connection with that 50% interest, not against Walsh for any portion he retained.

Lastly, the Court disagrees with Sweeny’s argument that Foster is precluded from his claim because Sweeny renewed the judgment only as to herself. Sweeny’s renewal of the judgment in her name does not change the fact that the judgment was obtained pursuant to the contract between Foster and Walsh. Sweeny cites no authority that her renewal invalidates Foster’s claim to her assigned interest. 

Finally, in the moving party’s reply they raise issues concerning whether responding party received sufficient notice concerning the original demurrer.   That is not an issue that the Court need address in this ruling and does not seek any argument on the issue.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Kelly Walsh Sweeny’s Demurrer came on regularly for hearing on October 30, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE DEMURRER IS SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND.  

CASE MANAGEMENT CONFERENCE IS CONTINUED TO JANUARY 30, 2024 AT 9:00 A.M.

PLAINTIFF AND CROSS-DEFENDANT TO GIVE NOTICE

IT IS SO ORDERED. 

DATE:  October 30, 2023                            _______________________________ 

                                                                         F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles