Judge Gary Y. Tanaka, Case 22TRCV01259 2023-05-18 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Thursday, May 18, 2023

Department B Calendar No. 7

Plaintiff’s Complaint was filed on November 16, 2022. Plaintiff alleges the following facts. Plaintiff is the conservator of conservatee Estate of Susan Gillett (“conservatee”). Defendant committed financial abuse against conservatee Susan Gillett. Defendant put conservatee into a high-interest, short term, multi-million-dollar loan secured against a first deed of trust against conservatee’s properties. Defendant knew that conservatee could not afford the loan. Consesrvatee’s son, John Michael Rogers (“Rogers”), orchestrated the scheme so he could start a hemp business in West Virginia which failed. Conservatee lost the majority of her assets. Defendant collected over $500,000 in interest and fees from conservatee and encumbered her property with millions of dollars of debt. Plaintiff alleges the following cause of action: 1. Financial Elder Abuse.

Defendant set forth a meet and confer declaration in sufficient compliance with CCP § 430.41. (Decl. John C. Holmes.)

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)

Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.) Under Code Civil Procedure § 430.10(f), a demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Defendant demurs to the sole cause of action for Elder Abuse solely based on uncertainty. CCP 430.10(f). The Court notes that Defendant purports to also demur to a cause of action for Fraud based on failure to state facts sufficient to state a cause of action but no such cause of action was asserted. The Court assumes that the reference to “fraud” must have been a typographical error.

Under Code Civil Procedure § 430.10(f), a demurrer may be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2. “Demurrers for uncertainty under Code of Civil Procedure section 430.10, subdivision (e) (sic) are disfavored. A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. A demurrer for uncertainty should be overruled when the facts as to which the complaint is uncertain are presumptively within the defendant's knowledge.” Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822 (internal citations and quotations omitted).

Defendant’s demurrer to the first cause of action for Elder Abuse is overruled. The cause of action is not uncertain. Also, again, assuming that the reference to “fraud” was an error by Defendant (as noted, Defendant demurred solely based on uncertainty to this cause of action), Plaintiff has stated facts sufficient to state a cause of action.

Welf. & Inst. Code, § 15610.30 states, in relevant part: “(a) “Financial abuse” of an elder or dependent adult occurs when a person or entity does any of the following:

(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

(3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 15610.70.”

“Under the Elder Abuse Act, an “elder” is “any person residing in this state, 65 years of age or older.” (§ 15610.27.) As relevant here, elder abuse includes “[p]hysical abuse, neglect, abandonment, isolation, abduction, or other treatment [of an elder] with resulting physical harm or pain or mental suffering.” (§ 15610.07, subd. (a)(1).2) “Mental suffering” is defined as “fear, agitation, confusion, severe depression, or other forms of serious emotional distress that is brought about by forms of intimidating behavior, threats, harassment, or by deceptive acts performed or false or misleading statements made with malicious intent to agitate, confuse, frighten, or cause severe depression or serious emotional distress of the elder or dependent adult.” (§ 15610.53.)” Darrin v. Miller (2019) 32 Cal.App.5th 450, 453–54(finding that no special relationship is required between an elder and the abuser so long as the elements above were met).

Pleading a claim for elder abuse requires specific facts of intentional or, at a minimum, reckless conduct. See Worsham v. O’Connor Hospital (2014) 226 Cal.App.4th 331, 338. To state the statutory cause of action for Financial Elder Abuse, Plaintiff must plead specific facts. See Covenant Care v. Superior Court (2004) 32 Cal.4th 771, 790. “[A] bank may be liable as an aider and abettor of a tort if the bank, in providing ordinary services, actually knew those transactions were assisting the customer in committing a specific tort. We thus conclude that when, as here, a bank provides ordinary services that effectuate financial abuse by a third party, the bank may be found to have “assisted” the financial abuse only if it knew of the third party's wrongful conduct.” Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 745 (internal citations and quotations omitted).

However, the Court notes that Das’ statement regarding the requirement of a bank to have actual knowledge is contradicted by specific language set forth in Welf. & Inst. Code, § 15610.30(b). “A person or entity shall be deemed to have taken, secreted, appropriated, obtained, or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or entity knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.” Id.

Here, Plaintiff has alleged specific facts contending that demurring Defendant knew or should have known that they were assisting Rogers in committing financial elder abuse. Plaintiff alleges the following: “Plaintiff is informed and believes and thereon alleges that Defendants knew (based on Hankey Capital’s file) that the loan proceeds were going to be being used by Susan’s son and his friend/business partner for a highly speculative, completely inappropriate, illiquid business venture in West Virginia.” (Complaint, ¶ 7). Then, Plaintiff alleges that Rogers and demurring Defendant acted in concert to put Plaintiff’s conservatee into a massive loan for the sole purpose that the funds could be diverted for Rogers’ own speculative hemp operation. Plaintiff alleges that Defendant knew that conservatee could not afford the loan and knew that this would be harmful to conservatee. (Complaint, ¶¶ 8-13).

Here, Plaintiff has stated the requisite specific facts to state a cause of action. Plaintiff seeks enhanced remedies under the Elder Abuse Act which requires Plaintiff to plead the requisite specific acts to meet the requirements of Civ. Code § 3294 as required by Wel. & Inst. Code § 15657.5. Here, Plaintiffs have alleged specific facts stating that Defendants acted with malice – the conscious disregard for the rights of Plaintiffs.

Defendant argues that it merely extended a loan to Plaintiff’s conservatee directly at her request, held security, collected interest, and expected repayment – just like any lender/borrower transaction. Defendant argues that this conduct cannot amount to financial elder abuse. However, with a demurrer, the Court must only evaluate the facts as pled by Plaintiff. Here, Plaintiff has specifically alleged that Defendant entered into this transaction with conservatee knowing that the funds would be used illegally. Plaintiff alleged that Defendant had full knowledge that the proceeds of the loan would not go to conservatee, and that ultimately, conservatee, based on the financial statements, could not repay the loan. Plaintiff has alleged that demurring Defendant acted in concert with Rogers in pursuing this financial elder abuse and caused harm to conservatee. Defendant will have the opportunity to assert and maintain its defenses. However, as noted above, with a demurrer the Court must presume the allegations as true.

For the foregoing reasons, the demurrer based on uncertainty and failure to state sufficient facts is overruled.