Judge: George F. Bird, Jr., Case: 21CMCV00125, Date: 2023-02-02 Tentative Ruling

“INSTRUCTIONS:
If the parties wish to submit on the tentative ruling and avoid a court
appearance on the matter, the moving party must:

1. Contact the opposing party and all other
parties who have appeared in the action and confirm that each will submit on the
tentative ruling.

2. No later than 4:00 p.m. on the court day
before the hearing, call the Courtroom (310-761-4302) advising that all parties
will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all
parties entitled to receive service.

If this procedure is followed, when the case is
called the Court will enter its ruling on the motion in accordance with its
tentative ruling. If any party declines to submit on the tentative ruling, then
no telephone call is necessary, and all parties should appear at the hearing.
If there is neither a telephone call nor an appearance, then the matter may
either be taken off calendar or ruled on. 

Case Number: 21CMCV00125    Hearing Date: February 2, 2023    Dept: B

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – SOUTH CENTRAL DISTRICT

I.       BACKGROUND

            Ana Campos (“Plaintiff”) filed the Complaint in this action on May 25, 2022, alleging Abel M. Palucho (“Defendant”) agreed to hold legal title to a property located at 10981 Anzac Avenue, Los Angeles, California 90059 (the “Property”) in a trust for the benefit of Guillermo Martinez Palucho (“Guillermo”), Plaintiff’s husband, and Plaintiff. (Complaint (“Compl.”),  ¶¶ 9, 11.)  

The Property was originally purchased by Guillermo on or around October 28, 2010, by obtaining a loan for $148,000.00 and providing $2,000.00 of Guillermo’s personal funds. (Compl., ¶ 3.) In 2013, Defendant began living at the Property with Plaintiff and Guillermo. (Compl., ¶ 5.) On April 20, 2013, Guillermo subsequently executed a gift deed granting the Property to Guillermo Martinez Palucho and Abel M. Palucho as joint tenants, which was recorded in the Los Angeles County Recorder’s Office. (Compl., ¶ 5; Compl., Exhibit 1.)

Plaintiff alleges that in 2017, Guillermo and Defendant orally agreed Guillermo would purchase Defendant’s interest in the Property. (Compl., ¶ 6.) Plaintiff alleges the agreement terms included Defendant moving out of the Property, Guillermo seeking a refinance of the Property, and Guillermo using approximately $60,000.00 of the proceeds of the refinance to purchase Defendant’s interest. (Ibid.) Plaintiff alleges that Guillermo and Defendant also agreed to leave Defendant on the title “for the sole purpose of qualifying for the maximum possible loan amount on a refinance.” (Compl., ¶ 7.)

Defendant allegedly complied with the terms of the oral agreement by moving out. (Compl., ¶ 8.) Guillermo allegedly complied with the terms of the agreement by opening an escrow for a new loan and refinancing the Property. (Ibid.) On March 14, 2017, Defendant allegedly received $59,011.18 from the refinance and the check was assigned to Defendant, in accordance with their alleged agreement, to purchase Defendant’s interest in the Property. (Ibid.; Compl. Exhibit 2.)

Plaintiff alleges that title and possession of the Property were severed when Defendant received the check for $59,011.18, transferring his equitable interest to Guillermo. (Compl., ¶ 9.) Plaintiff alleges the joint tenancy of Defendant and Guillermo was severed on the day Defendant received the check because at that moment title and possession of the Property were not unified. (Ibid.) Plaintiff further alleges that upon accepting the check, Defendant “promised Guillermo that he would hold the Property in trust for the benefit of Guillermo and Plaintiff jointly.” (Compl., ¶ 11.)

Plaintiff states that Guillermo’s equitable interest was jointly held by Guillermo and Plaintiff because they were married, lived in the Property together, and contributed to the mortgage and upkeep costs of the Property. (Compl., ¶ 10) Upon Guillermo dying in 2021, Plaintiff alleges that the equitable interest held by Guillermo was willed to her as the sole beneficial owner. (Compl., ¶ 11.)  Plaintiff alleges Defendant has repudiated his promise to hold legal title in trust to benefit Ana. (Compl., ¶ 13.) Defendant has allegedly requested $100,000 to deed the Property to Ana. (Ibid.) Plaintiff alleges that Defendant intends to sell the property and retain all proceeds for his own use. (Compl., ¶ 14.)

Plaintiff now brings causes of action for (1) resulting trust, (2) constructive trust, (3) promissory estoppel, and (4) breach of fiduciary duty.

II.       DEMURRER

A.    Defendant filed a demurrer on September 12, 2022.

            Defendant failed to properly serve Plaintiff the demurrer, so the Court moved off calendar the demurrer filed on September 12, 2022.

B.     Defendant filed this Demurrer on January 3, 2023.

Defendant requests the court sustain a demurrer to all causes of action under Code of Civil Procedure section 420.10, subdivision (e), for failure to plead facts sufficient to sustain a cause of action. Defendant argues there cannot be a recognizable trust in this matter because California Probate Code section 15206 only recognizes trust for real property if they are in writing or by operation of law. (Demurrer p. 6:13-19.) Defendant further argues if there is no trust between the parties, there is also no fiduciary duty imposed on Defendant. (Demurrer p. 3:24-28.)

Defendant argues that a constructive trust is not applicable to this situation because the failure to perform a promise does not create the basis for a constructive trust. (Demurrer p. 7:6-8.) Defendant states that a resulting trust is not a proper remedy here because Plaintiff did not allege a recognizable interest in the Property, that Defendant wrongfully acquired the Property, or that Plaintiff has meaningfully contributed to the Property. (Demurrer p. 7:17-23.)

Defendant argues that Plaintiff does not have proper standing to bring a promissory estoppel claim because Plaintiff was not a party to any dealings with the Property and Plaintiff is attempting to step into the shoes of Guillermo. (Demurrer p. 8:6-9.)

C. Opposition filed January 24, 2023.

            Under Code of Civil Procedure section 1005, subdivision (b), “All papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days … before the hearing.” This Opposition is untimely as it was filed seven court days before the hearing scheduled for February 2, 2023. Because this Court has discretion to consider late filings, the court will excuse the filing deadline and consider this motion on the merits. (Cal. Rules of Court rule 3.1300, subd. (d).)

            In the Opposition, Plaintiff stresses that several of Defendant’s arguments are opposing factual contentions which are not considered when analyzing a demurrer. Plaintiff argues that the Court must accept the factual allegation that Plaintiff will inherit the property from Guillermo as true and that evidence to support this contention is not necessary to survive a demurrer. Plaintiff presents the factual allegations which allegedly support the causes of action for a resulting trust, constructive trust, promissory estoppel, and breach of fiduciary duty. 

III.       LEGAL STANDARDS

            A demurrer tests the legal sufficiency of the factual allegations in the complaint. (K.G. v. S.B. (2020) 46 Cal.App.5th 625, 630.) “The purpose of a demurrer is to test whether, as a matter of law, the properly pleaded facts in the complaint state a cause of action under any legal theory.” (Olson v. Hornbrook Community Services Dist. (2019) 33 Cal.App.5th 502, 516.) In ruling on a demurrer, the court must “liberally construe[]” the allegations of the complaint in favor of plaintiff. (Code Civ. Proc., § 452; See Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)  

            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; McBride v. Smith (2018) 18 Cal.App.5th 1160, 1173.) “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law.” (Savea v. YRC Inc. (2019) 34 Cal.App.5th 173, 178; See also Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) For a statutory violation, “facts in support of each of the requirements of a statute” must be “specifically pled,” and simply “parroting the language” of a statute is insufficient to survive a demurrer. (Hawkins v. TACA Internat. Airlines, S.A. (2014) 223 Cal.App.4th 466, 477-478.) 

            Because a demurrer tests the legal sufficiency of a pleading, the plaintiff must show that the pleading alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) 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.) Where the pleading fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (Code Civ. Proc., § 430.10, subd. (e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.) 

VI.       REQUESTS FOR JUDICIAL NOTICE

Defendant requests the Court take judicial notice of four documents: (1) Grant Deed filed with the Los Angeles County Recorder’s Office as Document Number 20101546421; (2) Grant Deed filed with the Los Angeles County Recorder’s Office as Document Number 20140716911; (3) Deed of Trust dated March 8, 2017 filed with the Los Angeles County Recorder’s Office as Document Number 20170388791; (4) Affidavit – Death of Joint Tenant filed with the Los Angeles County Recorder’s Office as Document Number 20210969130.

   Under Evidence Code section 452, subdivision (b), the Court takes judicial notice of all four documents. Note that the Court takes judicial notice of the existence of these documents and that they were filed with the Los Angeles County Recorder’s Office. The Court declines to take judicial notice of the content of the documents as the contents are reasonably subject to dispute.

Plaintiff requests the Court take judicial notice of one document, the Minute Order – Abel M. Palucho vs. Ana Campos; LASC Case No. 22CMUD00132. Under Evidence Code section 452, subdivision (c), the Court takes judicial notice of this minute order.

VII.    DISCUSSION

A.    Meet and Confer

Code of Civil Procedure section 430.41, subdivision (a)(1), states that before a party files a demurrer, they must “meet and confer in person or by telephone” in which “the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies.” Defendant’s counsel provided a declaration stating that counsel had “transmitted a letter via email” to Plaintiff's counsel on two occasions in an effort to meet and confer. (Decl. of Marinaccio, ¶¶ 2, 3.) Such meet and confer efforts clearly fail the ‘in person or by telephone’ standard.

Additionally, upon review of the alleged meet and confer letter, Defendant cites the statute of frauds, California Family Code § 770, and Code of Civ. Proc., § 430.10, subd. (b) as legal support for the impending demurrer, but Defendant does not cite these authorities in their demurrer. Defendant instead relies on Code of Civ. Proc., § 430.10, subd. (e), California Probate Code § 15206, and Civil Code sections 2223 and 2224. Defendant did not “identify with legal support the basis of the deficiencies” which were relevant to the demurrer they filed. (Code Civ. Proc., § 430.41, subd. (a)(1).) The presented meet and confer efforts fail both in form and in content.

Because Plaintiff has submitted an opposition, the Court will continue to consider the motion on the merits though the meet and confer requirement was not properly complied with.

B.     Resulting Trust

            Pursuant to California Probate Code section 15206, a trust in relation to real property is not valid unless evidenced by one of the following methods: (a) By written instrument signed by the trustee, or by the trustee’s agent if authorized in writing to do so; (b) By a written instrument conveying the trust property signed by the settlor, or by the settlor’s agent if authorized by the settlor to do so; (c) By operation of law. Here, Plaintiff only alleges an oral agreement so a trust may only be created by an operation of law.

            “A resulting trust arises when the legal estate is transferred under such circumstances that the intent appears, or is inferred, that the beneficial interest should not be enjoyed with the legal title. [Citations.] Such a trust is implied by law to carry out the intention of the parties; it is implied from the facts, and neither written evidence of agreement nor fraud on the part of the trustee is an essential element.” (Internal quotations omitted.) (Laing v. Laubach (1965) 233 Cal.App.2d 511, 515 [43 Cal.Rptr. 537].) “A resulting trust does not arise from any oral agreement between the parties, but only as a result of the advancement of at least part of the consideration by the one claiming to be the beneficiary.” (Laing v. Laubach, supra, 233 Cal.App.2d at p. 516.)

            Here, Plaintiff alleges that Defendant moved out of the Property and “On March 14, 2017, GUILLERMO completed the refinance of the Property with cash proceeds amounting to $59,011.18 (the “Purchase Money”) paid in a check which was assigned to ABEL. Pursuant to their agreement, this check was the full amount for GUILLERMO to purchase ABEL’s interest in the Property.” (Compl., ¶ 8.) Additionally, Plaintiff alleges that “Both GUILLERMO and ANA contributed to the mortgage, property taxes and the upkeep of the Property. When GUILLERMO passed away, ANA continued to make pay for all expenses on the Property.” (Compl., ¶ 10.) Contributions may be considered consideration for the transfer and the circumstances alleged may be sufficient to imply a resulting trust as an operation of law.

            The Demurrer is OVERRULED on the theory of a resulting trust.

C.     Constructive Trust

            “A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.” (Internal quotations omitted.) (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1069 [80 Cal.Rptr.2d 704, 708].) A constructive trust requires a showing of three elements: (1) the existence of an interest in property, (2) the right of the complaining party to that property, and (3) some wrongful acquisition or detention of the property who is not entitled to it.

            Here, Plaintiff properly pleads an interest in the Property owned by Plaintiff and held in trust by Defendant. The Complaint states, “… ANA has an equitable title to 100% of the Property, which she holds as a widow after GUILLERMO’s passing. ABEL holds the legal title to the Property in trust for Plaintiff.” (Compl., ¶ 12.) Plaintiff also clearly pleads that Defendant is wrongfully detaining the Property by stating, “Since the time GUILLERMO passed away, ABEL has repudiated his promise to hold title to the Property in trust for the benefit of ANA, demanding that ANA pay ABEL additional funds of $100,000 for ANA to retain her equitable title to the Property and for ABEL to deed the Property to ANA.” (Compl., ¶ 13.)

            Though Defendant disagrees that Plaintiff is the rightful inheritor of the Property at issue, a demurrer assumes the truth of the allegations and only ensures that a plaintiff has pled facts sufficient to support some legal theory of recovery. (See Olson v. Hornbrook Community Services Dist. (2019) 33 Cal.App.5th 502, 516.) Plaintiff has properly pled the legal theory of a constructive trust.

            The Demurrer is OVERRULED on a theory of a constructive trust.

D.    Promissory Estoppel

            The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 901 [28 Cal.Rptr.3d 894, 905].) Defendant argues that Plaintiff fails to allege any promise made between Plaintiff and Defendant.

            The Court finds that Plaintiff does plead a promise between Plaintiff and Defendant where Plaintiff alleges “Defendant made a clear and unambiguous promise that if he were to receive the Purchase Money for his interest in the Property then Defendant would hold title to the Property for the benefit of Plaintiff and Decedent.” (Compl., ¶ 30.) Plaintiff satisfies the additional allegations necessary for a cause of action for promissory estoppel by alleging, “In reliance on Defendant’s promise, Decedent paid the Purchase Money funds to Defendant and both Plaintiff and Decedent have paid the mortgage, taxes and entire expenses for the Property since March 2017. Plaintiff continued to pay for all expenses for the Property after Decedent’s passing under the belief that she was now the sole beneficial owner of the Property. Plaintiff’s reliance was reasonable and foreseeable based on Plaintiff and Decedent putting trust and confidence in Defendant who was Decedent’s brother. As a direct and proximate result of Plaintiff’s reliance on Defendant’s promise, Plaintiff is now at risk of losing all value and the increased equity of the Property, which is held by Defendant.” (Compl., ¶¶ 31, 32, 33.)

            The Demurrer is OVERRULED on the promissory estoppel cause of action.

E.     Breach of Fiduciary Duty

            The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach. (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1534 [49 Cal.Rptr.3d 60, 72], as modified on denial of reh'g (Oct. 12, 2006).) Defendant argues Plaintiff has failed to plead a valid trust and as a result the breach of fiduciary duty cause of action cannot be maintained.

            As analyzed above, Plaintiff has properly pled facts to support a finding of a constructive trust and/or a resulting trust. Plaintiff directly alleges that, “Since the time ABEL accepted the Purchase Money, ABEL promised to GUILLERMO that he would hold the Property in trust for the benefit of GUILLERMO and ANA jointly.” (Compl., ¶ 11.) Plaintiff properly alleges a claim for breach of fiduciary duty by stating, “Defendant is a fiduciary of the Plaintiff by virtue of Defendant’s promise made to Plaintiff’s husband, Decedent, as the testator to hold the Property in trust for Plaintiff. Defendant has breached his fiduciary duty by repudiating his promise to hold the Property in trust for the Plaintiff and is threatening to withhold and keep Plaintiff’s equitable title to the Property unless Plaintiff agrees to pay Defendants a large sum of money. As result of Defendant’s breach of fiduciary duty, Plaintiff is threatened with the imminent loss of her equitable title to the Property.” (Compl., ¶¶ 37, 38, 39.)

            The Demurrer is OVERRULED on the cause of action for breach of fiduciary duty.

IV.       CONCLUSION

            The Demurrer is OVERRULED in its entirety.

Dated: February 2, 2023                                             ___________________________________

Judge of the Superior Court