Judge: H. Jay Ford, III, Case: 22SMCV00124, Date: 2023-01-24 Tentative Ruling

Case Number: 22SMCV00124    Hearing Date: January 24, 2023    Dept: O

  Case Name:  2400 Willow Lane Associates Limited Partnership, et al. v. Kozak, et al.

SUBJECT:                (1) DEMURRER TO FAC

                                    (2) MOTION TO STRIKE

MOVING PARTY:  Defendant Amber Lease

RESP. PARTY:        Plaintiffs 2400 Willow Lane Associates Limited Partnership and West Hollywood Property Limited Partnership

TENTATIVE RULING

            Defendant Amber Lease’s Demurrer is OVERRULED and Motion to Strike is DENIED.  Lease to answer in 20 days. 

I. Demurrer to 8^th cause of action for civil theft (Penal Code §496(c))—OVERRULE

            “Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney's fees.”  Penal C. §496(c). 

            “Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170.”

            The three essential elements of the offense under P.C. 496(a) are: (a) property obtained by theft or extortion; (b) receiving, concealing, selling, or withholding the property; and (c) knowledge of theft or extortion.  See 2 Witkin, Cal. Crim. Law (4^th ed. 2022), Crimes—Property, §72.  “Under California's broad statute [Penal Code §496(a)] it is not necessary to show knowledge at the time of receipt; it is sufficient that the defendant conceals or withholds the property after acquiring the knowledge.”  Id. at §81. 

            Defendant Lease argues Plaintiff fails to allege that she knew the property was stolen when she received it.  Knowledge that the property was stolen when received is not an essential element of Penal Code §496(a) violation.  Id.  Penal Code §496(a) criminalizes withholding stolen property from its rightful owner, knowing the property was stolen. 

            Lease is allegedly withholding the stolen funds from Plaintiff after clearly being notified that the property was stolen.  See FAC, ¶63.  Lease allegedly refuses to return the stolen property, despite Plaintiff’s demand.  Id. at ¶64.  Plaintiff therefore sufficiently alleges a violation of Penal Code §496(a) in support of a civil action for treble damages under Penal Code §496(c). 

II.  Demurrer to the 9^th cause of action for constructive trust—OVERRULE

            Civil Code §2223 provides, “One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.”  Civ. Code §2223.  Civil Code §2224 provides, “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.”  Civ. Code, § 2224. 

            “A constructive trust is not a true trust but an equitable remedy available to a plaintiff seeking the recovery of specific property in a number of widely differing situations. The cause of action is not based on the establishment of a trust, but consists of the fraud, breach of fiduciary duty, or other act that entitles the plaintiff to some relief. That relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer the property to the plaintiff.”  5 Witkin, Cal. Proc. (6^th ed. 2022) Plead §836. 

            Lease argues constructive trust is not a recognized cause of action but a remedy.  Lease is correct.  However, Plaintiff has alleged a cause of action for theft and withholding stolen property under Penal Code §496(a), conversion and money had and received against Lease.  These causes of action support a request for constructive trust.  Plaintiff inclusion of the remedy as a cause of action is an error in form that is not prejudicial.  Sustaining the demurrer on this ground would only require the Court to grant Plaintiff leave to plead constructive trust as a remedy.  Lease’s demurrer is therefore OVERRULED. 

III. 13^th cause of action for accounting—OVERRULE

            An action for an accounting may be brought where (1) a fiduciary relationship exists between the parties or (2) the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable. See 5 Witkin, Cal. Proc. (5th ed. 2008) Plead, § 820, p. 236.

To state a cause of action, only the simplest pleading is required:

            (1) The fiduciary relationship or circumstances appropriate to the remedy; and

            (2) A balance due from the defendant to the plaintiff that can only be ascertained by

an accounting. Id., at §820.

            Plaintiff alleges that Lease is holding an unknown amount of stolen property belonging to Plaintiff.  See Complaint, ¶91.  Plaintiff alleges the amount she is holding cannot be ascertained without an accounting.  Id. at ¶92.  These allegations are sufficient to state a claim for accounting. 

IV.  Motion to Strike—DENY

            Defendant Lease’s motion to strike the treble damages claim under Penal Code §496(c) is denied.  Plaintiff sufficiently alleges a violation of Penal Code §496(a) against Lease, which entitles Plaintiff to recover treble damages in a civil action under Penal Code §496(c). 

            Plaintiff has also alleged Lease’s knowing and intentional withholding of property stolen from Plaintiff by her boyfriend.  Plaintiff alleges Lease refuses to return any of the stolen property.  These facts sufficiently allege malice to support a claim for punitive damages under CC §3294. 

            The Court disagrees that ¶20(e) of the complaint contains judicial admissions of Lease’s innocence.  ¶20(e) does not allege that Lease is innocent or ignorant of the fact that the property in her possession is stolen.  Likewise, there is no allegation that Plaintiff is certain of the amount of stolen property in Lease’s possession.