Judge: Joseph Lipner, Case: 25STCV07651, Date: 2025-05-29 Tentative Ruling

Case Number: 25STCV07651    Hearing Date: May 29, 2025    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Plaintiff Sun Rye Lee moves for a preliminary injunction enjoining Defendants David Suk Kim and Lawrence Kim from engaging in nine (9) categories of conduct.

Defendant David Suk Kim, in his individual capacity and as Trustee of the David Suk Kim Trust dated October 26, 2005, demurs to Plaintiff’s complaint.

The Court SUSTAINS the demurrer as to the first cause of action with LEAVE TO AMEND.  The Court SUSTAINS the demurrer as to the third cause of action WITHOUT LEAVE TO AMEND, but with leave to substitute a legally appropriate claim regarding title.  The Court OVERRULES the demurrer to the second cause of action.  Plaintiff shall have 20 days to amend the complaint.

The Court is tentatively inclined to GRANT IN PART, as to Defendant David Suk Kim only,  Plaintiff’s motion for a preliminary injunction as set forth below.  The Court invites argument on the merits of this motion and also wishes to discuss whether Lawrence Kim has been served and, if not, whether a ruling on the preliminary injunction should await his service.

Background

            On March 18, 2025, Plaintiff Sun Rye Lee (“Plaintiff”) filed this action against defendant David Suk Kim aka Dae Suk Kim (“David” or “Defendant”), in his individual capacity and as Trustee of the David Suk Kim Trust dated October 26, 2005 (“the Kim Trust”). Plaintiff asserts claims for (1) breach of fiduciary duty, (2) an accounting, and (3) reformation of title pursuant to Family Code § 1100 et seq.

            On May 2, 2025, Plaintiff amended her complaint to name Doe 1 as Lawrence Kim (“Lawrence”). Plaintiff has not filed a proof of service as to Lawrence.

            (The Court uses the Kims’ first names for clarity, not out of familiarity or disrespect.)

            Plaintiff alleges she and Defendant have been married since July 2005 and remain so. (Compl., ¶ 7.) Prior to their marriage, Defendant owned three properties in Los Angeles: one on South Gramercy Place, one on West Venice Boulevard, and one on Los Adornos Way (“the Properties”). (Id., ¶ 8.) Prior to the marriage, all of Defendant’s properties were held in a “David Suk Kim 1994 Family Trust” (“the Family Trust”). (Id., ¶ 9.) Defendant created the Kim Trust and transferred title to the Properties from the Family Trust to the Kim Trust without Plaintiff’s knowledge, after their marriage. (Ibid.)

            Plaintiff also alleges Defendant encumbered one or more of the Properties with an equity line of credit during their marriage and “secretly purchased two (2) condominiums under the names of his son and daughter from his prior marriage.” (Id., ¶ 13.) Lawrence Kim, David’s co-defendant, is one of these children.

            Since the outset of the parties’ marriage, “Plaintiff has paid the mortgages, expenses for improvements, maintenance, repairs, property taxes, and insurances on all three [Properties], together with Defendant KIM,” both contributing their respective employment incomes toward these expenses. (Id., ¶ 10.)

            “During the entire time of their marriage and up until recently, whenever Plaintiff asked Defendant about any of the three (3) properties described in this Complaint, Defendant told and assured Plaintiff that Plaintiff owns the PROPERTIES together with Defendant as a co-owner.” (Id., ¶ 14.)

            On April 14, 2025, David demurred to Plaintiff’s complaint.

            On May 2, 2025, the same date of the fictitious name amendment first identifying Lawrence, Plaintiff filed this motion for a preliminary injunction.

            On May 14, 2025, Plaintiff filed her opposition to David’s demurrer.

            On May 19, 2025, Plaintiff filed a Notice of Non-Opposition to her motion for a preliminary injunction. On May 21, 2025, she filed a Supplemental Brief and Reply in support of her motion.

            On May 22, 2025, David filed an opposition to Plaintiff’s motion for an injunction, accompanied by a declaration from his counsel apologizing for the late filing explaining that he is experiencing a family crisis that interfered with his ability to timely respond.

David filed no reply in support of his demurrer.

Jurisdictional Matters

            As a threshold matter, the Court finds it has jurisdiction to decide Plaintiff’s claims. There is no dissolution action pending; no other department of the superior court has assumed jurisdiction. Actions between spouses are not per se confined to Family Court unless the Family Court has already assumed jurisdiction, and it does not do so automatically in an inter-spousal dispute over community property. (Cf. Askew v. Askew (1994) 22 Cal.App.4th 942, 961-962 [civil court lacks jurisdiction after family court assumes it]; Glade v. Glade (1995) 38 Cal.App.4th 1441, 1454-1455 [same]; In re Marriage of Schenck (1991) 228 Cal.App.3d 1474, 1482 [civil court properly declined jurisdiction where family court had retained it].) There does not appear to be any action already pending in any family court department. Thus, this Court has jurisdiction to decide the dispute.

            On another point: the Court does not have jurisdiction over defendant Lawrence Kim – or at least Plaintiff has not shown it does. Lawrence was named via fictitious name amendment on May 2, 2025. Plaintiff has not filed proof that he was individually served with the summons and complaint. He has not joined in any of David’s filings or filed any response to Plaintiff’s complaint, so he has yet to make an appearance. No order that the Court makes can apply to Lawrence, because Plaintiff has not established personal jurisdiction.

Demurrer

Legal Standard

Where pleadings are defective, a party may raise the defect by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A demurrer for sufficiency tests whether the complaint alleges facts sufficient to constitute a cause of action. (Cal. Code Civ. Proc. § 430.10; Young v. Gannon (2002) 97 Cal.App.4th 209, 220.)

When considering a demurrer, a court reads the allegations stated in the challenged pleading liberally and in context, and “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Put differently: for purposes of demurrer, the court treats all facts alleged – but only the facts alleged – in the complaint as true. (Picton v. Anderson Union High School District (1996) 50 Cal.App.4th 726, 732.) “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 v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Meeting and Conference

“Before filing a demurrer ... , 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.” (Code Civ. Proc., § 430.41(a).)

David’s counsel filed no declaration establishing he met and conferred with Plaintiff’s counsel prior to filing his demurrer.  The Court admonishes counsel to meet and confer prior to filing a demurrer as required by section 430.41.

Nevertheless, for the sake of efficiency, the Court proceeds to the merits.

Discussion

David demurs to each cause of action in the complaint on separate grounds:

·        As to the first cause of action for breach of fiduciary duty, that Plaintiff has failed to allege the existence of a fiduciary duty concerning the properties at issue, a breach of such duty, or damages proximately caused by any breach (and, in the body of Defendant’s papers, that the claim is time-barred);

·        As to the second cause of action for an accounting, that Plaintiff has failed to allege a fiduciary relationship or complex financial obligation requiring the equitable remedy; and

·        As to the third cause of action, that Plaintiff fails to allege grounds for reformation such as mutual mistake or fraud in the execution of property titles.

First Cause of Action for Breach of Fiduciary Duty

1. Existence of Duty

First: Plaintiff alleges a fiduciary duty between the parties, including a duty regarding the Properties. During marriage, one spouse bears the other a fiduciary duty in dealings involving community property. (Fam. Code, § 1100(e).) Although the Complaint concedes Defendant owned the properties prior to the marriage, it also alleges Plaintiff contributed to mortgages on the Properties during the marriage. Where one spouse contributes to the mortgage on property that at the outset is separately owned, the contributing spouse earns an equity interest in the property. (See In re Marriage of Moore (1980) 28 Cal.3d 366, 371-372.)

In this regard, Defendant’s argument that “[no] fiduciary duty applies unless the property is transmuted” (Dem., 4:26-27) is simply incorrect. Defendant cites In re Marriage of Moore, supra, 28 Cal.3d, at pp. 371-372 for the proposition that “ ‘[t]he mere use of community funds to pay off a loan on separate property does not transmute the property[.]” (Dem., 5:3-4.) Defendant’s “mere use” quotation does not, in fact, appear in Marriage of Moore. The portion Defendant cites in fact reads:

“Where community funds are used to make payments on property purchased by one of the spouses before marriage ‘the rule developed through decisions in California gives to the community a pro tanto community property interest in such property in the ratio that the payments on the purchase price with community funds bear to the payments made with separate funds.’ [Citations.] . . . For example in Bare v. Bare, the Court of Appeal directed the trial court to determine the increase in equity in the house during marriage and the fair market value of it before and after the marriage, stating: ‘the community is entitled to a minimum interest in the property represented by the ratio of the community investment to the total separate and community investment in the property. In the event the fair market value has increased disproportionately to the increase in equity the wife is entitled to participate in that increment in a similar proportion.’ ”

(In re Marriage of Moore (1980) 28 Cal.3d 366, 371-372, italics added.)

Accepting the Complaint as true, the community accrued a pro tanto interest in the Properties when both parties contributed community property to the mortgage during their marriage.  Plaintiff pleads Defendant owed her a fiduciary duty in general and regarding the community’s interest in the Properties. Defendant’s other arguments regarding duty all rely on the premise that the community has no interest at all in the Properties. As discussed, this is incorrect.

2. Breach

Plaintiff also alleges Defendant has breached his duty to her in three respects: first, that he denies her interest in the Properties (as also evident from the arguments raised in his demurrer); second, that he has encumbered the Properties without her permission; and third, that Defendant has secretly purchased condominiums for his children during the parties’ marriage with community funds.

/ / /

3. Damages

Defendant’s alleged breaches have plainly caused damage, with Plaintiff’s allegations accepted as true. He has subjected community assets to debts and secreted away community assets without her permission. Both impose a financial cost to her without her permission in breach of Defendants’ duties.

            4. Statute of Limitations

However, the Court agrees with Defendant that, as pled, Plaintiff’s causes of action are time-barred. The statute of limitations for breach of a fiduciary duty is four years. (Code Civ. Proc., § 343.) The statute of limitations for breach of fiduciary duty in the course of marriage is three years. (Code Civ. Proc., ¶ 1101(d).) In either case, the most recently-dated events appearing in the Complaint occurred in 2010. In the face of such a delayed suit, Plaintiff must plead facts showing why she did not discover the alleged breach earlier. (See Fox v. Ethicon Endo-Surgery (2005) 35 Cal.4th 797, 808.) She alleges by conclusion that she “learned about the existence of the KIM TRUST and a series of transfers of the titles of the PROPERTIES recently within the last six (6) months.” (Compl., ¶ 12.) Plaintiff appears to invoke the “discovery rule” to toll the applicable statute – but that rule requires that a party not discover, and not have reason to discover, her claim in order to delay her time for filing. (See Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) Her allegations do not satisfy this standard.

Plaintiff’s opposition sets forth more detailed facts that demonstrating that tolling rules may apply; these allegations must appear on the face of the complaint to defeat the demurrer. Leave to amend will be granted.

The demurrer to the first cause of action is sustained with leave to amend.

Second Cause of Action for an Accounting

An action for an accounting has two elements: (1) ‘that a relationship exists between the plaintiff and defendant that requires an accounting’ and (2) ‘that some balance is due the plaintiff that can only be ascertained by an accounting.’ [Citations.]” (Sass v. Cohen (2020) 10 Cal.5th 861, 869.)

“An accounting is an equitable proceeding which is proper where there is an unliquidated and unascertained amount owing that cannot be determined without an examination of the debits and credits on the books to determine what is due and owing. [Citation.] … [T]he plaintiff must show the legal remedy is inadequate. Thus, where the books and records are so complicated that an action demanding a fixed sum is impracticable, an accounting is appropriate. [Citation.] If an ascertainable sum is owed, an action for an accounting is not proper. [Citation.]” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1136–1137, italics added.) The mere existence of a fiduciary relationship, such as a partnership, does not support an action for an accounting by itself. (See id. at p. 1137.) A plaintiff bringing an action for an accounting must show the “defendant caused losses and became liable in various sums of money, the true amounts of which cannot be ascertained and determined without an accounting. (Kritzer v. Lancaster (1950) 96 Cal.App.2d 1, 6–7, italics added.)

For reasons discussed above, Plaintiff has pled a fiduciary relationship sufficient to sustain an action for an accounting. The Court also finds the Complaint sufficient to show transactions complex enough that an accounting is required. Ascertaining the community (and therefore Plaintiff’s) alleged interest in the Properties, and possibly the two condominiums purchased with community funds, will require an examination of Plaintiff’s and Defendant’s respective earnings, their contributions toward the mortgages on the Properties over the course of years, and outflows from the community toward the allegedly wrongful purchase of the condominiums, as well as the value of each property and any appreciation. The matter is sufficiently complex to require equitable relief.

The demurrer to the second cause of action is overruled.

Third Cause of Action for Reformation of Title

            Plaintiff has not stated a claim for reformation of title.

            An action for reformation of a written contract (including a deed) is described in Civil Code section 3399:

“When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.”

(Italics added.)

            Plaintiff does not allege she was a party to any deed alleged in the complaint. She alleges the parties’ marital community held a pro tanto interest in the Properties, but not a right to title. She also alleges community funds may have been used to purchase property for third parties, but she also does not allege she was a party to any of those transactions.

            The Court sustains the demurrer to Plaintiff’s reformation claim without leave to amend, but without prejudice for her to attempt to allege a different theory of title in an amended complaint.

Preliminary Injunction

Legal Standard

            The purpose of a preliminary injunction is to preserve the status quo pending a decision on the merits.  (Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal. App. 4th 618, 623.)  In deciding whether to grant a preliminary injunction, the court looks to two factors, including “(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.”  (White v. Davis (2003) 30 Cal.4th 528, 553-54.)  The factors are interrelated, with a greater showing on one permitting a lesser showing on the other.  (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.)  However, the party seeking an injunction must demonstrate at least a reasonable probability of success on the merits.  (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73-74.)  The party seeking the injunction bears the burden of demonstrating both a likelihood of success on the merits and the occurrence of irreparable harm.  (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571.)  Irreparable harm may exist if the plaintiff can show an inadequate remedy at law.  (CCP § 526(a).)

“The granting or denying of a preliminary injunction does not constitute an adjudication of the ultimate rights in controversy.”  (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286; see also Yee v. American National Ins. Co. (2015) 235 Cal.App.4th 453, 457-458 [“a preliminary injunction is not a determination on the merits….”].) 

Jurisdiction and Propriety of an Injunction

            Propriety of Injunction in the Wake of Demurrer           

Even where an amended complaint is pending, the Court may impose an injunction where a nominally-inoperative pleading states grounds for injunctive relief. (See Handyspot Co. of Northern Cal. v. Buegeleisen (1954) 128 Cal.App.2d 191, 193-195 [injunction permitted despite successful demurrer to relevant cause of action, where underlying contract otherwise demonstrated ground for relief and injunction was unopposed].)

Such is the case here. Although the Court has sustained the demurrer to Plaintiff’s first cause of action, it has overruled the demurrer to her second for an accounting. “An injunction against disposing of property is proper if disposal would render the final judgment ineffectual. [Citation.] Thus, . . . a preliminary injunction [may be] granted to restrain the disposal of property pending the result of an accounting. (Heckmann v. Ahmanson (1985) 168 Cal.App.3d 119, 136.)

The Court may issue a preliminary injunction despite its ruling partly sustaining Defendant’s demurrer.

Discussion

Likelihood of Prevailing on the Merits

Plaintiff has shown a likelihood of prevailing on the merits, in the sense that she has shown she may have some interest in the property at issue once an accounting is complete. Her declaration demonstrates a likelihood that she and Defendant were married at relevant times. (Lee Decl., ¶5 and Exhs A-B.) She also demonstrates that community property, including her income earned during marriage, was used to pay toward mortgages on the Properties. (Id., ¶ 7 and Exh. D.) And she attests, uncontradicted, that Defendant encumbered the Properties without her consent and used the proceeds of the loans to purchase properties for his children. (Id., ¶ 9.) She may have a claim to at least a pro tanto interest in the Properties and the rental income they generate.

Defendant has submitted no evidence in opposition to Plaintiff’s motion. His entire argument relies on points of law that have already been rejected in the Court’s ruling on his demurrer.

Plaintiff has demonstrated a likelihood that she will prevail, in the sense that she will obtain an accounting that determines she has a right to some of the assets that are titled in Defendant’s name. (She has made no such showing regarding properties held in the name of David’s children.)

Balance of Hardships

Plaintiff also demonstrates the balance of hardships tilts heavily in her favor. She attests – again, uncontradicted by any evidence from Defendant – that she is 70 years old and relies on rental income from the Properties to support herself. (Lee Decl., ¶ 36.) She also risks losing access to bank accounts and life insurance policies that contain, or have been contributed to with, community funds. (Id., ¶¶ 28-32, 37-38 and Exhs. I-J.)

Having submitted no evidence in support of his opposition, Defendant shows no hardship. Although his moving papers suggest the injunction would impose a financially-disastrous inconvenience, he has not provided support for his argument.

As to the Properties belonging to Defendant, Plaintiff has demonstrated the balance of hardships tilts in her favor.

Undertaking

A preliminary injunction ordinarily cannot take effect unless and until the plaintiff provides an undertaking for damages which the enjoined defendant may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled to the injunction.  (See CCP § 529(a); City of South San Francisco v. Cypress Lawn Cemetery Ass’n. (1992) 11 Cal. App. 4th 916, 920; see Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 15-16 [“the prevailing defendant may recover that portion of his attorney's fees attributable to defending against those causes of action on which the issuance of the preliminary injunction had been based”].)  

Subject to oral argument, the court concludes that an undertaking of $10,000 is sufficient to protect Defendant’s interests if the court ultimately decides that the Plaintiff was not entitled to the injunction. 

Conclusion

            The Court grants the preliminary injunction in part, as follows:

            Defendant David Suk Kim aka Dae Suk Kim, in his individual capacity and as Trustee, is enjoined from:

1. Selling, Offering to Sell, or Encumbering Any and All Real and/or Personal Properties of David Kim or the Trust, without Written Consent of Plaintiff;

2. Changing Beneficiary(ies) or Recipient(s) of Any and All Insurance Proceeds or Social Security Benefits owed to David Kim, without Written Consent of Plaintiff;

3. Withdrawing From or Closing Bank Accounts, Security Account(s), Investment Account(s), Insurance Account(s), or Any Financial Account(s) in the names of David Kim or the Trust, without Written Consent of Plaintiff;

4. Interfering with Plaintiff’s Collection of Rents on Gramercy Apartment and Venice Property and with Depositing Rents into Plaintiff’s Bank Account(s); and

5. Interfering with Performance under Existing Agreement with Residential Manager of Gramercy Apartment, Any and All Lease or Rental Agreements with Tenants, and/or Various Agreements Executed by KIM, TRUST, or Plaintiff.

            Plaintiff is ordered to file a Proposed Order reflecting the instant ruling, along with proof of payment of her undertaking to the Clerk of Court, within 10 days.