Judge: Lynette Gridiron Winston, Case: 22PSCV01588, Date: 2023-09-26 Tentative Ruling

Case Number: 22PSCV01588    Hearing Date: September 26, 2023    Dept: 6

Case Name: Benjamin Chui v. Scott Warmuth, et al.

TENTATIVE RULING

The Court SUSTAINS the Demurrer to the First, Second and Third Causes of Action with leave to amend.

The Court DENIES the motion to strike as moot.

Plaintiff is ordered to file and serve an amended pleading and provide proof of service of same within ten calendar days of the Court’s order.

BACKGROUND

This is a professional negligence case. On October 31, 2022, Plaintiff Benjamin Chui (Plaintiff) filed this action against Defendants Scott Warmuth, a Professional Corporation dba Law Offices of Scott Warmuth, Scott Warmuth, Yesenia Acosta (collectively, Defendants), and Does 1 through 100, alleging one cause of action for professional negligence. Shortly After Defendants demurred to the original complaint, Plaintiff filed the operative First Amended Complaint (FAC) on May 22, 2023, against the same Defendants, alleging causes of action for professional negligence, breach of fiduciary duty, and fraud.

On June 16, 2023, Defendants filed a demurrer and motion to strike to the FAC. On June 26, 2023, Plaintiff opposed the demurrer. On June 27, 2023, Plaintiff opposed the motion to strike. On July 7, 2023, Defendants replied.

LEGAL STANDARD - Demurrer

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint). (Code Civ. Proc., § 422.10; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of ruling on the demurrer; all facts pleaded in the complaint are assumed to be true. (Donabedian, supra, 116 Cal.App.4th at p. 994.) 

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at p. 994.) No other extrinsic evidence can be considered. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862 [disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287] [error to consider contents of release not part of court record].) 

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.) The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint; or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”]) 

A demurrer can only be sustained when it disposes of an entire cause of action. (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.)

REQUEST FOR JUDICIAL NOTICE

The Court GRANTS Defendants’ requests for judicial notice. (Evid. Code § 452, subd. (d).) However, the Court takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)

DISCUSSION – Demurrer

Meet and Confer

Per Code of Civil Procedure section 430.41, subdivision (a), Defendants were required to meet and confer before bringing this demurrer. (Code Civ. Proc., § 430.41, subd. (a).) The Court finds Defendants’ efforts to meet and confer insufficient, as there is no evidence they met and conferred telephonically or in person. (Reback Decl., ¶ 2.) Nevertheless, the Court may not overrule the demurrer for failure to adequately meet and confer. (Code Civ. Proc., § 430.41, subd. (a)(4).) The Court admonishes Defendants to comply with these requirements going forward.

First Cause of Action – Professional Negligence

“To state a cause of action for professional negligence, a party must show ‘(1) the duty of the professional to use such skill, prudence and diligence as other members of the profession commonly possess and exercise; (2) breach of that duty; (3) a causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional negligence.’” (Giacometti v. Aulla, LLC (2010) 187 Cal.App.4th 1133, 1137) [internal citation omitted].

Defendants demur to the First Cause of Action for professional negligence on the grounds that it fails to state a claim and is uncertain. (Code Civ. Proc., § 430.10, subds. (e), (f).) More specifically, Defendants contend that: (1) it fails to allege sufficient facts; (2) it is barred by the statute of limitations; and (3) Defendants were not the proximate cause of Plaintiff’s alleged injuries. 

Plaintiff alleges sufficient facts to establish a duty and breach of that duty. Plaintiff has alleged retaining Defendants to provide legal services for Plaintiff in connection with two post-marital agreements (the PMAs), one from 2016 and the other from 2018, involving Plaintiff’s now deceased spouse (Sinora Chan). (FAC, ¶¶ 9-11.) Plaintiff alleges that Defendants breached their duty to Plaintiff by failing to properly advise him in connection with the PMAs, which led to him converting separate property assets into community property assets and then later transferring those assets to Sinora to become her separate property. (FAC, ¶ 10.) 

However, “[t]o show damages proximately caused by the breach, the plaintiff must allege facts establishing that, ‘but for the alleged malpractice, it is more likely than not the plaintiff would have obtained a more favorable result.’” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 179 quoting Viner v. Sweet (2003) 30 Cal.4th 1232, 1244.) Here, Plaintiff does not allege sufficient facts establishing that but for the alleged malpractice of Defendants, it is more likely than not he would have obtained a more favorable result. Thus, Plaintiff fails to allege sufficient facts to state a cause of action for professional negligence against Defendants. 

Defendants’ contentions that the FAC fails to state a cause of action or is uncertain due to Plaintiff’s failure to allege the dates of when Plaintiff signed the PMAs, how the PMAs were unconscionable or the product of undue influence, or the failure to allege the specific types of property at issue are unavailing. The facts alleged in the FAC are presumptively within Defendants’ knowledge or are ascertainable by invoking discovery procedures. (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822; see also Code Civ. Proc., § 452 [“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.”]) Further, these facts are not required to state a claim for professional negligence.

Second, “ ‘[a] demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar ... to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. [Citation.]’ [Citation.]’” (Comm. for Green Foothills v. Santa Clara Cnty. Bd. of Supervisors (2010) 48 Cal.4th 32, 42) [internal citations omitted].

The problem for Defendants here is that the FAC does not allege facts that clearly and affirmatively disclose on its face that Plaintiff’s professional negligence claim is time-barred under Code of Civil Procedure section 340.6, subdivision (a). While Defendants contend that the execution of the 2016 and 2018 PMAs triggers the commencement of the statute of limitations, the FAC alleges that Plaintiff did not suffer harm until he was disinherited on October 16, 2021 and that he did not discover the financial harm until November 4, 2021. Thus, the FAC alleges facts to support the tolling of the statute of limitations beyond the four-year maximum timeframe under Code of Civil Procedure section 340.6, subdivision (a). Plaintiff filed his complaint on October 31, 2022. For purposes of the demurrer, the FAC does not clearly disclose that the professional negligence claim is time-barred. (See Childs v. State of California (1983) 144 Cal.App.3d 155, 160-161.) 

For the reasons set forth herein, the Court SUSTAINS the demurrer to the First cause of action with leave to amend.

Second Cause of Action – Breach of Fiduciary Duty

To plead a cause of action for breach of fiduciary duty, the plaintiff must allege facts showing:  “(1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach.” (O'Neal v. Stanislaus Cnty. Employees' Ret. Assn. (2017) 8 Cal.App.5th 1184, 1215.)

Defendants contend Plaintiff failed to allege facts to state a cause of action for breach of fiduciary duty. More specifically, Defendants contend Plaintiff’s Second Cause of Action for breach of fiduciary duty is merely a repeat of Plaintiff’s professional negligence claim. Defendants further contend that Plaintiff’s allegations of ethical violations are not supported by the facts. The Court agrees.

As discussed above with the professional negligence claim, Plaintiff fails to allege sufficient facts showing that Defendants’ alleged breach of fiduciary duty caused Plaintiff’s alleged damages.

With respect to the alleged ethical violations and conflict of interest, Plaintiff alleges that Defendants and Sinora had a professional relationship based on work that Sinora purportedly had done for one or more of the Defendants. (FAC, ¶ 15.) However, these allegations are vague and conclusory, as Plaintiff does not allege the type of work Sinora purportedly did for Defendants and fails to allege any facts explaining how such work created a conflict of interest between Plaintiff and Defendants. The SAC fails to allege sufficient facts to establish any ethical or statutory violations of professional conduct to support the claim for breach of fiduciary duty.

Additionally, the allegations regarding the email exchanges between Defendants and Sinora further fail to state any facts that evidence a breach of fiduciary duty. At most, they only show Defendants having some brief communications with Sinora on the subject of the PMAs prior to Defendants accepting the representation of Plaintiff. (See FAC, ¶ 15.) They also do not show that Sinora was paying for Plaintiff’s legal fees in connection with the PMAs or otherwise directing Defendants how to handle the provision of such services to Plaintiff.

Accordingly, the Court SUSTAINS the demurrer to the Second cause of action with leave to amend.

Third Cause of Action – Fraud Based on Concealment

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] Thus the policy of liberal construction of the pleadings ... will not ordinarily be invoked to sustain a pleading defective in any material respect.’ ” [Citation.] [¶] This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Ct. (1996) 12 Cal.4th 631, 645) [internal citations and quotation marks omitted]. “The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.” (Hambrick v. Healthcare Partners Med. Grp., Inc. (2015) 238 Cal. App. 4th 124, 162 [internal citations and quotations omitted].)”

Defendants contend Plaintiff has failed to allege facts sufficient to support a cause of action for fraudulent concealment. The Court agrees. The FAC lacks the specificity necessary to support a claim for fraudulent concealment. The FAC fails to allege specific facts showing what material facts were concealed or suppressed and when such misconduct occurred. The Court also agrees with Defendants that the FAC fails to allege facts evidencing who concealed what. 

This cause of action is instead based on conclusory allegations that Defendants owed Plaintiff a duty to disclose their incompetence and lack of qualifications. (FAC, ¶ 22.) However, the FAC fails to allege facts showing that Defendants lacked competence or the qualifications necessary for the work they did, or that they were aware they were incompetent or lacked qualifications for it. Plaintiff also alleges that Defendants failed to disclose their conflicts of interest, but as noted above, the FAC fails to allege facts that demonstrate a conflict of interest between Plaintiff and Defendants. (FAC, ¶ 22.)

Therefore, the Court SUSTAINS the demurrer to the Third cause of action with leave to amend.

LEGAL STANDARD – Motion to Strike

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (b)(2).) “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Id., § 436.)

DISCUSSION – Motion to Strike

Meet and Confer

Per Code of Civil Procedure section 435.5, subdivision (a), Defendants were required to meet and confer telephonically or in person before bringing this motion to strike. (Code Civ. Proc., § 435.5, subd. (a).) The Court finds Defendants’ efforts to meet and confer insufficient, as there is no evidence they met and conferred telephonically or in person. (Reback Decl., ¶ 2.) Nevertheless, the Court may not deny the motion to strike for failure to adequately meet and confer. (Code Civ. Proc., § 435.5, subd. (a)(4).) The Court admonishes Defendants to comply with these requirements going forward.

Analysis

The basis for Plaintiff’s punitive damages and emotional distress damage claims were from the Second Cause of Action and Third Cause of Action, (FAC, ¶¶ 19-20, 24-25), to which the Court has sustained the demurrer with leave to amend. Thus, Plaintiff’s requests for punitive damages and emotional distress damages are moot and the motion will be denied accordingly.

Therefore, the Court DENIES Defendants’ motion to strike as moot.

CONCLUSION

The Court SUSTAINS the Demurrer to the First, Second and Third Causes of Action with leave to amend.

The Court DENIES the motion to strike as moot.

Plaintiff is ordered to file and serve an amended pleading and provide proof of service of same within ten calendar days of the Court’s order.