Judge: Margaret L. Oldendorf, Case: 23AHCV00658, Date: 2023-08-29 Tentative Ruling
Case Number: 23AHCV00658 Hearing Date: August 29, 2023 Dept: P
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
NORTHEAST DISTRICT
I. INTRODUCTION
Plaintiff Catherine V. Burnham and Defendant Jonathan L.
Blackley were involved in a long-term romantic relationship and had a child
together. Maximilian Blackley was born in 2002. This lawsuit stems from the
termination of their relationship.
Specifically, Burnham alleges that while they were a couple,
they purchased real property together. The property is located at 916 Palm in
South Pasadena (Palm Property). Burnham alleges it was purchased jointly but
that she learned in 2014 Blackley was the only one listed on the title. Attached
to the operative First Amended Complaint is a Separation Agreement containing
certain terms regarding the Palm Property Burnham alleges were breached. Burnham
also alleges claims concerning agreements for storage of her personal belongings
at a warehouse.
Blackley
demurs to the First Amended Complaint and moves to strike the requests for punitive
damages and attorney fees. For the reasons that follow, the demurrer to the third
cause of action for breach of the Separation Agreement is overruled. The demurrer to all other claims are sustained. As the
demurrer eliminates the fraud claims, the motion to strike punitive damages is
moot. The motion to strike the prayer for attorney fees is granted.
Burnham
is granted twenty (20) days leave to amend.
II. SUMMARY
OF FACTS ALLEGED
Blackley’s unopposed request for judicial notice of
three documents is granted. Judicial notice of the two grant deeds to the
property (Exhibit 1, from the prior owners to Blackley, a single man; Exhibit 2,
from Blackley to the Infrared Catastrophe Trust) is granted pursuant to Evid.
Code §452(c). Judicial notice of the birth record for Max is granted pursuant
to Evid. Code §452(h).
The following summary of the allegations of the Verified
First Amended Complaint incorporates the
evidence from these documents.
Palm Property Dispute
In 2002, Max was born to Burnham and Blackley, in
Seattle, Washington.
¶7 In May 2005, Burnham and Blackley jointly purchased the Palm Property.
¶9 At the time, they were in a loving, committed relationship.
¶10 It was the parties’ mutual understanding that the Palm Property
would be purchased jointly; both parties contributed funds towards the purchase. Throughout escrow the names of both parties
were on all documents and it was understood that title would be taken in both
their names; at some point during escrow and unbeknownst to Burnham, title was
placed Blackley’s name alone.
¶11 Since that time and at all times during the relationship, it was
understood, acknowledged, and represented to Burnham that she was a co-owner of
the Palm Property.
¶14 In or around 2007, Burnham and Blackley entered into the Van
Burnham/Seamus Blackley Separation and Custody Agreement dated November 24,
2007. This document is attached as Exhibit 1 to the First Amended Complaint.
¶16 Under the terms of the Agreement, Burnham and Blackley agreed that
the Palm Property would be held in trust for Max, and that a family trust would
be created to serve as title holder for the property. Burnham and Blackley both
agreed not to sell the Palm Property or to use it as collateral for any loans.
¶17 Under the Agreement, Burnham would continue to live at the Palm Property
and Blackley agreed to pay the mortgage, taxes, insurance, etc.
¶12 In 2014, Burnham and Blackley separated, and Burnham discovered for
the first time that the Palm Property was in Blackley’s name alone.
¶18 In around October 2022, Blackley claimed full title to the Palm
Property and stated his intention to sell it. He offered to sell it to Burnham
even though she is a co-owner. Blackley requested that Burnham vacate the
property; and has refused to honor the Agreement to hold it in trust for Max.
¶19 In or about March 2023, Blackley posted a 30-day Notice To
Terminate and demanded that Burnham vacate the property.
Storage Fee Dispute
¶¶20-23 In about June 2018, the parties entered
into a written agreement in which Burnham agreed to relocate certain game items
out of a warehouse leased for the parties’ businesses, to grant Pacific Light
& Hologram (Blackley’s business) more space in the warehouse. In return,
Blackley agreed the game items would be moved to a storage facility in Banning
where Blackley would pay the storage fees. Blackley provided payments toward
the storage facility until July 2020. In 2020 the storage facility was being
sold and it became necessary to move the gaming items. At that time there was
an outstanding balance of $15,000. Burnham was forced to expend her own funds
to access and relocate the items. Burnham has made repeated demands for
reimbursement and for compliance with the storage agreement. In January 2023,
Blackley expressly refused to provide any such payments.
Office and Warehouse Dispute
¶¶24, 25 As part of the Storage Agreement, it was
further agreed that the warehouse leased for Burnham and Blackley’s businesses
would be kept in Blackley’s name and not transferred to Heat Engine LLC or its
associates. It was agreed that Burnham could continue utilizing her portion of
the space. Despite oral and written agreements, Blackley did not keep the lease
in his name and transferred it to other entities.
The causes of action alleged in the First Amended Complaint
are:
1. Quiet Title
2. Fraud
3. Breach of Contract
4. Promissory Estoppel
5. Breach of Contract (v. all
defendants)
6. Breach of Contract, Oral
(v. all defendants).
III. DEMURRER
A. Legal Standard
Code
Civ. Proc. §430.10(e) provides for a demurrer on the basis that a complaint
fails to state a cause of action. A demurrer tests the legal sufficiency of a
complaint. Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.
Code Civ. Proc. §430.30, subdivision (a) provides, “When any
ground for objection to the complaint . . . appears from… matter of
which the court is required to or may take judicial notice, the objection on
that ground may be taken by a demurrer to the pleading.”
B. The Quiet Title and Fraud Causes of Action Are Time
Barred
The fundamental basis for Burnham’s quiet title cause of
action is that Blackley acquired sole title by fraud. FAC ¶¶ 10-13; 35-37; 42-45.
Consequently, both the quiet title claim, and the fraud claim are subject to
Code Civ. Proc. §338(d)’s three-year statute of limitations. Burnham alleges
she learned of the fraud in 2014. FAC ¶¶12, 38. As this action was filed more
than 3 years later, the quiet title and fraud causes of action are barred by
the statute of limitations.
Burnham argues that in 2014 she “had not learned all the
facts to bring a cause of action for fraud and reasonably relied on Defendant’s
continued concealment and assurances.” Opposition at 9:18-19. The argument that
Burnham lacked sufficient facts to sue earlier fails because “the limitations
period begins when the plaintiff suspects, or should suspect, that she has been
wronged.” Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1113. “Under
the discovery rule, the statute of limitations begins to run when the plaintiff
suspects or should suspect that her injury was caused by wrongdoing, that
someone has done something wrong to her. . . . A plaintiff need not be aware of
the specific ‘facts’ necessary to establish the claim; that is a process
contemplated by pretrial discovery. Once the plaintiff has a suspicion of
wrongdoing, and therefore an incentive to sue, she must decide whether to file
suit or sit on her rights. So long as a suspicion exists, it is clear that the
plaintiff must go find the facts; she cannot wait for the facts to find her.” Id.
at 1111.
As for Blackley’s alleged “concealment and assurances,” Burnham
makes two arguments. She relies on Alton v. Rogers (1954) 127 Cal.App.2d
667 in arguing the statute of limitations is tolled where a party reasonably
relies on a wrongdoer’s reassurances. Alton does not discuss tolling. The
case involves a plaintiff who was tricked by an attorney into lending money
with the promise of a good investment. In affirming the judgment in favor of
the plaintiff/client, the court of appeal rejected the defendant/attorney’s
argument that the fraud claim was time-barred. Alton explains that the
claim was not for fraud but an oral, voluntary, and continuing trust, and that
the attorney’s continuing reassurances amounted to a renewal of the original
promise. No similar facts are alleged here.
Burnham also relies on Sanchez v. South Hoover Hospital
(1976) 18 Cal.3d 93, for the proposition that a defendant’s fraudulent concealment
of a cause of action against him tolls the statute of limitations. Sanchez
discusses the statute of limitations for medical negligence. Code Civ. Proc.
§340.5 provides that medial negligence claims must be brought within three
years of injury or one year after the plaintiff discovers, or through the use
of reasonable diligence should have discovered, the injury, whichever occurs
first. Sanchez analyzes the legislative purpose behind the statute,
concluding the intent was to adopt the discovery rule into the statute. Sanchez
says this conclusion is reinforced by the principle in fraudulent concealment
that “the defendant’s fraud in concealing a cause of action against him tolls the
applicable statute of limitations, but only for that period during which the
claim is undiscovered by plaintiff or until such time as plaintiff, by the
exercise of reasonable diligence, should have discovered it.” Id. at 99.
It is unclear how the fraudulent concealment rule assists
Burnham in this case. Accepting as true the allegation that in 2014 she
discovered that the Palm Property was in Blackley’s name alone, there was
nothing left to conceal at that point. Even if Blackley had assured her the property was in both their
names, and/or that they were co-owners, as of 2014 she knew this was not the
case.
The 2007 Separation Agreement does not assist her as it
contains no written promise to place Burnham on title. It contains terms regarding
placing the property in a family trust, leaving the property to Max, and
allowing Burnham to live on the property while Blackley pays all expenses. Thus,
the allegation in ¶43 does not amount to delayed discovery of Blackley’s
alleged fraud concerning title.
Because Burnham alleges in the First Amended Complaint that
she learned of Blackley’s allegedly fraudulent conduct (e.g., taking title in Blackley’s
name alone) in 2014; and because the action was not filed until 2023, nine
years later, the claims for quiet title and fraud are time-barred. On that
basis, the demurrer to these causes of action are sustained.
The parties’ briefs also discuss the sufficiency of the
factual allegations. The Court therefore
includes a short discussion of that issue here:
To state a quiet title cause of action, a plaintiff must
file a verified complaint alleging the following: (a) a description of the
property; (b) the title of the plaintiff as to which a determination is sought;
(c) the adverse claims to the title against which a determination is sought;
(d) the date as of which the determination is sought; and (e) a prayer for the
determination of title. Code Civ. Proc. § 761.020. The FAC arguably alleges
these elements at ¶¶28-33. Burnham alleges she has a 50% interest in the
property as of May 2005 when she and Blackley purchased it. She also alleges
that she seeks a determination adverse to the title ownership by Blackley’s
trust as of 2005.
Blackley urges that Burnham lacks standing to sue for quiet
title since she does not have legal title.
He cites G.R. Holcome Estate Co. v. Burke (1935) 4 Cal.2d 289,
297 [“an action to quiet title will not lie in favor of the holder of an
equitable title as against the holder of a legal title”]. As Burnham notes, a
more recent case declined to follow G.R. Holcome. That case, Warren
v. Merrill (2006) 143 Cal. App. 4th 96, is based on facts
concerning breach of a fiduciary duty, a claim not present here. The remedy in Warren
involved the imposition of a constructive trust. While the facts here do not
involve a fiduciary relationship, there is at least some reason for doubting that
G.R. Holcome applies. Blackley is correct, however, about Burnham’s
burden of proof in this action. Evid. Code §662 sets forth the presumption that
the holder of legal title is the owner of full beneficial title; which may only
be rebutted by clear and convincing evidence. “Evidence Code section 662 has
application, by its express terms, when there is no dispute as to where legal
title resides but there is question as to where all or part of the beneficial
title should rest.” Murray v. Murray (1994) 26 Cal.App.4th 1062,
1067.
Fraud
is also insufficiently pled. Pleadings are to be broadly construed (Code Civ.
Proc. §452) and demurrers are to be overruled where the facts are sufficient to
state any cause of action. Quelimane Co. v. Stewart Title Guaranty Co.
(1998) 19 Cal.4th 26, 38. The policy of liberal construction does not apply to
fraud claims, however. Fraud actions are subject to “strict requirements of
particularity in pleading. . . .
Accordingly, the rule is everywhere followed that fraud must be specifically
pleaded. The effect of this rule is twofold: (a) General pleading of the legal
conclusion of ‘fraud’ is insufficient; the facts constituting the fraud must be
alleged. (b) Every element of the cause of action for fraud must be alleged in
the proper manner (i.e., factually and specifically), and the policy of liberal
construction of the pleadings ... will not ordinarily be invoked to sustain a
pleading defective in any material respect.” Committee on Children’s
Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216,
superseded by statute on other grounds. “This
particularity requirement necessitates pleading facts which ‘show how, when,
where, to whom, and by what means the representations were tendered.’” Stansfield
v. Starkey (1990) 220 Cal.App.3d 59, 73. The FAC does not meet the
heightened pleading standard for fraud.
C. Breach of the Separation Agreement Is Adequately Pled
“To prevail on a
cause of action for breach of contract, the plaintiff must prove (1) the
contract, (2) the plaintiff’s performance of the contract or excuse for
nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the
plaintiff.” Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.
The third cause of action of the First Amended Complaint
alleges breach of the Separation Agreement. The contract terms are adequately
alleged, and are set forth in full in the attachment to the First Amended
Complaint. Burnham alleges her performance at ¶54. She alleges that Blackley
breached several terms of the Agreement, including that the property would be
held in trust for their son and would not be sold (FAC ¶49); and that Burnham
could live at the property and Blackley would pay the expenses (FAC ¶50). She
alleges Blackley breached these terms by stating his intention to sell the
property and by failing to keep up with property expenses. FAC ¶¶ 51, 52. Burnham
alleges at ¶55 that she has suffered damages.
Examining
the second contract term first (i.e., Burnham’s right to live on the property),
the Court provides the following analysis:
Blackley urges that this cause of action is time-barred;
but Burnham filed her action within 3 years of the date she learned Blackley
intended to sell the property.
Blackley urges that the Agreement lacks consideration. That
may be a valid defense but it is not a pleading requirement. The case on which
Blackley relies (Borelli v. Brusseau (1993) 12 Cal.App.4th 647) concerns
an oral agreement. Consideration may be a pleading requirement for an oral
contract (Civ. Code §1550); but a written contract contains presumptive
evidence of consideration (Civ. Code §1614).
Blackley argues that the contract lacks essential terms
because the statute of frauds requires that any agreement for an interest in
real property in excess of one year must be in writing. The Separation Agreement is in
writing. Blackley argues that Burnham’s occupancy is terminable at any time,
citing tenancy law. These are arguments that may be made in defense of the
action, but they do not constitute a pleading defect. In a similar vein,
Blackley argues that a reasonable term for Burnham’s tenancy (Max’s minority)
should be implied. This is another potentially valid argument for a later stage
of the case, but it does not constitute a proper pleading challenge.
Finally, Blackley argues that no breach has been alleged. But
the allegation that Blackley announced his intention to sell the property is
sufficient to constitute an anticipatory breach.
Regarding the alleged contractual promise to leave the
property to Max, Blackley urges that this is an unenforceable promise to make a
gift; and further that such claim is time-barred to the extent it is a basis
for a promissory fraud claim. Assuming that these arguments have merit, the
demurrer must be overruled, because a demurrer may not be sustained to part of
a cause of action. Daniels v. Select Portfolio Servicing, Inc. (2016) 246
Cal.App.4th 1150, 1167 (disapproved on other grounds in Sheen v. Wells Fargo
Bank, N.A. (2022) 12 Cal.5th 905).
D. Promissory Estoppel Is Not Adequately Alleged
The 4th cause of action for promissory estoppel
is based on the same facts; and appears to be included as an alternative theory
to the claim for breach of contract.
“The elements of a cause of action for promissory estoppel
are (1) a promise, (2) the reasonable expectation by the promisor that the
promise will induce reliance or forbearance, (3) actual reliance or
forbearance, and (4) the avoidance of injustice by enforcing the promise. (Citation.)
A cause of action for estoppel is a claim in equity that substitutes reliance
on a promise for consideration ‘in the usual sense of something bargained for
and given in exchange.’ (Citation.) If actual consideration was given by the
promisee, promissory estoppel does not apply. (Citations.)
“Although a cause of action for promissory estoppel is
inconsistent with a cause of action for breach of contract based on the same
facts (see, e.g. Money Store Investment Corp. v. Southern Cal. Bank
(2002) 98 Cal.App.4th 722, 732, 120 Cal.Rptr.2d 58), ‘[w]hen a pleader is in
doubt about what actually occurred or what can be established by the evidence,
the modern practice allows that party to plead in the alternative and make
inconsistent allegations.’ (Citation.)” Fleet v. Bank of America, N.A.
(2014) 229 Cal.App.4th 1403, 1412-1413.
The defect in this cause of action is that the First
Amended Complaint lacks allegations regarding Burnham’s detrimental reliance. Agreeing
to live in the Palm Property while Blackley pays all of the expenses cannot be
considered conduct Burnham engaged in to her detriment.
E. The Demurrer to the 5th and 6th
Causes of Action Are Sustained
The last two causes of action for breach of contract
concern the “Storage Fee” dispute and the “Office and Warehouse” dispute.
The 5th cause of action alleges a 2018 agreement,
pursuant to which Burnham agreed to have her game items relocated out of a warehouse
(being leased for both of their businesses), in return for Blackley’s promise
that the game items would be stored at a facility in Banning where Blackley would pay
the fees until the game items could be moved elsewhere. Burnham alleges that in
2020 when that storage facility was being sold she learned that $15,000 was owing;
which she then paid in order to get access to her property to relocate it.
In the 6th cause of action, Burnham alleges as
part of the Storage Agreement, Blackley agreed that the office and warehouse
would remain in his name, and not transferred to Heat Associates, LLC, or his
associates. Burnham alleges that despite the written and oral agreements
between the parties, Blackley transferred the lease to one of his entities.
Neither of these claims clearly set forth the source of the
parties’ obligations. If there is a written agreement, then consideration is
presumed. Otherwise, Burnham’s allegations of performance (FAC ¶¶69, 76) are
rather empty. Here, it is not clear whether there is a writing. The introductory
paragraphs allege a written contract (FAC ¶20); but this allegation is not
repeated in the 5th cause of action itself (FAC ¶¶63, 73).
The demurrer to the 5th and 6th
causes of action for breach of contract are sustained. In any amended pleading,
Burnham should specify whether there is a written agreement; and if not, what
her obligation/consideration under the agreement is.
IV. MOTION
TO STRIKE
A. Legal Standard
Code Civ. Proc. §436: “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.”
B.
The Motion to Strike is Granted in Part
Blackley
seeks to strike the allegations of and prayer for punitive damages. This
portion of the motion is moot in light of the ruling on the demurrer. The only
remaining cause of action is for breach of contract.
Blackley
also seeks to strike the prayer for attorney fees. This part of the motion has
merit. Attorney fees are only available when provided for by statute or
contract. Code Civ. Proc. §§1021, 1035(a)(10). The FAC does not allege a right
to recover fees under either, and the sole written contract attached to the
pleading does not contain an attorney fee provision. Burnham’s opposition
argument that fees may be recovered under the “tort of another” theory fails,
because she has not been required to bring an action against a third party to
protect her interests because of something that Blackley did.
The
motion to strike is therefore granted in part, as to the prayer for attorney
fees.
V. CONCLUSION
AND ORDER
The demurrer to the first cause of action for quiet title
and the second cause of action for fraud are sustained on the ground that, on the
face of the First Amended Complaint, it is evident that they are time-barred.
Both claims are fraud-based, and were filed more than three years after Burnham
discovered that she was not on title to the Palm Property. Code Civ. Proc.
§338(d).
The demurrer to the third cause of action for breach of the
Separation Agreement is overruled.
The demurrer to the fourth cause of action for promissory
estoppel is sustained for failure to allege facts demonstrating detrimental
reliance.
The demurrer to the fifth and sixth causes of action for breach
of the Storage Fee and Warehouse agreements are sustained as it cannot be
ascertained whether a written or oral agreement is alleged; and, if oral, what consideration
was provided.
The motion to strike the prayer for attorney fees is
granted. The motion to strike the punitive damages allegations is denied as
moot.
Burnham is granted 20 days leave to file a Second Amended
Complaint.
Blackley is ordered to provide notice of ruling.
Dated: _______________________________
MARGARET L. OLDENDORF
JUDGE
OF THE SUPERIOR COURT