Judge: Martha K. Gooding, Case: 22-01280470, Date: 2023-08-14 Tentative Ruling
1) Demurrer to Amended Complaint
2) Case Management Conference
Before the Court is a Demurrer by Defendants Ellie Phan and Pro Bookkeeping Services, Inc. (“collectively, “Defendants”) to the First Amended Complaint (“FAC”) filed by Plaintiff Rosalynn Crowell (“Plaintiff”). The Demurrer is OVERRULED. Defendants shall file and serve their Answer to the FAC no later than August 22, 2023.
On demurrer, a complaint must be liberally construed. Code Civ. Proc. § 452; Stevens v. Superior Court (1999) 75 Cal. App. 4th 594, 601. All material facts properly pleaded, and reasonable inferences therefrom, must be accepted as true. Aubry v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962, 966-67.
A pleading is adequate if it contains a reasonably precise statement of the ultimate facts, in ordinary and concise language, and with sufficient detail to acquaint a defendant with the nature, source and extent of the claim. The degree of detail required depends on the extent to which the defendant in fairness needs such detail which can be conveniently provided by the plaintiff. Less particularity is required when the defendant ought to have co-extensive or superior knowledge of the facts. Under normal circumstances, there is no need for specificity in pleading evidentiary facts. However, bare conclusions of law are insufficient. Code Civ. Proc. §§ 425.10(a), 459; Doe v. City of Los Angeles (2007) 42 Cal. 4th 531, 549-50; Zelig v. County of Los Angeles (2002) 27 Cal. 4th 1112, 1126; Doheny Park Terrace HOA v. Truck Ins. Exchange (2005) 132 Cal. App. 4th 1076, 1098-99; Berger v. California Insurance Guarantee Assn (2005) 128 Cal. App. 4th 989, 1006.
First Cause of Action for Financial Elder Abuse
The elements of a financial elder abuse claim are: (1) defendant took, hid, appropriated, obtained, or retained plaintiff’s property or assisted in same; (2) plaintiff was 65 years of age or older at the time of the conduct; (3) defendant did so for a wrongful use or with the intent to defraud or by undue influence; (4) plaintiff was harmed; and (5) defendant's conduct was a substantial factor in causing plaintiff's harm. [CACI 3100.]
“(a) ‘Abuse of an elder or a dependent adult’ means . . . (3) Financial abuse, as defined in Section 15610.30.” Welf. & Inst. Code, § 15610.07.
“(a) “Financial abuse” of an elder . . . occurs when a person or entity does any of the following:
(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. * * *
(c) For purposes of this section, a person or entity takes, secretes, appropriates, obtains, or retains real or personal property when an elder or dependent adult is deprived of any property right, including by means of an agreement. . .”
Welf. & Inst. Code, § 15610.30.
“‘Elder’ means any person residing in this state, 65 years of age or older.” Welf. & Inst. Code, § 15610.27.
“Taking” has been read broadly to encompass an impairment of a property right even without transfer. See Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 479 -480 (procuring trustee's signature on documents to sell property held by trust at a discount, and trying to enforce same, was sufficient to establish a “taking” under the Act, even though property remained in trust's possession and agreement was not performed: trust's duty to disclose the dispute over the property impaired the trust's ability to sell it for fair market value or to use it as security to obtain a loan and thus caused damage).
In addition, to impose liability under this section, a plaintiff must establish that “the person or entity knew or should have known that this conduct is likely to be harmful to the elder ... adult.” Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 657 (citing Welfare & Institutions Code § 15610.30(b)). Pursuant to “subdivision (b) of 15610.30, wrongful conduct occurs only when the party who violates the contract actually knows that it is engaging in a harmful breach, or reasonably should be aware of the harmful breach.” Id. at 658.
Plaintiff has alleged that Defendants obtained $298,000 from Plaintiff’s joint account, thus depriving her of that $298,000. Plaintiff also alleges that Defendants obtained $150,000 from Plaintiff’s joint account when it was used as a downpayment in the escrow for purchase of a house and office. [FAC ¶ 31.] Plaintiff further alleges that Phan facilitated the taking or encumbering of other amounts in the joint account. [Id.] And Plaintiff alleges Defendants knew this would be harmful to her. [FAC ¶34.]
These allegations are sufficient to support Plaintiff’s elder abuse claim.
The Demurrer is OVERRULED as to this cause of action.
Second Cause of Action for Conversion
The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; (3) interference with plaintiff's possession; and (4) damages. . McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1491; PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395.
There is no element of wrongful intent or motive for this cause of action; in California, conversion is a “strict liability tort.” Voris v. Lampert (2019) 7 Cal.5th 1141, 1150.
For this cause of action, Plaintiff alleges that Defendants “appropriated and/or prevented her access without her consent in the amount of approximately $60,448,000,” apparently adding up transfers and encumbrances – even those where Defendants themselves did not receive the money. [See FAC ¶ 39.]
Earlier in the FAC, however – and incorporated into this cause of action – Plaintiff alleges that Defendants obtained from her joint account $298,000 and $150,000. [FAC ¶¶ 25, 26, 38.]
Plaintiff also alleges that all of Defendants’ alleged actions (and, thus, their obtaining of the $298,000 and $150,000 from Plaintiff’s joint account) are part of a scheme to take “funds from her accounts for themselves, and/or by assisting in and facilitating the wrongful diversion of assets from her accounts to others.” [FAC ¶ 27.]
Plaintiff has thus alleged conversion at least as to these sums. Accordingly, the Demurrer to this cause of action is OVERRULED.
Third Cause of Action for Unjust Enrichment
Some courts have previously treated unjust enrichment as a stand-alone cause of action (see Kruss v. Booth (2010) 185 Cal. App. 4th 699, 729; Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal. App. 4th 333, 347; County of San Bernardino v. Walsh (2007) 158 Cal. App. 4th 533, 537-38; Lectrodryer v. SeoulBank (2000) 77 Cal. App. 4th 723, 726). However, the majority of recent cases treat unjust enrichment as a remedy akin to restitution, not a separate cognizable cause of action. Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231; Hill v. Roll Intern. Corp. (2011) 195 Cal.App.4th 1295, 1307; Levine v. Blue Shield of Calif. (2010) 189 Cal.App.4th 1117, 1138; Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370; Melchior v. New Line Productions, Inc. (2003) 106 Cal. App. 4th 779, 793.
That said, in Ghirado v. Antonioli (1996) 14 Cal. 4th 39, 43, the California Supreme Court appeared to recognize a cause of action for unjust enrichment, albeit in terms of a right to restitution.
Whether treated as a cause of action or a remedy, the elements are (1) the receipt of a benefit, and (2) the unjust retention of the benefit (3) at the expense of another. Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.
Plaintiff has alleged the elements of unjust enrichment as to the $448,000 ($298,000 + $150,000) she alleges Defendants received. [FAC ¶ 45.] Rather than require her to amend simply on the basis that unjust enrichment is not a separate cause of action, the Court overrules the demurrer to this cause of action.
Plaintiff is ordered to give notice.