Judge: Maurice A. Leiter, Case: 21STCV28185, Date: 2022-07-28 Tentative Ruling

Case Number: 21STCV28185    Hearing Date: July 28, 2022    Dept: 54

Hearing Date: July 28, 2022

Department 54, Judge Maurice Leiter

Demurrer to First Amended Complaint and Motion to Strike

Moving Party: Defendants The Fox Law Corporation and Steven Robert Fox

Responding Party: Plaintiff Martina A. Silas

T/R:    DEFENDANTs’ demurrer is overruled.

defendants’ motion to strike is denied.

defendants to file and serve and answer to the first amended complaint within 20 days of notice of ruling.

           DEFENDANTs TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

           The Court considers the moving papers, opposition, and reply.

BACKGROUND

On February 24, 2022, Plaintiff Martina Silas filed the operative first amended complaint against Defendants The Fox Law Corporation, Inc., Steven Robert Fox and Barry Roger Wegman, asserting causes of action for fraudulent transfer, fraud, conversion, and money had and received. Plaintiff alleges she obtained a judgment and assignment order against third-party James Arden for approximately $300,000.00 in 2011. At some point, Arden filed for bankruptcy. Plaintiff alleges that Arden paid Defendants, his purported attorneys in the bankruptcy proceedings, with money that belonged to Plaintiff under the assignment order.

REQUEST FOR JUDICIAL NOTICE

           Plaintiff’s requests for judicial notice are GRANTED as to the existence of the documents, but not as to the truth of the matters asserted in them.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

A. Fourth Cause of Action for Fraud and Concealment

“The elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 131.)

Defendants demur to the fourth cause of action on the ground that Plaintiff has failed to allege a duty to disclose. Plaintiff alleges Defendants had a duty under Professional Rules of Conduct Rule 1.15 and Bankruptcy Code § 329(a) to disclose Arden’s payments to Plaintiff. Plaintiff alleges Defendants have a fiduciary duty to Plaintiff because they are holding money belonging to Plaintiff. Defendants argue this does not establish duty because these statutes do not include a right to sue for damages.

These statutes establish that Defendants were obligated to make certain disclosures. This is sufficient to plead duty to disclose for a fraud cause of action.

The demurrer to the fourth cause of action is OVERRULED.

B. Fifth Cause of Action for Conversion

To plead a cause of action for conversion, one must allege (1) the plaintiff’s ownership or right to possession of personal property; (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)  

Defendants demur to the cause of action for conversion on the ground that Plaintiff has failed to allege a sum certain. Plaintiff alleges that the sum certain is capable of being determined. This is sufficient to allege conversion.

The demurrer to the fifth cause of action is OVERRULED.

C. Sixth Cause of Action for Money Had and Received

“A cause of action for money had and received is stated if it is alleged the defendant ‘is indebted to the plaintiff in a certain sum for money had and received by the defendant for the use of the plaintiff.’” (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460 (citing 4 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 508, p. 543).) 

Defendant argues that Plaintiff’s claim for money had and received fails because it is derivative of the fourth and fifth causes of action. This is not a sufficient ground to sustain a demurrer.

The demurrer to the sixth cause of action is OVERRULED.

D. Ninth Cause of Action for Accounting

“A cause of action for accounting requires a showing of a relationship between the plaintiff and the defendant, such as a fiduciary relationship, that requires an accounting or a showing that the accounts are so complicated they cannot be determined through an ordinary action at law.” (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413.) “‘An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.’” (Id. (quoting Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179).)  

           Defendants demur to the ninth cause of action on the ground that Plaintiff has failed to allege a fiduciary duty. Plaintiff alleges Defendants have a fiduciary duty to Plaintiff because they are holding funds belonging to Plaintiff. This is sufficient to plead accounting.

           The demurrer to the ninth cause of action is OVERRULED.

E. Motion to Strike

“Any party, within the time allowed to response to a pleading, may serve and file a notice of motion to strike the whole or any part" of that pleading. (CCP § 435(b)(1).) “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 asserted 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." (CCP § 436.)

           Defendant asks the Court to strike allegations of a duty to disclose. As discussed, Plaintiff has sufficiently alleged a duty to disclose. The motion to strike is DENIED.