Judge: Mel Red Recana, Case: 20STCV24345, Date: 2024-09-25 Tentative Ruling
Case Number: 20STCV24345 Hearing Date: September 25, 2024 Dept: 45
Hearing date: September 25, 2024
Moving Party: Defendant Andrew Lee
Responding Party: Plaintiff Min Jennifer Kim
(1) Demurrer to Third Amended
Complaint
The court
considered the moving, opposition, and reply papers.
The court OVERRULES
the Defendant’s demurrer to the first cause of action of the Third Amended
Complaint.
Background
Plaintiff Min
Jenifer Kim (“Plaintiff”) filed this action on June 22, 2020, and a First
Amended Complaint on August 13, 2020. Plaintiff filed a Second Amended
Complaint (SAC) on April 26, 2021, against Defendant Jongsik Kim (“Defendant
Kim”), alleging causes of action for (1) Fraud or Deceit; and (2) Civil
Conspiracy. Plaintiff filed an Amendment to the SAC on September 29, 2021,
adding Andrew Lee as a doe defendant (Doe 1).
Defendant Andrew
Lee (“Defendant Lee”) filed a Demurrer to the SAC to the first and second
causes of action on June 14, 2023. The Court considered the opposition and
reply papers. The Court sustained Defendant Lee’s Demurrer with 20 days leave
to amend on September 27, 2023.
Plaintiff filed
a Third Amended Complaint (TAC) on October 17, 2023, against Defendant Jongsik
Kim and Andrew Lee alleging one cause of action for Fraud and Deceit.
The TAC alleges
the following: Plaintiff opened an Individual Retirement Account (IRA) with
MassMutual in 2008, where Defendant Lee served as
her agent. (TAC, ¶ 6.) In late 2014, Defendant Lee contacted Plaintiff advising
her to transfer the money from the IRA to a new investment plan. (Id. at
¶ 11.) Defendant Lee represented to Plaintiff that the new plan would general
at least ten percent annual. (Ibid.) Defendant Lee did not disclose he
was no longer employed by MassMutual. (Ibid.) Plaintiff agreed to
transfer the total balance of $140,000. (Id. at ¶ 11.) In 2015,
Defendant Lee urged that Plaintiff should invest as much as Plaintiff could
afford into the account, and Plaintiff invested an addition $130,000. (Id.
at ¶ 13.) In 2017, Plaintiff began to receive demands for payments on her
investment, and when Plaintiff contacted MassMutual, it informed her that
Defendant Kim had been her agent since as early as 2011. (Id. at ¶ 18.)
Defendant Kim then informed Plaintiff that her account was closed with Mass
Mutual in 2014. (Id. at ¶ 19.) When Plaintiff contacted MassMutual
requesting documents relating to the closing of her account, it provided her
with the surrender form and a copy of the negotiated check concerning
distribution of the balance in her IRA when the account was closed. (Id.
at ¶ 21.) The negotiated check showed that Plaintiff’s surrender proceeds were
deposited into an account at Union Bank, which Plaintiff had never heard of
before. (Id. at ¶ 22.) In 2019, Plaintiff learned that her money was
invested into Fractional Life Settlement Investments, with a company names
Reliant Life Shares and/or the Entrust Group. (Id. at ¶ 23.)
In January 2020,
Plaintiff was advised by Entrust that it would refund her money if she paid a
$785 fee, and Plaintiff submitted the fee. (Id. at ¶ 24.) Entrust then
provided her a statement showing a zero balance in the account. (Id. at
¶ 25.)
In
March 2021, Plaintiff received a check for $48,424.25 from a settlement
resulting from an action filed by the Securities and Exchange Commission involving
fraudulent life insurance policy sales. (Id. at ¶ 26, Exh. A.) Plaintiff
alleges that her investments were obtained by Pacific West Capital Group, a
defendant entity named in the action. (Ibid.) A few months later. Defendant Lee called Plaintiff,
asking whether she received money from the action. (Id. at ¶ 27.)
Plaintiff alleges this call affirmed her suspicions that Defendant Lee invested
her money into the Fractional Life Insurance policy without her consent. (Id.
at ¶ 27.)
Defendant Lee filed this Demurrer to the
TAC on November 27, 2023. Plaintiff
filed an Opposition on September 11, 2024. Defendant replied on September 16,
2023.
Legal Standard
When
considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water
and Power (2006) 144 Cal.App.4th 1216, 1228.) “A demurrer tests the
pleadings alone and not the evidence or other extrinsic
matters. Therefore, it lies only where the defects appear on the face of
the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “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.)
Request for Judicial Notice
Defendant
requests that the court take judicial notice of the following in support of
demurrer:
1.
The initial Compliant filed in this present
case, Min Jennifer Kim v. Jongsik Kim, LASC Case No. 20STCV24345. (“Exhibit
1.”)
2.
The initial Complaint filed in the case, Min
Jennifer Kim v. Andrew Lee, LASC Case No. 20STCV24343. (“Exhibit 2.”)
3.
The First Amended Complaint filed in the case, Min
Jennifer Kim v. Andrew Lee, LASC Case No. 20STCV24343. (“Exhibit 3.”)
4.
The Second Amended Complaint filed in the case, Min
Jennifer Kim v. Andrew Lee, LASC Case No. 20STCV24343. (“Exhibit 4.”)
The court
GRANTS Defendant’s request for judicial notice. (Evid. Code § 452(d).)
Discussion
Meet and Confer
CCP § 430.41(a) states, in relevant part:
“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.”
CCP § 430.41(a)(2) states, in relevant
part: “The parties shall meet and confer at least five days before the date the
responsive pleading is due. If the parties are not able to meet and confer at
least five days prior to the date the responsive pleading is due, the demurring
party shall be granted an automatic 30-day extension of time within which to
file a responsive pleading, by filing and serving, on or before the date on
which a demurrer would be due, a declaration stating under penalty of perjury that
a good faith attempt to meet and confer was made and explaining the reasons why
the parties could not meet and confer.”
CCP § 430.41(a)(3) provides: “The
demurring party shall file and serve with the demurrer a declaration stating
either of the following: (A) The means by which the demurring party met and
conferred with the party who filed the pleading subject to demurrer, and that
the parties did not reach an agreement resolving the objections raised in the
demurrer. (B) That the party who filed the pleading subject to demurrer failed
to respond to the meet and confer request of the demurring party or otherwise
failed to meet and confer in good faith.”
Defendant’s counsel attests that on August
22, 2023, she emailed Plaintiff’s counsel requesting a phone conference to meet
and confer regarding a contemplated demurrer to the TAC, and Plaintiff’s
counsel agreed. (Jung Decl., ¶ 4, Exh. 1.) Defendant’s counsel declares she
spoke with Plaintiff’s counsel about the demurrer on August 25, 2023, and
Plaintiff’s counsel refused to amend the TAC. (Jung Decl., ¶ 5.) The Court
finds these facts are sufficient to show Defendant complied with the
meet-and-confer requirements of CCP § 430.41. The parties met and conferred by
telephone regarding Defendant’s objections to the TAC. Despite these good faith
efforts, the parties could not reach a resolution. The court therefore proceeds
to consider the Demurrer.
Demurrer
Defendant Andrew Lee (Doe 1)
demurs to the first cause of action for fraud on the ground it fails to state
facts sufficient to constitute a cause of action. (CCP §§ 430.10(e).)
Defendant Lee contends the fraud cause of
action does not state facts sufficient to constitute a cause of action because
the statute of limitations bars it. As in the Demurrer to the SAC, Defendant
Lee argues Plaintiff’s claims against him in the separate action in Case No. 20STCV24343
(“Related Case”) show Plaintiff was not ignorant of his identity or liability. Defendant
Lee argues that because relation back is not allowed, the filing date of the
Doe Amendment, September 29, 2021, should be used as the operative filing date
to determine whether the statute of limitations has run. Defendant argues that
in the Related Case, Plaintiff alleged she learned of Defendant Lee’s identity
or liability in 2011 or 2014 and so the statutes of limitations began to run. Plaintiff’s
current case is thus time-barred because it was filed September 29, 2021, more
than the 3.5 years after 2011 or 2014. Defendant also argues relation back
cannot apply because Plaintiff was not genuinely ignorant of Defendant Lee’s
identity or liability at the time she filed the SAC.
Plaintiff contends there are no
inconsistencies between the pleadings in the Related Case and the present case.
Plaintiff argues the allegations in the Related Case do not indicate that
Plaintiff knew of Defendant Lee’s identity or liability in 2011 or 2014. Specifically,
the allegations in the Related case involve a conversation in 2011 regarding
forgery of surrender papers. Defendant has failed to relate that 2011
conversation to Defendant’s misrepresentations in 2014 and 2015, which are the
subject of the TAC. Plaintiff further argues that Defendant Lee cannot offer Plaintiff’s
pleadings in the Related Case as evidence that Plaintiff actually knew of
Defendant Lee’s identity or the facts giving rise to the claims against
Defendant.
a.
Statute of Limitations
The Court finds that Defendant fails to establish
the allegations and judicially noticeable facts
necessarily show the statute of limitations bars Plaintiff’s claims against
Defendant.
The statute of limitations for fraud is
three years. “An action for relief on the grounds of fraud or mistake must be
commenced within three years. However, such action is not deemed accrued ‘until
the discovery, by the aggrieved party, of the facts constituting the fraud or
mistake.’ (Code Civ. Proc., § 338, subd. (d).)” (Kline v. Turner (2001)
87 Cal.App.4th 1369, 1373-74.) The Judicial Council Emergency Rule 9(a) tolled
the statute of limitations for civil actions. Emergency Rule 9(a) specifically
states: “Notwithstanding any other law, the statutes of limitations and repose
for civil causes of action that exceed 180 days are tolled from April 6, 2020 until
October 1, 2020.” With the Emergency Rule, the statute of limitations period is
extended to three years and 180 days.
“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.... [T]he limitations period begins once the plaintiff ‘ “ ‘has notice
or information of circumstances to put a reasonable person on inquiry ....’
” ’ [Citations.] 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.” (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642-43, quoting Jolly v. Eli Lilly & Co. (1988) 44
Cal.3d 1103, 1110-11.)
“Although a general demurrer does not
ordinarily reach affirmative defenses, it ‘will lie where the complaint “has
included allegations that clearly disclose some defense or bar to recovery.” ’
[Citations.] ‘Thus, a demurrer based on an affirmative defense will be
sustained only where the face of the complaint discloses that the action is
necessarily barred by the defense.’ [Citations.]” (Stella v. Asset
Management Consultants, Inc. (2017) 8 Cal.App.5th 181, 191.)
The Court finds that the TAC is not
time-barred. The TAC alleges that, “[i]n 2017, Plaintiff began receiving
demands for premium payments on the Fractional Life Insurance Settlement
Investments made without her knowledge or consent.” (TAC, ¶ 17.) Plaintiff further
alleges that “[on] March 6, 2018, Mass Mutual provided Plaintiff with the
documentation regarding the surrender form and copy of the negotiated check.” (Id.
at ¶ 21.) The Court’s refers to its ruling on Defendant’s Demurrer to the
Second Amended Complaint that addresses the date the statute of limitations
period began to run and whether the claim relates back:
Thus, the face of
the SAC shows Plaintiff became aware of the fraud on March 6, 2018. Taking into
account the three-year statute of limitations for fraud and the six-month
tolling under Emergency Rule 9(a), Plaintiff’s deadline to commence action
against Defendant would be sometime in September 2021. On
September 22, 2021, Plaintiff served on Defendant an Amendment to Complaint
substituting Defendant for Doe 1. The Amendment to Complaint was filed on
September 29, 2021. While the court agrees with Defendant that the amendment
would not relate back to Plaintiff’s initial Complaint or the First Amended
Complaint since those pleadings contain no doe allegations or fictitiously
designated parties (see Ingram v. Superior Court (1979) 98 Cal.App.3d
483, 492 [“The straightforward rule is that amendment after the statute of
limitations has run will not be permitted when the result is the addition of a
party who, up to the time of the proposed amendment, was neither a named nor a
fictitiously designated party to the proceeding.”]), the SAC has designated
does and doe allegations. Thus, the doe amendment would relate back to at least
when the SAC was filed. The SAC was filed on April 26, 2021. As such,
Plaintiff’s claims against Defendant would be timely based on these facts.
Defendant has conceded in this Demurrer to
the TAC that if relation back applies, the doe amendment would relate back no
earlier than April 26, 2021. The Court thus reaffirms that relation back
applies, and the claim is not time-barred.
b.
Ignorance of Facts
Defendant
nevertheless argues that relation back cannot apply because Plaintiff was not
genuinely ignorant of Defendant’s identity or liability at the time she filed
the SAC (when she designated does for the first time). The Court finds that
Defendant has provided no evidence of Plaintiff’s lack of ignorance.
“The distinction
between ‘actual facts’ and ‘mere suspicion’ was addressed in Dieckmann v.
Superior Court (1985) 175 Cal.App.3d 345, 220 Cal.Rptr. 602: ‘Section 474
allows a plaintiff in good faith to delay suing particular persons as named
defendants until he has knowledge of sufficient facts to cause a reasonable
person to believe liability is probable. The distinction between a
suspicion that some cause could exist and a factual basis to believe a
cause exists is critical in the operation of section 474.’ ” (Id.
at 595, emphasis in original.)
To meet their
burden, defendants must present evidence from which a reasonable inference
could be drawn that plaintiff actually knew of facts not pleaded and not
disclosed with respect to the doe. (See Breceda v. Gamsby (1968) 267
Cal.App.2d 167, 179 [“No evidence was produced to prove or from which any
reasonable inference could be drawn that plaintiff was aware earlier of facts
not pleaded and not disclosed. Gamsby had the burden of proving such awareness
if it existed.”].)
Defendant Lee has not provided sufficient evidence
that Plaintiff knew Defendant’s identity or liability at the time the action
commenced. Defendant Lee’s evidence consists of allegations in pleadings from a
prior case by Plaintiff against Defendant. Defendant Lee requests that the Court
take judicial notice of Plaintiff’s allegations in the Related Case (Case No.
20STCV24343 was dismissed on September 7, 2021). (See RJN, Exhs. 3-4.) However,
the Court cannot take judicial notice of the truth of the matters asserted in
those pleadings, only the fact that they exist as court records. (See Arce
v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482
[“While we may take judicial notice of court records and official acts of state
agencies (Evid.Code, § 452, subds. (c), (d)), the truth of matters asserted in
such documents is not subject to judicial notice.”]; Fremont Indem. Co. v.
Fremont General Corp. (2007) 148 Cal.App.4th 97, 113 [“Although the existence
of a document may be judicially noticeable, the truth of statements contained
in the document and its proper interpretation are not subject to judicial
notice if those matters are reasonably disputable.”].)
The Court thus cannot take judicial notice
of Plaintiff’s allegations in the Related Case as evidence to establish
Plaintiff’s lack of ignorance. Those pleadings in the Related Case are not
verified, so the Court cannot treat them as evidence of Plaintiff’s lack of
ignorance regarding Defendant’s identity or liability. Further, the pleadings
in the related case could have been based on Plaintiff’s suspicions of Defendant’s
wrongdoing, which is insufficient for determining actual ignorance for purposes
of CCP § 474 compliance. (See General Motors Corp., supra, 48
Cal.App.4th at pp.594-95.)
The Court therefore OVERRULES
Defendant’s Demurrer to the first cause of action.
It
is so ordered.
Dated:
September 25, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court