Judge: Mel Red Recana, Case: 22STCV38667, Date: 2024-02-28 Tentative Ruling
Case Number: 22STCV38667 Hearing Date: March 26, 2024 Dept: 45
Hearing
date: March 26, 2024
Moving Party: Cross-Defendants James H. Tuggle,
individually and as trustee of the James Tuggle Family Revocable Living Trust (“Tuggle”),
and Robert Conrad; and
Responding
Party: None
Demurrer
without Motion to Strike to Cross-Complaint
The court
considered the moving papers. No opposition has been filed.
The
court OVERRULES in part Cross-Defendants’ demurrer to the first through
fifth causes as moot and SUSTAINS in part the demurrer as to the sixth,
seventh, eighth, tenth, and eleventh causes of action. Kamath is granted leave to amend only as to
the tenth cause of action, assuming legal authority exists to support such a
claim. Kamath is ordered to file an amended pleading within 20 day of this ruling.
Background
On
December 12, 2022, Plaintiff James H. Tuggle, individually and as trustee of
the James Tuggle Family Revocable Living Trust (“Tuggle”), initiated this
action against Defendant Reshma Kamath (“Kamath”), alleging the following
causes of action: (1) legal malpractice; (2) breach of contract; and (3)
financial elder abuse.
On February 21,
2023, Kamath filed her answer to the complaint. On the same day, Kamath filed her
cross-complaint against Tuggle, individually and as trustee, and Robert Conrad
(“Conrad”), alleging the following causes of action: (1) defamation (libel); (2)
defamation (per se); (3) defamation (slander); (4) malicious
prosecution; (5) abuse of process; (6) racial discrimination; (7) gender
discrimination; (8) unfair misleading business practices; (9) breach of
contract; (10) breach of fiduciary duty; and (11) breach of covenant of good
faith and fair dealing.
On May 25, 2023,
Tuggle and Conrad (collectively “Cross-Defendants”) filed the instant demurrer
directed at Kamath’s cross-complaint.
On February 28,
2024, the court granted the Cross-Defendants’ special motion to strike the
first through fifth causes of action of the cross-complaint.
Legal
Standard
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.) “To survive
a demurrer, the complaint need only allege facts sufficient to state a cause of
action; each evidentiary fact that might eventually form part of the
plaintiff’s proof need not be alleged.”
(C.A. v. William S. Hart Union High School Dist. (2012) 53
Cal.4th 861, 872.) For the purpose of
testing the sufficiency of the cause of action, the demurrer admits the truth
of all material facts properly pleaded.
(Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962,
966–967.) A demurrer “does not admit
contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67
Cal.2d 695, 713.)
A demurrer tests
the legal sufficiency of the pleadings and will be sustained only where the
pleading is defective on its face. (City of Atascadero v. Merrill Lynch,
Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all
material facts properly pleaded but not contentions, deductions or conclusions
of fact or law. We accept the factual
allegations of the complaint as true and also consider matters which may be
judicially noticed. [Citation.]” (Mitchell v. California Department of
Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v.
Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged
in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally
construed. (Code Civ. Proc., §
452.) A demurrer may be brought if
insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).)
“If substantial
facts which constitute a cause of action are averred in the complaint or can be
inferred by reasonable intendment from the matters which are pleaded, although
the allegations of these facts are intermingled with conclusions of law, the complaint
is not subject to demurrer for insufficiency.” (Krug v. Meeham (1952)
109 Cal.App.2d 274, 277.)
Discussion
Cross-Defendants demur to the first, second, third,
fourth, fifth, sixth, seventh, eighth, tenth, and eleventh causes of action on
the ground that they fail to state facts sufficient to constitute a cause of
action pursuant to Code of Civil Procedure § 430.10(e), and Conrad separately
demurs to the first through seventh causes of action based on Kamath’s failure
to abide with Civil Code § 1714.10. (See Notice of Demurrer at pg. 2.) As a
preliminary matter, the instant demurrer is moot as to the first through fifth
causes of action in light of the court’s ruling on Cross-Defendant’s special
motion to strike. (See February 28, 2024 Minute Order.)
A.
Failure
to Comply with Civil Code § 1714.10
Conrad argues that the sixth cause of action for racial discrimination and
the seventh cause of action for gender discrimination fail based on Kamath’s
failure to comply with Civil Code § 1714.10.
That statute states
in part that “[n]o cause of action against an attorney for a civil conspiracy
with his or her client arising from any attempt to contest or compromise a
claim or dispute, and which is based upon the attorney's representation of the
client, shall be included in a complaint or other pleading unless the court
enters an order allowing the pleading that includes the claim for civil
conspiracy to be filed after the court determines that the party seeking to
file the pleading has established that there is a reasonable probability that
the party will prevail in the action.” (Civ. Code, § 1714.10(a).) “When it
applies, ‘the plaintiff must make a prima facie showing [of a reasonable
probability of prevailing] before being allowed to assert the claim.’” (Aghaian
v. Minassian¿(2020) 59 Cal.App.5th 447, 460,¿reh'g denied (Jan. 25,
2021), review denied (Apr. 14, 2021).) “[T]he pre-filing requirement does
not apply when the ‘[attorney's] acts go beyond the performance of a professional
duty to serve the client and involve a conspiracy to violate a legal duty in
furtherance of the attorney's financial gain.’” (Id., citing to Civ.
Code, § 1714.10(c).)
As alleged in
the cross-complaint, Conrad conducted himself as follows: (1) failed to substitute
as counsel for Tuggle in certain lawsuits; (2) improperly communicated with
opposing counsels for Tuggle, despite not being the attorney of record and
without including Kamath in such communications; (3) emailed a back-dated
substitution of attorney form to Kamath that she refused to sign; (4) providing
Kamath with unsolicited legal advice and guidance about dismissing a federal
case initiated by Tuggle. (Cross-Compl. ¶¶ 52, 53-58, 77, 79-83.) Additionally,
it is alleged that the acts of all cross-defendant acted as agents for one
another and had acted in concert. (Id. ¶¶ 29-30.)
Based on these
allegations, the court agrees with Conrad’s position that Kamath was required
to abide by Civil Code § 1714.10’s pre-filing requirement. While the
allegations suggest that Conrad’s conduct went beyond the performance of a
professional duty to serve Tuggle, there is nothing to suggest within the cross-complaint
that Conrad acted in the furtherance of his own financial gain.
Accordingly, Conrad’s
demurrers to the sixth and seventh cause of action is sustained.
B.
Sixth and
Seventh Causes of Action: Racial Discrimination and Gender Discrimination,
Respectively.
Cross-Defendants
next argue that sixth and seventh causes of action for racial discrimination
and gender discrimination, respectively, in violation of Title VII of the Civil
Rights Act and the Unruh Civil Rights Act are subject to demurrer because they
have not been sufficiently pleaded. (Demurrer at pp. 10-11.)
In support of
this position, Cross-Defendants first argue that Title VII does not apply because
Kamath has not alleged that there existed an employee-employer relationship
amongst the parties. (Demurrer at pg.
11, relying on Adcock v. Chrysler Corp. (9th Cir. 1999) 166 F.3d 1290,
1292 [“Title VII protects employees, but does not protect independent
contractors.”]) They reason that, as Tuggle’s attorney, Kamath would have been
an independent contract. Second, they assert that the Unruh Civil Rights Act
has no application because there are no allegations to suggest that Kamath was denied
public accommodations or that the discriminatory conduct was in the course of
furnishing goods, services or facilities. (Demurrer at pg. 11.)
Upon review of
the cross-complaint, the court finds that the sixth and seventh causes have
been insufficiently alleged. The cross-complaint alleges that Kamath provided
legal services to Tuggle pursuant to various retainer agreements. (Cross-Compl.
¶ 47.) This creates that inference that Kamath was an independent contractor. In
light of this allegation, Kamath would be precluded from alleging the
antagonistic alternative fact that she was also Tuggle’s employee. (See Manti
v. Gunari (1970) 5 Cal.App.3d 442, 449 [“While inconsistent theories of
recovery are permitted [Citation Omitted], a pleader cannot blow hot and cold
as to the facts positively stated.”]; see also Steiner v. Rowley (1950)
35 Cal.2d 713, 719.) Thus, her discrimination claims premised on Title VII of
the Civil Rights Act fail because there no allegations to suggest that Kamath
was Tuggle or Conrad’s employee. (Adcock, supra, 166 F.3d at 1292.)
While Kamath alleges that Tuggle discriminated against other individuals based
on their gender or ethnicity (Cross-Compl. ¶¶ 15-16, 150, 155, 157), Kamath would
lack standing to assert claims on their behalf.
Similarly, the
allegations are insufficient to support Kamath’s discrimination claims premises
on the Unruh Civil Rights Act. While the Unruh Civil Rights Act prohibits
discrimination on the basis of sex, race, color, religion, ancestry, national
origin, disability, medical condition, genetic information, marital status, or
sexual orientation, this prohibition is associated with an individual’s entitlement
to “full and equal accommodations, advantages, facilities, privileges, or
services in all business establishments of every kind whatsoever.” (Civil Code
§ 51(b).) The cross-complaint only makes conclusory allegations that Kamath was
discriminated based on her gender and race. It is devoid of any allegations
that she was denied accommodations from a business establishment by the
Cross-Defendants. “[S]tatutory causes of action must be pleaded with
particularity.” (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th
771, 790.)
In reviewing the
cross-complaint in its entirety, it is clear that Kamath would be unable to
reasonably correct this defect to maintain a claim for discrimination under either
Title VII or the Unruh Civil Rights Act when Kamath’s claims boil down to dispute
between attorney and her former client. This inability to successfully amend the
pleadings to correct this defect is underscored by the lack of opposition. (Goodman v. Kennedy (1976) 18 Cal.3d
335, 348 [determining that leave to amend should only be provided where there
is a reasonable possibility of successful amendment, which the complainant must
establish].)
Accordingly, Cross-Defendants’
demurrer to the sixth and seventh causes of action are sustained on this ground
without leave to amend.
C.
Eighth Cause of Action: Unfair
Business Practices (Business and Professions Code § 17200)
Tuggle next
demurs to the eighth cause of action for violation of Business and Professions
Code § 17200 on the ground that it has not been sufficiently pleaded. (Demurrer
at pg. 12.)
The Unfair
Competition Law prohibits “any unlawful or fraudulent business act or
practice.” (Bus. & Prof. Code § 17200.) “To state a cause of action based
on an unlawful business act or practice under the UCL, a plaintiff must allege
facts sufficient to show a violation of some underlying law.” (People v.
McKal (1979) 25 Cal.3d 626, 635.) “Although section 17200 contains sweeping language
as to what is considered a business practice, standing to sue under the
statute, as defined by Business and Professions Code section 17204, is confined
` ‘to any `person who has suffered injury in fact and has lost money or
property' as a result of unfair competition. [Citations.]’” (Bower v.
AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1553-1554 [quoting Kwikset
Corp. v. Superior Court (2011) 51 Cal.4th 310, 320–321].)
Tuggle contends that the UCL has no application here because there are no
allegations to show that Kamath was a consumer or a competitor of Tuggle’s businesses,
and as a result, Kamath lacks standing to bring such a claim. (Demurrer at pg.
12.) The court agrees. Based on the cross-complaint, Kamath alleges that the
unfair business practice consists of Tuggle’s failure to “make timely payments
of retainer, and then of issued invoices.” (Cross.Compl. ¶ 161.) Effectively,
Kamath is assert that the violation is a breach of contract claim. Thus, the cross-complaint
fails to allege that Tuggle has violated an underlying law. (People
v. McKal (1979) 25 Cal.3d at 635.) Moreover, because
there is no indication that Kamath has lost property or money stemming from
Tuggle’s purported unfair business practice, she lacks standing to assert such
a claim. (Bower, supra, 196 Cal.App.4th at 1553-1554.)
Accordingly, the court sustains Tuggle’s demurrer to the eighth cause of
action without leave to amend. (Goodman, supra, 18 Cal.3d at 348.)
D.
Tenth Cause of Action: Breach of
Fiduciary Duty
Tuggle also demurs
to the tenth cause of action for breach of fiduciary duty because it fails to
allege what fiduciary duties have been breached and questions whether there is
any legal authority to show that a client owes his attorney any fiduciary duty.
(Demurrer at pp. 12-13.) The court agrees that the cross-complaint is unclear
as to what fiduciary duty has been breached. While it may appear dubious that
client owes their attorney a corresponding fiduciary duty, the court shall
allow leave to amend if such legal authority exists.
Accordingly, the
court sustains the demurrer to the tenth cause of action with leave to amend.
E.
Eleventh Cause of Action: Breach of
Covenant of Good Faith and Fair Dealing
Lastly, Tuggle demurs
to the eleventh cause of action for breach of covenant of good faith and fair
dealing on the ground that it is superfluous as it relies on the same
allegations that support Kamath’s breach of contract claim. (Demurrer at pp.
13-14.)
As alleged in
the cross-complaint, Tuggle breached the covenant of good faith and fair dealing
based on his failure to execute retainer agreements, to pay retainer fees, and
to substitute into matters. (Cross-Compl. ¶ 183.) These alleged breaches are generally
consistent with those alleged in support of Kamath’s breach of contract claim.
(Id. at ¶¶ 172-174.) Thus, this cause of action is superfluous. (Careau
& Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d
1371, 1395.) Moreover, the cross-complaint fails to sufficiently allege that
Kamath suffered any damages stemming from Tuggle’s failure to execute the fee
agreements. Before any legal work could be commenced, a signed written fee
agreement is required under Business and Professions Code § 6148(a). Thus, by
law, Kamath was obligated not to provide legal services until such retainer
agreements had been signed.
Accordingly, the
demurrer to the eleventh cause of action is sustained without leave to amend.
Conclusion
It
is so ordered.
Dated:
_______________________
ROLF M. TREU
Judge of the
Superior Court