Judge: Mel Red Recana, Case: 23STCV25041, Date: 2024-10-29 Tentative Ruling
Case Number: 23STCV25041 Hearing Date: October 29, 2024 Dept: 45
Hearing date: October
29, 2024
Moving Party: Defendant Ruth Kamaleson Loisel
Responding
Party: Plaintiff Sunderraj Mark
Kamaleson
Demurrer
without Motion to Strike
The
Court OVERRULES the Demurrer to the first, second, and third causes of action.
The
Court SUSTAINS the Demurrer to the fourth cause of action with leave to amend.
Background
On
October 13, 2023, Plaintiff Sunderraj Mark Kamaleson (“Plaintiff”) filed this
action against Defendant Ruth Kamaleson Loisel (“Defendant”) and Does 1 to 20.
The Complaint alleges that Plaintiff and Defendant were the children of Samuel
T. Kamaleson (“Decedent”) and Adela Kamaleson (“Mother”) (collectively
“Parents”), where Plaintiff was appointed as Decedent’s personal representative
of the estate. The Complaint alleges that Defendant, as a co-signatory for
Parent’s three bank accounts, was entrusted to pay for Parents’ expenses while
they were outside of the state for work. Once Mother passed away in 2013,
Decedent moved to Georgia to live with Plaintiff due to health issues. Defendant
assumed sole responsibility for paying all of Decedent’s personal expenses and
collected bank statements from Decedent’s California home. Once Decedent passed
in 2021, Plaintiff eventually obtained the bank statements of the three
accounts, which allegedly revealed that Defendant had spent over $50,000 on
personal expenses, withdrawn $43,123, and transacted business with persons on
matters not involving Decedent’s expenses. The Complaint alleges the following
causes of action: (1) Fraudulent Concealment,
(2) Conversion, (3) Breach of Fiduciary Duty, an (4) Financial Elder Abuse
(Welfare and Institutions Code § 15610.30 et seq.).
On December 6, 2023, Defendant filed
this Demurrer.
On October 16, 2024, Plaintiff filed
the opposition.
No reply has been filed as of October 23, 2024.
Legal Standard
As
a general matter, in a demurrer proceeding, the defects must be apparent on the
face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury
Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿“A demurrer tests the pleading
alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants,
Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes
the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.)
The only issue a demurrer is concerned with is whether the complaint, as it
stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th
740, 747.)
Where
a demurrer is sustained, leave to amend must be allowed where there is a
reasonable possibility of successful amendment. (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court
that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015)
244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility
that the plaintiff can state a good cause of action, it is error to sustain a
demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969)
70 Cal.2d 240, 245)
Meet and Confer
Code
of Civil Procedure section 430.41, subdivision (a), and section 435.5,
subdivision (a), require meeting and conferring “in person or by telephone.” On
November 16, 2023, Defendant’s counsel sent a meet and confer letter to
Plaintiff’s counsel stating deficiencies with the Complaint and the possibility
of a demurrer. (Kashfian Decl., ¶ 4-5,
Exh. A.) On November 20, 2023, Plaintiff’s counsel sent an email to Defendant’s
counsel stating he would try to respond to the meet and confer letter by
November 22, 2023. (Kashfian Decl., ¶ 6, Exh. B.) Plaintiff’s counsel never
responded to the letter thereafter. (Kashfian Decl., ¶ 6-7.) The Court finds
the meet and confer requirements have not been met because the parties did not
meet and confer via telephone or in person. Nonetheless, in the interest of
judicial efficiency, the Court exercises its discretion to consider the merits
of Defendant’s demurrer, but notes that subsequent failures to comply with
statutory obligations may result in a continuance of the hearing on the subject
motion.
Discussion
Defendant argues that the Complaint is barred by the statute of
limitations and laches. Defendant argues that the first, second, third, and
fourth causes of action fail to allege facts sufficient to state a cause of
action. The Court will address the arguments in turn.
Statute
of Limitations
Defendant argues all causes of action are
time-barred. Firstly, the Complaint fails to allege delayed discovery because
it does not state the time and manner of discovery, citing Fox v. Ethicon
Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808). Neither does the Complaint
allege facts showing an inability to have made earlier discovery despite
reasonable diligence—Decedent had access to the three bank accounts, and thus
had the means to learn about Defendant’s alleged misuse from 2013 onwards. Defendant
further argues the claim is time-barred because Decedent had inquiry notice as
early as June 23, 2013, when Defendant did not provide accounting to Decedent
as she used to provide Mother. (Complaint, ¶¶ 13, 19.)
Plaintiff argues that the Complaint sufficiently
alleges that Decedent was in no position to review the bank statements, which
were mailed to Decedent’s home in California to be accepted by Defendant. Plaintiff
argues Decedent had no reason to question Defendant was misusing the bank
accounts when Defendant stopped providing accounting following Mother’s passing.
Plaintiff argues Decedent should not be penalized for trusting that Defendant
carried out her fiduciary responsibilities pursuant to their agreement, citing Eisenbaum
v. Western Energy Resources, Inc. (1990) 218 Cal.App.3d 314. Thus, the
statute of limitations began to run in 2021 when Plaintiff actually learned of
Defendant’s misuse through the bank statements. Alternatively, Plaintiff argues
each wrongful conversion of Decedent’s funds is an independent tort subject to
its own statute of limitations period.
Causes of action for fraud and conversion have a
three-year statute of limitations period. (Code Civ. Proc. § 338, subds. (c)(1), (d).) A breach of fiduciary duty cause of action has a
three-year statute of limitations where fraud is central to the claim. (See Fuller
v. First Franklin Financial Corp. (2013) 216 Cal.App.4th 955, 963.) The
statute of limitation for financial elder abuse is four years. (Welf. &
Inst. Code, § 15657.7.)
“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.)
The Court finds that the statute of limitations
began to run when Plaintiff, as Decedent’s personal representative, Plaintiff
gained access to the monthly statements associated with Decedent’s three Bank
of America accounts some time in 2021. (Complaint, ¶ 18.) While Defendant
argues Decedent was put on inquiry notice when Defendant stopped providing the
accounting in 2013, the Court finds this is insufficient to prove Defendant’s
suspicion of wrongdoing. The Complaint alleges Decedent was 83 years of age with
health issues, and Decedent trusted Defendant to assume sole responsibility for
his personal expenses—thus, Decedent had no means to learn about Defendant’s
misuse. (Complaint, ¶¶ 13, 14, 19.) Taking these allegations as true, the Court
finds Decedent had no reason to suspect or practical means to discover
wrongdoing on the part of Defendant. Thus, the statute of limitations began to
run when Plaintiff learned of Defendant’s alleged misuse in 2021, and the
causes of action are not time-barred.
Laches
Defendant
asserts the Complaint is barred by laches. Defendant argues the elements for
laches were met as follows: (1) Decedent never asserted any claims against
Defendant, even after he was put on notice, (2) ten years had passed since the
statute of limitations period started running, constituting an appreciable
delay, and (3) Defendant has been prejudiced because the two principal
witnesses to the agreement are dead.
In
opposition, Plaintiff argues laches is neither available as a defense to a
wrongdoer who has concealed his or her commission of wrongful nor to near
relatives, citing Bono v. Clark (2002) 103 Cal.App.4th 1409, 1433.
The
elements for laches are (1) failure to assert a right, (2) unreasonable delay,
and (3) resulting prejudice to the adverse party. (In re Marriage of Powers (1990)
218 Cal.App.3d 626, 64) Laches applies to equitable actions, not actions at
law. (Connolly v. Trabue (2012) 204 Cal.App.4th 1154, 1164.)
Here,
Plaintiff seeks compensatory damages. Plaintiff seeks no equitable remedies. The
Court finds that this action is an action at law, not an equitable action—thus,
the doctrine of laches does not apply.
First
Cause of Action – Fraudulent Concealment
Defendant argues the Complaint fails to plead fraud
with specificity. Defendant argues the Complaint fails to allege that
Defendant, through concealment about her misuse of Decedent’s funds, intended
to induce Decedent’s action or inaction. Lastly, the Complaint fails to allege
that Decedent was unaware Defendant’s alleged misuse. Thus, the fraudulent
concealment cause of action fails.
In opposition, Plaintiff argues that fraudulent
concealment claims need not be pled with heightened specificity. The Complaint
puts Defendant on sufficient notice that Decedent was unaware of Defendant’s
conduct and if he did know, he would have acted differently.
“[T]he 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.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162
Cal.App.4th 858, 868; see also Alfaro v. Community Housing Improvement
System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384 (rule
of specifically pleading how, when, where, to whom, and by what means,
misrepresentations were communicated, applies to affirmative
misrepresentations, not to concealment).)
The Court finds the Complaint adequately alleges a
fraudulent concealment cause of action. The Complaint alleges Defendant
knowingly concealed her misuse of Decedent’s bank account so she would not have
to repay Decedent. (Complaint, ¶ 23.) The Complaint alleges Defendant and
Decedent were in a fiduciary relationship because Decedent was given sole
responsibility to pay for Decedent’s expenses. (Complaint, ¶ 14, 35.) Further,
the Complaint alleges that Decedent had no means of knowing about Defendant’s
misuse, and had Decedent known about the misuse, he would have terminated
Defendant’s access to and authorization to use the accounts. (Complaint, ¶ 19,
24.) Decedent and his estate suffered financial harm in excess of $50,000.
(Complaint, ¶ 25.) The Court finds the Complaint alleges all elements to state
a cause of action for fraudulent concealment.
The Court OVERRULES the Demurrer to the first cause
of action for fraudulent concealment.
Second
Cause of Action – Conversion
The parties disagree as to whether the Complaint
need to allege an identifiable sum of money to allege facts sufficient to state
a cause for conversion. Defendant argues that the Complaint fails to allege a
specific, identifiable sum of money that was allegedly converted. Plaintiff
argues that at the pleading stage, a plaintiff need not allege that defendant
misappropriated a specific sum of money to state a claim for conversion.
Rather, the sum of money need only be capable of identification. The Complaint alleges
that Defendant’s misuse of Decedent’s three bank accounts caused Decedent to
suffer financial harm in excess of $50,000. (Complaint, ¶ 32.) Plaintiff argues
Defendant will be deposed to determine an exact sum of misappropriated funds,
but at the pleading stage, the Complaint’s allegations are sufficient to state
a claim for conversion.
“Conversion is the wrongful exercise
of dominion over the property of another. 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;
and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) “Money
cannot be the subject of a cause of action for conversion unless there is a
specific, identifiable sum involved, such as where an agent accepts a sum of
money to be paid to another and fails to make the payment.” (PCO, Inc. v.
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007)
150 Cal.App.4th 384, 395.) Money can be the subject of an action for conversion
if a specific sum capable of identification is involved. (Farmers Ins.
Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452.)
The Court finds the Complaint alleges
facts sufficient to state a cause of action for conversion. The Complaint
alleges Decedent was the sole owner of the three bank accounts following
Mother’s passing, Defendant misappropriated the funds in her position as an
authorized signatory acting on her parent’s behalf, and as a result of the
misappropriation, Decedent and his estate suffered financial harm in excess of
$50,000. (Complaint, ¶¶ 28, 30, 32.) The Court finds that the allegation
regarding the alleged sum converted is “capable of identification”—discovery as
to Defendant’s alleged transactions and the bank statements will likely reveal
the exact amount of funds misappropriated. (See Zerin, supra, 53
Cal.App.4th at p. 452.) Thus, the Complaint alleges all facts necessary to
state a cause of action for conversion.
The Court OVERRULES the Demurrer to
the second cause of action for conversion.
Third
Cause of Action – Breach of Fiduciary Duty
Defendant argues the Complaint fails to allege a
fiduciary relationship, noting that a parent-daughter relationship does not
give rise to fiduciary duty. Without the existence of a fiduciary relationship,
Defendant argues the breach of fiduciary duty cause of action fails. Plaintiff,
in opposition, argues Defendant was in a confidential, fiduciary relationship
with Decedent because Decedent entrusted her to use the bank accounts for
expenditures solely relating to Decedent.
The elements of a claim for breach of fiduciary duty are (1)
the existence of a fiduciary relationship, (2) its breach,
and (3) damage proximately caused by
that breach.” (Mendoza v. Continental Sales Co. (2006)
140 Cal.App.4th 1395, 1405.)
The Court finds that the Complaint adequately
alleges a cause of action for breach of fiduciary duty. The Complaint alleges
that Parents had “arranged” for Defendant, as a co-signatory of the three bank
accounts, to pay for Parent’s expenses while they were away (Complaint, ¶ 11.)
When Mother passed, Defendant “assumed sole responsibility for,” “accept[ed]
responsibility to,” and “under[took] to” pay Decedent’s expenses. (Complaint,
¶¶ 14, 21, 29, 35.) The Court finds
that, based on these allegations, Defendant agreed to act as Decedent’s agent,
giving rise to a fiduciary relationship. (See City of Hope Nat'l Med. Ctr.
v. Genentech (2008) 43 Cal.4th 375, 386 (“‘[B]efore a person can be charged
with a fiduciary obligation, he must either knowingly undertake to act on
behalf and for the benefit of another, or must enter into a relationship which
imposes that undertaking as a matter of law.’”); see also Brown v. Wells
Fargo Bank (2008) 168 Cal.App.4th 938, 960 (“An agent is a fiduciary as a
matter of law.”).) The Complaint further alleges that Defendant breached the
fiduciary relationship when she misappropriated Decedent’s funds without his
consent, resulting in over $50,000 in damages. (Complaint, ¶¶ 36-37.) The Court
finds all elements for breach of fiduciary duty have been alleged.
The Court OVERRULES the Demurrer to the third cause
of action for breach of fiduciary duty.
Fourth
Cause of Action – Financial Elder Abuse (Welfare & Institutions Code §
15600, et seq.)
Defendant argues Decedent was not an “elder” for
purposes of the statute because Decedent was not a person over the age of 65 residing
in the state. The Complaint admits Decedent was not a resident when the
alleged financial abuse took place. (Complaint, ¶ 1, 13.) Although Decedent
kept his home in California, he had no intent to return. (Ibid.)
Further, Plaintiff is without standing to assert financial elder abuse. Lastly,
Defendant argues the Complaint fails to allege financial elder abuse with
particularity, citing Carter v. Prime Healthcare Paradise Valley LLC
(2011) 198 Cal.App.4th 396, 410.
Plaintiff argues the Financial Elder abuse statute
should be construed liberally, and that it is unclear whether it is
inapplicable to a defendant who while in California, misappropriates an
out-of-state elderly victim’s money. Plaintiff argues that a jury must decide
whether Decedent resided in Georgia only temporarily for purposes of
determining if he was an ”elder” under the statute.
The Welfare & Institutions Code section 15610.30,
subdivision (a) states that a person commits financial elder abuse when the
person does 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.
(2) Assists in taking, secreting, appropriating,
obtaining, or retaining real or personal property of an elder or dependent
adult for a wrongful use or with intent to defraud, or both.
(3) Takes, secretes, appropriates, obtains, or
retains, or assists in taking, secreting, appropriating, obtaining, or
retaining, real or personal property of an elder or dependent adult by undue
influence, as defined in Section 15610.70. “
Section 15610.27 defines an “elder” as “any person
residing in this state, 65 years of age or older.” Section 17101 states that a
person’s residence is “the place where one remains when not called elsewhere
for labor or other special or temporary purpose, and to which he returns in
seasons of repose.”
Section 15657.3, subdivision (d)(1) states that
“after the death of the elder or dependent adult, the right to commence or
maintain an action shall pass to the personal representative of the decedent.”
The Court finds the Complaint fails to state a claim for financial elder
abuse because it fails to allege Decedent was a resident of California at the
time of the abuse. Decedent moved to Georgia to reside with Plaintiff in July
2013 due to health issues requiring medical supervision and in-home residential
care. (Complaint, ¶ 13.) The Complaint alleges no facts suggesting that
Decedent intended to return to California or that he was residing in Georgia on
a temporary basis, except for the fact that he kept his home in California. The
Complaint admits Decedent did not reside in California when the alleged abuse
was committed. (Complaint, ¶¶ 1, 13, 15, 19.) Thus, under a plain reading of
the statute, the Court finds Decedent was not an “elder” under Welfare &
Institutions Code sections 15610.30 and 15610.27.
The Court SUSTAINS the fourth cause
of action for financial elder abuse with leave to amend.
Conclusion
The Court OVERRULES the Demurrer to the first, second,
and third causes of action.
The Court SUSTAINS the Demurrer to the fourth cause of
action with leave to amend.
It is so ordered.
Dated: October 29, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court