Judge: Melissa R. Mccormick, Case: Silva v. Pinchot, Date: 2022-09-29 Tentative Ruling
Cross-defendants Dyrce Garcez Silva, Richard Fonseca Silva, and URCA, LLC’s Demurrer to Cross-complaint
Cross-defendants Dyrce Garcez Silva, Richard Fonseca Silva, and URCA, LLC demur to the five causes of action in cross-complainant Gifford Pinchot’s cross-complaint. For the following reasons, cross-defendants’ demurrer is overruled in part and sustained in part.
In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. Blank v. Kirwan (1985) 39 Cal.3d 311, 318. A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05. Questions of fact cannot be decided on demurrer. Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556. Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 n.7.
First cause of action (determining the invalidity of a trust and deeds based on undue influence and lack of capacity): Undue influence constitutes pressure brought to bear directly on the testamentary act, sufficient to overcome the testator’s free will, amounting, in effect, to coercion destroying the testator's free agency. David v. Hermann (2005) 129 Cal.App.4th 672, 684. This doctrine applies to any testamentary document, including a living trust. Id. at 679-80, 684. The person challenging the testamentary instrument bears the burden of proving undue influence. Id. However, a presumption of undue influence, shifting the burden of proof, arises upon the challenger’s showing that (1) the person alleged to have exerted undue influence had a confidential relationship with the testator, (2) the person actively participated in procuring the instrument’s preparation or execution, and (3) the person would benefit unduly by the testamentary instrument. Rice v. Clark (2002) 28 Cal.4th 89, 97.
The cross-complaint alleges on information and belief that: Silva and the decedent had a confidential relationship that became a fiduciary relationship (Cross-complaint ¶¶ 36, 42); Silva actively participated in the procurement of the trust at issue by choosing and retaining counsel for the drafting of the trust, dictating the terms of the trust’s dispositive provisions to Silva and Silva’s family members, placing herself in the position of co-trustee, driving the decedent to the meeting for the execution of the trust, and imposing her will on the decedent to unduly benefit from the decedent’s estate “via its unnatural disposition solely to herself” (Cross-complaint ¶ 43); and Silva was unduly benefited by the trust because the decedent had no familial or blood relationship with Silva, the trust does not provide for any family member or spouse, Silva was the decedent's caregiver, and the decedent had never previously evidenced an intent to provide for Silva (Cross-complaint ¶ 45).
These allegations are properly pled on information and belief. Although the matters are not within cross-complainant’s personal knowledge, cross-complainant has alleged facts that lead cross-complainant to believe the allegations are true. Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1158-59 (a plaintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true).
Cross-defendants contend allegations in the cross-complaint are defective because they are pleaded on information and belief as to matters ascertainable from public records or that should be personally known to cross-complainant. A plaintiff may not allege facts on information and belief when he has reason to know them directly. See, e.g., Searcy v. Hemet Unified School Dist. (1986) 177 Cal.App.3d 792, 802 (“facts that are ascertainable from public records may not properly be pleaded on information and belief”); Thompson v. Sutton (1942) 50 Cal.App.2d 272, 279 (holding that whether plaintiff owns an easement is a fact “peculiarly within the knowledge of the party,” and thus cannot be alleged on information and belief). On demurrer, courts draw all reasonable inferences in favor of the plaintiff. Rickley v. Goodfriend (2013) 212 Cal.App.4th 1136, 1141-42.
Among the allegations pleaded on information and belief are the following: the decedent suffered from complete amnesia and extensive brain damage (Cross-complaint ¶ 21); as a result of the decedent’s accident and injuries, the decedent suffered permanently from impaired cognitive function and abilities (Cross-complaint ¶ 23); the decedent had difficulty with orientation to time, place, persons, and situations, information processing, memory, recognition with familiar objects and persons, understanding and appreciating quantities, abstract reasoning and concepts, and mood and affect (Cross-complaint ¶ 23); Dorothy (the decedent’s mother) passed away on December 28, 2006 (Cross-complaint ¶ 31); and Ivan (the decedent’s father) passed away on November 14, 2007 (Cross-complaint ¶ 32). Even if cross-complainant may have reason to know the extent of the decedent’s injuries and/or might be able to determine from public records the dates the decedent’s parents died, alleging these facts on information and belief does not affect cross-complainant’s ability to state a claim for determining the invalidity of a trust and deeds due to alleged undue influence and lack of capacity. The demurrer to the first cause of action for determining the invalidity of a trust and deeds is overruled.
Second cause of action (financial elder abuse): The Elder Abuse and Dependent Adult Civil Protection Act (Cal. Welf. & Inst. Code § 15600 et seq.) provides remedies for elders and dependent adults who are subjected to financial abuse. Cal. Welf. & Inst. Code § 15657.5. Financial abuse occurs when, among other things, a person or entity “[t]akes, 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.” Id. § 15610.30(a)(1). A person or entity may also be liable for assisting in such conduct. Id. § 15610.30(a)(2).
Under the statute, “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, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult.” Id. § 15610.30(c). A “representative” includes an “attorney-in-fact of an elder or dependent adult who acts within the authority of the power of attorney.” Id. § 15610.30(d)(1).
The second cause of action alleges on information and belief that: Silva unduly influenced and coerced the decedent into creating the trust and recording real estate deeds for cross-defendants’ financial gain and benefit and that these transactions were to the detriment of the decedent and/or her rightful heirs (Cross-complaint ¶ 83); cross-defendants appropriated the decedent’s trust and property for their own benefit when they knew the decedent was vulnerable, highly susceptible to undue influence, and lacked capacity (Cross-complaint ¶ 84); cross-defendants appropriated the decedent’s property for a wrongful use and knew or should have known that the decedent was incapacitated and their conduct was likely to harm the decedent (Cross-complaint ¶ 85); and the decedent and cross-complainant were harmed by cross-defendants’ wrongful conduct (Cross-complaint ¶ 86). The cross-complaint also alleges Silva betrayed her position of trust by choosing and retaining counsel to draft the trust, dictating the terms of the trust’s dispositive provisions to Silva and Silva’s family members, placing herself in the position of co-trustee, driving the decedent to the meeting for the execution of the trust, and imposing her will over the decedent to unduly benefit from the decedent’s estate via its unnatural disposition solely to Silva (Cross-complaint ¶ 43). The allegations sufficiently allege a financial elder abuse cause of action against cross-defendants. The demurrer to the second cause of action is overruled.
Third cause of action (wrongful taking pursuant to Probate Code section 850): California Probate Code section 850 permits a trustee or a person interested a trust to make a claim to recover property if possession or title is held by another. Cal. Probate Code § 850. The third cause of action for wrongful taking pursuant to Probate Code section 850 alleges cross-complainant is an interested person as a statutory heir and surviving spouse of the decedent. Cross-complaint ¶ 93. The cross-complaint also sufficiently sets forth the facts upon which cross-complainant’s wrongful taking claim is based. Cross-complaint ¶¶ 33-34, 36-43. The cross-complaint alleges on information and belief that at the time of Ivan’s death, a trust entitled The Ivan J. David and Dorothy G. David Declaration of Trust dated January 5, 1993 (the “Ivan and Dorothy Trust”) existed, and that the Ivan and Dorothy Trust left everything to the decedent but did not name a successor trustee. Cross-complaint ¶ 53. The cross-complaint further alleges on information and belief that Silva was appointed successor trustee of the Ivan and Dorothy Trust; Silva transferred the property commonly known as 13121 Loretta Drive, Orange, CA 92705 (the “Loretta Property”) from the Ivan and Dorothy Trust to the decedent individually; and Silva then caused the decedent to transfer the Loretta Property to the trust Silva managed and of which Silva was the sole beneficiary after the decedent’s death. Cross-complaint ¶¶ 54-58. Cross-complainant alleges Silva recorded a Grant Deed transferring the Loretta Property to URCA, LLC. Cross-complaint ¶ 59.
Cross-defendants contend that the court lacks jurisdiction over the Ivan and Dorothy Trust because cross-complainant has not joined the Ivan and Dorothy Trust a party to the action. Cross-defendants also contend cross-complainant lacks standing to challenge the Ivan and Dorothy Trust because cross-complainant is not a beneficiary or contingent beneficiary or heir of either trustor of the Ivan and Dorothy Trust.
California Probate Code section 17200(a) provides “a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.” Construing that grant of standing consistent with the Probate Code’s statutory scheme as a whole, the Supreme Court in Barefoot v. Jennings (2020) 8 Cal.5th 822, 828 held an individual who would benefit from invalidation of a trust instrument, even though not a currently named beneficiary, has standing to challenge the document.
Similarly, an individual who claims to be a beneficiary under a decedent’s will if a trust instrument were invalidated may qualify as an “interested person” within the meaning of Probate Code section 48(a) and have standing to challenge an allegedly invalid trust. “[S]tanding for purposes of the Probate Code is a fluid concept dependent on the nature of the proceeding before the trial court and the parties’ relationship to the proceeding, as well as to the trust (or estate).” Arman v. Bank of Am. (1999) 74 Cal.App.4th 697, 703. As a general rule, those who are “’interested person[s]’ have legal standing to contest the provisions of a will or trust” (Schwan v. Permann (2018) 28 Cal.App.5th 678, 698); and the Probate Code’s definition of “interested person” includes “any person having a property right in or claim against a trust estate or the estate of a decedent which may be affected by the proceeding.” Cal. Probate Code § 48(a)(1). Cross-complainant has alleged sufficient facts demonstrating standing to state the third cause of action.
California Probate Code section 17200(a) states: “Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.” Section 17000(a) provides that “[t]he superior court having jurisdiction over the trust . . . has exclusive jurisdiction of proceedings concerning the internal affairs of trusts,” and “concurrent jurisdiction of . . . [a]ctions and proceedings to determine the existence of trusts.” Cal. Probate Code § 17000(a). The “internal affairs” of a trust, over which section 17000 provides the court with exclusive jurisdiction, includes proceedings of the sorts listed in the subsections of subdivision (b) of section 17200, including construing a trust instrument (Cal. Probate Code § 17000(b)(1)); determining a duty or right (Cal. Probate Code § 17000(b)(2)); passing on acts of a trustee (Cal. Probate Code § 17000(b)(5)); instructing a trustee (Cal. Probate Code § 17000(b)(6)); compelling a trustee to account or to provide information (Cal. Probate Code § 17000(b)(7)); granting powers to a trustee (Cal. Probate Code § 17000(b)(8)); appointing or removing a trustee (Cal. Probate Code § 17000(b)(10)); and compelling redress for a breach of trust (Cal. Probate Code § 17000(b)(12)). Cross-defendants have not demonstrated, at least at this juncture, that the probate court has exclusive jurisdiction over the cross-complaint such that the court should sustain a demurrer to the third cause of action. The demurrer to the third cause of action is overruled.
Fourth cause of action (quiet title): California Civil Procedure Code section 761.020 governs quiet title claims. Section 761.020 provides that a plaintiff must set forth the following five elements in a verified complaint: (1) a description of the property, both a legal description and a street address; (2) the title of the plaintiff, and the basis for that title; (3) the adverse claims to the plaintiff’s title; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the plaintiff's title against the adverse claims. Cal. Civ. Proc. Code § 760.020(a)-(e). The cross-complaint sets forth these elements in paragraphs 13-14, 36-52, 54-62, and 98-100. In addition, the cross-complaint sufficiently alleges matters not within cross-complainant’s personal knowledge on information and belief. The demurrer to the fourth cause of action is overruled.
Fifth cause of action (declaratory relief): The elements of a cause of action for declaratory relief are: (i) a proper subject for declaratory relief pursuant to Civil Procedure Code section 1060; (ii) the existence of an actual controversy relating to the legal rights and duties of the respective parties; and (iii) a request that the rights and duties of the parties be adjudged by the court. Ludgate Ins. Co. v. Lockheed Martin Corp. (2002) 82 Cal.App.4th 592, 605. “Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse” may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court. Cal. Civ. Proc. Code § 1060.
The fifth cause of action alleges that an actual controversy has arisen between the parties in relation to entitlement to the decedent’s trust and her assets at the time of her death. Cross-complainant seeks a judicial determination that the trust is invalid and that the decedent’s testamentary intent was always to provide for her surviving spouse and family members rather than for cross-defendants. Cross-complaint ¶ 105.
Section 1060 permits a party to seek a declaration of rights under “a written instrument, excluding a will or trust.” Because cross-complainant’s request for declaratory relief is based on the validity of a trust, and section 1060 expressly excludes declaratory relief based on a trust, the demurrer to the fifth cause of action is sustained without leave to amend.
The court will only sustain a demurrer for uncertainty if a pleading is so poorly drafted that defendants cannot reasonably respond. Khoury v. Maly’s of California Inc. (1993) 14 Cal.App.4th 612, 616. The cross-complaint is not “so incomprehensible that [cross-defendants] cannot reasonably respond.” Lickiss v. Financial Industry Regulatory Authority (2010) 208 Cal.App.4th 1125, 1135. Any “ambiguities can be clarified under modern discovery procedures.” Khoury, 14 Cal.App.4th at 616. The demurrer for uncertainty is overruled.
Cross-defendants are ordered to file and serve answers to the cross-complaint by October 10, 2022.
Pinchot to give notice.
Cross-defendants Dyrce Garcez Silva, Richard Fonseca Silva, and URCA, LLC’s Motion to Strike Cross-complaint
Cross-defendants Dyrce Garcez Silva, Richard Fonseca Silva, and URCA, LLC move to strike cross-complainant’s claims for attorneys’ fees and costs; the punitive damages allegations and prayer; requests for a finding that cross-defendants are liable for twice the value of the property recovered pursuant to Probate Code section 859; and requests that cross-defendants be deemed to have predeceased the decedent for purposes of any distributions of property, damages, or costs as a result of this action pursuant to Probate Code section 259. For the following reasons, cross-defendants’ motion to strike is denied.
A court may strike out any irrelevant, false, or improper matter inserted in any pleading or 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. Cal. Civ. Proc. Code § 436.
“When a plaintiff proves ‘by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs.’ ([Welf. & Inst. Code] § 15657.5, subd. (a), italics added.)” Cameron v. Las Orchidias Properties, LLC (2022) 82 Cal.App.5th 481 (citations omitted). Welfare and Institutions Code section 15657.5(d) permits a plaintiff who has suffered financial elder abuse to seek punitive damages pursuant to Civil Code section 3294. Civil Code section 3294(a) provides: “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”
To withstand a motion to strike punitive damages, a plaintiff must plead ultimate facts showing the plaintiff is entitled to such relief. Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166; see also Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042 (complaint “devoid of any factual assertions supporting a conclusion petitioners acted with oppression, fraud or malice” subject to motion to strike punitive damages allegations).
As discussed in the court’s contemporaneous ruling on cross-defendants’ demurrer to the cross-complaint, the cross-complaint sufficiently alleges that Silva obtained the property of an elder for a wrongful purpose or with fraudulent intent and thus alleges facts sufficient to state a financial elder abuse cause of action. The cross-complaint also sufficiently alleges facts demonstrating cross-defendants acted with oppression, fraud, or malice, or with willful or conscious disregard. Cross-complaint ¶¶ 30, 33-43, 47-48, 51-52, 55-60, 70-71, 78. The motion to strike cross-complainant’s claim for attorneys’ fees and costs and the punitive damages allegations and prayer is denied.
Probate Code section 859 provides in pertinent part that “[i]f a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a conservatee, a minor, an elder, a dependent adult, a trust, or the estate of a decedent, or has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder or dependent adult financial abuse, as defined in Section 15610.30 of the Welfare and Institutions Code, the person shall be liable for twice the value of the property recovered by an action under this part.”
As discussed in the court’s contemporaneous ruling on cross-defendants’ demurrer to the cross-complaint, the cross-complaint states a claim for a wrongful taking pursuant to Probate Code section 850. Cross-complaint ¶¶ 33-34, 36-43. Accordingly, cross-complainant has also adequately alleged facts demonstrating application of Probate Code section 859. The motion to strike the claim for Probate Code section 859 penalties is denied.
Probate Code section 259 acts to disinherit elder abusers by deeming the abusers “predeceased” for purposes of their right to benefit from the estate if its conditions are fulfilled. The legislative purpose of section 259 is “to deter the abuse of elders by prohibiting abusers from benefiting from the abuse.” Estate of Lowrie (2004) 118 Cal.App.4th 220, 229.
Section 259 sets forth the circumstances under which a person shall be deemed to have predeceased a decedent. Section 259(a) provides in pertinent part: “[a]ny person shall be deemed to have predeceased a decedent to the extent provided in subdivision (c) where all of the following apply: [¶] (1) It has been proven by clear and convincing evidence that the person is liable for . . . financial abuse of the decedent, who was an elder or dependent adult. [¶] (2) The person is found to have acted in bad faith. [¶] (3) The person has been found to have been reckless, oppressive, fraudulent, or malicious in the commission of any of these acts upon the decedent. [¶] (4) The decedent, at the time those acts occurred and thereafter until the time of his or her death, has been found to have been substantially unable to manage his or her financial resources or to resist fraud or undue influence.” Probate Code § 259(a).
The cross-complaint sufficiently alleges cross-defendants acted in bad faith to engage in financial elder abuse. The cross-complaint also alleges cross-defendants acted with oppression, fraud, or malice, and that the decedent was substantially unable to manage her financial resources or to resist fraud or undue influence. Cross-complaint ¶¶ 30, 33-43, 47-48, 51-52, 55-60, 70-71, 78. The motion to strike the claim for forfeiture pursuant to Probate Code section 259 is denied.
Cross-defendants are ordered to file and serve answers to the cross-complaint by October 10, 2022.
Pinchot to give notice.