Judge: Nathan Vu, Case: 30-2022-01297809, Date: 2023-08-07 Tentative Ruling
Demurrer
Defendant SchoolsFirst Federal Credit Union’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED, with 21 days leave to amend.
Defendant SchoolsFirst Federal Credit Union’s Request for Judicial Notice in Support of SchoolsFirst Federal Credit Union’s Demurrer is GRANTED as to Exhibits 1-6 and DENIED as to the Exhibit 7. (See Evid. Code, § 452, subd. (d); Voris v. Lampert (2019) 7 Cal.5th 1141, 1147, fn. 5 [newspaper articles “are not proper authorities to establish the truth of the matters asserted therein”].)
Plaintiff Sekayi R. White’s Request for Judicial Notice in Opposition to Defendant’s Demurrer is GRANTED as to Exhibit 2 and DENIED as to Exhibit 1. (See Evid. Code, § 452, subd. (d); Bridges v. Mt. San Jacinto Community College District (2017) 14 Cal.App.5th 104, 117 [printout from website “not the type of agency action we may judicially notice”]; Golden Door Props. v. County of San Diego (2020) 50 Cal.App.5th 467, 510, fn. 24 [court denied request for judicial notice of CARB’s website because it was irrelevant to resolution of issues].)
With respect to both Requests for Judicial Notice, while the Court can take judicial notice of the results reached in court documents, in may not take judicial notice of the truth of hearsay statements in court decisions or other papers. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.)
Defendant SchoolsFirst Federal Credit Union demurs to the 1st Cause of Action for Breach of Contract and the 2nd Cause of Action for Fraud and Conversion plead in the First Amended (FAC) filed by Plaintiff Sekayi R. White.
Standard for Demurrer
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 fn.7.)
Although courts should take a liberal view of inartfully drawn complaints, (see Code Civ. Proc., § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought, (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413). Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Code Civ. Proc., § 425.10, subd. (a).)
Statute of Limitations
Defendant first argues that both of the FAC’s two claims are barred by the statute of limitations.
An action upon any contract is subject to a four-year statute of limitations. (Code Civ. Proc., § 337, subd. (a).) Causes of action for fraud and conversion are subject to a three-year statute of limitations. (Code Civ. Proc., § 338, subds. (c), (d); Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 956; AmerUS Life Ins. Co. v. Bank of America, N.A. (2006) 143 Cal.App.4th 631, 637, 639.)
In the FAC, Plaintiff alleges that he learned, as early as December 19, 2008, and no later than February 18, 2011, that there were unauthorized transactions on his bank account and the loss of the $33,900 in funds that he now seeks to recover. (See FAC, ¶¶ 15, 23.)
Plaintiff did not file his original Complaint until December 21, 2022, more than 11 years after he learned that Defendant had allowed and processed the unauthorized transactions. (See ROA #1.) Thus, it does not appear that Plaintiff has complied with either the 4-year statute of limitations on breach of contract claims or the 3-year statute of limitations on fraud or conversion claims.
Civil Procedure Code Section 348
Plaintiff responds that his claims are not time-barred pursuant to Civil Procedure Code Section 348.
That statute mandates that “[t]o actions brought to recover money or other property deposited with any bank, banker, trust company, building and loan association, or savings and loan society or evidenced by a certificate issued by an industrial loan company or credit union there is no limitation.” (Code Civ. Proc., § 348.)
However, the Court of Appeal has held that where the claim against the bank is based on allegations of forged or altered checks, Code of Civil Procedure section 340’s one-year statute of limitations applies. (See Roy Supply, Inc. v. Wells Fargo Bank (1995) 39 Cal.App.4th 1051, 1065; see also Code Civ. Proc., § 340, subd. (c) [one-year statute of limitations applies to “[a]n action . . . by a depositor against a bank for the payment of a forged or raised check, or a check that bears a forged or unauthorized endorsement”].)
As the court in Roy Supply, Inc. v. Wells Fargo Bank explained, while Section 348 does not have a “limitation upon the time in which a customer may bring an action to recover money deposited with a bank,” that customer is subject to the one-year statute of limitation of Section 340 when the customer is a depositor bringing suit against a bank “for the payment of a forged or raised check.” (Roy Supply, Inc. v. Wells Fargo Bank, supra, 39 Cal.App.4th at pp. 1064-1065; Union Tool Co. v. Farmers’ & Merchants’ Nat’l Bank of Los Angeles (1923) 192 Cal. 40, 52 [section 340 of the Code of Civil Procedure must “be held to control the general rule expressed in section 348 of the Code of Civil Procedure”].)
The FAC alleges that Plaintiff learned, as early as December 19, 2008, and no later than February 18, 2011, that a number of unauthorized transactions had been made on his account. (FAC, ¶¶ 15, 23.) The FAC also pleads that Plaintiff’s action and his right to recovery “are based and for the payment of a forged or raised check.” (FAC, ¶¶ 23, 34.)
Thus, either the general statutes of limitations or Section 340, and not Section 348, apply in this case.
Civil Procedure Code Section 352.1
Plaintiff also argues that his claims are not barred under Civil Procedure Code section 352.1.
That provision states that “[i]f a person entitled to bring an action, mentioned in Chapter 3 (commencing with Section 335), is, at the time the cause of action accrued, imprisoned on a criminal charge, or in execution under the sentence of a criminal court for a term less than for life, the time of that disability is not a part of the time limited for the commencement of the action, not to exceed two years.” (Code Civ. Proc., § 352.1, subd. (a).)
Section 352.1 is inapplicable in this case because, “at the time the cause of action accrued,” Plaintiff was not “imprisoned on a criminal charge.” Here, Plaintiff’s causes of action accrued as early as December 19, 2008, and no later than February 18, 2011. (See FAC, ¶¶ 15, 23.)
However, from April 1, 2007, to August 2012, he was in county jail. (See FAC, ¶¶ 10, 12.) Plaintiff was not convicted and sent to state prison until August 2012. (See FAC, ¶ 12.)
In Austin v. Medicis (2018) 21 Cal.App.5th 577, the Court of Appeal held that Section 352.1 applies only where the plaintiff is serving a term of imprisonment in the state prison at the time that the causes of action accrue. (Id. at p. 597.) Thus, the Austin v. Medicis Court held that Section 352.1 did not apply to the plaintiff in that case while he was in pretrial custody in county jail. (Ibid.)
Plaintiff was in the “Orange County Jail . . . pending trial on criminal assault charges” between April 1, 2007 and August 2012. (See FAC, ¶¶ 10, 12.) Plaintiff’s causes of action accrued as early as December 19, 2008, and no later than February 18, 2011. (See FAC, ¶¶ 15, 23.) Thus, similar to the plaintiff in Austin v. Medicis, Plaintiff was in pretrial custody in jail at the time the causes of action accrued. Section 352.1 is inapplicable.
However, even if Section 352.1 applied, by its terms, it cannot extend the statute of limitations by more than 2 years. Here, Plaintiff did not file his original Complaint until 11 years or more after the causes of action accrued. Even if the Court did not count 2 years of Plaintiff’s incarceration in the Orange County Jail towards the running of the statutes of limitations, Plaintiff’s claims are still untimely.
Equitable Tolling
Plaintiff further asserts that his causes of action are allowed under the doctrine of equitable tolling.
“[E]quitable tolling today applies when three ‘elements’ are present: ‘[(1)] timely notice, and [(2)] lack of prejudice, to the defendant, and [(3)] reasonable and good faith conduct on the part of the plaintiff.’ These requirements are designed to ‘balanc[e] the injustice to the plaintiff occasioned by the bar of his claim against the effect upon the important public interest or policy expressed by the [operative] limitations statute.’” (Saint Francis Memorial Hospital v. State Department of Public Health (2020) 9 Cal.5th 710, 724-725, quoting Addison v. State of California (1978) 21 Cal.3d 313, 319.)
As noted above, Plaintiff knew, as early as December 19, 2008, and no later than February 18, 2011, that there were unauthorized transactions on his account.(See FAC, ¶¶ 15, 23.) The only action Plaintiff took from 2008 to 2022 was to send one letter to Defendant on February 18, 2011, “urging them to investigate losses of his funds and reimbursement.” (FAC, ¶ 23.) After that, he took no action with respect to Defendant until October 11, 2022, more than 11 years later, when he sent Defendant a demand letter for the immediate return of the $33,900. (See FAC, ¶ 28.)
In order to give timely notice, a party must cause the defendant to be “fully notified within the [statute of limitations] of plaintiffs’ claims and their intent to litigate.” (Addison v. State of California (1978) 21 Cal.3d at p. 321.) In this case, sending one letter urging Defendant to investigate does not fully notify Defendant of Plaintiff’s claims or his intent to litigate. In addition, Defendant’s demand letter sent more than 11 years later cannot be said to be timely.
Further, it is hard to see how there could be a lack of prejudice to Defendant since records and employees with knowledge of the matter are no longer available and the money itself will be long gone. Finally, Plaintiff’s action of sending only two letters to Defendant in more than 11 years does not constitute “reasonable and good faith conduct.”
Therefore, all of Plaintiff’s claims are time-barred and the court must sustain the demurrer as to all causes of action.
1st Cause of Action (Breach of Contract)
It is well-established that “the elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
Plaintiff has the existence of a contract and its terms. (See FAC, ¶ 9 [under terms of contract, “the bank would only authorize transactions via plaintiff’s signature, he signed on defendant’s signature card contract.”].) Plaintiff also plead the breach of the contract and his resulting damages. (See FAC, pp 15-16, 18, 28-29 [Defendant allowed and processed unauthorized transaction that caused Plaintiff to lose $33,900 and $1,223.76].) However, there are no allegations that Plaintiff performed his obligations under the contract.
Thus, the court must sustain the demurrer to the 1st Cause of Action.
2nd Cause of Action (Fraud/Conversion)
The elements of a fraud or intentional misrepresentation claim are: “(a) misrepresentation, false representation, concealment, or nondisclosure; (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.)
“‘In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) “Thus ‘the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect.’” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73, quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.)
“The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) The purpose of the requirement that fraud be pled specifically is to “provide[] enough information for respondents to know what purported falsehoods they must defend against.” (Murphy v. BDO Seidman, LLP (2003) 113 Cal.App.4th 687, 693.)
Plaintiff’s fraud cause of action lacks the required specificity. The FAC generally alleges that Defendant, at some unspecified time, allowed unidentified parties to deposit money into, and to drain money from, Plaintiff’s bank account by way of forged or raised checks. (See FAC, ¶¶ 15, 34-35.)
The FAC also lacks allegations that Defendant misrepresented any facts to Plaintiff, that it knew these facts were false, that it intended for Plaintiff to rely on these misrepresentations or to induce Plaintiff’s reliance, or that Plaintiff justifiably relied on any such misrepresentations.
“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.” (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.)
In this case, the FAC contains no allegations that Defendant converted or exercised wrongful dominion over Plaintiff’s property. Instead, Plaintiff has alleged Defendant was negligent in allowing unknown parties to make unauthorized deposits into and/or withdrawals out of Plaintiff’s bank account.
Therefore, the court must sustain the demurrer to the 2nd Cause of Action.
Leave to Amend
“It is an abuse of the trial court's discretion to sustain a demurrer without leave to amend if there is a reasonable possibility the plaintiff can amend the complaint to allege any cause of action.” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711.) “Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)
Nonetheless, it is the plaintiff's “burden to establish how the complaint can be amended to state a valid cause of action.” (Sanowicz v. Bacal (2015) 234 Cal.App.4th 1027, 1044.) In order to meet this burden, a plaintiff may submit a proposed amended complaint or enumerate facts and demonstrate how those facts establish a cause of action. (See Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 890.)
“[F]or an original complaint, regardless whether the plaintiff has requested leave to amend, it has long been the rule that a trial court's denial of leave to amend constitutes an abuse of discretion unless the complaint ‘shows on its face that it is incapable of amendment.’” (Eghtesad v. State Farm General Insurance. Co. (2020) 51 Cal.App.5th 406, 411, quoting King v. Mortimer (1948) 83 Cal.App.2d 153, 158; see Cabral v. Soares (2007) 157 Cal.App.4th 1234, 1240 [“Only rarely should a demurrer to an initial complaint be sustained without leave to amend.”].)
Although the court is ruling on the FAC rather than the original Complaint, this is the court’s first ruling on a demurrer to Plaintiff’s pleadings. In addition, Plaintiff is representing himself. Thus, the court will grant leave to amend.
Motion to Strike
Defendant SchoolsFirst Federal Credit Union’s Motion to Strike First Amended Complaint is taken OFF CALENDAR as moot.
Defendant SchoolsFirst Federal Credit Union moves to strike Paragraphs 21-22, 36, and 37(c) of the First Amended Complaint (FAC).
The court has sustained Defendant’s Demurrer to the entirety of the FAC and as to both causes of action. Thus, none of the paragraphs of the FAC are operative and Defendant’s Motion to Strike is moot. The court will take the Motion to Strike off calendar.
Defendant shall give notice of these rulings.