Judge: Olga Alvarez, Case: 37-2015-00005991-PR-LA-CTL, Date: 2023-11-14 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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CENTRAL COURTHOUSE TENTATIVE RULINGS - October 31, 2023

11/01/2023  10:30:00 AM  503 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Olga Alvarez

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Probate  Letters Of Administration Demurrer / Motion to Strike (Probate) 37-2015-00005991-PR-LA-CTL ESTATE OF JOHN R DUNSTAN [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 07/26/2023

Pursuant to San Diego County Superior Court Local Rules, rule 4.23.7, the Court's tentative ruling is as follows: The Demurrer to the Second Amended Petition filed by Guadalupe Lopez and Saul Torres (ROA 800) is SUSTAINED without leave to amend.

Respondents' Request for Judicial Notice (ROA 803) is GRANTED pursuant to Evidence Code section 452. Notice is taken to the extent permitted. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-1565 [the truth of matters asserted in court records and official acts are not subject to judicial notice.'].) I. BACKGROUND This case concerns the estate of John R. Dunstan ('Decedent'), who died on March 28, 2013. On April 14, 2015, the Court appointed Janice K. Hall ('Hall') as administrator with the will annexed. (ROA 14.) U.S. Specialty Insurance Company ('Petitioner') has provided bonds for Hall in the amounts of $225,000, $2,657,640, and $525,000. (ROA 15, 30, 76.) Decedent was married to Respondent Guadalupe Lopez ('Guadalupe'). Prior to his death, Decedent changed title to some of the real properties from Decedent, individually, to Decedent and Guadalupe, as joint tenants.

On January 26, 2022, Petitioner filed a Petition to Establish Estate's Claim of Ownership to Property, For Order Directing Its Transfer to Estate, and for Double Damages Pursuant to Probate Code Section 859 ('Petition'). (ROA 427.) The Petition alleges that Guadalupe and Leon Lopez ('Leon') obtained Decedent's accounts and real property through undue influence and financial elder abuse; Guadalupe improperly transferred Decedent's real property to her sons Saul Torres ('Saul') and Salvador Torres ('Salvador'); Guadalupe, Leon, Saul, and Salvador have collected rental income from real property belonging to the estate; Leon improperly transferred real property to Sandra Garcia, trustee of the Sandra L. Garcia Living Trust ('Garcia'); Hall has not included all of the estate's potential property in the inventories that she has filed; and Petitioner could be liable as the surety if Hall were surcharged.

On June 10, 2022, in response to the Probate Examiner's notes, Petitioner filed an amended petition ('FAP') which specifically identified the real property and accounts that Petitioner sought to be returned Calendar No.: Event ID:  TENTATIVE RULINGS

3003096 CASE NUMBER: CASE TITLE:  ESTATE OF JOHN R DUNSTAN [IMAGED]  37-2015-00005991-PR-LA-CTL to the estate. (ROA 530.) On February 9, 2023, Petitioner filed a motion for leave to file a second amended petition ('SAP') to name Victor Torres ('Victor'), another of Guadalupe's sons, as a respondent and assert allegations with respect to Victor. (ROA 703.) The Court granted this motion on May 24, 2023. (ROA 776, Minute Order filed May 24, 2023.) On May 26, 2023, Petitioner filed the SAP. (ROA 779.) On July 26, 2023, Guadalupe and Saul (collectively 'Respondents') filed the instant demurrer to the SAP on the ground the SAP does not state facts sufficient to constitute a cause of action against Respondents. (ROA 800.) Specifically, Respondents demur to the cause of action to reclaim the estate assets based on undue influence in that the claim is barred by the applicable statute of limitation. (ROA 801.) On October 19, 2023, Petitioner filed an opposition to the demurrer. (ROA 855.) On October 25, 2023, Respondents filed a reply. (ROA 856.) II. DISCUSSION A. Compliance with the Rules of Court Respondents' exhibits fail to comply with CRC 3.1100(f)(4), which requires that unless submitted by a self-represented party, the electronic exhibits must include electronic bookmarks with links to the first page of each exhibit, with bookmark titles identifying the exhibit number and briefly describing the exhibit. (See ROA 803.) The parties are expected to comply with all applicable rules in the future.

B. Demurrer 1. Argument Respondents argue the statute of limitations ('SOL') for undue influence and financial elder abuse is four years, and the claims accrued on March 20, 2012, and August 10, 2012,1 when Decedent transferred title jointly to Guadalupe of properties he owned as separate property. Decedent died on March 28, 2013, and thus, there were 1,231 days left on the SOL clock.

Respondents do not dispute delayed discovery applies but argue the triggering date was August 4, 2017, when Petitioner was served with the civil complaint in Elsineitti v. Lopez et al., case no.

2014-81988. This civil complaint put Petitioner on direct inquiry notice that there were real and personal assets outside Decedent's estate, and it provided sufficient information to trigger Petitioner's duty to investigate.

Respondents further argue that Petitioner would have also found the judgment against the Estate in the civil case, which had already been entered on September 22, 2016, prior to the filing and service of the civil complaint on Petitioner. A review of that judgment would have shown that there was now a debt on the estate of $7,443,918.59, which is significantly less than the bonds issued by Petitioner. At that time, Petitioner knew that there were insufficient estate assets to satisfy the known creditors, and the Personal Representative had failed to locate, identify, and marshal real and personal property of the Decedent into the Estate. This would put a reasonable person on notice to look for additional assets outside of the Estate to satisfy this debt and mitigate the need for a claim on the bond.

Respondents contend that Petitioner cannot claim ignorance of the civil action because it filed a Case Calendar No.: Event ID:  TENTATIVE RULINGS

3003096 CASE NUMBER: CASE TITLE:  ESTATE OF JOHN R DUNSTAN [IMAGED]  37-2015-00005991-PR-LA-CTL Management Statement in that case on December 21, 2017, and appeared in the case. Petitioner had until December 17, 2020 (1,231 days from August 4, 2017, the time remaining on the SOL clock) to file the Petition. The Petition was filed in January 2022, and thus, it is untimely. Whether the SOL is calculated from the date of Decedent's death, or from August 4, 2017, the Petition is still untimely.

In opposition, Petitioner argues that the SOL for Petitioner to file the 850 Petition did not begin to run on August 4, 2017, when its agent for service of process was served with the civil complaint regarding the judgement on Elsineitti's creditor's claim. Petitioner argues that Respondents failed to produce any evidence that Petitioner had knowledge of any of the facts sufficient to establish discovery before receipt of the inventories in January 2022, and for that reason the demurrer must be overruled.

Petitioner claims it has alleged facts sufficient to state its cause of action in the SAP, but the demurrer repeatedly refers to facts not within the SAP and requests that the Court take judicial notice of documents and facts not contained in the SAP, which is impermissible. Petitioner argues the demurrer must be overruled because Respondents go beyond the four corners of the SAP.

Petitioner argues that as the surety, its claims are based on a potential surcharge if Hall fails to perform her duties as administrator, and as such, the requisite knowledge to begin the accrual of the SOL is not only knowledge that the properties are outside the Estate, but also knowledge that Hall failed to take proper action to recover those properties to an extent that would result in surcharge.

Petitioner claims that on December 20, 2021, at a Case Management Conference, the Court discussed the possibility of an 850 Petition with Petitioner's counsel and directed attorney Caputo to file one by January 31, 2022, if he decided to do so. The Court further ordered attorney Ayer to file an 850 Petition by February 22, 2022, if attorney Caputo failed to file one. On January 10, 2022, Petitioner's counsel discovered that many properties previously owned by the Decedent were not included in the inventories while reviewing inventory and appraisals received from attorney Ayer's office over the holidays.

Respondents argue in reply that the Court may consider matters subject to judicial notice in ruling on the demurrer. Respondents further argue that Petitioner does not even attempt to claim delayed discovery, and nowhere in the SAP are there any allegations substantiating delayed discovery.

2. Analysis 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; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer is treated 'as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] [Courts] also consider matters which may be judicially noticed.' (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) No other extrinsic evidence can be considered (i.e., no 'speaking demurrers'). (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) The complaint must be liberally construed and given a reasonable interpretation, with a view to substantial justice between the parties. (Amarel v. Connell (1988) 202 Cal.App.3d 137, 140–141; see also, Poseidon Development, Inc. v. Woodland Lane Estates, LLC, supra, 152 Cal.App.4th 1106, 1111-12 [in ruling on demurrers, courts treat as being true 'not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged'].) A complaint should provide defendants sufficient notice of the cause of action stated against them so that they are able to prepare their defense. (People ex rel. Dept. of Transportation v. Superior Court (1992) 5 Cal.App.4th 1480, 1486.) 'To prevail on a demurrer based on the statute of limitations, a defendant must establish the entire cause of action is untimely.' (Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch LLP (2011) 195 Cal.App.4th 265, 274.) Trial court does not err in sustaining demurrer without leave to amend where the complaint discloses on its face that the action is barred by Calendar No.: Event ID:  TENTATIVE RULINGS

3003096 CASE NUMBER: CASE TITLE:  ESTATE OF JOHN R DUNSTAN [IMAGED]  37-2015-00005991-PR-LA-CTL statute of limitations. (Barton v. New United Motor Manufacturing, Inc. (1996) 43 Cal.App.4th 1200, 1204.) An action for elder abuse 'must be commenced within four years after the cause of action shall have accrued.' (CCP § 343.) An action for damages for financial elder abuse 'shall be commenced within four years after the plaintiff discovers or, through the exercise of reasonable diligence, should have discovered, the facts constituting the financial abuse.' (Welf. & Inst. Code, § 15657.7.) When a cause(s) of action survives the death a decedent, any person entitled to bring an action must do so before the expiration of either: (1) six months after the decedent's death; or (2) the limitations period that would have applied if the decedent had not died. (CCP § 366.1(b).) Here, as a preliminary matter, the Court notes that it is well established precedent that in ruling on a demurrer, the Court is not limited to a review of the pleadings but may consider matters outside the pleadings that are properly subject to judicial notice. Respondents submitted records subject to judicial notice (pursuant to Evidence Code §§ 451 and 452), of which the Court takes judicial notice as permitted. However, as discussed, the allegations in the SAP, or rather lack thereof, were sufficient for the Court to conclude the SAP fails to plead discovery of the claims.

On the merits, the issue is whether the SAP states sufficient facts to overcome the SOL. Petitioner does not dispute that the statutory SOL period had run by the time the Petition was filed in January 2022. The SAP alleges Decedent died on March 28, 2013. (ROA 779, SAP, ¶ 5.) Thus, it cannot be disputed that the SAP discloses on its face that the action is barred by the SOL. As such, the SAP must state sufficient facts to allege delayed discovery.

The SAP is devoid of any allegations of delayed discovery. In this regard, the parties dispute the triggering events and dates when the SOL began to run. On the one hand, Respondents argue the SOL clock started on August 4, 2017, when Petitioner was served with the complaint in the civil action, which placed Petitioner on inquiry notice. On the other hand, Petitioner argues the SOL did not begin to run until January 2022, when it had knowledge that Estate assets may be outside the Estate, which was not apparent when the civil complaint was served in August 2017.

However, the issue is whether the SAP states sufficient facts addressing delayed discovery. When the SOL began to run is a triable issue and beyond the scope of this motion. Further, a demurrer is not the proper mechanism to test issues of fact, as all properly pleaded factual allegations are admitted as true for purposes of ruling on a demurrer.

Petitioner relies on this Court's prior ruling on Respondents' motion to bifurcate. (ROA 855, Oppo., at p. 3.) However, the ruling to which Petitioner refers is the ruling on Petitioner's motion for leave to file the SAP, wherein the Court addressed Respondents' opposition arguments, including arguments based on the SOL. (ROA 776, Minute Order filed May 24, 2023.) Significantly, in granting the motion for leave to file, the Court also explained that it was 'inclined to follow the preferable practice of testing the legal sufficiency of a pleading by demurrer or other appropriate proceedings. Even if it were not, Guadalupe and Saul's assertions of untimeliness fail to show that leave to file the SAP should be denied.' (Id., at p. 3.) As such, the Court did not rule on the substance of the issue in the instant demurrer, which tests the sufficiency of the pleadings, and not the merits of the SOL defense.

'In order to rely on the discovery rule for delayed accrual of a cause of action, '[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.' [Citation.] In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to 'show diligence'; 'conclusory allegations will not withstand demurrer.' [Citation.]' (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) Because the SAP discloses on its face that it is barred by the applicable SOL, and no allegations of delayed discovery are contained in the SAP, the demurrer must be SUSTAINED.

Calendar No.: Event ID:  TENTATIVE RULINGS

3003096 CASE NUMBER: CASE TITLE:  ESTATE OF JOHN R DUNSTAN [IMAGED]  37-2015-00005991-PR-LA-CTL Petitioner opposes the demurrer but does not seek leave to amend. (Blank v. Kirwan, supra, 39 Cal.3d 311, 318 [The plaintiff bears the burden to show there is a reasonable possibility the defective pleading may be cured.].) Therefore, the demurrer is SUSTAINED without leave to amend.

The minute order constitutes the formal order of Court, and no further order is required.

Counsel for Respondents is directed to serve written notice of ruling on all parties in accordance with the provisions of CCP § 1019.5(a).

IT IS SO ORDERED.

[1] In the heading, Respondents argue the claims accrued on May 17, 2012 and September 7, 2012, but in the body of the memorandum of points and authorities, Respondents rely on different dates: March 20, 2012 and August 10, 2012. The Quit Claim Deeds transferring title are signed March 20, 2012 and August 10, 2012. (ROA 803, RJN, Exhs. 1, 2.) Thus, the Court relies on these dates found in the Quit Claim Deeds for purposes of counting the SOL time. Calendar No.: Event ID:  TENTATIVE RULINGS

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