Judge: Peter A. Hernandez, Case: 23PSCV02165, Date: 2024-04-18 Tentative Ruling


Case Number: 23PSCV02165    Hearing Date: April 18, 2024    Dept: K

Defendant Ronald B. Bibonia’s Demurrer to Complaint is SUSTAINED.

Wilfred T. Co’s Demurrer to Complaint is SUSTAINED in part (i.e., as to the first, second, sixth and ninth causes of action) and OVERRULED in part (i.e., as to the third through fifth, seventh, eighth and tenth causes of action).

The court will hear from counsel for Plaintiff as to whether leave to amend is requested, and as to which cause(s) of action, and will require an offer of proof if so.

Background   

Plaintiff Flossie C. Parungao (“Plaintiff”) alleges as follows:

Plaintiff and Wilfred T. Co aka Winnifredo T. Co (“Co”) are siblings. In June 2004, Plaintiff located and negotiated the purchase of the property located at 302 S. Loraine Ave., Glendora, California 91741 (“Property”) to serve as her residence. Co offered to assist Plaintiff with the purchase of the subject property. Plaintiff and Co agreed that (1) Co would co-sign the purchase financing documents and take record title to the subject property, (2) Plaintiff would provide all of the funds needed for the down payment and closing costs, (3) Plaintiff would thereafter directly pay or provide funds for payment of the loan, property taxes, insurance and other subject property related-expenses, and that (4) upon request from Plaintiff, Co would execute such documents and take such other actions as might be needed to evidence he had no interest in the subject property other than the bare record title he would be relinquishing (“Contract”). Plaintiff did all things required of her under the Contract.

 

In 2023, Plaintiff asked Co to sign over record title to her; Co refused. Plaintiff’s ensuing investigation revealed that Co transferred the subject property into the Ronald B. Bibonia and Wilfred T. Co Revocable Trust dated November 24, 2020 (“Trust”).

On July 18, 2023, Plaintiff filed a complaint, asserting causes of action against Co, individually and as Co-Trustee of the Trust, Ronald Bibonia (“Bibonia”), individually and as Co-Trustee of the Trust, and Does 1-50 for:

1.                  Specific Performance of Oral Contract

2.                  Breach of Oral Contract

3.                  Fraud [Promise Without Intent to Perform]

4.                  Intentional Misrepresentation

5.                  Breach of Fiduciary Duty

6.                  Conversion

7.                  Violation of Penal Code § 496

8.                  Quiet Title

9.                  Accounting

10.              Imposition of Constructive Trust

A Case Management Conference is set for April 18, 2024.

Legal Standard

A demurrer may be made on the grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action and/or is uncertain. (Code Civ. Proc., § 430.10, subds. (e) and (f).)

When considering demurrers, courts read the allegations liberally and in context. 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 pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905 [citations omitted].) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) “[A] demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

Discussion

Co and Bibonia demur, pursuant to Code of Civil Procedure § 430.10, subdivisions (e) and (f), to the first through tenth causes of action in Plaintiff’s complaint, on the basis that they each fail to state facts sufficient to constitute causes of action and are uncertain.

Request for Judicial Notice

The court rules on Co and Bibonia’s Request for Judicial Notice (“RJN”) as follows: Granted as to Exhibit A (i.e., deed of trust recorded April 11, 2007).

Merits

            As to Bibonia

Bibonia contends that the demurrer should be summarily sustained as it pertains to him, on the basis that the complaint is “completely devoid of factual allegations” against him. (Dem., 7:17-18). The court agrees, notwithstanding Plaintiff’s “broad agency and joint tortfeasor allegations” (Opp., 9:1) set forth in Paragraph 6 of the complaint, inasmuch as courts “give no credit to allegations that merely set forth contentions or legal conclusions.” (Wilson v. Hynek (2012) 207 Cal.App.4th 999, 1007). Bibonia’s demurrer is sustained on this basis.

First and Second Causes of Action (i.e., Specific Performance of Oral Contract and Breach of Oral Contract, Respectively)

“[T]he 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 alleged that in June 2004, she “located and negotiated the purchase of the Property to serve as her residence” and that “[a]t the time, . . . [her brother] Co offered to assist [her] with the purchase of the Property (Complaint, ¶¶ 7 and 8); that she and Co agreed that “(1) Co would assist [her] by co-signing the purchase financing documents and taking record title to the Property, (2) [she] would provide all of the funds needed for the down payment and closing costs, (3) [she] would thereafter directly pay or provide funds for the payment of the loan, property taxes, insurance and other Property related expenses, and (4) upon request from [her, Co would execute such documents and take such other actions as might be needed to evidence he had no interest in the Property other than the bare record title he would be relinquishing (‘Contract’)” (Id.).

Co first argues that the alleged oral contract is barred by the Statute of Frauds. (See Civil Code § 1624, subd. (a)(3) [“The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the part’s agent: . . . (3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein . . .”] Plaintiff, however, has alleged that she “did all things required of her under the Contract, including providing all of the funds needed for the down payment and closing costs, and directly paying or providing funds for payment of the loan, property taxes, insurance and other Property related expenses” (Complaint, ¶ 9), that “[t]he Contract. . . has been fully performed by Plaintiff” (Id., ¶ 13), that she “has provided all funds needed for purchase and maintenance of the Property” (Id.) and that “[t]he Contract is not subject to the statute of frauds because it has been fully performed by Plaintiff” (Id., ¶ 18).“Where. . . there has been full performance upon the part of the party seeking to enforce the contract, the doctrine of estoppel arises, and when it does arise no writing is required because the courts will not permit a litigant to use the statute of frauds as an instrument with which to perpetrate fraud or oppression.” (Marr v. Postal Union Life Ins. Co. (1940) 40 Cal.App.2d 673, 679.) Although Co points to RJN Exhibit A to dispute Plaintiff’s contention that the agreement has been “fully performed” by Plaintiff, RJN Exhibit A does not, as Co urges, show that Plaintiff “has not performed her obligation to pay the mortgage which continues to be carried in [Co’s name.” (RJN, 2:17-19); rather, it is merely a copy of the deed of trust recorded April 11, 2007. Since the allegations of Plaintiff’s complaint must be taken as true, the court overrules the demurrer on statute of frauds grounds.

Co next argues that the alleged oral contract fails for lack of consideration. (See Civ. Code § 1550 [“It is essential to the existence of a contract that there should be: 1. Parties capable of contracting; 2. Their consent; 3. A lawful object; and, 4. A sufficient cause or consideration”].)

Plaintiff has alleged that “[t]he Contract was supported by substantial consideration from Plaintiff in the form of the entire purchase price of the Property as well as payment of all Property related expenses over the years” (Id., ¶¶ 13 and 18). Plaintiff does not allege, however, that Co received any benefit of any kind pursuant to the above arrangement. Plaintiff’s citation to Probate Code § 15208 (i.e., “[c]onsideration is not required to create a trust, but a promise to create a trust in the future is enforceable only if the requirements for an enforceable contract are satisfied”) in opposition is irrelevant, as Plaintiff has not alleged that Co contracted for the creation of a trust. Co’s demurrer is sustained on this basis.

Third and Fourth Causes of Action (i.e., Fraud [Promise Without Intent to Perform and

Intentional Misrepresentation, Respectively)

“The essential allegations of an action for fraud are a misrepresentation, knowledge of its falsity, intent to defraud, justifiable reliance, and resulting damage.” (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109.) “’Promissory fraud’ is a subspecies of the action for fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

Co asserts that there is no actionable misrepresentation because, “by [Plaintiff’s] admission, she herself has failed to perform her own obligations to pay or provide funds for payment of the loan.” (Dem., 10:24-27). Co does not identify where Plaintiff made such an admission. Co next asserts that Plaintiff has not alleged justifiable reliance, “as an immediate relinquishment of title by [Co] without [Plaintiff] would violate the Deed of Trust that he continues to be burdened with, which prohibits transfer of title without Lender approval.” (Dem., 10:27-11:2). This assertion, however, again improperly seeks to challenge Plaintiff’s allegation of full performance. The court also rejects Co’s assertion that Plaintiff has failed to plead damages. (See Complaint, ¶¶ 25, 26, 32 and 33). Co’s demurrer to the third and fourth causes of action is overruled.

Fifth Cause of Action (i.e., Breach of Fiduciary Duty)

“The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 646 [quotations and citation omitted].)

“[A] fiduciary relationship is any relation existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter's knowledge or consent.” (Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1338 [internal quotations and citation omitted].) “[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.” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 632 [quotations and citation omitted; emphasis added].)

The court determines that Plaintiff has adequately pled the elements of this cause of action. Again, Plaintiff has alleged that Co, her brother, offered to assist her with the purchase of the Property (Complaint, ¶ 8); that they agreed that “(1) Defendant Co would assist Plaintiff by co-signing the purchase financing documents and taking record title to the Property, (2) Plaintiff would provide all of the funds needed for the down payment and closing costs, (3) Plaintiff would thereafter directly pay or provide funds for payment of the loan, property taxes, insurance and other Property related expenses, and (4) upon request from Plaintiff, Defendant Co would execute such documents and take such other actions as might be needed to evidence he had no interest in the Property other than the bare record title he would be relinquishing (Id.); that Plaintiff “provid[ed] all of the funds needed for the down payment and closing costs, and directly pa[id] or provid[ed] funds for payment of the loan, property taxes, insurance and other Property related expenses” (Id., ¶ 9); that in 2023 she asked Co to sign over record title to the Property to her (Id., ¶ 10) and that Co refused Plaintiff’s request and “inform[ed] Plaintiff the Property was now his to do with as he pleased” (Id.) Co’s demurrer to this cause of action is overruled.

Sixth Cause of Action (i.e., Conversion)

“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.” (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387 [quotations and citation omitted].) Further, “[t]he tort of conversion applies to personal property, not real property.” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1295.)

Plaintiff has alleged that “Defendant Co has repudiated his agreement to replace himself with Plaintiff as record title holder of the Property, denied Plaintiff’s interest as owner of the Property. In doing so, Defendants have effectively converted and taken for their own use and benefit all of the monies expended by Plaintiff in connection acquisition [sic] and ownership of the Property.” (Complaint, ¶ 42).

Co asserts that Plaintiff’s cause of action fails because the Property cannot be the subject of a claim for conversion. Plaintiff, in turn, argues that “[w]hat was taken was not real property, but instead a specific corpus of personal property—money. . .” (Opp., 12:14-15). Plaintiff, however, has not alleged that the “monies expended” by Plaintiff to live in the property ever went to Co, as opposed to the lender. Co’s demurrer to this cause of action is sustained.

 

Seventh Cause of Action (i.e., Violation of Penal Code § 496)

Penal Code § 496, subdivision (a) provides, in relevant part, that “[e]very person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170.”

Co does not provide any authority for his position that Penal Code § 496 does not apply to real property. Again, Plaintiff has alleged that when she asked Co to sign over record title to the Property to her, Co refused to do so and told Plaintiff “the Property was now his to do with as he pleased.” (Complaint, ¶ 10). Co’s demurrer to this cause of action is overruled.

Eighth Cause of Action (i.e., Quiet Title)

A cause of action for quiet title requires (1) a legal description and street address of the subject property; (2) the title of the plaintiff as to which a determination is sought and the basis of the title; (3) the adverse claims to the title of the plaintiff against which a determination is sought; (4) the date as of which the determination is sought and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. (Code Civ. Proc., § 761.020.) The complaint must also be verified. (Id.)

Co asserts that Plaintiff lacks standing to plead this cause of action because “an action to quiet title will not lie in favor of the holder of an equitable title as against the owner of the legal title.” (South v. Wishard (1954) 123 Cal.App.2d 642, 653.) However, “when legal title has been acquired through fraud any number of remedies are available and appropriate. These remedies include quieting title in the defrauded equitable title holder's name . . .” (Warren v. Merrill (2006) 143 Cal.App.4th 96, 114.) Co’s demurrer to this cause of action is overruled.

Ninth Cause of Action (i.e., Accounting)

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.)

Plaintiff has alleged that she “is entitled to an accounting of all loans and other transactions secured by or relating in any way to the Property from 2004 to the present, an accounting of any charges or liens against the Property resulting from the conduct and activities of Defendant, as well as an accounting of all property and other assets obtained or derived by Defendants with funds borrowed against or otherwise obtained with respect to the Property.” (Complaint, ¶ 54).

Plaintiff has not alleged that Co ever received any monies for the Property from Plaintiff or anyone else in connection with the Property at any time. Further, Plaintiff has not alleged that Co encumbered the Property at any time. Co’s demurrer to this cause of action is sustained.

 

Tenth Cause of Action (i.e., Imposition of Constructive Trust)

Three conditions are necessary to create a constructive trust as defined in Civil Code § 2224: “the existence of a res (property or some interest in property), the plaintiff’s right to that res, and the defendant’s gain of the res by fraud, accident, mistake, undue influence, the violation of a trust or other wrongful act.” (Lazar v. Hertz Corp. (1983) 143 Cal.App.3d 128, 139 [quotations and citation omitted].)

Again, “when legal title has been acquired through fraud any number of remedies are available and appropriate. These remedies include . . . making the legal title holder the constructive trustee of the property for the benefit of the defrauded equitable titleholder.” (Warren, supra, 143 Cal.App.4th at 114). Plaintiff has adequately pled her fraud causes of action. Co’s demurrer to this cause of action, then, is overruled.