Judge: Peter A. Hernandez, Case: 24STCV14298, Date: 2025-01-21 Tentative Ruling

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Case Number: 24STCV14298    Hearing Date: January 21, 2025    Dept: 34

Defendant Inland Medical Enterprises Inc.’s Demurrer to Plaintiffs’ Third Cause of Action for Fraud is SUSTAINED. 

Background

            On June 7, 2024, Plaintiffs Hui Chung Kim and Jeong Seang Park (aka Michael Park) (“Plaintiffs”) filed a complaint against Defendant Inland Medical Enterprises Inc. (“Defendant”) arising from the care of Plaintiff Hui Chung Kim in Defendant’s facilities alleging causes of action for:

1.         Elder Abuse/Neglect;

2.         Negligence;

3.         Wrongful Death; and

4.         Violation of Patient’s Rights.

On September 10, 2024, Plaintiffs filed a First Amended Complaint (“FAC”) against Defendant alleging causes of action for:

1.         Elder Abuse/Neglect;

2.         Negligence;

3.         Fraud (Constructive);

4.         Violation of Patient’s Rights; and

5.         Wrongful Death.

On December 2, 2024, Defendant filed this Demurrer to the third cause of action for fraud in Plaintiffs’ FAC. On January 2, 2025, Plaintiffs filed an opposition. On January 9, 2025, Defendant filed a reply.

Legal Standard

            “The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of” various grounds listed in statute. (Code Civ. Proc., § 430.10.)

            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 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).

Discussion

            Defendant demurs, pursuant to Code of Civil Procedure section 430.10, subdivisions (e) and (f), to the Plaintiffs’ third cause of action for fraud, on the basis that Plaintiffs fail to state facts sufficient to constitute a cause of action and that it is uncertain.

Uncertainty

            A party may demur to a complaint where “[t]he pleading is uncertain,” meaning also that it is “ambiguous [or] unintelligible.” (Cal. Code Civ. Proc. § 430.10, subd. (f).) The law encourages courts to liberally construe pleadings and disfavors demurrers for uncertainty. (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279. 292.) That said, where the complaint does not properly distinguish between multiple defendants, such that it is not clear which factual allegations are made as to which parties, the complaint fails for ambiguity. (Hawley Bros. Hardware Co. v. Brownstone (1899) 123 Cal. 643, 646-647.)

The court finds that Plaintiffs’ allegations supporting the third cause of action for fraud are not so unintelligible that Defendant is not apprised of the issues it has to meet. Defendant also fails to make direct arguments regarding how Plaintiffs’ third cause of action is uncertain.

Accordingly, the special demurrer for uncertainty is overruled. 

Constructive Fraud

            “Constructive fraud ‘ “ ‘is a unique species of fraud applicable only to a fiduciary or confidential relationship.’ ” ’ [Citation.] ‘Constructive fraud “arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice.” [Citation.] Actual reliance and causation of injury must be shown. [Citation.]’ Citations.]” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1131.) The elements of a constructive fraud cause of action are (1) a fiduciary duty or confidential relationship, (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance resulting in injury. (Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498, 516, fn. 14.)

Generally, fraud must be pled with particularity. (Hills Transportation Co. v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 707.) Pleadings must allege facts as to “‘how, when, where, to whom, and by what means the representations were tendered.’" (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

            Defendant argues that Plaintiffs fail to plead all of the elements required for fraud by making vague and conclusory allegations while also failing to state the identity of any individual who spoke on Defendant’s behalf with the intent to defraud. (Demurrer, at p. 6.) Additionally, Defendant argues that Plaintiffs’ constructive fraud claim is based on concealment but Plaintiffs fail to allege any facts that show concealment by Defendant. (Ibid.) Defendant also argues that Plaintiffs fail to properly allege that a fiduciary relationship existed. (Id., at p. 7.)

            In opposition, Plaintiffs contend that they properly pleaded that Defendant owed a fiduciary duty and the elements of cause of action for constructive fraud referencing paragraphs 20 to 28 of the FAC. (Opp., at pp. 5-8.)

            In reply, Defendant continues to argue that Plaintiffs’ constructive fraud claim is not sufficiently pled as Plaintiffs fail to establish that a fiduciary duty exists nor how it was breached. (Reply, at p. 2.)

            Plaintiffs allege that a fiduciary relationship existed between Defendant and Plaintiff Hui Chung Kim (“Kim”) as Kim was dependent upon Defendant for custodial care and assistance. (FAC, ¶¶ 20-22.) The court does not find that Plaintiffs sufficiently plead that a fiduciary relationship existed. As the court noted in Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 13, “[t]he mere placing of a trust in another person does not create a fiduciary relationship.”

            Additionally, Plaintiffs fail to identify the specific facts that were concealed by Defendant with the level of specificity required. Plaintiffs do not identify when, where, and by what means the concealments were made. Plaintiffs do not identify what Defendant or Defendant’s agents specifically said, other than that Defendant was aware, but concealed from Plaintiffs, that Defendant was managing its facility “in a manner that was focused on maximizing its profits to the fullest possible extent even when doing so was to the detriment of the care to be provided.” (FAC, ¶ 24.) Additionally, Plaintiffs do not sufficiently allege Defendant’s intent to deceive Plaintiffs.

            As such, Defendant’s demurrer is sustained as to Plaintiffs’ third cause of action.

Conclusion

Defendant Inland Medical Enterprises Inc.’s Demurrer to Plaintiffs’ Third Cause of Action for Fraud is SUSTAINED.