Judge: Peter A. Hernandez, Case: 24STCV27415, Date: 2025-04-24 Tentative Ruling

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Case Number: 24STCV27415    Hearing Date: April 24, 2025    Dept: 34

Defendants Kerry Welsh, Helen Welsh, and Lise Welsh’s LLC’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED.

The court will inquire whether leave to amend should be granted at the hearing.

Background

            On February 14, 2025, Plaintiff Abylay Zhakashov (“Plaintiff”) filed a complaint against Defendants California TD Specialists, Kerry Welsh, Helen Welsh, Lise Welsh, David Manasher, TJM Real Estate Investments Inc., AGA Stars Trust LLC, DaMa Kaw Group & Associates, LLC, and Veronica Lopez (“Defendants”) arising from a dispute over the title of Plaintiff’s residence located at 7632 Topanga Canyon Blvd., Unit 122, Canoga Park, CA 91304 (“Subject Property”) alleging causes of action for:

1.                 Declaratory and Injunctive Relief;

2.                 Cancellation of Written Instruments;

3.                 Quiet Title;

4.                 Fraud;

5.                 Conversion;

6.                 Violation of Penal Code § 496; and

7.                 Breach of Fiduciary Duty.

On October 29, 2024, Plaintiff filed a Notice of Lis Pendens over the Subject Property.

On November 18, 2024, the court found cases 24STCV06279 and 24STCV27415 related, assigning case 24STCV06279 as the lead case.

On January 6, 2025, Plaintiff filed a First Amended Complaint (“FAC”) and Amended Notice of Lis Pendens.

On February 14, 2025, Defendants Kerry Welsh, Helen Welsh, and Lise Welsh (“Moving Defendants”) filed this Demurrer to Plaintiff’s FAC. On April 15, 2025, Moving Defendants filed a Reply to Plaintiff’s non-opposition.

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 pled 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

            Moving Defendants demur, pursuant to Code of Civil Procedure section 430.10, to the first through third causes of action in Plaintiff’s FAC alleged against Moving Defendants.

Request for Judicial Notice

Moving Defendants’ request for judicial notice is granted. Judicial notice may be taken of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code §§ 452, subd. (c) and (h).) This court may also take judicial notice of the records of any court of record of the United States. (Evid. Code §§ 452, subd. (d).)

Standing

            Moving Defendants argue that Plaintiff lacks standing to bring this action as the transactions giving rise to Plaintiff’s claims arose prior to Plaintiff filing for bankruptcy in 2022 whereby Plaintiff failed to include any interest over the Subject Property in his bankruptcy schedules. (Demurrer, at p. 5; RJN, Exh. 1.) As such, Moving Defendants contend that the Subject Property remains an asset of Plaintiff’s bankruptcy estate even after Plaintiff received his discharge. (Ibid.)  

            The court finds that Plaintiff lacks standing to bring this action. Once a bankruptcy petition is filed, all legal and equitable interests in the debtor's property become part of the bankruptcy estate. (M & M Foods, Inc. v. Pacific American Fish Co., Inc. (2011) 196 Cal.App.4th 554, 562.) “The bankruptcy estate includes all of the debtors legal and equitable interests in property as of the commencement of the case. (11 U.S.C. § 541(a)(1).)” (Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 503–504.) "It is of course indisputable that any causes of action which accrue to a debtor who has filed for relief under the Bankruptcy Act before the filing of the bankruptcy petition become the property of the bankruptcy estate and may thereafter be prosecuted only by the trustee or a duly appointed representative of the estate." (Chrysler Credit Corp. v. B.J.M., Jr., Inc. (E.D.Pa. 1993) 834 F. Supp. 813, 839.) For plaintiffs to regain standing, the bankruptcy trustee must explicitly abandon the claim. (M & M Foods, Inc, supra,196 Cal.App.4th 554, 563.) This requires affirmative action from the trustee and adherence to federal bankruptcy statutes, including notice and hearing requirements. Without this abandonment, Plaintiff's complaint is vulnerable to a demurrer because it fails to state a valid cause of action due to the jurisdictional defect of lacking standing. (Bostanian v. Liberty Savings Bank (1997) 52 Cal.App.4th 1075, 1086-1087.) 

            However, “property not formally scheduled in the bankruptcy proceeding is not abandoned at the close of the bankruptcy proceeding, even if the trustee was aware of the existence of the property.” (M & M Foods, Inc, supra,196 Cal.App.4th 554, 563,564, citing Vreugdenhill v. Navistar Internat. Transportation Corp. (8th Cir. 1991) 950 F.2d 524, 526.)

            Here, Plaintiff alleges that Defendant David Manasher (“Manasher”) forged a grand deed transferring title over the Subject Property to AGA Stars Trust LLC (“AGA”) around January 10, 2019, and recorded on April 21, 2021. (FAC, ¶¶ 21.) Subsequently, as trustee of AGA, around November 17, 2023, Manasher obtained a loan in the amount of $342,000 from Moving Defendants secured by a deed of trust against the Subject Property recorded on December 4, 2023. (Id., ¶ 20.) As such, Plaintiff’s cause of action against Manasher arose on April 21, 2021, when the fact that Manasher had fraudulently conveyed title of the Subject Property to AGA was disclosed in public records.

            Additionally, Plaintiff did not list any potential claim against Defendants nor interest over the Subject Property in his bankruptcy petition, statement of intentioned, or any schedule filed on March 27, 2022. (RJN, Exh. 1.) Thus, at the time Plaintiff’s bankruptcy case was closed on July 1, 2022, Plaintiff’s causes of action against Defendants still belonged to the bankruptcy estate. (RJN, Exhs. 2-3.) Only the bankruptcy trustee has standing to assert these causes of action against Defendants, absent an abandonment by the bankruptcy trustee. (Haley, supra, 72 Cal.App.4th at 503-04; M & M Foods, Inc., supra, 196 Cal.App.4th at 563-64.)

            The court also notes that Plaintiff does not oppose Moving Defendants’ demurrer, which the court construes as a tacit admission that Moving Defendants’ arguments are meritorious. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410; Chadbourne, Inc. v. Superior Court¿(1964) 60 Cal.2d 723, 728, fn. 4 [where nonmoving party fails to oppose a ground for a motion, "it is assumed that [nonmoving party] concedes" that ground].) 

            Accordingly, Moving Defendants’ demurrer to Plaintiff’s first through third causes of action is sustained.

Conclusion

Defendants Kerry Welsh, Helen Welsh, and Lise Welsh’s LLC’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED.

The court will inquire whether leave to amend should be granted at the hearing.