Judge Ralph C. Hofer, Case Number: 21GDCV01289, Date: 2025-01-03 Tentative Ruling

The First Amended Complaint alleges that Ivy Fung, the mother of plaintiff Kurt Takashi Ando, created a Revocable Trust in 2016. Ivy Fung was the Trustee, with successor Trustees being plaintiff and/or Marie Bernardini. Ivy Fung died in 2017. Ivy Fung transferred her real property in La Crescenta to the revocable trust.

The FAC alleges that the Trust was created by Ivy Fung after she was diagnosed with terminal illness, and was revocable until her death, after which the Trust became irrevocable and all Trust property was to be handed over to her only child and next of kin, plaintiff Ando.

The FAC alleges that Marie Bernardini had been named as a successor trustee by connections between Ivy Fung, Bernardini, defendant Chaba Monari and defendant Church of Scientology. Plaintiff alleges that trust funds were used to pay defendant Monari over $200,000 a year from 2016-2017, and that following the death of Ivy Fung, Marie Bernardini began encumbering the property in La Crescenta with loans facilitated by other defendants, used trust funds and loans to pay off her personal obligations, transferred funds to her company defendant Realty Home Solutions, and that following Marie Bernardini’s death, Bernardini’s husband defendant Jim Cox sold the property to a bona fide purchaser. The trust was depleted of all funds with the exception of $3,000. The FAC also alleges that defendant Jim Cox removed personal property of Ivy Fung from the property, including expensive jewelry.

The FAC also alleges that prior to the death of Jim Cox in January of 2022, Jim Cox sold the family house in Burbank to his son defendant Sean Cox for only the one mortgage remaining on the family house after paying of mortgages and possibly other notes using the assets of the Ivy Fung Revocable Family Trust, thereby converting the assets of the trust to equity in the family house.

The FAC alleges that defendant Sean Cox is an heir to the estate of Marie Bernardini and acquired assets from that estate which belonged to the Ivy Fung trust, including equity in the family house he purchased from Jim Cox, jewelry, and automobiles belonging to the trust, which assets, after the death of Ivy Fung, belonged to her only heir, plaintiff Ando.

The file shows that on October 6, 2022, the court heard an OSC re: Default Judgment/Default Prove Up, at which the court was informed that defendant Jim Cox Sr. was deceased, with decedent’s son, James Cox Jr. being present in court. The court ordered the OSC discharged and stayed the case “in its entirety, pending the disposition of the probate case.”

On September 11, 2023, the court conducted a Status Conference Re: Stay/Probate Case/Status of Successor in Interest, at which Travis Cox, son of decedent, was present in court. The court ordered the stay previously ordered to remain in full force and effect pending a hearing on a motion substituting Travis Cox as a party defendant in this action in place of defendant Jim Cox, deceased, in his capacity as Personal Representative of the Estate of Jim Cox.

The matter remained subject to a stay until May 8, 2024, when at a Status Conference the court found that the Probate Court had rejected plaintiff’s creditor’s claim pursuant to Probate Code Section 925, and lifted the stay.

The file shows that on October 30, 2023, plaintiff filed an Amendment to Complaint, amending the complaint by substituting the true name of Sean Cox for the fictitious name of defendant Doe 1.

The demurrer was sustained with leave to amend as to the first cause of action for breach of fiduciary duty, second cause of action for conspiracy and third cause of action for conversion on the ground the causes of action appeared to be intended to be directed to Doe defendants, but included no charging allegations against the Does or against moving defendant Sean Cox. The demurrer was overruled to the fourth cause of action for negligence, and on all other grounds.

“Demurrer is SUSTAINED WITH LEAVE TO AMEND to the first cause of action for breach of fiduciary duty, second cause of action for conspiracy, and third cause of action for conversion on the ground these causes of action appear to be intended to be directed to Doe defendants but include no charging allegations against the Does or against moving defendant Sean Cox.”

To state a civil conspiracy a pleading must allege a civil wrong (for example, fraud or battery), the formation and operation of the conspiracy, a wrongful act done pursuant to the conspiracy, and resulting damage. Unruh v. Truck Ins. Exchange (1972) 7 Cal.3d 616, 631, (noted to have been superseded by statute on other grounds in Hendy v. Losse (1991) 54 Cal.3d 723.)

The FAC here now alleges that defendants, including specifically Sean Cox, were part of a conspiracy to commit embezzlement and misappropriate funds and property of the trust, that the agreement was oral and implied by the conduct of the conspirators, that assets were acquired which belonged to the fund, and were ultimately acquired by Sean Cox, and that as a result of the acts of the co-conspirators, plaintiff has suffered harm. [FAC, paras. 41- 47]. This recitation is sufficient to state all elements of the cause of action, and allege charging allegations against defendant Sean Cox to satisfy the court’s previous concerns.

Defendant argues that the allegations are conclusory, and do not include allegations of knowledge of the planned wrongful conduct, agreement or intent to aid. However, the pleading does in fact include such allegations, and alleges that defendants operated through their connection with the Church of Scientology, and the general allegations provide details concerning the connection between Marie Bernardini, Jim Cox, her husband, and Sean Cox, Jim Cox’s son. [FAC, paras. 41-47, 25, 29-31].

There is also an argument that the allegations regarding Sean Cox’s receipt of property are contradictory, as it is alleged that Sean Cox received property from Jim Cox, while there is also an allegation of receipt from the estate of Marie Bernardini. These allegations do not appear contradictory or legally insufficient, and, in any case, under the liberal rules of pleading, parties are permitted to plead duplicative, alternative, or even inconsistent allegations. See Jackson v. County of Los Angeles (1997, 2nd Dist.) 60 Cal.App.4th 171, 177, 180; Adams v. Paul (1995) 11 Cal.4th 583, 593 (“a party may plead in the alternative and may make inconsistent allegations.”).

Again, the demurrer to this cause of action was previously sustained on the ground it appeared to be directed to Doe defendants “but include[s] no charging allegations against the Does or against moving defendant Sean Cox.”

To state a cause of action for conversion, plaintiff must allege the following elements: Ownership, or right to possession of property; wrongful disposition of property right; and damages. Imperial Valley Land Co. v. Globe Grain & Milling Co. (1921) 187 Cal. 352, 354-355.

The pleading standards with respect to conversion are ordinarily not particularly strict, and it has long been held that a general allegation that defendants “converted and disposed of the property to their own use,” is sufficient to withstand demurrer. See Daggett v. Gray (1895) 110 Cal. 169, 171.

The pleading here alleges that plaintiff Ando was the rightful owner with the right to possess the trust and all property of the trust, and that defendants, including Sean Cox, knowingly and intentionally took possession of the property by taking funds and assets “for themselves, their company, and their debts.” [FAC, paras. 49, 50]. This recitation is sufficient to state the elements of a conversion claim, and to allege charging allegations against Sean Cox and satisfy the court’s previous concerns.

Defendant argues that the conversion claims are legally deficient as the real property claims regarding the Rose Street property fail because real property cannot be converted and Sean Cox is a bona fide purchaser for value. However, the cause of action includes various other forms of property which were allegedly converted, and a demurrer cannot be sustained to only part of a cause of action. The arguments sound more in affirmative defenses, not in a challenge to the sufficiency of the conversion cause of action, which, as noted above, is subject to a liberal pleading standard.

Defendant also argues that conversion claims for money have to be based on specific, identifiable sums. Pleading requirements provide that when money is the subject of a conversion, plaintiff must plead that a specific identifiable sum was taken. See Vu v. California Commerce Club (1997) 58 Cal.App.4th 229, 235. As pointed out in the opposition, the pleading attaches checks for specific amounts, alleges the specific amount of $800,000 obtained by Sean Cox, and, in any case, alleges the conversion of not only money but specific personal property, including two automobiles, and jewelry. [FAC, paras. 54, 55].

The demurrer argues that no specific items are identified, but does not cite to any legal authority requiring such specificity with respect to conversion of personal property claims. The allegation that two automobiles belonging to the trust were converted also appears to sufficiently specify converted items. [FAC, para. 55].

Defendant evidently seeks to strike the entire complaint on the ground the Doe Amendment adding Sean Cox as a defendant was improper because plaintiff’s counsel knew of Cox’s identity and alleged involvement before filing the original complaint.

(b) Where the motion to strike is based on matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, such matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.”

The argument depends on a declaration of Sean Cox submitted with the motion, which describes and attaches a Facebook exchange. This material does not appear from the face of the pleading, is not subject to judicial notice, and no request to judicially notice the material is made.

Defendant does indicate in the notice of motion that defendant is requesting that the court take judicial notice of the original complaint and FAC. However, as pointed out in the opposition, there is no separate document requesting judicial notice filed.

There has been no separate document filed here, and the only request is made in the notice, and plaintiff has objected on this ground. In any case, even if the court were to take judicial notice, the complaint and FAC do not show that the Doe Amendment was improper. The motion to strike on this ground is denied.

Defendant also argues that the new allegations regarding automobiles and the sale of the Rose Street property do not relate back to the filing of the original complaint. Again, this is a factual question which is not supported by the allegations of the pleading.

The argument seems to be related to an argument that the third cause of action is time-barred. The motion argues that the conversion occurred in 2017 or shortly thereafter, but does not point to any particular allegation of the complaint which would fix such a time period. There is also an argument that the conversion claim fails to meet pleading standards. As discussed above, the court has rejected that argument. The motion to strike is denied on these grounds as well.

Finally, defendant argues that the FAC’s inclusion of allegations against Sean Cox in the breach of fiduciary duty cause of action, despite not naming him as a defendant to that cause of action, creates substantial prejudice and impairs Sean Cox’s ability to defend against this claim.

Plaintiff in the opposition concedes that the first cause of action is not intended to be brought against the moving defendant. The court accordingly grants the motion to strike on this ground and order stricken from the FAC at paragraph 39, p. 8:4, the words “and SEAN COX’s.”

At the concession in the opposition, the language mentioning moving defendant Sean Cox in the first cause of action for breach of fiduciary duty is included in error. The Court accordingly GRANTS the motion to strike as to this argument and orders STRICKEN WITHOUT LEAVE TO AMEND from the FAC at paragraph 39, p. 8:4, the words “and SEAN COX’s.”

Even if the Court were inclined to judicially notice the documents referenced, the complaint and First Amended Complaint in this matter, the Court would take judicial notice only to the extent permitted by Day v. Sharp (1975) 50 Cal.App.3d 904, 914 (e.g, the court takes judicial notice of the existence of court records, but not the truth of hearsay allegations contained therein, except in connection with certain exceptions enumerated in that case.).

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