Judge: Robert S. Draper, Case: 21STCV21946, Date: 2022-08-04 Tentative Ruling

Case Number: 21STCV21946    Hearing Date: August 4, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Cross-Defendant Carmel Nungaray’s Demurrer to the Cross-Complaint is SUSTAINED as to the First and Second Causes of Action. Cross-Complainant is granted thirty days leave to amend. 

Cross-Defendant Carmel Nungaray’s Demurrer is OVERRULED as to the Third, Fourth, and Fifth Causes of Action.

FACTUAL BACKGROUND 

This is an action for a family dispute over real property. The Complaint alleges as follows.

In about 1994, Defendants Seberiano Nungaray (“Seberiano”) and Abigail (“Abigail” and together with Seberiano, “Parents”) purchased real property on Fellowship Street in La Puente (the “Subject Property”). (Compl. ¶ 10.) The Subject Property was purchased with the understanding that Parents’ daughter, Plaintiff Carmel Nungaray (“Plaintiff”) would become the owner. (Ibid.) 

Parents struggled financially, and Plaintiff frequently paid for the family’s previous residence. (Compl. ¶ 12.) In July 1995, Parents decided to transfer the Subject Property to Plaintiff with the understanding that Plaintiff would pay the mortgage payments. (Compl. ¶ 13.) On July 25, 1995, Parents recorded a Grant Deed (the “Deed”) transferring title of the Subject Property from Parents to Plaintiff, as a sole owner. (Compl. ¶ 14.) From that date until 2006, all mortgage payments were made from a joint bank account shared by Parents and Plaintiff, into which Plaintiff frequently made deposits. (Compl. ¶ 15.) In 2001 or 2002, Parents began paying rent to Plaintiff. (Compl. ¶ 16.)

In 2006, Plaintiff’s sister, Defendant Maria Nungaray (“Maria”, and together with Parents, “Defendants”) argued that Parents and Plaintiff should no longer share a bank account, as it would cause Parents to lose their government benefits. (Compl. ¶ 17.) Plaintiff continued to make mortgage payments on the Subject Property, and in 2012, began making the payments directly to the mortgage lender. (Compl. ¶ 18.)

In September 2016, Plaintiff allowed her brother, Defendant Hugo Nungaray (“Hugo”) to stay in the Subject Property. (Compl. ¶ 20.) Hugo and Maria began to harass Plaintiff, including trying to force Plaintiff to sign legal documents against her will, and taking Parents to Las Vegas. (Compl. ¶ 23.) In 2019, Maria obtained a power of attorney for the affairs of Seberiano, who was suffering from dementia at that time. (Compl. ¶ 24.)

In 2019, Plaintiff abandoned the Subject Property due to the constant harassment by Maria and Hugo. (Compl. ¶ 26.) Hugo has remained living in the Subject Property, without paying rent, and has begun conducting construction without Plaintiff’s permission. (Compl. ¶ 27.) Hugo will not vacate the property, despite Plaintiff’s requests. (Compl. ¶ 29.)

The Cross-Complaint, brought by Seberiano as an individual and as successor in interest to Decedent Abigail, alleges as follows.

Parents purchased the Subject Property in 1994 and acquired all ownership as joint tenants. (XC ¶ 6; Ex. 1.) In 1995, Parents conveyed the Property to Plaintiff in trust, for the benefit of all Parents’ children. (XC ¶ 7; Ex. 2.) Plaintiff did not exchange consideration to acquire title from Parents, and Parents retained equitable title and continued to live at the Subject Property with the right to use, enjoyment, and benefit of the Subject Property. (XC ¶ 8.) Around 2000, Parents requested that Maria be added to title with Plaintiff; Plaintiff did not object, but never made efforts to add Maria to the Title. (XC ¶ 9.) Shortly thereafter, Maria discovered that Plaintiff was improperly claiming to be Parents’ caregiver, allowing Plaintiff to receive benefits and compensation intended for actual caregivers. (XC ¶ 10.) Accordingly, Maria demanded that Plaintiff remove her name from the joint bank account shared with Parents. (XC ¶ 10.)

In 2013, Plaintiff moved into the property with her husband and two children. (XC ¶ 11.) They did not pay rent. (XC ¶ 11.) In 2016, Parents requested that Maria and Sergio by placed on the title to the Subject Property instead of Plaintiff. (XC ¶ 12.) Additionally, Hugo came to live at the Subject Property to help care for his parents. (XC ¶ 12.)

Plaintiff refused to convey title to Maria because Plainti9ff believed Maria would transfer title to Hugo, with whom Plaintiff was not on good terms. (XC ¶ 13.) Maria and Hugo requested that Plaintiff return title to the Subject Property to Parents, but Plaintiff refused. (XC ¶ 14.)

In 2019, following an argument between Plaintiff and Hugo, Seberiano demanded that Plaintiff vacate the Subject Property. (XC ¶ 15.) On June 21, 2019, Parents sent a demand letter to Plaintiff stating that she needed to revert title to the Subject Property back to them as Joint Tenants, and that they only transferred the deed to Plaintiff in case they passed away. (XC ¶ 18.) Plaintiff refused, and instead commenced the instant action. (XC ¶ 20.)

PROCEDURAL HISTORY 

On June 11, 2021, Plaintiff filed the Complaint asserting three causes of action:

1.    Quiet Title;

2.    Declaratory Relief; and

3.    Accounting

On September 30, 2021, Plaintiff filed the operative First Amended Complaint asserting the same causes of action, adding a fourth cause for Conversion.

On March 24, 2022, Defendants filed an Answer.

Also on March 24, 2022, Seberiano filed the Cross-Complaint asserting five causes of action:

1.    Resulting Trust;

2.    Constructive Trust;

3.    Breach of Fiduciary Duty;

4.    Quiet Title; and

5.    Financial Elder Abuse.

On May 9, 2022, Plaintiff filed the instant Demurrer.

On July 26, 2022, Seberiano filed an Opposition.

No Reply has been filed.

DISCUSSION 

I.               DEMURRER

Plaintiff demurs to all causes of action in the Cross-Complaint.

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) As is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“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. [Citation.]”)

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.

A.  First and Second Causes of Action – Resulting Trust and Constructive Trust

Plaintiff demurs to the First Cause of Action for Resulting Trust and the Second Cause of Action for Constructive Trust.

Both Resulting Trusts and Constructive Trusts are implied trusts, which “need not be evidenced by writing or even by an express declaration.” (Calistoga Civic Club v. City of Calistoga, 143 Cal.App.3d, 11, 118 (1983).

A Constructive Trust requires “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.” (Kraus v. Willow Park Pub. Gold Course (1977) 73 Cal.App.3d 354, 373.)

“[A] Resulting Trust arises from a transfer of property under circumstances showing that the transferee was not intended to take the beneficial interest. . . . It has been termed an ‘intention-enforcing’ trust, to distinguish it from the other type of implied trust, the constructive or ‘fraud-rectifying’ trust.

The resulting trust carries out the inferred intent of the parties; the constructive trust defeats or prevents the wrongful act of one of them.” (American Motorists Ins. Co. v. Cowan (1982) 127 Cal.App.3d 875, 884-885.) “Ordinarily a resulting trust arises in favor of the payor of the purchase price of the property where the purchase price, or a part thereof, is paid by one person and the title is taken in the name of another. [Citation.]” (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238.) 

Here, Plaintiff argues that no Trust in relation to real property was created because, pursuant to California Probate code § 15206, a trust is not valid unless established:

(a) By a written instrument signed by the trustee, or by the trustee's agent if authorized in writing to do so.

(b) By a written instrument conveying the trust property signed by the settlor, or by the settlor's agent if authorized by the settlor do so.

(c) By operation of law.

First, Plaintiff argues that, as there is no evidence of a written trust, a trust cannot be established.

In response, Seberiano argues that a trust may be created by operation of law when a grantee in a confidential relationship repudiates an oral promise to hold title to real property for the benefit of the grantor or some third person. (Opposition at p. 2; quoting Orella v. Johnson (1952) 38 Cal.2d 693, 696.) Additionally, Seberiano notes that “the breach of an oral promise to reconvey real property by a person held in confidence by the grantor, with no other consideration, constitutes constructive fraud and supports the equitable cause of action to establish a constructive trust to prevent unjust enrichment.” (Opposition at p. 2; quoting Day v. Greene (1963) 59 Cal.2d 404, 411.)

Seberiano argues that the Cross-Complaint sufficiently alleges the establishment of an implicit trust by law by asserting that Parents conveyed the Subject Property to Plaintiff for the specific purpose of holding title for the benefit of Parents and Plaintiff’s siblings, that Plaintiff did not exchange consideration for that conveyance, that Plaintiff accepted fiduciary duties as to her parents affairs by purporting to manage Parents’ finances, and that her conduct ratified a conveyance in trust with Plaintiff acting as trustee. (Opposition at p. 3.)

Indeed, the Cross-Complaint alleges that Parents conveyed the Subject Property to Plaintiff “for the purposes of holding title to the Property in trust, for the benefit of Seberiano and Abigail’s children,” and that Plaintiff “never exchanged consideration to acquire title from her parents, nor did she seek to reside at the Property after she acquired title.” (XC ¶¶ 7-8.)

Next, the Cross-Complaint alleges that Plaintiff “was claiming to be Seberiano and Abigail’s caregiver,” and that she managed a joint account in their names. (XC ¶ 10.) Finally, the Cross-Complaint alleges that, while Plaintiff did move onto the Subject Property temporarily, their use was limited to a sectioned off bedroom for which they paid rent. (XC ¶ 13.)

Second, Plaintiff argues that Seberiano failed to show that he meaningfully contributed to the Property as he has not established the amount he allegedly contributed. (Demurrer at p. 7.) Plaintiff contends that Seberiano cannot show such contribution, as “Plaintiff/Cross-Defendant is the only real contributor, not only to the purchase of the Property, but to the mortgage.” (Demurrer at p. 6.)

However, the Cross-Complaint alleges that “Seberiano and his wife, Abigail, purchased the Property at market value and acquired all ownership and title rights as joint tenants.” (XC ¶ 6.) Additionally, Seberiano attaches the Deed to the Subject Property in his name to the Cross-Complaint. Finally, as to Plaintiff’s argument that she was the only contributor to the Subject Property, Plaintiff provides no judicially noticeable material, and the face of the Cross-Complaint contains no allegations, stating such. Therefore, this argument is improper to consider on Demurrer.

Finally, Plaintiff argues that a Resulting Trust is a remedy, and not a cause of action. (Demurrer at p. 6; see Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 76.) Additionally, the Court notes that the weight of authority in California is that there is no cause of action for a constructive trust. Under California law, "[a] constructive trust . . . is an equitable remedy, not a substantive claim for relief." (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, (2007) 150 Cal. App. 4th 384, 398; Glue-Fold, Inc. v. Slautterback Corp. 82 Cal. App. 4th 1018, 1023 (stating that a constructive trust is not an independent cause of action).) 

Accordingly, the Court finds that, though the Cross-Complaint states sufficient facts to pray for a Constructing and Resulting Trust, they are properly stated as remedies, not independent causes of action.

Accordingly, Plaintiff’s Demurrer to the First and Second Causes of Action are SUSTAINED with thirty days leave to amend.

B.  Third Cause of Action – Breach of Fiduciary Duty

Plaintiff demurs to the Third Cause of Action for Breach of Fiduciary Duty.

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.)  

“‘[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.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140 (quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221).) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.) 

Here, Plaintiff argues that, as there is no written Trust, Seberiano cannot allege that Plaintiff breached any fiduciary duty related to that Trust.

However, as addressed above, the Cross-Complaint sufficiently alleges facts to establish an implied trust. Additionally, Seberiano cites Steinberger v. Steinberger, 60 Cal.App.2d 116 (1943), to support his contention that a fiduciary relationship can be established absent a written trust.

In Steinberger, property was conveyed to family members William, Earle, and to Earle’s brother. Earle conveyed his interest to William conditioned on William’s “oral promise to reconvey upon the request of Earle.” (Steinberger at 116.) When William passed, the administrator refused to recognize Earle’s interest in the property without a written instrument. The Court found that William and Earle stood in a confidential relationship with one another such to establish fiduciary duties as “there is not only the evidence of the status of uncle and nephew, and of cotenants, but there is ample evidence to show that a confidential relationship in fact existed.” (Steinberger at p 123.)

Here, Plaintiff and Seberiano’s relationship as father and daughter, combined with the allegations of the establishment of a trust, suffice to establish the existence of a fiduciary relationship at the pleading stage.

Accordingly, Plaintiff’s Demurrer to the Third Cause of Action is OVERRULED.

C.  Fourth Cause of Action – Quiet Title

Plaintiff demurs to the Fourth Cause of Action for Quiet Title.

CCP section 761.020 provides that a complaint for quiet title shall be verified and include: (1) a description of the property that is the subject of the action, including both the legal description and its street address or common designation if the subject property is real property; (2) the plaintiff’s title as to which determination is sought and basis of the title; (3) the adverse claims to the plaintiff’s title against which determination is sought; (4) the date of which the determination is sought; and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. (See Code Civ. Proc., § 761.020.)  

Here, Plaintiff argues that the cause of action fails as Seberiano is not on the Title to the property, and as the allegation regarding the verbal trust is illegitimate.

However, as addressed above, the Cross-Complaint alleges facts sufficient for Seberiano to pray for an implied trust. Additionally, “an exception exists ‘when legal title has been acquired through fraud.” Warren v. Merrill (2006) 143 Cal.App.4th 96, 114).) “In that case, available ‘remedies include quieting title in the defrauded equitable title holder’s name and making the legal title holder the constructive trustee of the property for the benefit of the defrauded equitable titleholder.’” (Id.)

Here, as the Cross-Complaint alleges that Plaintiff obtained Title through her fraudulent promise to hold the Property for the benefit of her siblings, the exception cited in Warren applies.

D.  Fifth Cause of Action – Financial Elder Abuse

Plaintiff Demurs to the Fifth Cause of Action for Financial Elder Abuse

Financial elder abuse occurs when a person takes the property of an elder for a wrongful use or with intent to defraud or by undue influence. (See Welf. & Inst. Code § 15610.30(a).) A person is deemed to have taken the property when he or she has deprived an elder of any property right. (See id. § 15610.30(c).) Although bad faith or intent to defraud is no longer required, wrongful use of property must still be alleged. (Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527-28.) “A person . . . shall be deemed to have taken . . . property for a wrongful use if . . . the person  . . . takes  . . . the property and the person . . . knew or should have known that this conduct is likely to be harmful to the elder . . . .” (Id. § 15610.30(b).) 

“Claims under the Elder Abuse Act, including for financial elder abuse, must be pleaded with particularity.” (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

Here, Plaintiff argues that the Cross-Complaint fails to allege facts demonstrating financial elder abuse with particularity.

The Cross-Complaint alleges that both Seberiano and Abigail were 65 years or older when they transferred the title of the property to Plaintiff to hold in trust for the benefit of themselves and their children (XC ¶ 45); that Plaintiff wrongfully claimed the Property as her own, knowing that her conduct would cause direct harm and place her parents in severe emotional distress (XC ¶ 46); that when Parents requested that Plaintiff transfer the duty of holding title to the Property to her siblings, Plaintiff refused (XC ¶ 47); and that as a result of her actions, Seberiano has suffered from continued sadness and depression, exasperating the deterioration of his physical and mental health. (XC ¶ 49).

The Court finds that these allegations are stated with sufficient particularity to successfully state a claim for Financial elder Abuse.

Accordingly, Plaintiff’s Demurrer to the Fifth Cause of Action is OVERRULED.

DATED: August 4, 2022                                    

______________________

Hon. Robert S. Draper 

Judge of the Superior Court