Judge Robert S. Draper, Case 23STCV04089 2023-05-17 Tentative Ruling

Defendant’s demurrer to plaintiffs’ complaint is SUSTAINED in its entirety with leave to amend on or before July 13, 2023. Plaintiffs, if they wish, must file their amended complaint on or before July 13, 2023.

Plaintiff Saeed Novel alleges that during some period in the past – the precise dates are unclear from the complaint – he kept a business account with defendant Bank of America, N.A. (BANA). (Compl., 1:18.) (BANA states in its demurrer that it has been misnamed in the complaint; the court uses therefore uses the name defendant has assigned itself.)

According to Novel, at some point he attempted to withdraw money from his business account, but BANA staff would not permit him to do so. (Id., 1:19-20.) When BANA denied him access, Novel learned a third person (one “Luna Nigire”), whom he had never heard of, had been “joined into [his] account.” (Id., 1:24.) Identifying information associated with the account had been changed, and the bank would not let him access his money even when he presented three forms of identification. (Id., 1:20-22.)

Novel requested that BANA freeze his account and investigate, and he provided them with financial documentation for his business to facilitate a resolution. (Id., 1:28-2:1.) He discovered that “all [his] money that [he had] saved since 1995” had been given to the third party, Nigire. (Id., 2:2-3.)

Novel alleges he is elderly and ill (id., 2:8 and 2:26), and because he was unable to access the money he stored with BANA he is now homeless. (Id., 2:18-19.)

Plaintiffs Saeed Novel and Janet Farahi Moghadam filed their complaint on February 24, 2023. They caption their complaint “Fraud on my Bank Account”; the body of the complaint also refers to elder abuse as a possible theory of relief.

Defendant Bank of America, N.A. (BANA) demurred on March 27, 2023. Defendant argues plaintiffs’ complaint fails to state facts sufficient to constitute a cause of action and is uncertain.

Plaintiffs opposed on April 24, 2023. Their opposition consists almost entirely of evidentiary material not subject to judicial notice, which is not admissible for the purposes of demurrer.

A demurrer is a commonplace procedure used in the early stages of a lawsuit for one party to challenge the basis for the other party’s claim for relief. Where one party claims the other’s initial complaint or answer is defective, that party may raise the defect by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.)

A demurrer addresses only “the face of the pleadings” – that is, it only deals with the allegations within the complaint itself. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The court does not accept evidence in support of a demurrer, unless the evidence is properly subject to judicial notice (e.g., evidence that neither party can reasonably dispute, or that is readily available from public records). (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)

In fact, in ruling on a demurrer to a complaint, the court accepts all of the facts in the complaint as true. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.) The court examines the complaint and asks whether, if all the facts in it are true, the plaintiff has shown he or she is entitled to relief. (Hahn v. Mirda, supra, 147 Cal.App.4th at p. 747.) A court considers the allegations in the complaint in their full context, and if they are ambiguous the court construes them liberally in favor of the party who filed the pleading that has been challenged. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Even liberally construed, however, a pleading subject to demurrer must state facts sufficient to constitute any cause of action on which a plaintiff bases his claim to relief.

(Cal. Code Civ. Proc. § 430.10; Young v. Gannon (2002) 97 Cal.App.4th 209, 220.) A valid complaint must state “facts constituting the cause of action, in ordinary and concise language.” (Code Civ. Proc. § 425.10, subd. (a)(1).) The allegations must be reasonably clear and certain, so the defendant can ascertain the precise facts on which the plaintiff bases his claim and deny them or defend against them as necessary. (Committee On Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211–212.) “The complaint in a civil action serves a variety of purposes … : [among other things,] it serves to frame and limit the issues … and to apprise the defendant of the basis upon which the plaintiff is seeking recovery . . . .” (Ibid.)

Partly for this reason, the California Rules of Court dictate the manner in which pleadings should set out their causes of action. Rule of Court 2.112, for example, requires that each cause of action in a complaint must be numbered, specifically named, identify which plaintiffs have brought it, and identify the party or parties to whom it is directed. Various other court rules contain similar requirements for the proper form and format of a civil complaint.

Even if a complaint fails because it is uncertain or fails to state a cause of action, the court is required to give a party leave to file a new, amended complaint where it appears there is “a reasonable possibility any defect identified by the defendant can be cured by amendment . . . .” (Aubry v. Tri-City Hospital District, supra, 2 Cal.4th at p. 967.) In fact, “[a] demurrer should not be sustained without leave to amend if the complaint . . . can state a cause of action under any theory . . . .” (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037.)

The term “fraud”, as used in the law, does not encompass every dishonest act. A civil cause of action for fraud requires a plaintiff to plead and prove five specific elements: (a) that a defendant made a false representation; (b) that the defendant knew the representation was false when he made it; (c) that the defendant intended his victim to rely on the representation as if it were true; (d) that the victim did rely on the representation, and it was reasonable for him to do so under the circumstances; and (e) that the victim was harmed because he relied on the defendant’s false representation. (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

Fraud must also be pled specifically, not with “general and conclusory allegations.” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) More so than most other causes of action, fraud must be pled with “particularity”; “[t]his particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the [allegedly fraudulent] representations were tendered.’ ” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

From plaintiffs’ complaint, it is unclear what specific false representation BANA allegedly made to Novel. For example, BANA apparently refused to let Novel access his account, but it does not appear they lied to him about why. It is not clear from the complaint that BANA made any statement it knew was false. And it is not clear what any false representation by BANA induced plaintiff Novel to do or not to do.

The complaint also does not clearly state how, when, where, to whom, or by what means any alleged representation was made to Mr. Novel. For the purposes of demurrer, the court only regards the facts stated in the complaint itself. The court cannot consider the various records and declarations that plaintiffs included with their opposition. Without more specifics included in the complaint, the court (legally and procedurally speaking) has no information regarding where exactly this incident took place, who exactly made representations to the plaintiff, or even when it purportedly occurred.

Finally, plaintiffs do not clearly allege how a purported fraud committed by BANA caused them harm. While it appears from the complaint that a third party might have committed fraud upon Mr. Novel or upon the bank, it is not clear that BANA participated in that fraud or enabled it.

A plaintiff claiming elder abuse must allege (1) he is an elder adult and (2) a defendant took, secreted, appropriated, or retained his real or personal property, or assisted another to do so, (3) to a wrongful use, with an intent to defraud, or by undue influence. (Wel. & Inst. Code § 15610.30, subd. (a); Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174.)

For the purposes of the abuse statute, “ ‘[e]lder’ means any person residing in this state, 65 years of age or older.” (Wel. & Inst. Code § 15610.27.) “[A] person or entity takes, secrets, appropriates, obtains, or retains real or personal property when an [elder] is deprived of any property right . . . .” (Id., § 15610.30, subd. (c).)

A person takes an elder’s property “to wrongful use” if, among other things, the person “knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.” (Id., § 15610.30, subd. (b).) “[T]o establish a ‘wrongful use’ of property to which an elder has a contract right, the elder must demonstrate a breach of the contract, or other improper conduct.” (Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 657.) Bad faith or intent to defraud are not required if wrongful use can be shown (and it is hard to imagine how the former could be shown without the latter). (Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527.)

In the alternative, “ ‘ “[u]ndue influence” means excessive persuasion that causes another person to act or refrain from acting by overcoming that person's free will and results in inequity.’ (§ 15610.70.) The test for ‘undue influence’ is governed by a series of listed factors, including the ‘vulnerability of the victim’ (§ 15610.70, subd. (a)(1)), the ‘influencer's apparent authority’ (id., subd. (a)(2)), the ‘actions or tactics used by the influencer’ (id., subd. (a)(3)), and the ‘equity of the result’ (id., subd. (a)(4)).” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 857.)

Plaintiffs have stated Novel is elderly, but they have not specifically alleged that he is of an age that qualifies as “elderly” for the purpose of the elder abuse statute. Plaintiffs have alleged BANA wrongfully retained his property – although certain important clarifying details are needed in that regard, as explained more fully above. Most importantly, however, plaintiffs have not alleged BANA appropriated Mr. Novel’s property intentionally or to a wrongful use.

A demurrer for uncertainty lies where the pleading is uncertain, including where the pleading is ambiguous or unintelligible. (Code Civ. Proc. § 430.10, subd. (f); Landau v. Salam (1971) 4 Cal.3d 901, 909.) To survive demurrer, a plaintiff must set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source, and extent of his cause of action. (See Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 719.)

Demurrers for uncertainty are disfavored. (Chen v. Benjamin (2019) 33 Cal.App.5th 811, 822.) Nonetheless, a defendant must have information clear and specific enough to fully comprehend a plaintiff’s allegations and respond with appropriate denials and defenses. (See Committee On Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at pp. 211–212.)

Plaintiffs’ complaint does not satisfy the requirements of the Code of Civil Procedure or the Rules of Court and does not put defendant BANA on sufficiently clear notice of the facts on which their claims are based – or, indeed, of the precise nature of their claims.

Plaintiffs have as yet had no opportunity amend their complaint. The limited facts disclosed in the complaint amply allege that plaintiffs were harmed, although they do not clearly explain what facts or legal theory render BANA responsible for that harm. The facts already alleged, however, show a reasonable possibility that plaintiffs might cure their complaint by amendment, with careful reference to the Rules of Court for proper form and format.