Judge Ronald F. Frank, Case 22TRCV01066 2023-03-23 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV01066, Date: 2023-03-23 Tentative Ruling

Case Number: 22TRCV01066 Hearing Date: March 23, 2023 Dept: 8

Tentative Ruling

HEARING DATE: March 23, 2023¿

CASE NUMBER: 22TRCV01066

CASE NAME: Mauricio E. Valencia v. Bank of America, N.A., et al.

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MOVING PARTY: Defendant, Bank of America, N.A.

RESPONDING PARTY: None.

MOTION:¿ (1) Defendant’s Demurrer to Plaintiff’s Complaint

(2) Defendant’s Motion to Strike Plaintiff’s Complaint

Tentative Rulings: (1) Defendant’s Demurrer to Plaintiff’s Complaint is SUSTAINED with 20 days Leave to Amend as to four of the five causes of action, without leave to amend as to the fifth

(2) Defendant’s Motion to Strike Plaintiff’s Complaint is mooted

I. BACKGROUND¿

A. Factual¿

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On November 1, 2022, Plaintiff, Mauricio E. Valencia (“Plaintiff”) filed a Complaint against Defendants, Bank of America N.A., Ruben Curhuamaca, and Sogla and Associates, Inc.. The Complaint alleges causes of action for: (1) Fraud; (2) Money Wire Fraud; (3) Breach of Fiduciary Duties; (4) Negligence; and (5) Imposition of Constructive Trust. Defendant, Bank of America, N.A. (“BANA”) now files a Demurrer and Motion to Strike.

B. Procedural

On January 17, 2023, BANA filed a Demurrer and Motion to Strike. To date, no opposition has been filed.

¿II. GROUNDS FOR MOTIONS

BANA demurs to Plaintiff’s Complaint on the grounds that BANA contends that the complaint does not state facts sufficient to constitute any cause of action against BANA.

BANA also moves to Strike the Complaint, or alternatively, the Declaration of Mauricio E. Valencia in Plaintiff’s Complaint, as BANA argues that the Complaint is improperly verified.

III. REQUEST FOR JUDICIAL NOTICE

BANA requests this Court take judicial notice of the following:

1. The Statement of Information for Sogla and Associates, Inc., filed with the California Office of the Secretary of State on August 1, 2022. Judicial notice is requested pursuant to Evidence Code Section 452(g)-(h).

This Court grants BANA’s request and takes judicial notice of the above document.

IV. ANALYSIS ¿

A. Demurrer

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿

A pleading is uncertain if it is ambiguous or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing defendant cannot tell what he or she is supposed to respond to.¿ (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) However, “[a] demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿

Fraud

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Here, Plaintiff’s Complaint alleges that “Plaintiff and respondent Ruben Curhuamaca filed the ‘separation’ from the corporation due to irreconcilable differences on 10.05.2022.” (Complaint, ¶ 8.) Plaintiff asserts that the document was filed with the State of California office of the secretary of state, therefore, showing that the Plaintiff had separated from the business. (Complaint, ¶ 9.) Plaintiff states that he was allowed to take his fair share of the money held in the bank account before the dissolution of the partnership. (Complaint, ¶ 10.) Plaintiff claims he consulted the company’s accountant to get a fair value for his share as of the moment before the separation. (Complaint, ¶ 11.) Plaintiff argues that he had been obstructed by the Defendant Ruben Curhuamaca from obtaining any of the corporation funds in order to be able to recoup his original investment. (Complaint, ¶ 12.) Plaintiff further notes that Defendant Ruben Curhuamaca did not notify plaintiff, ask for permission, acted as agent or otherwise obtained written, oral consent and or authorization to file a fraudulent claim with Defendant Bank of America alleging the plaintiff had committed a fraudulent money wire transfer. (Complaint, ¶ 13.) Plaintiff notes that he lawfully and legally made a money wire from the corporation bank account to his personal account before the separation from the partnership. (Complaint, ¶ 14.) Lastly, Plaintiff argues that Defendant, Ruben Curhuamaca used fraudulent tactics to illegally gain control of the Plaintiff’s money from the proceedings of the business, using a fraudulent claim. (Complaint, ¶ 15.)

This Court finds Complaint fails to allege any of the elements (which are described in the paragraph above) required for a fraud causes of action as against BANA. Moreover, a cause of action for fraud requires the cause of action to be pleaded with specificity. Here, the Court does not find that the Complaint meets this heightened pleading standard. As such, the Demurrer for fraud is SUSTAINED with 20 days leave to amend.

Money Wire Fraud

Here, Plaintiff’s complaint claims that Plaintiff’s duties under the partnership agreement have been fully performed and executed, when respondent Ruben Curhuamaca knowingly and fraudulently filed a claim to obtain a money wire to his account, he committed money wire fraud. (Complaint, ¶ 16.) Plaintiff also argues that he has been damaged by Defendant’s fraud and malice in a sum according to proof but not less than $120,000. (Complaint, ¶ 17.)

Again, this Court finds that the Complaint fails to allege any of the elements required for a fraud cause of action against BANA. Moreover, a cause of action for fraud requires the cause of action to be pleaded with specificity. Here, the Court does not find that the Complaint meets this heightened pleading standard. As such, the Demurrer for Money Wire Fraud is SUSTAINED with 20 days leave to amend.

Breach of Fiduciary Duty

“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)

Plaintiff argues in his Complaint that Defendant BANA was responsible for holding the plaintiff’s money in their bank. Plaintiff contends that the bank’s duties consist of making sure their client’s money is safe and secure. Plaintiff submits that there are many safeguards put in place, by the bank itself and also by the FDIC and OCC. Further, Plaintiff asserts that the bank cannot unilaterally make decisions that could jeopardize depositor’s funds. (Complaint, ¶ 18.) On July 26, 2022, Plaintiff asserts that he went to his local branch of BANA to make a legal money transfer from his business account to his personal account. As of this day, he notes that he was still the CEO of the restaurant Sogla and Associates, Inc. Plaintiff notes that the manager of the bank intervened because the amount of the transfer was a large amount ($90,000) and therefore, the manager’s approval was needed. (Complaint, ¶ 19.) Plaintiff further notes that the bank’s manager approved the transfer, and that he left the bank knowing that his money had been legally transferred to his personal account. (Complaint, ¶ 20.)

Plaintiff further asserts in his Complaint that BANA received a “fraud” claim and decided to unilaterally take the full $90,000 from the plaintiff's account and then transferred the money to the plaintiff's ex business partner. (Complaint, ¶ 21.) Plaintiff argues that the bank failed to investigate if the claim was legitimate or made fraudulently. Instead, Plaintiff contends that the bank simply believed the word of the other defendant and took it upon itself to violate its fiduciary responsibility. (Complaint, ¶ 22.)

In BANA’s demurrer, it asserts that Plaintiff cannot satisfy the first element of a breach of fiduciary duty cause of action because it is settled law that “banks ‘are not fiduciaries for their depositors.’” (citing Kurtz-Ahlers, LLC v. Bank of America, N.A. (2020) 48 Cal.App.5th 952, 956.) Rather, BANA contends that the relationships between banks and their customers is contractual, not fiduciary in nature. Because Plaintiff has failed to file an opposition brief, offers no opposing authorities, and has not alleged a fiduciary relationship but rather only an inferred contractual relationship, the demurrer as to the second cause of action for Breach of Fiduciary duty is SUSTAINED with 20 days leave to amend.

Negligence

In order to state a claim for negligence, Plaintiff must allege the elements of (1) “the existence of a legal duty of care,” (2) “breach of that duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)

Plaintiff’s Complaint contends that Defendant Bank of America, N.A. was negligent by not performing the necessary due diligence when accepting a claim for fraud and unilaterally accepting it without performing a thorough investigation by including the plaintiff and contacting their own manager that approved the transfer. (Complaint, ¶ 23.)

In Defendant BANA’s demurrer, it argues that Plaintiff’s fourth cause of action for Negligence fails for lack of duty. The Court agrees. Plaintiff has not alleged facts to satisfy the required elements of a legal duty that arose between BANA and himself. While one might infer a contractual duty from the allegation that Plaintiff had one or more accounts with BANA, for a negligence cause of action he must alleged more, i.e., an independent duty of due care. As such, the Demurrer as to this issue is SUSTAINED with 20 days leave to amend.

Imposition of Constructive Trust

“A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing.” (Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 920, citations omitted.) “[A] constructive trust may only be imposed where the following three conditions are satisfied: (1) the existence of a res (property or some interest in property); (2) the right of a complaining party to that res; and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it.” (Ibid., italics omitted.)

Plaintiff contends in his complaint that at all material times a special relationship of trust and confidence existed between the Plaintiff and the Defendant(s), which the defendant violated within the immediately preceding to file a fraudulent claim and to accept that claim without further warning to the plaintiff or a comprehensive investigation. (Complaint, ¶ 24.) Further, Plaintiff asserts that this Court should impose a constructive trust on the subject business and funds made from the business for the benefit of the Plaintiff and order the Defendant to transfer and convey all right, title and interest therein to the Plaintiff and to return the money illegally obtained. (Complaint, ¶ 25.) Moreover, Plaintiff argues that he seeks equitable compensation and reimbursement from the proceeds of the venture herein for expenses incurred by Plaintiff, including but not limited to mental anguish, pain and suffering, profit from the sales, attorney fees if any, travel expenses, and any other compensation as deem just and necessary by the Court. (Complaint, ¶ 26.)

On Demurrer, Defendant, BANA asserts that Plaintiff’s fifth cause of action for Imposition of Constructive Trust fails because it is an equitable remedy, not a cause of action. The Court concurs. “The theory of a constructive trust was adopted by equity as a remedy to compel one to restore property to which he is not justly entitled, to another. The person holding the property may have acquired it through fraud, undue influence, breach of trust, or in any other improper manner and he is usually personally liable in damages for his acts. But the one whose property has been taken from him is not relegated to a personal claim against the wrongdoer, which might have to be shared with other creditors; he is given the right to a restoration of the property itself.” (Bainbridge v. Stoner (1940) 16 Cal.2d 423, 428–429, emphasis added.)

While Plaintiff might be entitled to the equitable remedy of the imposition of a constructive trust if he properly alleged and proved a fraud cause of action, for example, he has not yet done so here. As such, the Demurrer to the Fifth Cause of Action is SUSTAINED without leave to amend.

B. Motion to Strike

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)¿¿

Because the entire Demurrer is SUSTAINED as to Defendant, BANA, the Motion to Strike is mooted.

III. CONCLUSION¿

Based on the foregoing, Defendant, BANA’s Demurrer is SUSTAINED with leave to amend as to four of the five causes of action, and without leave to amend as to the fifth alleged cause of action because is assert the right to a remedy, not an independent cause of action. Because of this, the Motion to Strike is mooted.

Moving party is to give notice.