Judge: Salvatore Sirna, Case: 21PSCV00702, Date: 2022-10-12 Tentative Ruling

Case Number: 21PSCV00702    Hearing Date: October 12, 2022    Dept: A

Plaintiff Shelia Robles and Rachel Neu’s DEMURRER TO DEFENDANT PETER ELIAS’ CROSS-COMPLAINT

Respondent: Defendant Peter Elias

TENTATIVE RULING

Plaintiff Shelia Robles and Rachel Neu’s demurrer to Defendant’s Cross-Complaint is SUSTAINED, with 10 days’ leave given to amend.

BACKGROUND

Plaintiffs Shelia Robles (a.k.a. Cecilia A. Robledo) and Rachel Neu are co-trustees of the Luis M. Elias Trust. Luis Elias transferred his real property to the trust, while retaining the right to possess, profit from, and manage the trust property until his death. Luis Elias leased the trust property to Peter Elias (Defendant), who collected rent from the property’s tenants. After Luis Elias died, Defendant continued to collect rent on the trust property. 

On March 30, 2022, Plaintiffs filed a Second Amended Complaint (SAC), asserting causes of action against Defendant, Jenny Milner, Mario Garcia, and Does 1 through 20 inclusive for: 

1.  Conversion (against Milner and Doe 1)

2.  Conversion (against Defendant and Does 1-2)

3.  Breach of Fiduciary Duty (against Milner and Does 1-2)

4.  Money had and received (against Defendant and Does 1-2)

5.  For rent due (against Garcia)

On July 27, 2022, the Defendant filed a cross-complaint against the Plaintiffs, alleging causes of action for:

1.  Breach of Contract

2.  Conversion

3.  Breach of Fiduciary Duty

4.  Money had and received and action for rent

5.  Intentional Infliction of Emotional Distress

6.  Defamation

7.  Malicious Prosecution

8.  Declaratory Relief

A CMC is set for October 12, 2022. 

ANALYSIS

Plaintiff Shelia Robles and Rachel Neu’s demurrer to Defendant’s Cross-Complaint is SUSTAINED, with 10 days’ leave given to amend. 

Judicial Notice

The Court grants the Plaintiffs’ request for judicial notice of the Declaration of Trust attached to their Second Amended Complaint. 

Legal Standard

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) 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 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.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, at p. 747.)

Plaintiffs demur to Defendant’s third cause of action for breach of fiduciary duty and seventh cause of action for malicious prosecution, arguing Defendant has failed to allege sufficient facts to state a claim for either cause of action. Plaintiffs’ counsel met and conferred with Defendant telephonically but was unable to come to a resolution. (McMeekin Decl., ¶ 3.) The court is also not in receipt of any opposition from the Defendant. 

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.) If a party does not establish the existence of a fiduciary duty in their action for breach of fiduciary duty, their complaint will fail to state of cause of action. (Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 45.) 

Defendant Elias failed to plead a cause of action for breach of fiduciary duty because he failed to allege the existence of a fiduciary duty. Trustees owe fiduciary duties to all beneficiaries of a trust. (Hearst v. Ganzi (2006) 145 Cal.App.4th 1195, 1208.) However, the Defendant did not plead any facts in his cross-complaint that show he is a beneficiary of the Luis M. Elias Trust. Instead, Defendant merely recites facts that he believes demonstrate the Plaintiffs have breached their fiduciary duty by essentially not honoring the lease agreement and improperly administering the trust. (Cross Compl., ¶18- 30.) Because Defendant has not established that he is a beneficiary of the trust or that Plaintiffs owe him a fiduciary duty, his cause of action for breach of fiduciary duty fails to state a claim.

Thus, the court sustains Plaintiffs’ demurrer to the third cause of action.

Malicious Prosecution

To bring a cause of action for malicious prosecution, a party must establish “a lawsuit ‘(1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.’” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 872, quoting Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292.) “It is hornbook law that the plaintiff in a malicious prosecution action must plead and prove that the prior judicial proceeding of which he complains terminated in his favor.” (Babb v. Superior Court (1971) 3 Cal.3d 841, 845.)

Defendant failed to plead a cause of action for malicious prosecution because he did not establish a favorable termination of the Plaintiffs’ suit. It appears Defendant is alleging that the malicious prosecution occurred in a prior probate proceeding to which he states he “was not allowed to participate in.” (Cross Compl., ¶ 5, 11, 61-62) However, the probate court’s decision shows that the court found in favor of Plaintiffs, determining that the trust owned the real property at issue. (Ex. C.) Even if the probate action to which Defendant was not a party could qualify as a basis for malicious prosecution, Defendant’s own evidence establishes he did not obtain a favorable termination of the probate case. And to the extent he seems to plead that the present case is malicious prosecution because Plaintiffs refused to engage in alternative dispute resolution with him (Cross Compl., ¶ 60), he cannot assert such a claim because there has not yet been a termination of Plaintiffs’ action against him. (See Loomis v. Murphy (1990) 217 Cal.App.3d 589, 593-594.) 

Thus, the court sustains the Plaintiffs’ demurrer as to the Defendant’s seventh cause of action. 

Defendant and Cross-Complainant Peter Elias shall have 10 days leave to amend the third and seventh causes of action in his cross-complaint.