Judge: Salvatore Sirna, Case: 21PSCV00702, Date: 2023-01-11 Tentative Ruling

Case Number: 21PSCV00702    Hearing Date: January 11, 2023    Dept: G

Plaintiff Rachel Neu’s Demurrer to Defendant’s First Amended Cross-Complaint

Respondent: Defendant and Cross-Complainant Peter Elias  

TENTATIVE RULING

Plaintiff Rachel Neu’s Demurrer to Defendant and Cross-Complainant Peter Elias’ First Amended Cross-Complaint is SUSTAINED with ten (10) days leave to amend.  

BACKGROUND

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

On August 30, 2021, Robles, as trustee of the Luis M. Elias Trust, filed a complaint against Jenny Milner, Defendant Peter Elias, Mario Garcia, and Does 1-20, alleging the following causes of action: (1) conversion, (2) breach of fiduciary duty, (3) money had and received, and (4) rent due. On September 16, Robles filed a First Amended Complaint. On March 30, 2022, Robles and Neu filed a Second Amended Complaint against the same defendants alleging the same causes of action.

On July 27, 2022, Defendant Peter Elias filed a cross-complaint against Robles and Neu, 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, and (8) declaratory relief. On October 12, the court sustained Robles and Neu’s demurrer to Defendant’s cross-complaint with 10 days leave to amend.

On October 24, 2022, Defendant filed a First Amended Cross-Complaint (FACC) against the same defendants, 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, and (7) declaratory relief.

On October 27, 2022, Neu filed the present demurrer. On December 6, the court continued a hearing on the demurrer to January 11, 2023, so Neu’s counsel could meet and confer with Defendant’s counsel. On December 7, 2022, Neu’s counsel spoke on the telephone with Defendant’s counsel who declined to discuss the demurrer and promised to follow-up in a few days. (McMeekin Supp. Decl., ¶ 2.) After receiving no call, Neu’s counsel attempted to contact Defendant’s counsel via telephone on December 16 and December 22 but was unable to obtain a response. (McMeekin Supp. Decl., ¶ 3-4.)

LEGAL STANDARD

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) 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.) 

ANALYSIS

Neu demurs to Defendant’s third cause of action for breach of fiduciary duty in the FACC on the grounds that it fails to state facts sufficient to state a claim. For the following reasons, the court agrees and SUSTAINS the demurrer.

As an initial matter, Defendant argues Neu failed to timely serve notice of the demurrer before the December 6 hearing. However, any alleged defect is cured by the fact that Defendant’s counsel appeared at the December 6 hearing—albeit through another attorney—where the court continued the hearing to give parties to time to meet-and-confer.

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.) 

In this case, Defendant alleges Neu owed a fiduciary duty to Defendant as an heir of Luis Elias in the event a beneficiary fails in the trust. (FACC, ¶ 25.) However, Probate Code section 16002 states a “trustee has a duty to administer the trust solely in the interest of the beneficiaries.” While the FACC does allege Defendant is an heir of Luis Elias, nowhere in the FACC does it allege Defendant is a beneficiary of the Luis M. Elias Trust.

In opposition to the demurrer, Defendant argues Neu held a position of trust and confidence with respect to heirs and beneficiaries of the estate. However, that is insufficient to establish a fiduciary relationship that gives rise to fiduciary duties. (See Ampuero v. Luce (1945) 68 Cal.App.2d 811, 819.) Additionally, Defendant’s arguments on this point lack any citation to authority that would support the existence of a fiduciary duty. Thus, because Defendant failed to plead any facts that establish Defendant is beneficiary of the Luis M. Elias Trust, Neu did not owe Defendant any fiduciary duties as a trustee of said trust.

Accordingly, Neu’s demurrer is SUSTAINED.

CONCLUSION

Based on the foregoing, Neu’s demurrer to Defendant’s First Amended Cross-Complaint is SUSTAINED with ten (10) days leave to amend.