Judge: Salvatore Sirna, Case: 21PSCV00702, Date: 2023-03-29 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 21PSCV00702    Hearing Date: March 29, 2023    Dept: G

Plaintiff Shelia Robles’s Demurrer to Second Amended Cross-Complaint

Respondent: Defendant and Cross-Complainant Peter Elias

TENTATIVE RULING

Plaintiff Shelia Robles’s Demurrer to Second Amended Cross-Complaint is SUSTAINED with twenty (20) 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, 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 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 January 11, 2023, the court sustained Neu’s demurrer to Defendant’s FACC with 10 days leave to amend.

On January 23, 2023, Defendant filed a Second Amended Cross-Complaint (SACC) against the same defendants and Mario Garcia that alleged the same causes of action.

On February 21, 2023, Robles filed the present demurrer. Prior to filing on February 17 and February 20, Robles’s counsel attempted to meet and confer with Defendant’s counsel by calling counsel but was unable to receive a response. (McMeekin Decl., ¶ 2.)

A hearing on the demurrer is set for March 29, 2023. A mandatory settlement conference is set for December 7, while a final status conference is set for June 6, 2024 and a jury trial is set for June 18.

ANALYSIS

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

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.)

Discussion

As an initial matter, Defendant argues Robles failed to timely demur because Robles did not join Neu in demurring to Defendant’s FACC. As support, Defendant cites to Code of Civil Procedure section 430.40, subdivision (a) which states “[a] person against whom a complaint or cross-complaint has been filed may, within 30 days after service of the complaint or cross-complaint, demur to the complaint or cross-complaint.” However, the court finds Defendant’s interpretation unsupported as the statute merely states “a complaint or cross-complaint” and does not require that complaint or cross-complaint be the initial one. Furthermore, “[i]t is well established that an amendatory pleading supersedes the original one, which ceases to perform any function as a pleading.” (Meyer v. State Bd. of Equalization (1954) 42 Cal.2d 376, 384.) Thus, the court rejects this argument and finds Robles’s demurrer to the SACC is timely.

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 Robles owed a fiduciary duty to Defendant as an heir of Luis Elias in the event a beneficiary fails in the trust. (SACC, ¶ 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 SACC does allege Defendant is an heir of Luis Elias, nowhere in the SACC does it allege Defendant is a beneficiary of the Luis M. Elias Trust. Thus, the court finds Robles did not owe Defendant a fiduciary duty as trustee given Defendant was not a beneficiary.

Defendant also suggested Robles had “a duty to protect [Defendant’s] Lease by and through their powers as trustees.” (SACC, ¶ 24.) Defendant alleges Robles’s failure to follow landlord-tenant law “is negligence on their part and a breach of their fiduciary duty to [Defendant] as the actual lessee and subleasor of the property who has a valid contract in existence.” (SACC, ¶ 29.)

“A fiduciary relation in law is ordinarily synonymous with a confidential relation. It is also founded upon the trust or confidence reposed by one person in the integrity and fidelity of another, and likewise precludes the idea of profit or advantage resulting from the dealings of the parties and the person in whom the confidence is reposed.” (Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, 654, quoting Bacon v. Soule (1912) 19 Cal.App. 428, 434.) “Traditional examples of fiduciary relationships in the commercial context include trustee/beneficiary, directors and majority shareholders of a corporation, business partners, joint adventurers, and agent/principal.” (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 30.)

“[T]he contractual right to contingent compensation in the control of another has never, by itself, been sufficient to create a fiduciary relationship where one would not otherwise exist.” (Id., at p. 30-31.) Similarly, the cost-sharing provisions of a lease agreement by themselves are also insufficient to establish fiduciary duties. (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 808.) Furthermore, in Korens v. R.W. Zukin Corp. (1989) 212 Cal.App.3d 1054, the court rejected arguments that a landlord’s holding of a tenant’s security deposit constituted a trust relationship. (Id., at p. 1058-1059.) Thus, absent additional allegations establishing how Defendant was in a fiduciary or confidential relationship with Robles beyond that of a typical landlord-tenant, the court finds this also is insufficient to establish Robles owed Defendant a fiduciary duty.

Accordingly, Robles’s demurrer is SUSTAINED with leave to amend.

CONCLUSION

Based on the foregoing, Robles’s demurrer to Defendant’s Second Amended Cross-Complaint is SUSTAINED with twenty (20) days leave to amend.