Judge: Stephen P. Pfahler, Case: 24STCV01168, Date: 2024-09-04 Tentative Ruling

Case Number: 24STCV01168    Hearing Date: September 4, 2024    Dept: 68

Dept. 68

Date: 9-4-24

Case #24STCV01168

Trial Date: Not Set

DEMURRER

MOVING PARTY: Plaintiff/Cross-Defendant, Nick Alden, pro se

RESPONDING PARTY: Defendant/Cross-Complainant, David Westley, et al.

RELIEF REQUESTED

Demurrer to the Cross-Complaint

·         1^st Cause of Action: Professional Negligence

·         2^nd Cause of Action: Breach of Fiduciary Duty

·         3^rd Cause of Action: Declaratory Relief

SUMMARY OF ACTION

In January 2012, Defendants David and Victoria Westley, and Han Realty, Inc., retained attorney Plaintiff Nick Alden for representation involving a pending foreclosure of their home. Following several years of litigation, Plaintiff presented a legal bill of $1.35 million. Plaintiff represents third party mortgage holder Bank of America agreed to “pay” the outstanding legal bill “in full by reducing the amount owed ... in exchange” for payment of $50,000 to Bank of America. Plaintiff also agreed “to give” the Westleys $400,000 from the $1.35 million received from Bank of America. The agreement with the Westleys was apparently secured with a $960,000 deed of trust by Westleys, which Plaintiff alleges was false. Plaintiff alleges discovery of the fraudulent deed of trust upon efforts to record the document.

Meanwhile, the Westleys “attempted to sell the house” to third parties Victor and Nicole Palumbo. A title report revealed the property was encumbered with $3.8 million in liens. On August 12, 2016, the Palumbos filed a complaint against the Wesleys and Han Realty. Plaintiff initially represented the Wesleys in the Palumbo litigation until disqualification “after six years of litigation” due to Plaintiff potentially appearing in the action as a “material witness.” The liens were subsequently expunged.

On January 16, 2024, Plaintiff, in pro se, filed a complaint for Fraud and Deceit, Declaratory Relief, and Breach of Contract. The subject complaint appears to only involve the allegedly fraudulent deed of trust notwithstanding the allegations of the Palumbo litigation.

On March 15, 2024, Defendants answered and filed a cross-complaint against Nick Alden, Law Offices of Nick Alden, and Aleksey Sirotin for Professional Negligence, Breach of Fiduciary Duty, and Declaratory Relief. Cross-Complainants allege Alden both conducted the litigation in a substandard manner, as well as engaged in conduct constituting a conflict of interest without obtaining a waiver or consent from the clients.

On July 29, 2024, Cross-Defendants dismissed Aleksey Sirotin and Law Offices Nick Alden without prejudice.

RULING: Sustained with Leave to Amend in Part/Overruled in Part.

Request for Judicial Notice in the Reply: DENIED.

The request includes a number of items not subject to judicial notice. Any and all of the documents were introduced well after the opposition thereby depriving Cross-Complainants from responding to any and all of the documents, even if said documents actually support the extrinsic reliant narrative(s) driving this demurrer. The court therefore declines to consider any content, even if some of the documents, such as the grant deed were subject to judicial review.

Plaintiff/Cross-Defendant, Nick Alden, pro se, (Alden) submits a demurrer to the cross-complaint of David Westley, Victoria Westley, and Han Realty Corp. Alden contends the cross-complaint is barred by the statute of limitations, and subject to demurrer on grounds of uncertainty. Cross-Complainants in opposition provide an extensive background referencing allegations, including information beyond any allegations in the operative cross-complaint; deny any bar under the statute of limitations; and, maintain all claims are sufficiently pled. Plaintiff/Cross-Defendant in reply introduces new argument challenging a lack of actual damages, due to the pending “underlying action.” The reply again extensively cites to the extrinsic evidence, including factual challenge to the counter-narrative presented in the opposition, as well as the motion for disqualification in order to establish certain fixed dates.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

“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; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

The demurrer and opposition both reference documents via judicial notice. The court electronic filing system shows no request for judicial notice filed by Alden before, concurrent with, or after the filing of the April 11, 2024, notice of demurrer and demurrer, or any request for judicial notice by Cross-complainants concurrent with, before or after the August 23, 2024, filed opposition. Again, the court declines to take judicial notice of number of items submitted with the reply. Both parties reference numerous facts beyond the scope of the operative cross-complaint, which cannot be considered as established in the standard for a demurrer.

Statute of Limitations

Alden challenges the entire cross-complaint on grounds of the statute of limitations. Although the notice of demurer identifies the statute of limitations defense as part of the demurrer to both the first and second causes of action, the court finds no specific argument as to the breach of fiduciary claim statute of limitations.

The argument relies on the complaint and extrinsic inference, whereby Alden maintains disqualification from any representation of Cross-Complainants on December 8, 2021, as well as the representation beginning with the Bank of America action, whereby judgment was entered on February 4, 2016. Notwithstanding the position of Alden, the operative cross-complaint alleges representation by Alden from April 12, 2016, to April 21, 2023, in the Palumbo action only. [Cross-Comp., ¶ 10.]

The court declines to rely on any and all of the extrinsic references relied upon by any party in reviewing the demurrer. The court will NOT consider factual argument beyond the operative pleading or the documents submitted in the request for judicial notice with the reply. The demurrer establishes no basis for a finding of claims barred by the one year statute of limitations given the allegations of representation occurring until 2023, and the complaint and cross-complaint both filed less than 12 months from the end of the purported representation period. The demurrer is overruled on this basis.

1^st Cause of Action: Professional Negligence

“The elements of a cause of action for professional negligence are (1) the duty of the professional to use such skill, prudence and diligence as other members of the profession commonly possess and exercise; (2) breach of that duty; (3) a causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional negligence.” (Nichols v. Keller (1993) 15 Cal.App.4th 1672, 1682.) The cross-complaint sufficiently articulates the elements. [Cross-Comp., ¶¶ 10-14.] The court declines to consider the argument over standing, the Bank of America litigation, or any other facts completely extrinsic to the operative cross-complaint. The demurrer is overruled on this cause of action.

2^nd Cause of Action: Breach of Fiduciary Duty

“‘The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.’” (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 932.) The cross-complaint sufficiently articulates the elements. [Cross-Comp., ¶¶ 15-20.] The court declines to consider the argument over standing, the Bank of America litigation, or any other facts completely extrinsic to the operative cross-complaint. The demurrer is overruled on this cause of action.

3^rd Cause of Action: Declaratory Relief

Alden challenges the subject cause of action on grounds of failure to state a prospective claim. Declaratory relief under Code of Civil Procedure section 1060 requires “two essential elements: “‘(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.’” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.)

The cross-complaint alleges a claim of $1.3 million in damages from improperly collected fees. Given the cessation of representation articulated in the cross-complaint as 2013, it remains unclear how and what requires further determination between the parties. Any claim for damages involving past conduct in no way qualifies for declaratory relief. The opposition lacks any apparent argument on this argument regarding an ongoing controversy. The demurrer is sustained with leave to amend.

In summary, the demurrer is OVERRULED as to the professional negligence and breach of fiduciary duty causes of action, and SUSTAINED with 30 DAYS LEAVE TO AMEND, as to the declaratory relief cause of action.

Cross-Complaints may NOT add any new causes of action, and may ONLY add facts in support of declaratory relief. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Any new causes of action added without leave of court may be subject to a motion to strike. Material changes to the operative complaint seeking to alter the material terms of any purported agreements or representation may also be subject to a demurrer under the sham pleading standard. Any potential demurrer to first amended cross-complaint will only be allowed as to the declaratory relief cause of action unless Cross-Complainants in any way alters the two overruled causes of action.

If Cross-Complainants elect to not file a first amended cross-complaint, Alden shall answer the remaining causes of action of the cross-complaint within 10 days of the lapse of the 30 day amendment deadline (e.g. 40 days from the date of this order).

Case Management Conference and OSC re: Failure to Obtain Defaults set for October 11, 2024.

Nick Alden to give notice.