Judge Theresa M. Traber, Case Number: 22STCV29709, Date: 2023-12-14 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCV29709, Date: 2023-12-14 Tentative Ruling

Case Number: 22STCV29709 Hearing Date: December 14, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: December 14, 2023 TRIAL DATE: NOT SET

CASE: George Adam Adamian, individually and as Trustee of the George Adamian Living Trust v. Paul Krzemuski, as Trustee of the Violette Krzemuski AKA Violette Adamian 2013 Family Trust

CASE NO.: 22STCV29709

DEMURRER TO SECOND AMENDED COMPLAINT; MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT

MOVING PARTY: Defendant Paul Krzemuski, as Trustee of the Violette Krzemuski AKA Violette Adamian 2013 Family Trust

RESPONDING PARTY(S): Plaintiff George Adam Adamian, individually and as Trustee of the George Adamian Living Trust

CASE HISTORY:

· 09/12/22: Complaint filed.

· 04/18/23: First Amended Complaint filed.

· 09/08/23: Second Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a quiet title action. Plaintiff alleges that Defendants improperly foreclosed on a parcel of real property owned by Plaintiff using a fraudulent deed of trust.

Defendant demurs to the Second Amended Complaint in its entirety and moves to strike portions of the Second Amended Complaint.

TENTATIVE RULING:

Defendant’s Demurrer to the Second Amended Complaint is SUSTAINED without leave to amend.

Defendant’s Motion to Strike is DENIED AS MOOT.

DISCUSSION:

Demurrer to Second Amended Complaint

Defendant demurs to the Second Amended Complaint in its entirety.

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 read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) 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, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true”].) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

Meet and Confer

Before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the demurrer and file a declaration detailing their meet and confer efforts. (Code Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is not grounds to overrule or sustain a demurrer. (Code Civ. Proc., § 430.41(a)(4).)

The Declaration of Daniel J. Enowitz in support of this motion states that he met and conferred with Plaintiff’s counsel electronically on September 27, 2023 and telephonically on October 5, 2023. (Declaration of Daniel J. Enowitz ISO Demurrer. ¶¶ 3-4.) The parties were unable to resolve this dispute. (Id. ¶ 5.) The Court therefore finds that Defendant has satisfied the statutory meet-and-confer obligations.

Request for Judicial Notice

Defendant requests that the Court take judicial notice of (1) The Debtors’ First Amended Chapter 11 Plan of Reorganization filed on July 8, 2005 in In Re: George Adamian and Alice Adamian, U.S. Bankruptcy Court Case No. LA 03-37003 ER; (2) the Order Confirming Debtors’ First Amended Chapter 11 Plan of Reorganization filed December 1, 2005 in the above action; (3) the Notice of Motion and Motion for Entry of Final Decree Closing Debtors’ Chapter 11 Case and accompanying papers filed January 12, 2009 in the above action; and (4) the Court’s July 17, 2023 Minute Order in this action. Defendant’s requests are GRANTED pursuant to Evidence Code section 452(d) (court records).

Plaintiff requests that the Court take judicial notice of a Notice of Default and Election to Sell Under Deed of Trust recorded on August 30, 2023 in the Recorder’s Office of Los Angeles County. As this document is not material to the Court’s ruling, Plaintiff’s request is DENIED. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].)

Validity of Lien

Defendant demurs to the Second Amended Complaint in its entirety for failure to state facts sufficient to constitute a cause of action. The parties agree that all causes of action asserted in the operative complaint except for the Second Cause of Action for Financial Elder Abuse survive or fail together. The Court therefore considers the first and third through sixth causes of action together.

Plaintiff’s original complaint sought to set aside a deed of trust against a property owned by Plaintiff at 2709 E. South Street, Long Beach, California on the basis that he never obtained a loan in 2001 from his sister, Violette Adamian, and never provided the deed of trust to secure that loan. (Complaint ¶¶ 15-16.) Defendant subsequently unearthed a 2005 First Amended Chapter 11 Plan of Reorganization filed by Plaintiff in a bankruptcy proceeding acknowledging the existence of both the loan and deed of trust. (RJN Exh. 1.) Plaintiff’s Plan of Reorganization set forth a 10-year payment schedule on the loan at a 10% annual interest rate. (Id. pp. 7-8.) The Reorganization Plan was confirmed on December 1, 2005, and the bankruptcy proceeding discharged. (RJN Exh. 2.) Plaintiff requested formal closure of the bankruptcy case on January 28, 2009. (RJN Exh. 3.)

After discovering these records, Defendant demurred to the original Complaint. Plaintiff, in lieu of opposition, amended the Complaint, acknowledging the bankruptcy proceeding but alleging that the Plan of Reorganization extinguished the lien created by the Deed of Trust. (FAC ¶ 36.) On July 17, 2023, the Court sustained Defendant’s demurrer to the First Amended Complaint in its entirety, finding that Violette’s claim was included in the class of secured claims under the Plan of Reorganization and was not extinguished by the Plan. (RJN Exh. 4. p.8.) The Court also rejected Plaintiff’s argument that the Court should exercise its equitable authority to cancel the deed of trust. (Id. pp. 8-9.) Nonetheless, the Court exercised its discretion to allow Plaintiff to amend the Complaint. (Id. p.10.)

Plaintiff’s Second Amended Complaint asserts the same causes of action for Cancellation of Written Instrument Under Civil Code § 3412, Financial Elder Abuse, Quiet Title, Declaratory Relief, Injunctive Relief, and Slander of Title previously alleged, but adds a new cause of action for Financial Elder Abuse. The new allegations in the Second Amended Complaint repackage Plaintiff’s arguments asserted in opposition to the previous Demurrer and to Defendant’s Motion to Modify Preliminary Injunction. For example, Plaintiff alleges that the deed of trust was extinguished by the Bankruptcy Court’s order approving the plan of reorganization, and that the Court has the equitable power to cancel the deed of trust. (SAC ¶¶ 99-100.) Defendant contends that these allegations are fatally defective because they assert claims which the Court rejected in its July 17 ruling.

Plaintiff, in opposition, argues that the Bankruptcy Court’s order “superseded” the Deed of Trust, and, even if it did not, that the Court should exercise its equitable powers to cancel the deed of trust. Plaintiff asks the Court to reconsider its prior ruling on this issue. Reconsideration may only be sought as set forth by Code of Civil Procedure section 1008 as either a motion for reconsideration, which must be brought within 10 days of the prior order under subdivision (a) or a renewed motion under subdivision (b). (See Code Civ. Proc. § 1008.) In either case, Plaintiff would be required to demonstrate new or different facts, circumstances, or law by affidavit. (See, e.g., Code Civ. Proc. § 1008(b).) Plaintiff makes no attempt to do so and instead challenges the Court’s interpretation of the facts, records, and authorities set forth in the previous briefing and in the Court’s prior rulings. This is not a basis for reconsideration. As to Plaintiff’s new allegations of other misconduct by Violette Adamian in support of the equitable argument to cancel the deed because the statute of limitations has run (see SAC ¶¶ 67-69), these allegations are irrelevant because the Court has already ruled that Defendant’s putative power of sale as trustee would not be extinguished by the running of any statute of limitations. (See May 19, 2023 Ruling on Matter Taken Under Submission p. 5.)

The Court therefore finds that Plaintiff has failed to allege facts establishing the invalidity of the lien such that Plaintiff could state a cause of action for cancellation of written instrument, quiet title, declaratory relief, injunctive relief, or slander of title. Accordingly, Defendant’s Demurrer to the first, third, fourth, fifth, and sixth causes of action is SUSTAINED.

Financial Elder Abuse

Defendant also demurs to the second cause of action for financial elder abuse for failure to state facts sufficient to constitute a cause of action.

Financial elder abuse occurs when a person or entity “[t]akes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intend to defraud, or both.” (Welf. & Inst. Code § 15610.30.)

Defendant argues that the second cause of action fails for the same reason as the other causes of action in that it is predicated on the invalidity of Violette Adamian’s lien on the property and the wrongfulness of the foreclosure. Plaintiff contends in opposition that the second cause of action is sufficiently pled because it alleges an entire pattern of conduct by Defendant seeking to wrongfully obtain the subject property, of which the foreclosure was merely the climax. Certainly, the Second Amended Complaint alleges a pattern of behavior oriented toward and culminating in foreclosure on the subject property. However, Plaintiff’s elder abuse claim presupposes that the attempt to foreclose on the property is wrongful because the Deed of Trust was extinguished. (See SAC ¶¶ 111-112.) As the Court has repeatedly found, the Deed of Trust and the underlying lien were not extinguished. A lender does not take property for a wrongful use within the meaning of the elder abuse statute by properly foreclosing on the lender’s security for a loan. (Stebly vs. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 528.) Since the lien remained valid, Defendant’s foreclosure on the property could not be wrongful as a matter of law.

Leave to Amend

When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318). When a plaintiff “has pleaded the general set of facts upon which his cause of action is based,” the court should give the plaintiff an opportunity to amend his complaint, since plaintiff should not “be deprived of his right to maintain his action on the ground that his pleadings were defective for lack of particulars.” (Reed v. Norman (1957) 152 Cal.App.2d 892, 900.) Accordingly, California law imposes the burden on the plaintiffs to demonstrate the manner in which they can amend their pleadings to state their claims against a defendant. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) “Denial of leave to amend constitutes an abuse of discretion unless the complaint shows on its face it is incapable of amendment. [Citation.] Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

The Court extended Plaintiff an opportunity to allege new facts that would tend to support Plaintiff’s interpretation of the bankruptcy documents. Instead, Plaintiff either repackaged previous arguments and factual contentions in an attempt to escape the impact of the Court’s prior rulings or simply challenged the Court’s conclusions outright. Plaintiff thus implicitly concedes that it is not possible to amend the pleadings to assert new factual contentions that cure the defects identified herein. Further, although Plaintiff has not previously asserted an elder abuse claim, it is apparent from the allegations brought in support of that cause of action that the elder abuse claim is predicated on the same invalid legal theory as the rest of the pleadings. The Court therefore finds that leave to amend would be futile in this case.

Conclusion

Accordingly, Defendant’s Demurrer to the Second Amended Complaint is SUSTAINED without leave to amend.

Motion to Strike Portions of Second Amended Complaint

Defendant also moves to strike portions of Plaintiff’s Second Amended Complaint. As the Court has sustained Defendant’s demurrer without leave to amend, the Motion to Strike is DENIED AS MOOT.

CONCLUSION:

Accordingly, Defendant’s Demurrer to the Second Amended Complaint is SUSTAINED without leave to amend.

Defendant’s Motion to Strike is DENIED AS MOOT.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: December 14, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.