Judge Thomas Falls, Case 22PSCV00580 2023-02-28 Tentative Ruling

DEMURRER TO PLAINTIFF’S VERIFIED FIRST AMENDED COMPLAINT is SUSTAINED in part with leave to amend (i.e., as to the fraud and quiet title causes of action) and OVERRULED in part (i.e., as to the breach of fiduciary duty, declaratory relief, injunctive relief, unjust enrichment/constructive trust, and quantum meruit causes of action).

This is a quiet title action regarding properties located at 16485 Monte Cristo Drive, Hacienda Heights, CA 91745 (the “Monte Cristo Property”), 1621 Derringer Lane, Diamond Bar, CA (the “Derringer Lane Property”), and 14211 Skyline Drive, Hacienda Heights, CA (the “Skyline Drive Property”).

On June 14, 2022, Plaintiff filed the complaint against BO SUN, an individual; ALL PERSONS UNKNOWN, Claiming Any Legal or Equitable Right, Title, Estate, Lien, or Interest in the Property Described in this Complaint Adverse to Plaintiff’s title, or any Cloud upon Plaintiff’s Title Thereto; and DOES 1 through 20, inclusive for:

On August 24, 2022, Defendant filed a Demurrer, which on October 4, 2022 the court sustained with leave to amend.

On December 5, 2022, Plaintiff filed a FAC for 1. BREACH OF FIDUCIARY DUTY 2. QUIET TITLE 3. FRAUD 4. DECLARTORY RELIEF 5. INJUNCTIVE RELIEF 6. UNJUST ENRICHMENT/ CONSTRUCTIVE TRUST 7. QUANTUM MERUIT.

Previously, the court sustained the demurrer because “the complaint [was] unintelligible” as it listed a variety of properties without indicating their relevance to each cause of action.

Now, the FAC more clearly states that the properties are relevant as to the parties’ joint venture agreement (“Joint Venture Agreement”) consisting of real property such that the court can address the merits of the demurrer. Before doing so, the court turns to the allegations regarding each property.

Regarding the Monte Cristo Property, Plaintiff alleges that as part of an arbitration agreement, she deeded the property to Defendant in 2007 (FAC ¶23), but that “Defendant refused to reimburse Plaintiff for the monthly mortgage, taxes, improvements, insurance, utilities and maintenance of the Monte Cristo Property from 2008 to present.” (FAC ¶26.)

Regarding the Derringer Lane Property, Plaintiff alleges that pursuant to their Joint Venture Agreement, the parties purchased the property, each contributing to the total purchase price, but that “Defendant did not put Plaintiff on title and instead took title entirely in his own name without ever disclosing this material fact to Plaintiff” and that Defendant intends to sell the property with all proceeds from the sale to be distributed to himself. (FAC ¶¶29, 32.)

As to the Skyline Drive Property, again pursuant to the joint venture agreement Plaintiff contributed funds, but Defendant intends to sell the property without repaying Plaintiff for her loan, utility payments, and improvements.

Defendant argues that while the court gave leave to amend, Plaintiff the fourth, fifth, sixth and seventh causes of action causes of action in the FAC without first obtaining leave from the court.

California Courts have recognized that a grant of leave to amend in connection with a demurrer “must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained.” (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.)

Here, the court’s order did not confine leave to amend as to a specific cause of action such that it would preclude the addition of new causes of action. Rather, the court’s order allowed for a “general” leave to amend so that Plaintiff could refine her complaint.

Accordingly, as the new causes of action respond to the court's reason for sustaining the earlier demurrer—in that the allegations are clearer and comport with the alleged causes of action—the court finds that the causes of action fall within the scope of permitted amendment.[1]

Therefore, the court OVERRULES the demurrer as to the fourth, fifth, sixth and seventh causes of action for declaratory relief, injunctive relief, unjust enrichment / constructive trust and quantum meruit, respectively, because they were not improperly added in the FAC.

As a prefatory matter, Defendant’s demurrer addresses a conversion and common counts cause of action, but the FAC does not assert a conversion cause of action. Therefore, the argument will not be addressed.[2]

The basis of this cause of action is that as joint adventurers, the parties owed a fiduciary duty to each other.

In its demurrer, Defendant argues that there is no relationship aside from the parties “personal romantic relationship.”[3]

Not so. Rather, the basis of this cause of action is that as joint adventurers, they owe each other fiduciary duties. (FAC ¶¶43, 44.)

Therefore, as Plaintiff does allege that their relationship bore the fiduciary relationship rather a business relationship, the court OVERRULES the demurrer as to the 1^st cause of action for Breach of Fiduciary Duty.

Defendant demurs on the grounds that the fraud cause of action is premised upon conclusory allegations.

The court agrees. Turning to the complaint, the cause of action is predicated upon the allegation that Defendant made a false representation “in that he never intended to reimburse Plaintiff nor transfer title or share of title over to Plaintiff.” (FAC ¶58.) Fraud requires pleading with specificity but merely pleading that Defendant did not fulfill a promise does not amount to fraud.

Therefore, as plaintiff’s opposition merely repleads allegations in the FAC, the court SUSTAINS the demurrer WITH LEAVE TO AMEND.

Quiet title actions are governed by Code of Civil Procedure section 760.020, subdivision (a). In turn, the CCP statute permits a party to bring an action “to establish title against adverse claims” to real property. The first step is that a plaintiff files a verified complaint, which is to delineate “[t]he adverse claims to the title of the plaintiff against which a determination is sought” and name as defendants “the persons having adverse claims that are of record or known to the plaintiff or reasonably apparent from an inspection of the property. (Code Civ. Proc., § 761.020, subd. (b).) Moreover, the plaintiff is required to “[i]mmediately” record a lis pendens. (Id.) The court is then required to “examine into and determine the plaintiff's title against the claims of all the defendants.” (Code. Civ. Proc., §764.010.)

Plaintiff asserts this cause of action as to the Derringer Lane Property and is premised upon the following allegation: “Plaintiff transferred $520,000 to Defendant as her share of the purchase price with the expectation that Plaintiff would be entitled to rights to title and equity” but “Defendant did not put Plaintiff on title and instead took title entirely in his own name without ever disclosing this material fact to Plaintiff. Defendant has breached his agreement.” (FAC ¶¶53, 54.)

Defendant demurs on the grounds that an owner of an equitable title interest cannot maintain an action for quiet title against the owner of a legal title.

Indeed, “[i]t has been held consistently that the owner of an equitable interest cannot maintain an action to quiet title against the owner of the legal title. (Stafford v. Ballinger (1962) 199 Cal. App.2d 289, 294-295.)

Therefore, as Plaintiff’s opposition does not address Defendant’s cited authority, the court SUSTAINS the demurrer as to this cause of action WITH LEAVE TO AMEND.[4]

Based on the foregoing, the demurrer is SUSTAINED in part with leave to amend (i.e., as to the fraud and quiet title causes of action) and OVERRULED in part (i.e., as to the breach of fiduciary duty, declaratory relief, injunctive relief, unjust enrichment/constructive trust, and quantum meruit causes of action).

[1] Even assuming arguendo Plaintiff’s use of leave to amend was improper, Plaintiff would likely file a motion for leave to amend, which the court would likely grant such that sustaining the demurrer on said grounds would be futile.

[2] And on this note, Defendant refers to the original complaint, but the operative complaint is the FAC.

[3] This was pled in the original complaint, not in the FAC. Therefore, it cannot form the basis of Defendant’s demurrer to the FAC.

[4] Plaintiff should note that as a matter of law, she has not pleaded allegations to assert legal title. If she can amend the pleadings to plead legal title, then she is permitted to amend the complaint as to this cause of action. If not, then re-asserting a quiet title cause of action is futile.