Judge Upinder S. Kalra, Case 22STCV07463 2022-12-20 Tentative Ruling

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1. An order sustaining the demurrer as to the Second and Third[1] Causes of Action

On March 2, 2022, Plaintiffs Tracey Fontenette Allen (“Plaintiff”) filed a complaint against Defendants Ashely Nicole Fontenette, Anthony H. Ruey, an individual and Sureties on his Bond, and Does 1 through 10.

Plaintiff filed a Motion for Leave to File First Amended Complaint, which was granted on May 27, 2022.

Plaintiff filed the First Amended Complaint on May 27, 2022, against Defendants Ashely Nicole Fontenette, Anthony H. Ruey, an individual and Sureties on his Bond, MUFG Union Bank, N.A., and Does 1 through 20. The FAC alleged four causes of action: (1) Breach of Fiduciary Duty as to Defendant Ruey, (2) Fraud and Deceit as to Defendant Ashley Fontenette, (3) Failure to Comply with Form 0044 – failure to file a Suspicious Activity Report and Emotional Distress as to Defendant Union Bank, and (4) Emotional Distress as to Defendants Ruey and Ashley Fontenette. The complaint alleges that Plaintiff and Victor Fontenette were trustees of their mother’s living trust. Plaintiff alleges that Defendant Ashley Fontenette fraudulently obtained power of attorney as to her father, Victor Fontenette, and withdrew money from the family trust for personal gain.

The current Demurrer was filed on September 8, 2022. Plaintiff’s Opposition was filed on November 17, 2022.

A demurrer for sufficiency 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. 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. …. 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 147 Cal.App.4th at 747.)

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to Code of Civ. Proc. §430.41(a)(2) & (3). The Declaration of Daniel Fonda indicates that he was retained for a limited purpose to prepare the current demurrer. It also states that counsel believed Defendant Fontenette was ordered to file the current demurrer and the meet and confer was “excused based on the positions taken and statements by all parties in previous filings and/or appearances.” (Dec. Fonda ¶ 4.)

Defendant Ashely Fontenette demurs on the grounds that the second and third causes of action fail to sufficient facts for a cause of action, as well as Plaintiff lacks standing to pursue these claims. Additionally, Defendant also argues that the entire demurrer ambiguous and uncertain.

Defendant argues that the fraud cause of action fails because it does not allege any facts

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice…this particularity requirements necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tenders.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) “[W]hen averments of fraud are made, the circumstances constituting the alleged fraud must be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong.” Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.2003) (internal quotations and citations omitted). The allegations “must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” (Arikat v. JP Morgan Chase & Co. (N.D. Cal. 2006) 430 F.Supp.2d 1013, 1022).

The FAC does not contain allegations of intent or reliance by Plaintiff. While the FAC may contain sufficient allegations of a misrepresentation to a bank employee, there are not allegations of reliance, or justifiable reliance, by Plaintiff, and also fails to state facts that Defendant intended to defraud Plaintiff.

Demurrer as to the Cause of Action for Fraud, Second Cause of Action, is SUSTAINED.

Defendant argues that the FAC fails to indicate which type of emotional distress is being pleaded: intentional or negligent. Additionally, there are no allegations that Defendant caused Plaintiff to suffer any emotional damage. Moreover, the bystander theory also is not met because Plaintiff was not present for the notarization.

Plaintiff argues that under CCP § 367, which requires an action be prosecuted by a real party in interest, Plaintiff was a real party in interest due to the “equity interest” in the $7,000 that was taken.

Intentional infliction of emotional distress requires the Plaintiff to show “(1) outrageous conduct by the defendant; (2) the defendant's intention of causing or reckless disregard of the probability of causing emotional distress; (3) the plaintiff's suffering severe or extreme emotional distress; and (4) actual and proximate causation of the emotional distress by the defendant's outrageous conduct.” (Yau v. Santa Margarita Ford, Inc. (2014) 229 Cal.App.4th 144, 160).

A “negligent causing of emotional distress is not an independent tort but the tort of negligence....’ [Citation.] ‘The traditional elements of duty, breach of duty, causation, and damages apply.’” (Eriksson v. Nunnink (2015) 233 Cal.App.4th 708, 729). “In the absence of physical injury or impact to the plaintiff himself, damages for emotional distress should be recoverable only if the plaintiff: (1) is closely related to the injury victim, (2) is present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim and, (3) as a result suffers emotional distress beyond that which would be anticipated in a disinterested witness.” (Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1073).

The FAC does not allege facts that constitute either intentional or negligent infliction of emotional distress. No allegations are stated that Defendant intended to cause emotional distress or outrageous conduct, which is required for a cause of action for intentional infliction of emotional distress. Further, the bystander theory of negligent infliction of emotional distress also does not apply.

Demurrer as to the Cause of Action for Emotional Distress, Fourth Cause of Action, is SUSTAINED.

Leave to amend should be liberally granted if there is a reasonable possibility an amendment could cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.) The Plaintiff has the burden of demonstrating that leave to amend should be granted, and that the defects can be cured by amendment. (“Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The Court has already Sustained Demurrers as to other Defendants, denied leave to amend because from the detail factual allegations, it was unlikely that Plaintiff would be able cure the defects. Similarly, assuming the facts are alleged in the FAC are true, which the Court must, while it is understandable why Plaintiff is pursuing action against Defendant, it is equally clear that Plaintiff will be unable to successfully allege facts that would constitute fraud or negligent infliction of emotional distress. Accordingly, leave to Amend is DENIED.

Demurrer as to the Second and Fourth Causes of Action is SUSTAINED without leave to amend.

Pursuant to CCP § 581d, this written order of dismissal constitutes a judgment and shall be effective for all purposes. The Clerk shall note this judgment in the register of actions in this case.

[1] The Court notes that in the notice, it states second and third causes of action, which are fraud, and failure to comply with Form 0044 as to Defendant Union Bank. However, in the motion, the arguments are for the fourth cause of action, which is an emotional distress cause of action, against Defendant Fontenentte. The Court views this has a typographical error.