Judge: Virginia Keeny, Case: 20STCV42539, Date: 2023-01-19 Tentative Ruling

Case Number: 20STCV42539    Hearing Date: January 19, 2023    Dept: W

ALBERT FRIDLIN JEUNG, et al. v. DIAMOND RESORTS U.S. COLLECTION DEVELOPMENT, LLC, et al.

 

MOTION FOR JUDGMENT ON THE PLEADINGS

 

Date of Hearing:        January 19, 2023                   Trial Date:       September 11, 2023

Department:              W                                            Case No.:        20STCV42539

 

Moving Party:            Defendants Diamond Resorts U.S. Collection Development, LLC, Diamond Resorts Financial Services, Inc., Diamond Resorts International Marketing, Inc., and “Eddie” Ido Ben Am Ram

Responding Party:     Plaintiffs Albert Fridlin Jeung and Karen Ubaldi

Meet and Confer:      Yes. (Humphreys Decl. ¶2.)

 

BACKGROUND

 

This is a wrongful death action. Plaintiffs allege Defendants, through unconscionably high-pressure sale tactics and fraudulent misrepresentations, induced Plaintiffs to enter several agreements to purchase timeshare interests. Plaintiffs allege due to the wrongful and emotionally abusive conduct, Plaintiff Albert Fridlin Jeung (“Decedent”) committed suicide.

 

On November 5, 2020, Plaintiffs Albert Fridlin Jeung and Karen Ubaldi filed a complaint against Defendants Diamond Resorts U.S. Collection Development, LLC, Diamond Resorts Financial Services, Inc., Diamond Resorts International Marketing, Inc., and “Eddie” Ido Ben Am Ram asserting a cause of action for wrongful death. Plaintiffs filed a first amended complaint on December 8, 2021, replacing their single wrongful death action with three causes of action for wrongful death premised on (1) intentional conduct, (2) negligence, and (3) breach of fiduciary duty.

 

[Tentative] Ruling

 

Defendants Motion for Judgment on the Pleadings Re: Plaintiffs’ Third Cause of Action is DENIED.

 

discussion

 

Defendants Diamond Resorts U.S. Collection Development, LLC, Diamond Resorts Financial Services, Inc., Diamond Resorts International Marketing, Inc., and “Eddie” Ido Ben Am Ram move the court pursuant to Code of Civil Procedure section 438(c)(1)(B)(ii) for judgment on the pleadings as to the third cause of action for wrongful death based on breach of fiduciary duty asserted in Plaintiffs’ first amended complaint.

 

It is well established in California that either prior to trial or at the trial the plaintiff or the defendant may move for judgment on the pleadings and that the appropriate ground for such a motion is the same as that arguable by general demurrer, namely, the failure to state a cause of action or defense. (Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 791; See also Sofias v. Bank of America (1985) 172 Cal.App.3d 583, 586 [The non-statutory motion for judgment on the pleadings can be made at any time, even during trial, since the grounds for a general demurrer are never waived.].)  

 

The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322 (citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216).) Matters which are subject to mandatory judicial notice may be treated as part of the complaint and may be considered without notice to the parties. Matters which are subject to permissive judicial notice must be specified in the notice of motion, the supporting points and authorities, or as the court otherwise permits. (Id.)

 

“’”The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 483 [80 Cal.Rptr.2d 329]. )”’” (Hodges v. County of Placer (2019) 41 Cal.App.5th 537.) 

 

“’A fiduciary relationship is ‘’’”any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter's knowledge or consent ....’”(Herbert v. Lankershim (1937) 9 Cal.2d 409, 483, 71 P.2d 220; In re Marriage of Varner (1997) 55 Cal.App.4th 128, 141, 63 Cal.Rptr.2d 894; see also Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, 654, 192 Cal.Rptr. 732 [‘’A ‘fiduciary relation’ in law is ordinarily synonymous with a ‘confidential relation.’ It is ... 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.” ’].) (Hodges, at pp. 546-547.) 

 

“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. [Citations.]” (Hodges, at p. 547.) 

 

The courts of appeal are split as to whether the existence of a fiduciary relationship is a question of fact or law.  (Compare Hodges, at p. 546 [“Whether a fiduciary duty exists is generally a question of law]; same David Welch Co. v. Erskine & Tulley (1988) 203 Cal.App.3d 884, 890, and Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1161 [“the existence of a confidential relationship generating a fiduciary duty is a question of fact”].)  Where there is a conflict, this court may elect between the decisions based on which is the better reasoned.  (Auto Equity Sales, Inc. v. Superior Court of Santa Clara (1962) 57 Cal.2d 450.)  Here, the court finds the Persson  decision to be better reasoned as it draws on extensive authorities articulating the factual basis for finding a fiduciary relationship.    

 

Persson reviewed the basic principles governing “fiduciary and confidential relations. The two terms are often said to be synonymous, but there are ‘significant differences:”

 

 Both relationships give rise to a fiduciary duty, that is, a duty ‘to act with the utmost good faith for the benefit of the other party.’(Bacon v. Soule (1912) 19 Cal.App. 428, 434, 126 P. 384.)   ‘”Technically, a fiduciary relationship is a recognized legal relationship such as guardian and ward, trustee and beneficiary, principal and agent, or attorney and client ... whereas a ‘confidential relationshi’ may be founded on a moral, social, domestic, or merely personal relationship as well as on a legal relationship.”’ [Citation omitted.] A confidential relation may exist where there is no fiduciary relation. (Vai v. Bank of America (1961) 56 Cal.2d 329, 337–338, 15 Cal.Rptr. 71, 364 P.2d 247.) “Because confidential relations do not fall into  well-defined categories of law and depend heavily on the circumstances, they are more difficult to identify than fiduciary relations.” [Citation omitted.] The existence of a confidential relationship is a question of fact, and “ ‘the question is only whether the plaintiff actually reposed such trust and confidence in the other, and whether the other “accepted the relationship.”’” [Citation omitted]; . . . Chodos, The Law of Fiduciary Duties (2000) pp. 49–50.) A “relationship” must exist over a period of time. [Citation omitted]; Chodos, The Law of Fiduciary Duties, supra, at p. 53.)

 

(Perrson, at p. 1161.) 

 

The Perrson court continued:

 

Nonetheless, because of “[t]he vagueness of the common law definition of the confidential relation that gives rise to a fiduciary duty, and the range of the relationships that can potentially be characterized as fiduciary,” the “essential elements” have been distilled as follows:

 

“‘1) The vulnerability of one party to the other which 2) results in the empowerment of the stronger party by the weaker which 3) empowerment has been solicited or accepted by the stronger party and 4) prevents the weaker party from effectively protecting itself.’ ” (Citation omitted.) 

 

In short, vulnerability “is the necessary predicate of a confidential relation,” and “the law treats [it] as ‘absolutely essential’....” (Cittion omitted.) 

 

(Persson at p. 1161.) 

 

Defendants first argue it is blackletter law that the sale of timeshare points does not create a fiduciary duty. To support their contention, Defendants rely on three cases: Kissling v. Wyndham Vacation Resorts, Inc. (N.D. Cal., Nov. 18, 2015, No. 15-CV-04004-EMC) 2015 WL 7283038; Martinez v. Welk Group, Inc. (S.D. Cal. 2012) 907 F.Supp.2d 1123; and Renner v. Bluegreen Corp. (C.D. Cal., Aug. 15, 2016, No. EDCV1600239JVSKKX) 2016 WL 10835981.  It is correct that in each of these federal cases, the court found that plaintiff had not established a fiduciary relationship with the seller of time shares.  Nonetheless, each decision was limited to its facts and suggested that different  facts might warrant a different finding. (Kissling, at p. * 6 (“no evidence to suggest that the transaction between Plaintiff and the sales agent at the Wyndham Canterbury was anything more than a contractual relationship”); Martinez, supra, at p. 1133 (at summary judgment, plaintiff unable to produce any evidence to support the existence of a fiduciary relationship above and beyond the contractual relationship between the parties); Renner  at p. *4 (plaintiff did not even state bare bones allegations of a fiduciary relationship). 

 

Moreover, each of those cases is distinguishable because none alleged the particular vulnerability of the plaintiff, as here; the unusually high degree of confidence placed in the sales agent over an extended period of time; the peculiar power of the defendant over the plaintiff because of the circumstances of the sale; and the acts taken by the defendant to isolate, disempower and exhaust the elderly plaintiff.  Nor did they present the question of whether the contract between the parties may have misled plaintiff to believe that defendant was serving in a dual agency role. 

 

Thus, the court disagrees that it is black letter law that the sale of timeshare points can never create a fiduciary duty.  On the contrary, the courts recognize and plaintiffs have adequately alleged sufficient facts for the trier of fact to conclude a confidential relationship had been created here.  Whether plaintiff has evidence to support such allegations is better tested at summary judgment.

 

Accordingly, Defendants’ Motion for Judgment on the Pleadings as to the Third Cause of Action is DENIED.