Judge: Virginia Keeny, Case: 21STCV44344, Date: 2025-03-28 Tentative Ruling

Case Number: 21STCV44344    Hearing Date: March 28, 2025    Dept: 45

RONALD P. SLATES, A PROFESSIONAL CORPORATION vs KURTIS GEORGE BORG, et al.

demurrer to the first amended complaint

Date of Hearing:        March 28, 2025                                 Trial Date:       None set.

Department:              45                                                        Case No.:        21STCV44344

Moving Party:            Defendant Stephanie Borg

Responding Party:     Plaintiff Ronald P. Slates, A Professional Corporation

Meet and Confer:      Yes. (Severino Decl. ¶¶3-4.)

BACKGROUND

On December 6, 2021, Plaintiff Ronald P. Slates, a Professional Corporation, filed this action against Defendants Kurtis George Borg aka Kurtis Borg aka Kurt Borg (“Kurtis Borg”) and Stephanie F. Borg, asserting causes of action for breach of written contract, (2) open book account, (3) account stated, (4) fraud and deceit – intentional misrepresentation – fraud in the inducement, (5) fraud and deceit – negligent misrepresentation - fraud in the inducement, and (6) fraud and deceit – promise made without intent to perform.  Plaintiff alleges commencing on June 17, 2009, and continuing through at least December 9, 2016, Plaintiff and Defendants entered into a written retainer agreement whereby the Defendants requested and Plaintiff agreed to represent the defendants in legal matters. However, Defendants breached the agreement by failing to pay $92,152.45 for  legal services provided. Plaintiff filed a First Amended Complaint on July 15, 2024.

On January 20, 2022, default was entered against Defendant Stephanie F. Borg and on July 19, 2022, Defendant filed a motion to set aside the default. On March 23, 2023, the court granted the motion and set aside the default.  

[Tentative] Ruling

REQUEST FOR JUDICIAL NOTICE

Plaintiff requests this court take judicial notice of official records in the Court of Appeal of the State of California, Second Appellate District, Division Six, Civil No. B210865 (Super Ct. No. SC046452 entitled The Cadle Company II, Inc. v. Stephanie F. Borg et al.) and Defendants’ answer to the complaint in the instant action.

The court GRANTS Plaintiff’s request for judicial notice.

DISCUSSION

Defendant Stephanie Borg demurs to the First Amended Complaint on the grounds that the first, second, and third causes of action plead against Mrs. Borg do not state facts sufficient to constitute a cause of action. Specifically, Mrs. Borg was not a party to the attorney-client agreement between Kurtis Borg and Slates that is the basis for all three claims. Defendant Borg also demurs on the grounds the claims are barred by the four-year statute of limitations.

Liability

As noted above, Defendant Borg demurs to the amended complaint on the grounds the complaint fails to allege Mrs. Borg would be liable for her husband’s actions under any legal theory. Defendant Borg maintains the allegation that Kurtis Borg acted as Stephanie Borg’s agent is entirely unsupported by the facts of the case or exhibits attached. Moreover, there is no explanation for how Kurtis Borg could act as Mrs. Borg’s agent in agreeing to an attorney-client agreement that is solely between Kurtis Borg and Slates. Defendant Borg relies on California Family Code section 1000 to support this contention, which provides “a married person is not liable for any injury or damage caused by the other spouse except in cases where the married person would be liable therefor if the marriage did not exist.” (Cal. Family Code § 1000). Moreover, Plaintiff’s allegations “upon information and belief” that the Defendants were agents of each other and in conspiracy with one another are conclusory.

In opposition, Plaintiff argues Mrs. Borg is liable for the unpaid legal fees owed to the firm under Family Code §§ 910 and 914 and Probate Code §§13550 and 13551; Mrs. Borg received a benefit from Plaintiff’s services to her separate property and she is a necessary party when a creditor seeks to reach her separate property as well as her share of the community estate; and Mrs. Borg benefitted from the legal services performed by the Firm on behalf of the community businesses and is liable pursuant to Family Code §1000(b).

Family Code section 910 provides “Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.”

Family Code section 914 provides that a married person is personally liable for a debt incurred by the person’s spouse during marriage for necessaries of life of the person’s spouse while living together.

Probate Code section 13550 states, “Except as provided in Sections 11446, 13552, 13553, and 13554, upon the death of a married person, the surviving spouse is personally liable for the debts of the deceased spouse chargeable against the property described in Section 13551 to the extent provided in Section 13551.”  Probate Code section 13551 describes this property as (1) “[t]he portion of the one-half of the community and quasi-community property belonging to the surviving spouse … that is not exempt from enforcement of a money judgment and is not administered in the estate of the deceased spouse; (2) “[t]he portion of the one-half of the community and quasi-community property belonging to the decedent … that passes to the surviving spouse without administration”; and (3) “[t]he separate property of the decedent that passes to the surviving spouse without administration.”

The court agrees that plaintiff has sufficiently alleged claims against  Mrs. Borg based on both the family law and probate codes.    

Statute of Limitations

Defendant Borg demurs to each cause of action on the grounds the case was filed after the applicable four-year statute of limitations for breach of a written contract, open book and account stated.

Defendant Borg argues as stated in the FAC, the alleged breach occurred March 17, 2017; however, the complaint was not filed until December 6, 2021, which is four years and eight months after the alleged breach. Moreover, any alleged “promise” to pay made after that date was made by Kurtis Borg, and therefore, does not apply to Mrs. Borg.

In opposition, Plaintiff argues Mrs. Borg’s absence from California while in Guam tolls the statute of limitations pursuant to Code of Civil Procedure section 351 and moreover, she is equitably estopped from raising the statute of limitations because the Firm was promised payments up until August 12, 2018, which induced it not to file suit against the Borgs.

Civil Code 351 provides “If, when the cause of action accrues against a person, he is out of the State, the action may be commenced within the term herein limited, after his return to the State, and if, after the cause of action accrues, he departs from the State, the time of his absence is not part of the time limited for the commencement of the action”]; Filet Menu, Inc. v. Cheng (1999) 71 Cal.App.4th 1276, 1283 [“‘[I]nterstate commerce is affected when persons move between states in the course of or in search for employment. [Citations.]’ [Citation]”]; Ibid. [“Because the implications of section 351 for such travel apply equally to residents engaged in interstate commerce and to residents not so occupied, tolling statutory periods for the duration of out-of-state travel unrelated to interstate commerce does not violate the commerce clause”]; cf. Arrow Highway Steel, Inc. v. Dubin (2020) 56 Cal.App.5th 876, 889 [holding that “section 351 violates the dormant commerce clause as applied to a defendant who moved out of state to operate a business engaged in interstate commerce”].) 

It is alleged Mr. Borg went to Guam for work and Mrs. Borg accompanied him. Defendant argues, however, Plaintiff does not allege that Mrs. Borg’s absence from California was permanent or that she intended to remain outside the state indefinitely. Therefore, her temporary absence from California does not toll the statute of limitations under Section 351. Moreover, even if Civil Code section 351 applied, the statute of limitations had already expired by the time Plaintiff filed the complaint. Plaintiff also argues equitable estoppel does not apply because Plaintiff has not alleged any facts showing that Mrs. Borg made any misrepresentations or promises of payment and moreover, Plaintiff has not alleged any facts showing that it relied on any misrepresentations by Mrs. Borg or that it was induced to delay filing suit as a result of her actions.

The court agrees that plaintiff has adequately alleged that Mr. and Mrs. Borg were out of state in Guam for work and that the statute of limitations would be tolled during that period.  (FAC, ¶13-16.) 

Accordingly, the court overrules the demurrer  in its entirety.  Answer to be filed and served within 30 days.