Judge: Yolanda Orozco, Case: 22STCV01686, Date: 2022-12-15 Tentative Ruling
Case Number: 22STCV01686 Hearing Date: December 15, 2022 Dept: 31
DEMURRER TO
FIRST AMENDED
CROSS-COMPLAINT IS SUSTAINED IN PART; MOTION TO STRIKE IS GRANTED IN PART
tentative ruling
Since Cross-Complainant has failed to allege actual malice and the demurrer to the sixth cause of action was SUSTAINED WITH LEAVE TO AMEND, the motion to strike the prayer for punitive damages is GRANTED WITH LEAVE TO AMEND.
Mara Enterprise’s demurrer is OVERRULED as to the third cause of action and SUSTAINED WITH LEAVE TO AMEND as to the sixth cause of action.
Mara Enterprise’s Motion to Strike is DENIED as to Paragraph No. 47, page 10, lines 21-15 and GRANTED WITH LEAVE TO AMEND as to:
·
Paragraph No. 48, page 11, lines 1-4.
·
Paragraph No. 72, page 14, lines 12-16.
· Prayer, Item No. 6, page 15, line 27.
Background
On January 14, 2022, Plaintiff Mara Enterprises (“Mara”) filed a Complaint against Defendants Sannette Gite, as Trustee of the Vaughn Family Trust; Yong Hwa Chung; Jun Hyn Park, et al. The Complaint asserts causes of action for:
1) Quiet Title; and
2) Declaratory Relief
On June 23, 2022, a Notice of Partial Settlement was filed between Mara and Jung Hyun Park and Jung Hyun Park as Co-Trustee of the Paulistavivola Living Trust, U/A Dated February 17, 2017.
On August 03, 2022, Sannette Gite, as Trustee of the Vaughn Family Trust, filed an Amended Cross-Complaint (FACC) alleging causes of action for:
1) Quiet Title; and
2) Declaratory Relief
3) Slander of Title
4) Fraud
5) Intentional Infliction of
Emotional Distress (IIED)
6) Negligent Infliction of Emotional
Distress (NIED)
7) Implied Equitable Indemnity
On October 27, 2022, Plaintiff/Cross-Defendant Mara Enterprises (“Mara”) filed a Demurrer with a Motion to Strike the Amended Cross-Complaint.
On November 30, 2022, Cross-Complainant filed opposing
papers. Mara filed a reply on December 06, 2022.
MEET AND CONFER¿
¿
Before filing a demurrer or motion to strike, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading. (Code Civ. Proc., §§ 430.41, 435.5.) “Any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.” (Code Civ. Proc., § 430.41, subd. (a)(4).)¿
The meet and confer requirement has been met. (Tsylina Decl. ¶¶ 2-4, Ex. 1, 2.)
Legal Standard
A. Demurrer¿¿
¿
A demurrer can be used only to challenge defects that
appear on the face of the pleading under attack or from matters outside the
pleading that are judicially noticeable.¿ (Blank v. Kirwan (1985) 39
Cal.3d 311, 318.)¿ “To survive a demurrer, the complaint need only allege facts
sufficient to state a cause of action; each evidentiary fact that might
eventually form part of the plaintiff’s proof need not be
alleged.”¿ (C.A. v. William S. Hart Union High School Dist. (2012)
53 Cal.4th 861, 872.)¿ For the purpose of testing the sufficiency of the cause
of action, the demurrer admits the truth of all material facts properly
pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962,
966-967.)¿ A demurrer “does not admit contentions, deductions or conclusions of
fact or law.”¿ (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695,
713.)¿
B. Motion to Strike¿
Any party, within the time allowed to respond to a pleading
may serve and file a notice of motion to strike the whole or any part thereof.
(Code of Civ. Proc., § 435(b)(1); Cal. Rules of Court (CRC), Rule 3.1322(b).)
The court may, upon a motion or at any time in its discretion and upon terms it
deems proper: (1) strike out any irrelevant, false, or improper matter inserted
in any pleading; or (2) strike out all or any part of any pleading not drawn or
filed in conformity with the laws of California, a court rule, or an order of
the court. (Code of Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767,
782 [“Matter in a pleading which is not essential to the claim is surplusage;
probative facts are surplusage and may be stricken out or disregarded”].)¿¿
¿
C. Leave to Amend¿¿
¿
“Where the defect raised by a motion to strike or by demurrer
is reasonably capable of cure, leave to amend is routinely and liberally
granted to give the plaintiff a chance to cure the defect in question.” (CLD
Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)
The burden is on the complainant to show the Court that a pleading can be
amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿
Discussion
I. Demurrer to 3rd and 6th COA
Allegations in First
Amended Cross-Complaint (FACC)
This case involves a dispute over ownership of the subject property located in Los Angeles, California. (FACC ¶ 1) Luerendia Vaughn obtained title to the subject property on November 6, 1997, via a grant deed in fee simple. (Id. ¶ 14, Ex. 1.) Cross-Complainant came into possession of the subject property on April 18, 2011, when she was substituted as Trustee for Luerendia Vaughn, and has been in possession of the subject property as Trustee since then. (Id. ¶ 15.) Cross-Complainant has paid property taxes on the subject property since she came into possession as Trustee. (Id. ¶ 16.)
On July 21, 2015, Cross-Complainant filed an unlawful detainer action against decedent Yong Hwa Chung in Los Angeles Superior Court (LSAC) Case No. BC588697. (FACC ¶ 17, Ex. 2.) On May 5, 2016, a Judgment of Immediate Possession was entered, and recorded on October 25, 2016. (Id. ¶ 18, Ex. 3.)
On November 25, 2015, Cross-Complainant filed another action for Quiet Title against multiple Cross-Defendants including Yong Hwa Chung and Jung Hyun Park in LASC Case No. BC692757. (FACC ¶ 20, Ex. 4.) On July 18, 2019, Cross-Defendants Yong Hwa Chung and Jung Hyun Park as co-trustees of the Paulistavivola Trust recorded a Grant Deed against the property on July 18, 2019, despite the ongoing litigation for Quiet Title in LASC Case No. BC692757. (Id. ¶ 22, Ex. 6.)
On July 18, 2019, a Deed of Trust, Security Agreement, Assignment of Leases, Rents, and Profits, and Fixture Filing was recorded in the amount of $960,000.00 by Trustor Yong Hwa Chung and Trustee T.D. Service Company, all naming Velocity Commercial Capital, LLC (“Velocity”) as beneficiary. (FACC ¶ 23, Ex. 7.)
On October 19, 2020, an Assignment of Deed of Trust was recorded wherein Velocity assigned the beneficial interest of the Deed of Trust to Cross-Defendant U.S. Bank National Association. (FACC ¶ 8, Ex. 8.)
On December 12, 2019, Cross-Defendant Mara Enterprises (“Mara”) entered into a Deed of Trust with Assignment of Rents with decedent Yong Hwa Chung, in the amount of $400,000.00. (Id. ¶ 25, Ex. 9.)
On May 19, 2020, an Amended Judgment in LASC Case No. BC692757 for Quiet Title was recorded in favor of Cross-Complainant. (FACC ¶ 26, Ex. 10.)
Cross-Defendant Mara and U.S. National Bank Association assert that no lis pendens was filed in case no. BC692757 such that Mara’s December 12, 2019 Deed of Trust (Exhibit 9) and Velocity’s July 18, 2019 Deed of Trust, Security Agreement, Assignment of Leases, Rents, and Profits and Fixture Filings (Exhibit 7), were recorded prior to the Quiet Title Judgment (Exhibit 10), are not bound by the Quiet Title Judgment.
Cross-Complaintant argues that because the Judgment of Possession was properly recorded three years prior, Mara had notice of Cross-Complainant’s interest in the subject property. (FACC ¶ 27, Ex. 3.)
Cross-Defendant Mara now demurrers to Cross-Complainant’s third cause of action for “Slander of Title” and sixth cause of action for “Negligent Infliction of Emotional Distress.”
3rd COA: Slander of Title
In order to adequately plead a cause of action for slander of title, a Plaintiff must allege: (1) a publication; (2) which is without privilege or justification and thus with malice, express or implied; (3) is false, either knowingly so or made without regards to its truthfulness, and (4) cause direct and immediate pecuniary loss. (Howard v. Schaniel (1980) 113 Cal.App.3d 256, 263-264.)
The FACC alleges the Cross-Defendants, including Mara, published disparaging statements clouding Cross-Complainant’s exclusive valid title by preparing and executing the documents in Exhibit 5, 6, 7, 8, and 9. (FACC ¶ 42.) Mara is alleged to have entered into a Deed of Trust with Assignment of Rents with decedent Yong Hwa Chung, in the amount of $400,000.00 on December 12, 2019. (Id. ¶ 25, Ex. 9.) Cross-Defendants executed the recording when they knew or should have known that such documents were improper because Cross-Defendants had no right, title, or interest in the subject property. (Id. ¶ 43.) As a direct and proximate result of the Cross-Defendant’s actions, Cross-Complainant’s title to the subject property has been disparaged and slandered, and there is a cloud on Cross-Complainant’s title, thus damaging Cross-Complainant. (Id. ¶ 44.)
Mara demurs to Cross-Complainant’s third cause of action on the basis that she cannot show malice sufficient to sustain a cause of action for Slander of Title.
First, Mara argues that malice cannot be shown because it
had no knowledge of Cross-Complainant’s competing claim. However,
Cross-Complaintant argues that even if no lis pendens was recorded during the
pendency of LASC Case No. BC692757, a Judgment of Possession had already been previously
recorded with the Los Angeles County’s Recorder Office, therefore, Mara had
inquiry notice. (FACC ¶ 27.)
By law, recording statutes impose notice of prior judgments
and conveyances. (Civ. Code, § 18.) “By
statute, notice may be actual or constructive. Actual notice is defined as
express information of a fact, while constructive notice is that which is
imputed by law. A person generally has notice of a particular fact if that
person has knowledge of circumstances which, upon reasonable inquiry, would
lead to that particular fact.” (In re Marriage of Cloney (2001) 91 Cal.App.4th 429, 436–437 [internal
citations and quotations omitted].) “Constructive notice of a lien or other interest in property arises
from the proper recording of that interest.” (Vasquez v. LBS Financial Credit Union (2020) 52
Cal.App.5th 97, 108.)
Here, the properly recorded Judgment of Possession was sufficient to give Mara constructive notice of Cross-Complainant’s interest in the subject property as a matter of law. “Every duly recorded conveyance of real property, or recorded judgment affecting title to or possession of real property, is constructive notice of the contents thereof to subsequent purchasers and mortgagees from the time of recordation. By the same token, any conveyance of real property is void as against any prior recorded judgment affecting the title.” (In re Marriage of Cloney, supra, 91 Cal.App.4th at 437.)
To sustain a cause of action for Slander of Title, Cross-Complaintant needs to show either actual or implied malice. Actual malice requires “a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff's rights.” (Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 413 [internal citations omitted].) Here, Cross-Defendant alleges that the Deed of Trust with Assignment of Rents recorded on December 12, 2019, was disparaging, and caused Cross-Complainant’s exclusive title to the subject property to become clouded. (¶¶ 25, 42, 43, Ex. 9.) Since, Mara had constructive notice of the judgment of possession, when Mara entered into the Deed of Trust with Assignment it knew or should have known about Cross-Complainant’s ownership and possessory interest.
“Slander of title is effected by one who without privilege publishes untrue and disparaging statements with respect to the property of another under such circumstances as would lead a reasonable person to foresee that a prospective purchaser or lessee thereof might abandon his intentions. (Citation.) It is an invasion of the interest in the vendibility of property. In order to commit the tort actual malice or ill will is unnecessary.” (Phillips v. Glazer (1949) 94 Cal.App.2d 673, 677.) “To be disparaging a statement need not be a complete denial of title in others, but may be any unfounded claim of an interest in the property which throws doubt upon its ownership.” (Phillips, supra, (1949) 94 Cal.App.2d 673, 677.)
Since Mara by law had or should have had constructive
notice of the Judgment of Possession, the recording of the Deed of Trust with
Assignment, was without privilege and was foreseeable that the unprivileged
recording would disparage and cloud Cross-Complainant’s title. Thus,
Cross-Complainant has pled sufficient facts to show implied malice.
California courts have repeatedly recognized that Negligent Infliction of Emotional Distress (NIED) is not an independent tort, but the tort of negligence such that the traditional elements of duty, breach of duty, causation, and damages apply. (See, e.g., Spates v. Dameron Hospital Association (2003) 114 Cal.App.4th 208, 213; Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48 Cal.3d 583, 588.) Emotional distress damages are generally not authorized in cases other than that of physical injury. (See Branch v. Homefed Bank (1992) 6 Cal.App.4th 793, 800.) “[D]amages for mental suffering and emotional distress are generally not recoverable in an action for breach of an ordinary commercial contract in California. (Erlich v. Menezes (1999) 21 Cal.4th 543, 558.) “Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.” (Id., citing Rest.2d Contracts, § 353.)
The FACC alleges that in recording Exhibits 5, 6, 7, 8, and 9, Mara acted negligently and caused emotional distress to Cross-Complainant. (FACC ¶ 68.) Cross-Defendants failed to exercise ordinary care in recording the above documents and it was foreseeable that due to Cross-Defendants’ actions, Cross-Complainant would be harmed. (Id. ¶¶ 69, 72.)
Mara demurs on the basis that Cross-Complainant cannot show that Mara owed a legal duty Plaintiff or that a prior consensual relationship existed between the parties. (See Lawson v. Management Activities, Inc. (1999) 69 Cal.App.4th 652, 653–655 [“If the plaintiff claims direct victim status, [the] requirement that there be both a preexisting consensual relationship between the parties (Citation) and the defendant's conduct reach a certain level of outrageousness.”].
The FACC fails to articulate what duty Mara owed Cross-Complainant to sustain a negligence cause of action. Moreover, there are no facts showing that a preexisting consensual relationship existed between the parties to support an NIED claim.
Accordingly, the demurrer to the sixth cause of action is SUSTAINED WITH LEAVE TO AMEND.
II. Motion to Strike
Mara requests the following paragraphs be stricken from Cross-Complainant’s FACC:
1) Paragraph No. 47, page 10, lines 21-25: “At the time that the false and disparaging documents were created and recorded by the Cross-Defendants, Cross-Defendants knew or should have known the documents were false and created and recorded them with the malicious intent to injure Cross-Complainant and deprive her of her exclusive right, title, and interest in the Property, and to obtain the Property for their own use by unlawful means.”
Since Paragraph No. 47 relates to Cross-Complainant’s third cause of action, Cross-Complainant sufficiently alleges that Mara had constructive notice of the Judgment of Possession and sufficiently plead implied malice. Accordingly, the request as strike Paragraph No. 47, page 10, lines 21-25 is DENIED.
2) Paragraph 48, page 11, lines 1-4: “The conduct of the Cross-Defendants in creating and recording the Exhibits 5 and 6 was fraudulent, oppressive, and malicious. Therefore, Cross-Complainant is entitled to an award of punitive damages in an amount sufficient to punish Cross-Defendants for their malicious conduct and deter such misconduct in the future.”
Since Cross-Complainant has failed to plead sufficient facts to show actual malice, Cross-Complaintant cannot show she is entitled to punitive damages for Slander of Title. (Civ. Code, § 48a sub. (d)(2); McCoy v. Hearst Corp. (1986) 42 Cal.3d 835.)
The request to strike Paragraph No. 48, page 11, lines 1-4 is GRANTED WITH LEAVE TO AMEND.
3) Paragraph No. 72, page 14, lines 12-16: “Cross-Defendants’ intentional act resulted in foreseeable emotional distress to Cross-Complainant. Cross-Defendants’ actions were fraudulent, malicious and oppressive. Cross-Complainant is thus entitled to and herein seeks punitive and exemplary damages from Cross-Defendants, in an amount according to proof at trial, to punish Cross-Defendants and deter others from engaging in similar future conduct.”
Since the demurrer was SUSTAINED WITH LEAVE TO AMEND the sixth cause of action, the motion to strike Paragraph No. 72, page 14, lines 12-16 is GRANTED WITH LEAVE TO AMEND.
4) Prayer, Item 6, page 15, line 27: “For punitive damages as allowed by law.”
Since Cross-Complainant has failed to allege actual malice and the demurrer to the sixth cause of action was SUSTAINED WITH LEAVE TO AMEND, the motion to strike the prayer for punitive damages is GRANTED WITH LEAVE TO AMEND.
Conclusion
Mara Enterprise’s demurrer is OVERRULED as to the third cause of action and SUSTAINED WITH 30 DAYS LEAVE TO AMEND as to the sixth cause of action.
Mara Enterprise’s Motion to Strike is DENIED as TO Paragraph No. 47, page 10, lines 21-15 and GRANTED WITH 30 DAYS LEAVE TO AMEND as to:
·
Paragraph No. 48, page 11, lines 1-4.
·
Paragraph No. 72, page 14, lines 12-16.
· Prayer, Item No. 6, page 15, line 27.
Moving party to give notice.