Defendants? demurrers to the Third Amended Complaint are overruled at this time.
Defendants? Motions to Strike portions of the Third Amended Complaint, are denied at this time.
Defendants are to answer within 7 days.
Plaintiff to give notice.
1st C/A (False Promise)
The demurrer is overruled.? The pleading now has sufficient detail to permit the claim to withstand the demurrer. ?The issue is not the plausibility of the allegations, or their likely success.? Defendant is free to argue to the trier of fact that the Defendant?s performance of the agreement for periods of time, demonstrates that alleged promises made in 2003 were not made with an intent not to perform; as well as to try to persuade the trier of fact of any defense that there has been unreasonable delay in discovering claimed information (see generally CACI No. 1925) or other positions.
However, it would be appropriate to treat these issues as presenting questions of fact, rather than matters of law.? (See?Tenzer v. Superscope, Inc.?(1985) 39 Cal.3d 18, 30-31?(noting??if plaintiff adduces no furtherevidence?of fraudulent intent than proof of nonperformance of an oral promise, he will never reach a jury?);?Beckwith v. Dahl?(2012) 205 Cal.App.4th 1039, 1061 (?It is certainly possible?[defendant]?will be able to convince a jury she had every intention of preparing the trust documents for [client] but he died before she could follow through. It is also possible?[plaintiff]?will not be able to convince a jury that?[defendant]?had no intention of sharing [client’s] estate with him when she made her statements ?. But when reviewing an order sustaining a demurrer for failure to state a cause of action, ?the question of plaintiff’s ability to prove … [the] allegations, or the possible difficulty in making such proof does not concern the reviewing court??).??See also 5 Witkin, Cal. Proc. 5th (2008) Plead, ? 728, p. 145?(intent can be plead generally);?Beckwith,?205 Cal.App.4th 1039, 1061?(intent is for the trier of fact to resolve).)
3rd C/A (Restitution)
The demurrer is overruled. ??Restitution is not a cause of action but a type of relief.? However, regardless of labeling, cases consider whether the allegations give rise to a right to relief.? (See McBride v. Boughton (2004) 123 Cal.App.4th 379, 387-88; Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 939.)
Plaintiff alleges a sufficient basis to request the relief, here.? Essentially, it is alleged that some part of Plaintiff?s funds in the joint bank accounts were withdrawn by Defendant Im, and allegedly used for Defendant?s personal benefit without permission.? It is alleged that this included checks to Defendant Im of $50,000.? (TAC ? 17, 24, 58, 60.)?? Whether Plaintiff can prove these allegations is not the issue at this time.? The allegations set forth a basis for seeking restitution from the Defendant.? (See?Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593?(elements of unjust enrichment include that the defendant received a benefit, and the defendant retained it at the expense of the plaintiff).)
The demurrer is overruled.?? Plaintiff has alleged the specific sums of money that are claimed to have been converted.? (TAC ? 76-79.)?Defendants argue, conversion cannot lie where Plaintiff had agreed to have a joint bank account with Defendant Kim and to the Defendant exercising some control over her funds.? The argument is not persuasive at this time.? The allegation which must be accepted as true for present purposes is that the Defendants allegedly withdrew funds from these accounts, for their?personal use, without the Plaintiff?s permission. (TAC ? 76, 78 and 79.)???
?Consent? is not an ?all or nothing? proposition under the case law.? The issue becomes one of the scope of the consent, and whether the defendant may have exceeded the scope of authority given. ?(See, e.g.,?Tavernier v. Maes (1966) 242 Cal.App.2d 532, 552, 589; Duke v. Superior Court?(2017) 18 Cal.App.5th 490, 506 (?If a defendant is authorized to make a specific use of a plaintiff’s property, use in excess of that authorized may subject the defendant to liability for conversion, if such use seriously violates another’s right to control the use of the property?).)
Defendant is free to argue that there was consent and authority, express or implied from the parties? circumstances or even that funds were put to proper use.?? However, this is an issue for the trial.
7th?C/A for Accounting
The Court does not consider the demurer to this c/a.? The Court has already overruled Defendant Kim?s demurrer to the instant cause of action in the prior pleading.? The Court found that the alleged relationship between Defendant Kim and Plaintiff was sufficient to support the assertion of the theory.??(See Minute Order of 8/3/18, p. 5; Evid. Code ?452(d).)? ?For this reason, the Court declines to consider a renewed demurrer to the cause of action.? In addition, the moving brief relies upon facts that are extrinsic to the complaint, which the Court cannot properly consider. ??(See Dmrr. at 14:21?(reciting a Notice of Written Consent was given) and?Ion Equip. Corp. v. Nelson?(1980) 110 Cal.App.3d 868, 881.)
MOTION TO STRIKE:
To support punitive damages, the complaint need only allege ultimate facts supporting the circumstances of oppression, fraud, or malice.? (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1055;?Clausen v. Superior Court (1988) 67 CalApp4th 1253, 1255?(“In order to survive a?motion to strike an allegation of punitive damages, the ultimate facts showing entitlement to such relief must be pled by a?plaintiff.”).
Request to Strike Punitive Damages under the 1st?and 4thC/As
The motion to strike is denied.? The demurrer to the fraud cause of action is overruled by the Court at this time.? It is generally understood that a fraud cause of action that is adequately pled is adequate to support a request for punitive damages.? (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610;?see also Bardis v. Oates (2004) 119 Cal.App.4th 1, 23; Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1255.)
For the breach of fiduciary duty theory, such a tort can sound in negligence or can sound in more intentional-style breaches including breaches involving allegedly fraudulent or oppressive circumstances.?? (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210.)???A fiduciary?s breach committed with circumstances of fraudulent or oppressive conduct can support an award of punitive damages.? ?(See id; Flyer’s Body Shop Profit Sharing Plan v. Ticor Title Ins. Co. (1986) 185 Cal.App.3d 1149, 1154;?Heller v. Pillsbury Madison & Sutro (1996) 50 Cal.App.4th 1367, 1390.)
Here, the Third Amended Complaint has a cause of action of fraud that is sufficient to withstand demurrer.? The related fiduciary-theory can include a request for punitive damages for the present time.
Request to Strike Punitive Damages in relation to 6th?C/A
The motion to strike is denied.?? As with other intentional-torts, punitive damages can be awarded in connection with a conversion that is attendant with circumstances of fraud, oppression or malice.? (Haines v. Parra (1987) 193 Cal.App.3d 1553, 1560;?In re Butcher?(Bankr. C.D. Cal. 1996) 200 B.R. 675, 680, aff’d (B.A.P. 9th Cir. 1998) 226 B.R. 283.)????Oppression includesdespicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person?s rights.? (Civ. Code ? 3294(c)(2).)
Here, Plaintiff alleges a conversion of substantial sums of money, in the amount of millions of dollars, in connection with a business that was jointly owned with the Defendants and which the Defendants were allegedly entrusted to operate.? Whether the allegations are true is not the issue at this time.? For pleading purposes, the allegations appear sufficient to support the request for punitive damages as to each Defendant.
Request to Strike Attorney Fees from the Prayer, ? 6
The motion to strike is denied.? In connection with a past motion, Plaintiff argued that attorney fees are available in connection with the partition claim. ?The Court granted the previous motion to strike with leave to amend, for plaintiff to ?clarify the basis [for fees] in an amended pleading.???(8/3/18 Mins., p. 6.)
In the amended complaint, Plaintiff included a prayer for the following: ????reasonable attorney?s fees where allowed by statute, contract or law, and for costs.?? (TAC, p. 17, ? 6.)?? Defendant is moving to strike the prayer.
While it is true that Plaintiff did not identify the statute involved, it may not be necessary to do so, after all.?? According to more recent cases, the complaint does not have to include a request to recover costs of suit, including attorney fees, and if it does, this does not need not be supported by factual allegations. ?Thus, the request for costs of suit/fees, to the extent permitted by law, may be quite permissible in the pleading.? (See Faton v. Ahmedo (2015) 236 Cal.App.4th 1160, 1169?(?It is now well-settled that attorney fees, whether authorized by contract or statute, are recoverable under [Code of Civil Procedure] section 1033.5, subdivision (a)(10) as an element of costs, and rather than claim attorney fees as an element of damages, the proper method to recover attorney fees is as an item of costs awarded upon noticed motion.?);??Snatchko v. Westfield LLC (2010) 187 Cal.App.4th 469, 497? (?As there was no requirement they be pled at all, the trial court err[ed] in striking ? [the] prayer for attorney fees based on a failure to adequately plead their basis??);?Yassin v. Solis (2010) 184 Cal.App.4th 524, 533?(?”There is no requirement that a party plead that it is seeking attorney fees, and there is no requirement that the ground for a fee award be specified in the pleadings.”).
Accordingly, the motion to strike is denied.
In any event, the Defendant is made aware of a possible basis for the prayer through this proceeding.? The briefing demonstrates that the Court could not resolve further disputes, as a matter of law, at this time.? Plaintiff?s brief cites to CCP ?874.010(a) which provides, ?The costs of partition include:?? Reasonable attorney’s fees incurred or paid by a party for the common benefit.???? In the reply, Defendant claims the partition statutes only allow attorney fees to be awarded when they are found to have been incurred for the common benefit.? (E.g.,?Orien v. Lutz?(2017) 16 Cal.App.5th 957, 966 (?counsel fees may be allowed … for services rendered for the common benefit even in contested partition suits?).) ???Assuming this is so, then merely asking for ?reasonable attorney?s fees where allowed by statute, contract or law, and for costs? (TAC, Prayer ? 6) does not appear to be improper.???An actual entitlement, if any, would be litigated presumably by the cost-procedures at the conclusion of the litigation.
Further, Defendant argues that attorney fees have to be apportioned equally in proportion to the parties? respective ownership interest in the real property in partition cases.? A trial court apparently still enjoys some discretion in making allocations that can result in?the unevenreimbursement of fees incurred by parties, if and when the circumstances warrant it. ?(See CCP ? 874.040?(?Except as otherwise provided in this article, the court shall apportion the costs of partition among the parties in proportion to their interests?or make such other apportionment as may be equitable.?);?Lin v. Jeng?(2012) 203 Cal.App.4th 1008, 1025 (?we cannot say the trial court exceeded the bounds of reason in finding that an apportionment of [plaintiff?s] attorney fees that placed the?entire?liability on [plaintiff] was equitable?).
It is premature for the Court to decide the matter at this time.