Case Name: Vatthana Tran v. The Khmer Kampuchea Krom Buddhist Association, Inc., et al.
Case No.: 17CV311250

I. Background

This case brought by Vatthana Tran against the Khmer Kampuchea Krom Buddhist Association, Inc. (“KKBA”), and 23 individual association members (“Association Members”), arises from a dispute over control of a nonprofit religious corporation, KKBA, which allegedly began in 2015.

Mr. Tran is a Buddhist monk who alleges that KKBA and Association Members unlawfully removed the existing board of directors and purported to adopt new Articles and Bylaws. Mr. Tran alleges that he entered into a contract with the KKBA whereby he agreed to perform certain duties (teach Buddhist scripture and Cambodian history and culture in the framework of Buddhism, conduct Buddhist ceremonies on request, and travel to various pagodas in California to perform those duties) and in return he was to be provided room and board at the KKBA’s pagoda and have his travel paid for. Mr. Tran alleges that the individual defendants “caused the Association to file Statements of Information” with the Secretary of State “that falsely listed Voeng Thach as the Chief Executive Officer of the Association.” (Complaint, ¶ 35.) Mr. Tran also alleges that individual defendants made false statements about him, and that he was served with a Notice to Vacate his residence at KKBA’s pagoda. Mr. Tran filed a complaint stating seven causes of action: 1) Breach of Fiduciary Duty; 2) Breach of Contract; 3) Declaratory Relief; 4) Conspiracy; 5) Slander Per Se; 6) Libel Per Se, and; 7) Tortious Interference with Contractual Relations.

The KKBA and Association Members (collectively “Cross-Complainants”) filed a cross complaint against Vatthana Tran (hereafter “Cross-Defendant”), which is the focus of the instant matter. According to the First Amended Cross-Complaint (“FACC”), Cross-Defendant was a monk, a Director on KKBA’s Board of Directors, and Treasurer of KKBA. Cross-Defendant told KKBA’s President he would close the KKBA’s current bank account, and open a new bank account for KKBA. This caused KKBA to investigate Cross-Defendant’s actions as Treasurer. In the course of the investigation, KKBA determined that Cross-Defendant had withdrawn more than $60,000 from KKBA’s bank accounts for his personal use. Members of KKBA confronted Cross-Defendant, and asked about the missing money, but he refused to answer. The money has not been returned.

Cross-Complainants filed the FACC alleging 1.) Conversion; 2.) Breach of Fiduciary Duty; 3.) Failure to Use Reasonable Care; 4.) Fraud/Concealment and; 5.) Breach of Contract. Currently before the Court is Cross-Defendant’s demurrer to each cause of action in the FACC.

II. Merits of the Demurrer

A demurrer may be taken to the whole complaint or any of the causes of action stated therein. (Code Civ. Proc., § 430.50, subd. (a).) Cross-Defendant demurs to each of the first four causes of action on the same grounds. According to him, these causes of action fail to state sufficient facts to constitute a cause of action under Code of Civil Procedure section 430.10, subdivision (e), and are uncertain pursuant to Code of Civil Procedure section 430.10, subdivision (f). Cross-Defendant also demurs to the fifth cause of action on the grounds that it cannot be ascertained from the FACC whether the contract at issue was written, oral, or implied under Code of Civil Procedure section 430.10 subdivision (g), and is uncertain pursuant to Code of Civil Procedure section 430.10, subdivision (f).

The Court notes several of the grounds for demurrer listed in the demurrer itself are not supported in Cross-Defendant’s memorandum. For instance, the sections on the first and second causes of action discuss the ground of failure to state sufficient facts, but do not mention uncertainty. The section on the second and third causes of action does the opposite; discussing the ground of uncertainty, but not addressing failure to state sufficient facts. Cross-Defendant’s section on the fifth cause of action is the only portion of the memorandum which addresses both grounds raised in the demurrer. Cross-Defendant does not clearly advance any argument with respect to the omitted grounds. Thus, the Court does not construe the demurrer as being predicated on those particular grounds.

A. The First Cause of Action for Conversion

Cross-Defendant argues Cross-Complainants do not allege sufficient facts in that they do not allege a specific and identifiable sum of money was converted.

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff’s ownership or right to possession of the property at the time of the conversion; the defendant’s conversion by a wrongful act or disposition of property rights; and damages.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451.) “Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved.” (McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1491; see Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235.)

The conversion cause of action at issue here is for money. Therefore, Cross-Complainants must allege a specific identifiable sum.

Cross-Complainants do not quarrel with this rule in principle. Instead, Cross-Complainants ad0vance the position that they need not plead a precise sum at present, so long as they “place Tran on notice of the basis for the conversion claim” and “a specific sum capable of identification” is eventually shown. (Opp., p. 8:17-20; see Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 485.) According to Cross-Complainants the amount of money taken “will … ultimately be precise” because the funds were withdrawn from bank accounts. (Opp., p. 8:17-18.)

In support of their position that they need not plead a specific amount at this time, Cross-Complainants cite PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384 (“PCO”). In that case, the plaintiffs claimed the defendant converted duffle bags full of cash. (PCO, supra, 150 Cal.App.4th at 397.) The court made a distinction between the plaintiffs’ allegations, where plaintiffs stated a specific number of duffle bags containing a specific amount of money had been converted, and the inconclusive evidence. (Id. at 397.) Plaintiff’s evidence did not prove exactly how many duffle bags were taken, or how much cash was in each duffle bag. (Ibid.) Thus, plaintiffs could only estimate the amount of money involved, rather than show a specific identifiable amount. (Ibid.)

While Cross-Complainants are correct PCO implies there is a distinction between pleading sufficient allegations of a certain sum and subsequently presenting supporting evidence, PCO is distinguishable. The plaintiffs in PCO alleged a definite sum of money was converted. Here, Cross-Complainants do not allege any specific sum.

Cross-Complainants argue, in essence, they need not allege a specific amount of money, because if they are allowed to proceed they will eventually discover a precise amount from bank records. Cross-Complainants do not cite, and the Court is not aware of, any case stating that a party alleging conversion need not identify a specific sum in their pleadings because discovery or investigation may later reveal a specific amount.

Accordingly, the demurrer to the first cause of action for conversion is SUSTAINED, with 10 days leave to amend.

B. The Second and Third Causes of Action for Breach of Fiduciary Duty and Failure to Use Reasonable Care

Cross-Complainants allege that by taking money from KKBA for personal use, Cross-Defendant breached his fiduciary duties to KKBA, and failed to use reasonable care with respect to its finances. Cross-Defendant argues the second and third causes of action are uncertain “insofar as the Association fails to allege when the funds were withdrawn, from what bank accounts the funds were withdrawn, how the funds were used for Plaintiff’s personal use, or that that [sic] the alleged fund withdrawals were actually wrongful or in derogation of Tran’s fiduciary obligations to the Association.” (P&As ISO Dem., p. 5:4-6.)

Code of Civil Procedure section 430.10, subdivision (f) provides that a demurrer may be based upon the ground of uncertainty. Demurrers for uncertainty are disfavored. (Lickiss v. Financial Industry Reg. Authority (2012) 208 Cal.App.4th 1125, 1135.) To sustain a demurrer on this ground the pleading must be so unintelligible the defendant cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Uncertain allegations should be liberally construed, “particularly where the facts as to which the complaint is uncertain are presumptively within the knowledge of the defendant.” (Childs v. State of California (1983) 144 Cal.App.3d 155, 160.) A special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made. (People v. Lim (1941) 18 Cal.2d 872, 883; Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145-146.)

Here, Cross-Complainants’ allegations are not so uncertain that Cross-Defendant cannot respond to the FACC. The allegations, generally speaking, are that while Cross-Defendant was a monk, Treasurer and a Director, he had fiduciary obligations as a result of these roles. Cross-Defendant breached those obligations and failed to use reasonable care by taking KKBA funds from bank accounts for his own personal use.

The FACC could be clarified through additional specific facts, but as Cross-Complainants correctly point out, failure to incorporate sufficient facts does not support a demurrer for uncertainty. Moreover, the facts that Cross-Defendant identifies as “missing” are presumptively within his knowledge, and therefore not a basis for uncertainty.

In his reply memorandum, Cross-Defendant raises several new arguments regarding uncertainty. Cross-Defendant’s new arguments include that it is uncertain to whom Cross-Defendant was a fiduciary, when Cross-Defendant was a fiduciary, and the meaning of the term “personal use.” (Reply, p. 3:1-8, 3:17-22.) Points raised for the first time in reply briefs are generally not considered for due process reasons. (See In re Tiffany Y. (1990) 223 Cal.App.3d 298, 302-303; see also Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764; REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489, 500].) As such, the Court declines to consider these new arguments.

Accordingly, the demurrer to the second and third causes of action on the ground of uncertainty is OVERRULED.

C. The Fourth Cause of Action for Fraud/Concealment

Cross-Complainants allege Cross-Defendant committed fraud by false representations, and by concealing the fact he took Cross-Complainants’ money for his personal use. Cross-Defendant argues that the fraud allegations are not sufficiently particular, and thus Cross-Complainants have failed to allege sufficient facts. Cross-Complainants counter that they have plead a fraud cause of action based upon concealment.

One necessary element of a fraud claim is misrepresentation. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Misrepresentation can be alleged in three varieties: false representation, concealment, or nondisclosure. (Ibid.) Each element of fraud must be pled with particularity, and the doctrine of liberal construction of pleadings does not apply. (Id. at 645.) However, less particularity is required where the allegations show the opposing party must necessarily possess greater information. (Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc. (2009) 171 Cal.App.4th 1356, 1384; City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211.) The particularity requirement necessitates that to plead fraud by false representation a party must allege specific details about the false statement, such as how, when, where, and to whom to the statement was made. (See Alfaro v. Community Housing Imp. System & Planning Ass’n., Inc., supra, 171 Cal.App.4th at 1384.) The particularity requirement is more difficult to apply to fraud by concealment, because a pleader cannot allege when, where, and to whom a statement was not made. (Id. at 1384.) A claim for concealment is sufficiently particular if it adequately puts the opposing party on notice of the claims against them. (Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1200.)

Cross-Defendant generally argues in the demurrer neither fraud by false statements nor fraud by concealment is adequately pleaded. This approach is reasonable because the fourth cause of action mentions both misrepresentation and concealment. Cross-Defendant then presents a specific argument that Cross-Complainants must allege “how, when, where, to whom, by what means the misrepresentations were tendered.” (P&As ISO Dem., p. 5:16-17.)

Cross-Defendant’s specific argument in the demurrer addresses only fraud by misrepresentation, and does not apply to concealment. Thus, even assuming Cross-Defendant’s argument was meritorious, the specific argument presented would support a demurrer to only part of the cause of action. A general demurrer will not lie to part of a cause of action. (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.) Thus, the demurrer is not sustainable.

In reply, Cross-Defendant addresses concealment in depth, contesting each element. Cross-Defendant’s arguments against fraud by concealment are presented for the first time in reply. As discussed above, arguments presented initially in a reply are disregarded.

Accordingly, the demurrer to the fourth cause of action for fraud is OVERRULED.

D. The Fifth Cause of Action for Breach of Contract

Cross-Complaints allege that Cross-Defendant entered into an agreement with KKBA that in exchange for room, board and other consideration, he would provide services as a monk, Director, and Treasurer. Cross-Defendant demurs, arguing it cannot be ascertained from the FACC whether the alleged contract was written, oral, or implied in conduct, and that the breach of contract claim is uncertain.

Code of Civil Procedure, section 430.10, subdivision (g) permits a demurrer on the ground that “[i]n an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.” (Code Civ. Proc., § 430.10, subd. (g).) A breach of contract cause of action clearly fulfills the preliminary requirement that the relevant action be based upon a contract. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.) Cross-Defendant correctly notes that the FACC contains no allegation specifying if the contract is oral, written, or implied in conduct, nor is it ascertainable from the facts alleged.

Cross-Complainants do not assert that they have alleged whether the contract is written, oral, or implied in conduct, but rather that Code of Civil Procedure, section 430.10, subdivision (g) should be ignored on these facts. Cross-Complaints dismiss this ground for demurrer as purely technical, citing Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394 (“Miles”). In Miles the Court of Appeal refused to consider Code of Civil Procedure, section 430.10, subdivision (g) for several reasons. (Miles, supra, 236 Cal.App.4th at 401.) These reasons included that the demurring party clearly knew the contract at issue, the allegations supported a reasonable inference the agreement was in writing, and this ground was not raised at the trial court level. (Ibid.)

There are obvious distinctions between the present facts and Miles; specifically that here the parties seem to disagree about what contract is being referenced, the ground is being properly asserted at the trial court, and it is not inferable from the pleadings whether the contract was written, oral or implied. In conclusion, Miles is not sufficiently analogous to justify a similar exception to a statutory basis for demurrer. Thus, the demurrer to the fifth case of action is sustainable on the basis of a failure to allege whether the contract was written, oral or implied in conduct.

Additionally, Cross-Defendant argues that the fifth cause of action is uncertain because Cross-Complainants fail to identify the specific contractual provision breached by Cross-Defendant. As discussed in section II, B, a demurrer for uncertainty challenges ambiguity in the allegations already made, not a failure to incorporate sufficient facts. Thus, Cross-Defendant’s argument is inapt with respect to a demurrer for uncertainty.

Cross-Defendant’s citation to Moncada v. W. Coast Quartz Corp. (2013) 221 Cal.App.4th 768 (“Moncada”) does not change this analysis. Moncada dealt with whether an agreement to provide a bonus large enough to allow the recipient to retire was so uncertain as to be unenforceable. (Id. at 777.) Cross-Defendant cites the opinion as “affirming trial court order sustaining demurrer to amended complaint’s breach of contract claim…” (P&As ISO Dem., p. 6:12-14; Reply, pp. 5:27-28 through 6:1.)

As a preliminary matter, the page cited by Cross-Defendant and the holding referenced are from the concurring-dissenting opinion, not the majority. A dissent has no precedential value. (People v. Lopez (2012) 55 Cal.4th 569, 585; Fischer v. Time Warner Cable Inc. (2015) 234 Cal.App.4th 784, 797.) Additionally, Cross-Defendant has an obligation to honestly identify when he is citing to a concurring or dissenting opinion, rather than mislead the Court as to the weight of a citation. (See Business and Professions Code Section 6068, subdivision (d).)

Contrary to Cross-Defendant’s argument, the majority ruling in Moncada generally aids Cross-Complainants. The majority stated the law favors finding some interpretation which will carry out the will of the parties, and disfavors non-enforcement or destruction of contracts based purely upon uncertainty. (See Moncada, supra, 221 Cal.App.4th at 777.) Here, there is an alleged agreement to perform several jobs in exchange for room, board and other compensation. Cross-Defendant presents no law or argument suggesting the agreement is so uncertain the Court cannot find a reasonable interpretation of it based upon the will of the parties. Therefore, the demurrer is not sustainable on the basis that the breach of contract claim is uncertain.

Accordingly, the demurrer to the fifth cause of action is SUSTAINED, with 10 days leave to amend.