2010-00091529-CU-FR

Darlyne Andrus vs. Stewart Title Of Placer

Nature of Proceeding: Motion for Summary Adjudication

Filed By: Samaan, Nabil

Defendants Brett Adair, Stone Canyon Mortgage, Adair Realty & Land Development’s
Motion for Summary Judgment, or in the Alternative for Summary Adjudication of
Issues is DENIED.

Neither Plaintiffs nor moving Defendants have complied with the requirements of
C.R.C., Rule 3.1354 (as amended 2007) in asserting their evidentiary objections.
Counsel for both parties shall provide separate documents containing their objections
in compliance with such rule, and separate orders for the Court’s ruling on each
objection.

On April 13, 2012, the Presiding Judge ordered the complaints in 2010-91529 (Andrus
complaint) and 2010-94562 (Ruiz complaint) consolidated.

Plaintiffs Darlyne Andrus, Individually and as Trustee of The Golden Majestic Family
Trust, Daniel Proskine and Wendy Proskine’s Second Amended Complaint (“SAC”)
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alleges seven causes of action: the 1 for fraud, the 2 for financial elder abuse, the 3
rd for negligent hiring and supervision, the 4th for breach of fiduciary duties, the 5th for

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civil RICO, the 6 for negligent misrepresentation and the 7 for constructive fraud.
The third cause of action is not alleged as to moving party Defendants. Defendants
move for summary judgment, or in the alternative for summary adjudication of each
cause of action alleged against them.

The First Amended Complaint (“FAC”) of plaintiffs Ernest L. Ruiz, Jennifer A. Ruiz and
Darlene Record (the “Ruiz plaintiffs”) alleges identical causes of action. However,
moving party defendants here are not named defendants in the First Amended
Complaint filed by the Ruiz plaintiffs. While the Court notes that the Ruiz plaintiffs
attempted to file a Second Amended Complaint, it was rejected by the Clerk of the
Court on Dec.16, 2013, and has not been resubmitted since then and therefore is not
before the Court.

The Ruiz FAC contains no allegations as to the moving parties, nor have they been
added by Amendments as Doe defendants. The Court therefore does not rule on the
motion insofar as it purports to address the Ruiz plaintiffs. The function of the
pleadings in a motion for summary judgment is to delimit the scope of the issues.
Whelihan v. Espinoza (2003) 110 Cal. App. 4th 1566, 1572.

The Separate Statement of the moving party defendants does not comply with C.R.C.,
Rule 3.1350(d). The Separate Statement of Undisputed Material Facts in support of a
motion must separately identify each cause of action, claim, issue of duty, or
affirmative defense, and each supporting material fact claimed to be without dispute
with respect to the cause of action, claim, issue of duty, or affirmative defense. Id.

The Defendants’ Separate Statement provided here sets forth 86 “background”
material facts as to the named plaintiffs, before it sets forth the first issue requested be
adjudicated, beginning with fact no. 87. None of the background material facts have
been expressly incorporated by reference into the issues to be summarily adjudicated.

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Summary adjudication of the 1 for fraud and the 7 for constructive fraud is DENIED.

Plaintiffs allege fraud by the defendants in connection with the real property commonly
known as 8481 Whispering Oak Lane, Orangevale, California. The SAC alleges that
Defendants sold Plaintiffs’ home and defrauded Plaintiffs out of the proceeds when the
belief of Plaintiffs was that the home was being refinanced. Defendants are alleged to
have forged Plaintiffs’ signatures to the Purchase Agreement and also forged
signatures of Plaintiffs to the Grant Deed to the property to effectuate their scheme.
Thereafter defendants illegally distributed the Plaintiffs’ assets and proceeds.

In support of this motion, moving defendants submit evidence that Plaintiff Darlyne
Andrus admitted in her deposition testimony that she only had one meeting with
Moving Defendant Brett Adair that barely lasted more than a few minutes and that
there was “hardly any conversation” between the two. (UMF 89 and 90.) Darlyne
Andrus also admitted Brett Adair did not make any misrepresentations to Darlyne
Andrus or speak with her about her transaction during that brief encounter or anytime
thereafter. (UMF 91, 92, 93 and 94.) Darlyne Andrus also admitted in her deposition
that she only relied on three people when she made her decision to invest, who were
Chris Jackson, Ernest Ruiz and Jennifer Ruiz. (UMF 30.) Moving Defendants therefore
assert that they made no fraudulent or any other false representations to Plaintiff
Darlyne Andrus.

The Court finds that the material facts presented in the separate statement by moving
party are insufficient to negate the fraud of defendants as alleged by plaintiffs in the
SAC. Moving parties have failed to meet their initial burden on summary adjudication
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of the 1 and 7 causes of action.

In opposition, Darlyne Andrus’ declaration raises numerous other inferences of
fraudulent conduct by defendant Adair. The alternative ground for summary adjudication, that of the bar of the statute of
limitations (3 years from closing of escrow in Dec. 2006) is also insufficient to grant this
motion. Darlyne Andrus’ declaration declares that she did not discover any facts
sufficient to suspect Adair’s fraud until June 2013, when her attorneys obtained
relevant documents.

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Moving parties have failed to address the elements of the 7 cause of action for
constructive fraud, which are: (1) fiduciary relationship; (2) nondisclosure (breach of
fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation).
Younan v. Equifax Inc. (1980) 111 Cal. App. 3d 498, 517.

Summary adjudication of the 2nd for financial elder abuse is DENIED.

Under California Welfare and Institutions Code section 15600, et seq. in order to
commit “financial abuse” against an elder, the defendant must defraud or otherwise
exert undue influence over the elder plaintiff. (Welf. & Instit. Code §15610.30 (a) (1)-
(3).) “Undue influence” is defined as “excessive persuasion that causes another
person to act or refrain from acting by overcoming that person’s free will and results in
inequity.” (Welf. & Instit. Code §15610.70 (a).)

The SAC alleges that Plaintiff Darlyne Andrus, whose date of birth is December 10,
1933, is an elder.

Moving parties rely heavily on the Court’s presumed grant of summary adjudication as
to fraud in their favor, to meet their burden of proof on this cause of action. Moving
party defendants have provided little legal analysis as to how they can prevail in the
absence of summary adjudication of fraud in their favor. The initial burden on
summary adjudication is on the moving parties, and they have failed to satisfy this
burden.

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Summary adjudication of the 3 for negligent hiring and supervision is not ruled upon
by the Court, as it is not alleged against the moving parties.

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Summary adjudication of the 4 for breach of fiduciary duties is DENIED.

The elements of a cause of action for breach of fiduciary duty are: (1) existence of a
fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that
breach.” (Mosier v. Southern California Physicians Insurance Exchange (1998) 63
Cal.App.4th 1022, 1044.)

“Before a person can be charged with a fiduciary obligation, he must either knowingly
undertake to act on behalf and for the benefit of another, or must enter into a
relationship which imposes that undertaking as a matter of law.” (Committee on
Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221.)

Opposing parties plaintiff concede that although the seller’s agent does not generally
owe a fiduciary duty to the buyer, he or she nonetheless owes the buyer the affirmative
duties of care, honesty, good faith, fair dealing and disclosure, as reflected in Civil
Code section 2079.16, as well as such other nonfiduciary duties as are otherwise
imposed by law. Holmes v. Summer (2010) 188 Cal. App. 4th 1510, 1528. Moving parties have met their initial burden of proof on summary adjudication of the
issue of fiduciary duty as to the Andrus plaintiffs.

In opposition, plaintiffs have submitted evidence in opposition sufficient to create a
disputed issue of material fact requiring determination by the finder of fact at trial.
(DMF 109-116, PSSF 13, 14, 18, 20, 23, 27, 31, 32, 36, 40, 46.)

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Summary adjudication of the 5 for civil RICO is DENIED.

The elements of a civil RICO claim are: (1) conduct (2) of an enterprise (3) through a
pattern (4) of racketeering activity (known as ‘predicate acts’) (5) causing injury to the
plaintiffs’ ‘business or property.” (Living Designs, Inc. v. E.L Dupont de Nemours and
Co. (9th Cir 2005) 431 F.3d 353, 361,
see also Grimmett v. Brown (9th Cir.1996) 75 Fed.3d 506, 510, citing 18 U.S.C. §§
1964 (c), 1962(c) and Sedima, S.P.R.L. v, Imrex Co. (1985) 473 U.S. 479, 496.)
Generally, RICO renders criminally and civilly liable “any person” who uses or invests
income derived “from a pattern of racketeering activity” to acquire an interest in or to
operate an enterprise engaged in interstate commerce, 18 U.S.C. § 1962(a); or who
acquires or maintains an interest in or control of such an enterprise “through a pattern
of racketeering activity,” § 1962(b).

RICO is to be “liberally construed to effectuate its remedial purposes.” Taffet v.
Southern California (1991) 930 Fd.2d, 847.

Moving party defendants have provided no legal analysis as to how material facts 120-
123, 125 negate a cause of action for civil RICO. The initial burden on summary
adjudication is on the moving parties, and they have failed to satisfy this burden.

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Summary adjudication of the 6 for negligent misrepresentation is DENIED.

Moving party defendants have provided no legal analysis to support their assertion that
plaintiffs’ negligent misrepresentation claim must fail.

A cause of action for negligent misrepresentation requires the following essential
elements: (1) a misrepresentation of a past or existing material fact, (2) without
reasonable grounds for believing it to be true with intent to induce another’s reliance on
the fact misrepresented (e.g., breach of duty), (3) ignorance of the truth and justifiable
reliance thereon by the party to whom the misrepresentation was directed, and (4)
resulting damages. Fox v. Pollack (1986) 181 Cal.App.3d 954, 962; B.L.M. v. Sabo &
Deitsch (1997) 55 Cal.App.4th 823, 834.

Here, assuming the relevant material facts submitted are sufficient to meet the moving
parties’ burden, plaintiffs have disputed each of the material facts relied upon and
submitted additional material facts in opposition sufficient to create a disputed issue of
material fact requiring determination by the finder of fact at trial. (DMF 126-139, PSSF
13-15, 17, 22, 26, 27. 29, 30, 37.)

Summary adjudication of the Affirmative Defense of Plaintiffs’ Unclean Hands is
DENIED.

Moving parties’ Separate Statement fails to separately identify the affirmative defense
it seeks to have summarily adjudicated with the material facts in support claimed to be without dispute as required by C.R.C., Rule 3.1350(d).

The Court does determine the material facts for this affirmative defense for the moving
party.

As summary adjudication of each cause of action is not granted, the motion for
summary judgment is also denied.

The prevailing party is directed to prepare a formal order complying with C.C.P. §437c
(g) and C.R.C. Rule 3.1312.