2013-00152140-CU-OR

James A Anderson vs. Mark J Gilroy

Nature of Proceeding: Hearing on Demurrer to First Amended Complaint

Filed By: Gevelinger, Jacquie

Defendant Mark J. Gilroy’s (“Defendant”) demurrer to Plaintiff James A. Anderson, Jr.’s
(“Plaintiff”) First Amended Complaint is OVERRULED.

This action arises out a personal relationship between Plaintiff and Defendant that
soured in February 2012. Plaintiff alleges that Defendant has retained possession
and/or control over multiple pieces of real property (claimed to belong in whole or part
to Plaintiff), and withholding profits earned on the real property holdings. The First
Amended Complaint includes five causes of action for: (1) breach of implied
agreement, (2) promissory estoppel, (3) fraud and deceit, (4) conversion, and (5) constructive trust.

Defendant demurs to all five causes of action on grounds that each fails to state facts
sufficient to constitute a cause of action given the contents of Plaintiff’s bankruptcy
filings in October of 2007, and the Bankruptcy Court’s Order discharging Plaintiffs’
debts in November 2008. In particular, Defendant argues that because Plaintiff’s
bankruptcy filings do not reflect that Plaintiff had any ownership interests in the various
real properties at the center of his claims in this case, such that Plaintiff’s alleged
causes of actions are inadequately supported. As described below, the argument is
not well-taken.

Defendant’s Request for Judicial Notice (“RJN”) attaches Plaintiff’s 2007 bankruptcy
petition (Exh. A), the Bankruptcy Court’s Order discharging Plaintiff’s debts (Exh. B),
and several recorded grant deeds (Exhs. C-F). Defendants’ RJN is GRANTED.

However, the Court only takes judicial notice of the existence of these documents, not
the truth of the factual contents stated therein. (Evid. Code § 452(d) (“Records of . . .
any court of this state or . . . any court of record of the United States . . .” are records
that “may be judicially noticed.”); Joslin v. H.A.S. Ins. Brokerage (1986) 184
Cal.App.3d 369, 374 (“[t]aking judicial notice of a document is not the same as
accepting the truth of its contents.”).) Indeed, “[c]ourts may not take judicial notice of
allegations in affidavits, declarations and probation reports in court records because
such matters are reasonably subject to dispute and therefore require formal proof.” (
Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal. App.
4th 875, 882.) “Although the existence of a document may be judicially noticeable, the
truth of statements contained in the document and its proper interpretation are not
subject to judicial notice if those matters are reasonably disputable.” (Unruh-Haxton v.
Regents of University of California (2008) 162 Cal.App.4th 343, 364-365 (quoting
Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113).)

A “hearing on demurrer may not be turned into a contested evidentiary hearing through
the guise of having the court take judicial notice of documents whose truthfulness or
proper interpretation are disputable.” (Unruh-Haxton, supra, 162 Cal.App.4th at 364-
365 (quoting Fremont, supra, 148 Cal.App.4th at 113.).) “In ruling on a demurrer, a
court may consider facts of which it has taken judicial notice. [Citation.] This includes
the existence of a document. When judicial notice is taken of a document, however,
the truthfulness and proper interpretation of the document are disputable. (Id. (citations
omitted) (quoting Fremont, supra, 148 Cal.App.4th at 113.) Moreover, “[t]aking judicial
notice of a document is not the same as accepting the truth of its contents or accepting
a particular interpretation of its meaning. [Citation.] On a demurrer a court’s function is
limited to testing the legal sufficiency of the complaint. [Citation.]” (Id. (citations and
quotation marks omitted) (quoting Fremont, supra, 148 Cal.App.4th at 113.) “A
demurrer is simply not the appropriate procedure for determining the truth of disputed
facts.” (Id.) “[J]udicial notice of matters upon demurrer will be dispositive only in those
instances where there is not or cannot be a factual dispute concerning that which is
sought to be judicially noticed.” (Id. (quoting Fremont, supra, 148 Cal.App.4th at 113- 14.).)

Here, Defendant’s demurrer turns upon the Court’s acceptance of the truth of the
contents of the petition and order from Plaintiff’s 2007 bankruptcy. Defendant has not
shown that the factual contents of the bankruptcy documents (Exhs. A-B) are not
“reasonably disputable.” (See id.) Defendant argues that Exhibits A and B reveal that,
during the relevant time periods, Plaintiff has no ownership interest in parcels of real
property at the center of his claims in this case. But Plaintiff disputes the truth of the
factual contents of the bankruptcy documents (Pl.’s Oppo. at 4-6), including but not
limited to arguing that Plaintiff was not necessarily required to include the subject
properties in the bankruptcy petition in the first place. (Id.) Accordingly, the Court
does not find that the representations made are beyond dispute or that they should be
construed against Plaintiff at this procedural posture. Incidentally, the Court notes that
the one-page form Order discharging Plaintiff’s debts (Exh. B to RJN) did not include
any substantive discussion regarding Plaintiff’s assets or property ownership, nor did it
substantively discuss the veracity of Plaintiff’s representations in his bankruptcy filings,
so this Court cannot take the “truth” of any such findings.

Accordingly, because Defendant has not shown that the Court must take judicial notice
of the truth of the factual representations made in these bankruptcy filings, Defendant’s
demurrer is OVERRULED.

The Court also notes that Defendant’s RJN also attaches various recorded grant
deeds. (Exhs. C-F.) Again, while the Court takes judicial notice that such grant deeds
were recorded, the Court does not take judicial notice of the factual representations
therein. In taking judicial notice of the recorded land documents, the Court accepts the
fact of their existence, not the truth of their contents. (Herrera v. Deutsche Bank Nat’l
Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (“While courts take judicial notice of
public records, they do not take notice of the truth of matters stated therein.”); see also
Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265 (“[A] court may
take judicial notice of the fact of a document’s recordation, the date the document was
recorded and executed, the parties to the transaction reflected in the recorded
document, and the document’s legally operative language, assuming there is no
genuine dispute regarding the document’s authenticity.”).) Moreover, Defendant has
not shown that the absence of Plaintiff’s name from the recorded grant deeds would
preclude his claims as a matter of law or necessarily render his causes of action as
lacking the requisite supporting factual allegations.

Defendant’s demurrer also includes one argument that appears not to depend upon
the truth of facts included within judicially noticeable documents: that Plaintiff’s fourth
cause of action for conversion is defectively pleaded because it lacks specificity
regarding the allegedly converted property and funds. (Def.’s Ps & As at 12.) The
demurrer is OVERRULED in this regard, as Plaintiff’s pleading describes specific items
of property and money, as Defendant can engage in discovery to ascertain further
details thereon.

Defendant’s demurrer is OVERRULED in its entirety. Defendant shall file and serve an answer to the First Amended Complaint no later than June 19, 2014.

The minute order is effective immediately. No formal order pursuant to California Rule
of Court 3.1312 or other notice is required.