Case Number: EC061912    Hearing Date: July 18, 2014    Dept: NCD

TENTATIVE RULING (7-18-14)
#5
EC 061912
EVANS v. EVANS

Defendant Wheels Financial Group, LLC’s Demurer to Plaintiff’s First Amended Complaint
TENTATIVE:
Demurrer is SUSTAINED on the ground plaintiff appears to lack standing to pursue these claims which are within the province of the Chapter 7 bankruptcy trustee.

Demurrer is further SUSTAINED to the first cause of action for fraud and the third cause of action for negligence for the reasons stated in the moving papers. The fraud claim does not allege each essential element as against the moving defendant, and fails to state the claim with sufficient specificity. The negligence claim fails to allege that this defendant owed any duty of care, or how that duty was breached, instead appearing to allege intentional misconduct.

Ten days leave to amend.

Demurrer on all other grounds is OVERRULED.

CAUSES OF ACTION: from First Amended (Form) Complaint (Summary of Ruling)
1) Intentional Tort (Fraud) – – sustained with leave.
2) Intentional Tort (Conversion) – – overruled.
3) General Negligence – – sustained with leave.
4) Declaratory Relief – – overruled.
Re bankruptcy – – sustained with leave.

SUMMARY OF FACTS:
Plaintiff Marcie J. Evans alleges that defendant Anthony Wade Evans, her ex-husband, and Defendant Wheels Financial Group entered into a loan agreement secured by plaintiff’s vehicle, and that defendants conspired to defraud plaintiff by allowing an unknown female to impersonate plaintiff and purport to co-sign defendant Evans’ loan. Defendant Evans defaulted on the loan agreement and defendant Wheels seized the vehicle and demanded that plaintiff pay the balance due. Plaintiff alleges that as a result of defendants’ conduct, she lost her vehicle and the use of her vehicle, and also lost wages because she was unable to obtain transportation to her employment. Plaintiff also alleges that she suffered severe emotional distress because she was unable to participate in shared custody of her daughter due to lack of reliable transportation.

Defendant Evans filed a demurrer and motion to strike in response to the original complaint, which were taken off calendar upon the filing of the First Amended Complaint.

Defendant Wheels now demurs to the First Amended Complaint.
ANALYSIS:
Bankruptcy
Defendant argues that plaintiff recently filed for Chapter 7 Bankruptcy, so that plaintiff lacks standing to pursue this matter, because the claims are an asset of the bankruptcy estate and only the trustee of plaintiff’s bankruptcy estate may pursue them.

The FAC alleges that plaintiff “was forced to file for bankruptcy protection which resulted in her vehicle being returned to her…” [P. 5, para. IT-1]. The RFJN shows that plaintiff filed a voluntary petition for relieve under Chapter 13 on February 5, 2013, and a Notice of Conversion to a chapter 7 case on May 2, 2014, and a trustee has been appointed. [RFJN, Exs. A-C]. Under such circumstances, involving a Chapter 7 proceeding, the Second District holds that the matter must be pursued by the bankruptcy trustee or with the permission of the bankruptcy court. Bostanian v. Liberty Savings Bank, FSB (1997) 52 Cal.App.4th 1075, 1078-1979 (“ the bankruptcy court supervises the liquidation of failed chapter 7 debtors, who can begin or maintain lawsuits in their own name only with the bankruptcy court’s and trustee’s approval.”).
The opposition argues that the trustee intends to issue an order abandoning this lawsuit. The demurrer is therefore sustained with leave to amend to permit plaintiff to obtain and plead approval by or abandonment by the trustee.

First Cause of Action—Intentional Tort (Fraud)
To state a cause of action for fraud, plaintiff must plead the following elements: A false representation, actual or implied, or concealment of a matter of fact material to the transaction which defendant had a duty to disclose, or defendant’s promise made without intention to perform; defendant’s knowledge of the falsity; defendant’s intent to deceive; plaintiff’s justifiable reliance thereon; and resulting damage to plaintiff. Pearson v. Norton (1964) 230 Cal.App.2d 1; Witkin §668 et seq.; Judicial Council Form 982.1 (23).

Generally, in a fraud cause of action, a plaintiff must allege specifically how, what, where, to whom and by what means a defendant made a misrepresentation. Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73. When such a claim is made against a corporation, the level of specificity required is even higher. Under Lazar v. Superior Court, (1996) 12 Cal.4th 631, 645, in fraud complaints against a corporation, a plaintiff must allege all of the following:
-the names of the persons who made the misrepresentation;
-their authority to speak for the corporation;
-to whom they spoke;
-what they said or wrote; and
-when it was said or written.

As to moving defendant, it is not clear what false representation or concealment was made as to plaintiff; the allegation is that the defendants allowed an unknown female to impersonate plaintiff and purport to co-sign a loan. [Para. IT-1]. This does not plead a false representation or concealment on the part of Wheels which it had a duty to disclose, and it is not clear that such is sufficiently alleged against Evans so that a conspiracy claim can be stated. In addition, the pleading fails to allege what was said, to whom, where, or by what means any representation was made, or any authority of the speaker to speak for Wheels.

The opposition argues that details need not be provided when knowledge of the facts is within the exclusive province of defendants. To this extent, it might be said that plaintiff merely speculates. This claim overall does not state a cause of action based on traditional elements of fraud toward plaintiff, and some additional details are necessarily required. The demurrer is sustained.

Second Cause of Action—Intentional Tort—Conversion
To state a cause of action for conversion, plaintiff must allege the following elements: Ownership, or right to possession of property; wrongful disposition of property right; and damages. Imperial Valley Land Co. v. Globe Grain & Milling Co. (1921) 187 Cal.352, 354. See also 5 Witkin, Cal.Proc.3d section 654.

The pleading standards with respect to conversion are ordinarily not particularly strict, and it has long been held that a general allegation that defendant “converted the property to his own use” is sufficient to withstand demurrer. See Daggett v. Gray (1895) 110 Cal. 257, 260; 5 Witkin Cal.Proc. 3d sec. 662.

Here, the pleading alleges that “By seizing plaintiff’s vehicle with no legal authorization, Wheels unlawfully converted plaintiff’s property.” [P. 5, para. IT-1]. Defendant argues that plaintiff cannot allege that Wheels committed any wrongful act as it had a fully enforceable loan contract with plaintiff’s signature. This is not what is alleged in the pleading, however, which is that the loan agreement had been forged by an imposter, and that Wheels was aware of that fact. The demurrer is therefore overruled.

Third Cause of Action—Negligence
To state a claim for negligence, plaintiff must allege the following elements: Defendant owed a legal duty of care to plaintiff; defendant breached the duty (negligent act or omission); plaintiff was injured as a result (proximate or legal cause); and damages. Palmer v. Crafts (1936) 16 Cal.App.2d 370, 375; Witkin §537; Judicial Council Form 982.1(1).

Defendant argues that the pleading fails to sufficiently state that this defendant owed a legal duty of care to plaintiff. The cause of action is not entirely clear to the extent it alleges that “both defendants conspired to defraud plaintiff,” which is an intentional act, not negligence. There is no direct allegation that either defendant owed plaintiff a duty of care. The opposition argues that Wheels negligently allowed an imposter to present an expired drivers’ license and failed to closely inspect and demand current valid identification. This is not what is alleged in the pleading, however, and since the allegation is that plaintiff was not in fact a customer of defendant’s, it appears there may be a hurdle to overcome in alleging a recognized legal duty to plaintiff. The demurrer is sustained.

Fourth Cause of Action—Declaratory Relief
Defendant argues that this cause of action fails because plaintiff has no valid underlying claim to warrant this remedy.

CCP § 1060 provides with respect to declaratory relief:
“Any person interested under a written instrument,…or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property… , may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”

A very liberal pleading standard applies:
“ A complaint for declaratory relief is sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties… and requests that these rights and duties be adjudged by the court.”
Wellenkamp v. Bank of America (1978) 21 Cal.3d 943, 947.

The pleading alleges that plaintiff contends “that she never entered into any contract with Wheels, and never conveyed a security interest in her BMW vehicle to Wheels,” and owes no obligation, and that Wheels “contends otherwise,” and seeks a judicial declaration that plaintiff did not sign the loan agreement and “owes no legal obligation to Wheels” under such agreement. [P. 7, para. IT-1]. This appears sufficient.

Defendant also argues that the claim is duplicative of the other causes of action. The cause of action seeks an appropriate declaration governing the future conduct of the parties concerning the legal obligations owed by defendants to plaintiff, which does not duplicate the other causes of action, that seek past damages. Some amount of “duplication” is permissible in any event. The demurrer is overruled.