Case Name: Marcus Morellon v. Anna Lopez, et al.
Case No: 18CV337722

I. Background

Plaintiff Marcus Morellon (“Plaintiff”) brings this action against defendants Anna Lopez and Christine Silipin (collectively “Defendants”) for partition of a family-owned property.

According to the allegations of the first amended complaint (“FAC”), Plaintiff’s mother, Erminia Cifuentes, and her husband owned property at 927 Peter Pan Avenue in San Jose. (FAC, ¶¶ 1, 8.) In 2005, Ms. Cifuentes gifted the property to her daughter Ms. Silipin through a recorded Grant Deed. (Id. at 10.) However, they agreed that the property would be transferred to Ms. Silipin as trustee for the benefit of each of Ms. Cifuentes’ children: Plaintiff, Ms. Lopez, Elsie Barragan, and Delia Morellon. (FAC, ¶ 24.) Ms. Cifuentes continued to live in the home until her death in 2008. (Id. at ¶ 11.) Shortly after her death, Delia Morellon also died. (Id. at ¶ 12.)

Thereafter, Ms. Silipin rented the property and kept the income until 2013 when she began sharing the income with Plaintiff and Ms. Barragan. (FAC, ¶¶ 13, 14.) In 2014, she began sharing the rental income with all the surviving siblings. (Id. at ¶ 15.) She did so until December 2017, when the tenants moved out. (Id. at ¶ 16.)

In 2018, Ms. Silipin agreed to name all of the surviving siblings on the property title. (FAC, ¶ 18.) However, shortly thereafter she gifted the property to Ms. Lopez. (Id. at ¶ 19.) Plaintiff and Ms. Barragan requested that all four children be named on the title, and sent a “letter of intention” to that effect. (Id. at ¶ 20.) Ms. Silipin agreed in writing that the property would be appraised and Plaintiff and Ms. Barragan would receive their portion of the property’s value either through a buy-out or sale of the property. (Id. at ¶ 21.) Plaintiff and Ms. Barragan agreed in writing to either alternative. (Id. at ¶ 22.) Despite their promise, Defendants have refused to comply. (Id. at ¶ 31.)

As a result of the foregoing allegations, Plaintiff asserts seven causes of action for: (1) confirmation of trust/resulting trust; (2) constructive trust; (3) negligence; (4) restitution/unjust enrichment; (5) fraud; (6) accounting; and (7) partition of real property.

Presently before the Court is Defendants’ demurrer to all seven causes of action.

II. Demurrer

Defendants demur to all seven causes of action on the ground of failure to state sufficient facts pursuant to Code of Civil Procedure section 430.10, subdivision (e) , uncertainty pursuant to section 430.10, subdivision (f), and failure to allege whether the contract was oral, written, or implied pursuant to section 430.10, subdivision (g).

A. Legal Standard

A demurrer tests the legal sufficiency of a pleading, but not the truth of a plaintiff’s allegations or the accuracy with which he or she describes the defendant’s conduct. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958; citing Committee on Children’s Television Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213.) The demurrer is treated as admitting all material facts, properly pleaded, but not contentions, deductions or conclusions of law. (Ibid.)

B. Uncertainty

Defendants demur to all seven causes of action on the ground of uncertainty, arguing that the pleading is “ambiguous and unintelligible.

A demurrer for uncertainty will lie where a pleading is uncertain, ambiguous or unintelligible. (§ 430.10, subd. (f).) “Demurrers based on uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.) However, “where the complaint contains substantive factual allegations sufficiently apprising a defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Here, the pleading does not suffer from the ambiguity or unintelligibility contemplated by this ground for demurrer. The pleading is not so incomprehensible that Defendants cannot reasonably respond. There are substantive factual allegations and corresponding causes of action. Therefore, the demurrer on this ground will be overruled.

C. Failure to State Sufficient Facts

a. Statute of Limitations

Defendants contend that the first cause of action for confirmation of trust, the second cause of action for constructive trust, and the fifth cause of action for fraud are barred by the respective statutes of limitations.

A demurrer for failure to state sufficient facts lies where the dates alleged in the complaint show the action is barred by the statute of limitations. (E-Fab., Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1316.) The defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred. (Ibid.) “In assessing whether claims are time-barred, two basic questions drive [the] analysis: (a) [w]hat statutes of limitations govern the plaintiff’s claims? (b) [w]hen did the plaintiff’s causes of action accrue?” (Id. at 1316.) Generally speaking, a cause of action accrues at the time when the cause of action is complete with all its elements. (Id. at 1317.)
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1. First Cause of Action: Resulting Trust

Defendants contend that the applicable statute of limitations is that for breach of an oral agreement, presumably referring to the agreement between Ms. Cifuentes and Ms. Silipin made in 2005. However, the cause of action is for resulting trust, not breach of contract. The applicable statute of limitations on an action to establish a resulting trust is the four-year limitation pursuant to section 343. (Estate of Yool (2007) 151 Cal.App.4th 867, 875.) The statute of limitations does not begin to run against a voluntary resulting trust “until demand has been made upon the trustee and the trustee refuses to account or convey.” (Ibid.)

Here, the facts allege that Plaintiff’s first demand as a trust beneficiary was made to Ms. Silipin and Ms. Lopez in August 2018. (FAC, ¶ 20; Exhibit D.) Prior to that, Ms. Silipin rented out the property, and at times disbursed the income to her other siblings, but Plaintiff made no demand regarding the property or distribution of rental income. (FAC, ¶¶ 13, 14, 15.) Since the action was filed less than a year after the demand, as alleged the facts show it is within the statute of limitations, and the demurrer to the first cause of action for failure to state sufficient facts will be overruled.

2. Second Cause of Action: Constructive Trust

Defendants also argue that the statute of limitations bars the constructive trust remedy. An action to impose a constructive trust on real property is governed by the five year statute of limitations in section 318 . (Coppinger v. Superior Court (1982) 134 Cal.App.3d 883, 891.) The limitations period begins to run from the time “the beneficiary has notice or should know of the wrongful holding of the property.” (Martin v. Kehl (1983) 145 Cal.App.3d 228, emphasis in the original.)

The facts allege that Ms. Silipin held the property in trust for the benefit of her siblings from 2008 to 2018. (FAC, ¶ ¶ 24, 25.) In April 2018, she first promised to name all the siblings on the title, but then gifted the property to Ms. Lopez. (Id. at ¶ ¶19, 33.) Shortly thereafter, Plaintiff demanded that his name be put on the title, that he be bought out, or alternatively that Ms. Lopez pay rent for occupying the property, but Defendants have not responded. (Id. at ¶¶ 30, 31, 34, 35.) Prior to that time, there is no allegation to support Plaintiff’s awareness or notice that the property was being wrongfully held. Since the complaint was filed within the year of his alleged notice of the wrongful holding, the statute of limitations has not run, and the demurrer cannot be sustained on this basis.

3. Fifth Cause of Action: Fraud

Defendants also contend that the fifth cause of action for fraud is time-barred.

For the tort of fraud, the statute of limitations is three years. (§ 338, subd. (d).) By its nature, fraud may not be immediately apparent to a plaintiff, however facts must be alleged to support delayed discovery. (E-Fab., Inc. v. Accountants, Inc. Services, supra, 153 Cal.App.4th 1308, 1318; § 338, subd. (d).) The discovery rule “postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Ibid.) A plaintiff must plead facts to show both the time and manner of discovery and the inability to have made earlier discovery despite reasonable diligence, and conclusory allegations will not withstand the demurrer. (Id. at 1320.)

Here, the facts merely allege that “Plaintiff did not discover… the wrongful actions until well within the year of filing this action.” However, there is no reference to the manner of discovery or the inability to have made an earlier discovery despite reasonable diligence. The statement that is pleaded is insufficient to allege delayed discovery.

Consequently, the demurrer to the fifth cause of action for failure to state sufficient facts on the basis of the statute of limitation will be overruled.

b. Sufficiency of Pleading

Defendants also argue that the second, third, fourth, fifth, sixth and seventh causes of action are not sufficiently pleaded.

1. Second Cause of Action: Constructive Trust

Defendants argue that the cause of action for constructive trust is insufficiently pleaded.

A constructive trust is a remedy which by operation of law creates an involuntary equitable trust to compel the transfer of property from a person wrongfully holding it to the rightful owner. (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 400.) The required elements are (1) property or some interest in real property; (2) the right of the complaining party to that property; and (3) some wrongful acquisition or detention of the property by another party who is not entitled. (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 992.) A wrongful act may include fraud, accident, mistake, undue influence or the violation of trust. (Civ. Code, § 2224; Communist Party v. 522 Valencia, Inc., supra, 35 Cal.App.4th 980, 992.) However, a constructive trust may be imposed in “practically any case where there is a wrongful acquisition or detention of property to which another is entitled.” (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1069.)

Defendants’ argument focuses on the sufficiency of the pleading of fraud, mistake or breach of trust. However, this is unavailing. The facts allege that there is a wrongful detention of a property against one who has some right to it. (Complaint, ¶¶ 30, 31, 34, 35.) Thus, constructive trust is sufficiently alleged and the demurrer on this basis cannot be sustained.
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2. Third Cause of Action: Negligence

Defendants argue that negligence is insufficiently pleaded. Specifically, they take issue with the pleading of fiduciary duty owed and further argue that the cause of action does not allege the elements of negligence.

While the title of the cause of action is “Negligence” as the demurrer suggests, the pleading sounds more in breach of fiduciary duty, and the Court will analyze it as such. (See Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 938, [holding that a party is entitled to relief which may be appropriate under the scope of pleadings and within the facts alleged regardless of the title of the pleading].)

A cause of action for breach of fiduciary duty must allege the elements of fiduciary duty, breach of the duty, and damages. (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 395.) It is well established that a trustee owes a fiduciary duty to a trust beneficiary. (Hearst v. Ganzi (2006) 145 Cal.App.4th 1195, 1208.)

Here, a fiduciary duty is alleged that is supported by the other pleadings. (FAC, ¶¶ 42, 43.) The allegations state that Ms. Silipin held the property in trust for the benefit of her siblings, and together they are equitable owners. (Id. at ¶¶ 24, 25.) As a trustee, then, Ms. Silipin owes a fiduciary duty to Plaintiff. Therefore, the demurrer cannot be sustained on the basis that fiduciary duty is insufficiently pleaded.

3. Fourth Cause of Action: Restitution/Unjust Enrichment

Defendants argue that unjust enrichment is insufficiently pleaded because the complaint fails to allege Plaintiff’s right to any interest in the property or rents received from it. Though this is not dispositive, the pleading is not sufficient to allege the cause of action.

Unjust enrichment is an equitable doctrine that applies where despite there being no enforceable contract, a plaintiff has conferred a benefit on a defendant, that defendant knowingly accepted but has not paid for its value. (Hernandez v. Lopez, supra, 180 Cal.App.4th 932, 938.)

Here, the pleading is devoid of facts in support of unjust enrichment. It does not allege that Plaintiff has conferred a benefit upon defendants, but instead that he has been denied his own benefits to the property, wrongfully held by Defendants. Therefore, the demurrer as to the fourth cause of action for failure to state sufficient facts is sustained.

4. Fifth Cause of Action: Fraud

Defendants also argue that fraud has not been sufficiently pleaded.

Fraud claims must be alleged with specificity and general and conclusory allegations do not suffice. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Here, the allegations of fraud are entirely conclusory, and have no basis in the facts alleged. Furthermore, no specific species of fraud is alleged against which to compare the facts pleaded. Therefore, the demurrer for failure to sufficiently plead fraud is sustained.

5. Sixth Cause of Action: Accounting

Defendants argue that the cause of action for an accounting is insufficiently alleged as Plaintiff fails to show a legal right to interest in the property.

A cause of action for an accounting must allege a relationship that exists between the plaintiff and defendant and that some balance is due to the plaintiff that can only be ascertained by an accounting. (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.)

Here, Plaintiff has alleged a trust-beneficiary relationship between him and Defendant Ms. Silipin. (FAC, ¶¶ 24, 25.) It is also alleged that rental income was received on the property, and at times Plaintiff did not receive the benefit of the income, and a balance is due. (Id. at ¶¶13, 17, 48, 53.) He seeks an accounting for the rents and profits derived from the property. (Id. at 62.)

Therefore, the demurrer to the sixth cause of action on the ground of failure to state sufficient facts is overruled.

6. Seventh Cause of Action: Partition

Defendants demur to the seventh cause of action for partition, arguing that Plaintiff has not alleged a right to the property.

A co-owner of real or personal property may bring an action for partition, which is an action to “sever the unity of possession.” (Cummings v. Dessel (2017) 13 Cal.App.5th 589, 596.) An interest in the property must be shown. (See Id. at 597.)

In the present case, Plaintiff has alleged that he co-owns the property as beneficiary of the trust intended by his mother. (FAC, ¶¶ 24, 25, 26, 64-67.) He has thus alleged an interest in the property for which a partition may be sought.

Therefore, the demurrer to the seventh cause of action on the ground of failure to state sufficient facts is overruled.

D. Failure to Allege Oral or Written Contract

Defendants demur to the complaint on the basis that it cannot be ascertained whether the contract is written, oral or implied by conduct pursuant to section 430.10, subdivision (g).

To sustain a demurrer on this ground, the cause of action necessarily must be “founded on a contract.” (§ 430.10, subd. (g).) The complaint does not allege a contract. To the extent there was an agreement between Ms. Cifuentes and Ms. Silipin, it was to establish a trust.

Therefore, the demurrer on this ground will be overruled.

III. Conclusion

The demurrer to the first, second, third, fourth, fifth, sixth and seventh causes of action on the ground of uncertainty is OVERRULED.

The demurrer to the first cause of action on the ground of failure to state sufficient facts is OVERRULED.

The demurrer to the second cause of action on the ground of failure to state sufficient facts is OVERRULED.

The demurrer to the third cause of action on the ground of failure to state sufficient facts is OVERRULED.

The demurrer to the fourth cause of action on the ground of failure to state sufficient facts is SUSTAINED, with 10 days leave to amend on the basis that unjust enrichment has not been sufficiently pleaded.

The demurrer to the fifth cause of action on the ground of failure to state sufficient facts is SUSTAINED, with 10 days leave to amend on the basis of the statute of limitations and the insufficiency of the pleading of fraud.

The demurrer to the sixth cause of action on the ground of failure to state sufficient facts is OVERRULED.

The demurrer to the seventh cause of action on the ground of failure to state sufficient facts is OVERRULED.

The demurrer on the ground of failure to allege whether a contract was oral, written or implied is OVERRULED.