2018-00226925-CU-BT

Michael Anderson vs. Radoslovich Parker

Nature of Proceeding: Hearing on Demurrer to the 1st Amended Complaint

Filed By: Maas, Ryan J.

Defendant Radoslovich Shapiro, PC’s (“Defendant”) demurrer to plaintiff Michael Anderson’s (“Plaintiff”) First Amended Complaint (“FAC”) is ruled upon as follows.

Plaintiff’s Complaint alleges various claims against Defendant law firm arising out of a purported fee referral agreement between Plaintiff and Defendant’s predecessor law firm (Radoslovich Parker Turner). Defendant has demurred to the second cause of action for elder abuse on the grounds that it fails to state facts sufficient to constitute a cause of action (Code Civ. Proc. § 430.10(e)) and is uncertain (Code Civ. Proc. § 430.10(f)).

Legal Standard

The rules applicable to demurrers require that pleadings are to be liberally construed. (CCP § 452.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action, not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591; Adelman v. Associated Int’l Ins. Co. (2001) 90 Cal.App.4th 352, 359.) A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 746, 778; Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532, 542.) “Plaintiff need only plead facts showing that he may be entitled to some relief …, we are not concerned with plaintiff’s possible inability or difficulty in proving the allegations of the complaint.” ( Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.)

A demurrer to an alleged cause of action must be sustained where the pleading “does not state facts sufficient to constitute a cause of action (CCP § 430.10(e)), or is “uncertain,” i.e, ambiguous or unintelligible (CCP § 430.10(f)). Only well-pled facts suffice to state a cause of action under California law, and conclusory assertions are disregarded in ruling on a demurrer. (Serrano, supra, 5 Cal.3d at 591.) While the Court must accept as true all materials allegations properly pled in the complaint in evaluating a demurrer, the Court need not accept legal conclusions, contentions or deduction.” (Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986; see also Freeman v. San Diego Ass’n of Realtors (1999) 77 Cal.App.4th 171, 144, fn. 11; Aubry v. Tri-City Hospital (1992) 2 Cal.App.4th 962, 966-967.) Plaintiff bears the burden of pleading facts sufficient to state a claim; courts will not supply essential elements of a claim that were not initially pled. “California has rejected the legal theory form of pleading. ‘It is not essential that a complaint state a cause of action for the relief which

plaintiff seeks, provided the facts stated show some right of recovery… ‘” (Carlsen v. Koivumaki (2014) 227 Cal. App. 4th 879, 902, fn. 10.)

Second Cause of Action (Financial Elder Abuse)

Plaintiff’s Second Cause of Action is premised on financial elder abuse. The Legislature has defined financial elder abuse as the taking of property of a “person residing in this state, 65 years of age or older” with intent to defraud or make a “wrongful” use of his or her property by taking, secreting, appropriating, obtaining or retaining real or personal property. (Welf. & Inst. Code §§ 15610.30 (a), 15610.27; Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527; see Intrieri v. Superior Court (2004) 117 Cal.App.4th 72, 82 (“elements of a cause of action under the Elder Abuse Act are statutory”).) A person or entity “shall be deemed to have taken, secreted, appropriated, obtained, or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or entity knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.” (Welf. & Inst. Code § 15610.30(b).)

Thus, to maintain a claim for financial elder abuse, Plaintiff must plead facts sufficient to establish: (1) that the named defendant has assisted in taking / hiding / appropriating / obtaining or retaining Plaintiff’s property; (2) that Plaintiff was 65 years of age or older or a dependent adult at the time of the conduct; (3) that defendant assisted in the taking, hiding, appropriating, obtaining, or retaining the property for a wrongful use, or with the intent to defraud or by undue influence; (4) that Plaintiff was harmed; and (5) that Defendant’s conduct was a substantial factor in causing Plaintiff harm. (CACI 3100.) Defendant demurs on the grounds that the Complaint fails to set forth facts sufficient to constitute a cognizable cause of action. It bears noting, claims under the Elder Abuse Act are statutory, and as such must be pled with specificity. ( Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

The Court sustained Defendant’s first demurrer to the second cause of action in Plaintiff’s original complaint with leave to amend because Plaintiff failed to plead facts “that Defendant assisted in taking, hiding, appropriating, obtaining, or retaining Plaintiff’s real or personal property for a wrongful use, let alone with any intent to defraud Plaintiff.” The Court found Plaintiff’s conclusory allegations failed to meet Plaintiff’s obligation to plead actual facts to support his claim.

In the FAC, Plaintiff has now made the following allegations. Pursuant to a fee agreement, Defendant agreed to pay Plaintiff a 10% referral fee from the net contingency fee recovery at the same time Defendant distributed the settlement proceeds to itself. (FAC ¶¶ 10, 25.) Defendant received a net contingency fee of $1,566,640.58 from the settlement amount and deducted another $890,000 as a “litigation reserve.” (FAC ¶ 11.) The express purpose of the litigation “reserve” was for the prompt payment of Plaintiff’s earned fees. (FAC ¶ 12, 28.) Defendant made a partial payment of $40,000 to Plaintiff, but the balance of $116,664.06 is due and owing. (FAC ¶¶ 13, 14.) Defendant knew Plaintiff would be financially harmed if he was not promptly paid, but instead Defendant paid itself the $116,664.06, which should have been paid to Plaintiff. (FAC ¶¶ 14, 27.) Plaintiff has made repeated demands for the payment, but Defendant continues to ignore these demands and refuses to pay Plaintiff the full amount and this conduct evidences that Defendant never intended to pay Plaintiff the remaining portion of his earned fees (FAC ¶ 16, 29), and that

Defendant intends to indefinitely and/or permanently deprive Plaintiff of the full amount of his earned fees by retaining them as though they belong to Defendant. (FAC ¶¶ 12, 14, 16, 25, 30.) Plaintiff has also alleged he is 65 years of age or older. (FAC ¶ 24.)

Despite Defendant’s contention otherwise, the foregoing are not simply allegations regarding legal conclusions, but additional facts supporting Plaintiff’s claim. Plaintiff has sufficiently alleged more than just a breach of contract. Plaintiff’s amended allegations state facts that Defendant knowingly engaged in a harmful breach of the alleged referral fee agreement by repeatedly failing to pay the balance of the referral fee allegedly due to Plaintiff, instead paying that amount to itself, and knowing this would cause Plaintiff harm.

Defendant’s argument that Plaintiff has failed to provide new evidence to support his claim is inapposite on a demurrer. As explained above, a demurrer is not an evidentiary hearing. A demurrer tests the legal sufficiency of a claim. On demurrer, the Court must accept as true all materials allegations properly pled in the complaint.

Defendant’s argument that Plaintiff must allege he lacks capacity to state a claim for financial elder abuse is rejected. Defendant relies on the last sentence of W&I § 15657.6 in support, but this section is not applicable to this action. Section 15657.6 (Return of property to elder or dependent adult lacking capacity) states:

“A person or entity that takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining the real or personal property of an elder or dependent adult when the elder or dependent adult lacks capacity pursuant to Section 812 of the Probate Code, or is of unsound mind, but not entirely without understanding, pursuant to Section 39 of the Civil Code, shall, upon demand by the elder or dependent adult or a representative of the elder or dependent adult, as defined in subdivision (d) of Section 15610.30, return the property and if that person or entity fails to return the property, the elder or dependent adult shall be entitled to the remedies provided by Section 15657.5, including attorney’s fees and costs. This section shall not apply to any agreement entered into by an elder or dependent adult when the elder or dependent adult had capacity.” (emphasis added.)

Defendant’s argument that the legislative history of the Elder Abuse Act does not demonstrate an intent to deem mere breaches of contract actionable instances of elder abuse is also rejected. Even assuming this contention is correct, as noted above, Plaintiff has alleged more than a mere breach of contract as he has alleged facts that demonstrate a willful and knowing disregard for an elder’s property rights.

Based on the foregoing, Defendant’s demurrer to the second cause of action on the ground it fails to state a cause of action is OVERRULED.

The demurrer for uncertainty is also OVERRULED. The allegations are not so uncertain that Defendant cannot frame a response. Demurrers for uncertainty are disfavored and are only granted where the complaint is so muddled that the defendant cannot reasonably respond. The favored approach is to clarify theories in the complaint through discovery. (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616; 1 Weil & Brown, Civil Procedure Before Trial (Rutter 2014), sec. 7:85, p. 7(l)-39.)

Defendant has indicated the incorrect address in its notice of motion. The correct address for Department 53 of the Sacramento County Superior Court is 813 6th Street, Sacramento, California 95814. Defendant shall notify Plaintiff immediately.

The notice of motion does not provide notice of the Court’s tentative ruling system as required by Local Rule 1.06(D). Defendant is ordered to notify Plaintiff immediately of the tentative ruling system and to be available at the hearing, in person or by telephone, in the event Plaintiff appears without following the procedures set forth in Local Rule 1.06(B).

Defendant shall file and serve its answer by September 14, 2018.

This minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.