Rancho Las Cruces, LLC, et al. v.Robert Ramirez
Case No: 19CV00717
Hearing Date: Mon May 13, 2019 9:30

Nature of Proceedings: Demurrer/Motion Strike

Rancho Las Cruces, LLC, et al., v. Robert Ramirez, et al., #19CV00717, Judge Sterne

Hearing Date: May 13, 2019

Matters: Demurrer and Motion to Strike

Attorneys:

For Plaintiffs: Charles M. Oxton, et al.

For Defendant: James F. Scafide, et al.

Tentative Ruling:

1. The court sustains the demurrer of defendant John Mogens Henning, individually and as personal representative of the Estate of Carolyn Jane Winther, to the second, third, and fourth causes of action in plaintiffs’ complaint, as to plaintiff Walter J. Henning, individually and as trustee of the Walter C. Henning Trust and as trustee of the Caroline Henning Trust, and as to plaintiff James E. Henning, without leave to amend. The court overrules the demurrer in all other respects.

2. The court denies the motion of defendant John Mogens Henning to strike portions of plaintiffs’ complaint.

Background: On February 6, 2019, plaintiffs Rancho Las Cruces, LLC; Walter J. Henning, individually and as trustee of the Walter C. Henning Trust and as trustee of the Caroline Henning Trust, and James E. Henning filed their complaint against defendants Robert Ramirez, an individual, and John Mogens Henning, individually and as personal representative of the Estate of Carolyn Jane Winther. Plaintiffs allege:

Walter J. Henning (“Walter J.”), James E. Henning (“James”), and Carolyn Jane Winther, now deceased (“Carolyn”) are the children of Walter C. Henning (“Walter C.”) and Caroline D. Henning (“Caroline”), a married couple now deceased. Walter C. and Caroline acquired the real properties near 600 Las Conovas Canyon Road in Gaviota. [Complaint ¶13]

Walter C. acquired eight parcels (Parcels 3, 7, 8, 9, 11, 21, 25, and 26) as his separate property. [Complaint ¶14] Walter C. and Caroline acquired nine parcels (Parcels 4, 5, 10, 43, 52, 54, 56, 57, and 58) held as tenants in common. [Complaint ¶15] Walter C. placed all his interests in the properties in the Walter C. Henning Trust. [Complaint ¶16] Caroline placed all her interests in the properties in the Caroline Henning Trust. [Complaint ¶17]

On April 3, 2005, Walter C. died, leaving the entirety of his interest in both his separate parcels and his undivided one-half interest in the parcels he shared with Caroline D. as tenants in common, all such properties being titled in the Walter C. Henning Trust, to his two sons, Walter J. and James. Carolyn was omitted entirely from Walter C.’s estate. [Complaint ¶18]

On September 18, 2008, Caroline died, leaving her undivided one-half interest in the jointly acquired parcels, all such properties being titled in the Caroline Henning Trust, to her three children, Walter J., James, and Carolyn, in equal shares. [Complaint ¶19]

In 2009, Walter J., James, and Carolyn formed Rancho Las Cruces, LLC (“RLC”), with each sibling purporting to contribute to RLC his or her interests in the parcels each received by inheritance from their parents, pursuant to the terms of the Operating Agreement. Carolyn, who lived overseas, consented in the Operating Agreement to Walter J. and James retaining management and control of RLC and its parcels. [Complaint ¶20]

On December 11, 2009, for the specific purpose of funding RLC, Walter J., James, and Carolyn each conveyed their respective interests in the real properties they acquired by inheritance from their parents, to RLC. [Complaint ¶21] RLC is subject to dissolution at any time at the sole option of Walter J. and James. [Complaint ¶22]

On September 13, 2016, Carolyn died intestate, resulting in a probate proceeding in Santa Barbara Superior Court (#18PR00001) regarding defendant Estate of Carolyn Jane Winther, which probate is being administered by defendant John Mogens Henning (“John”), Carolyn’s son. [Complaint ¶23]

On April 20, 2017, defendant Robert Ramirez (“Ramirez”), another of Carolyn’s sons, moved onto Parcel 21, at the direction and with the assistance of John, but without the consent of plaintiffs. [Complaint ¶24] Ramirez, at the direction and with the assistance of John, demolished a pre-existing historical adobe structure on Parcel 21 and moved a trailer, several vehicles, a storage container, and various other items of personal property onto the parcel, resulting in significant damage to the parcel, and continuing harm to plaintiffs. [Complaint ¶25]

On November 7, 2017, RLC served a Notice to Quit occupancy of Parcel 21 on Ramirez, who refused to vacate. RLC initiated an unlawful detainer proceeding in Santa Barbara Superior Court (Rancho Las Cruces LLC v. Robert Ramirez, #17CV05747), which was dismissed on or about March 23,2018, without a hearing on the merits. [Complaint ¶26] Ramirez continues to possess and refuses to leave Parcel 21, which plaintiffs own and which RLC manages and controls. [Complaint ¶27]

The causes of action in the complaint are: 1) declaratory and injunctive relief, 2) ejectment, 3) trespass, and 4) waste. Plaintiffs seek: A) a finding that plaintiffs, together, own Parcel 21 free and clear of any ownership or possessory interest of defendants; B) a finding that defendants’ continued occupancy of Parcel 21 is unlawful; C) restitution of Parcel 21 to plaintiffs; D) a finding that RLC manages and controls all of the real properties described herein, and that, upon dissolution, said real properties must be distributed to the parties in the percentage interests to which they were entitled at the time of the settlors’ deaths; E) a finding that defendants unlawfully trespassed on plaintiffs’ real property; F) a finding that defendants committed waste on plaintiffs’ real property; G) an accounting of all cash income to RLC and a declaration of entitlement of the parties to a percentage interest in income and expenses proportionate to their interests in said real properties upon which income was generated; H) general and special damages; and I) reasonable attorneys’ fees and costs.

Demurrer: Defendant John Mogens Henning, as an individual and as personal representative of the Estate of Carolyn Jane Winther, demurs to the complaint on the ground that plaintiffs have failed to state facts constituting the causes of action. (For purposes of this discussion, the court will refer to John Henning as “defendant.”)

1. Pleadings: Defendant’s demurrer and motion to strike do not comply with CRC 2.109 and 3.1110(c). The page numbering of papers filed in trial court “must begin with the first page and use only Arabic numerals (e.g., 1, 2, 3).” CRC 2.109 and 3.1110(c). “CRC 3.1113(h). Defendant’s pleadings begin with page 1 and then numbering starts over with the memoranda of points and authorities. The memorandum in support of the demurrer is 15 pages long and does not include a table of contents and table of authorities as required by CRC 3.1113(f).

Plaintiffs’ opposition also exceeds ten pages and does not have a table of contents or table of authorities. Plaintiffs’ request for judicial notice includes exhibits that are not labeled and there are no electronic bookmarks as required by CRC 3.1110(f)(4).

Notwithstanding these deficiencies, the court will consider the merits of the demurrer and motion to strike and opposition thereto.

2. Request for Judicial Notice: In support of both his demurrer and motion to strike, defendant asks the court to take judicial notice of court files and recorded deeds.

Defendant asks the court to take judicial notice of two entire court files. Defendant does not specify or provide copies of the documents of which the court should take judicial notice. The court denies the motion with respect to the court files.

Defendant asks the court to take judicial notice of three grant deeds. Plaintiffs object that defendant seeks to use these documents to convert the demurrer into a motion for summary judgment. Plaintiffs also object that the deeds are out of context as they are part of a much larger series of “governing documents.”

The court will take judicial notice of recorded documents. Herrera v. Deutsche Bank National Trust Co., 196 Cal.App.4th 1366, 1375 (2011). Judicial notice does not extend to the truth of factual matters stated in the documents. Poseidon Development, Inc. v. Woodland Lane Estates, LLC, 152 Cal.App.4th 1106, 1117 (2007). “The official act of recordation and the common use of a notary public in the execution of [recorded real property documents, including deeds of trust] assure their reliability, and the maintenance of the documents in the recorder’s office makes their existence and text capable of ready confirmation, thereby placing such documents beyond reasonable dispute.” Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256, 264-265 (2011).

“In addition, courts have taken judicial notice not only of the existence and recordation of recorded documents but also of a variety of matters that can be deduced from the documents.” Id. at 265. The court is permitted to take judicial notice of the legal effect of a document’s language when that effect is clear. Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256, 265 (2011).

The deeds relate to transactions pleaded in the complaint in ¶¶18, 19, 20, and 21. The court will take judicial notice of the first two deeds. However, the third deed, recorded December 11, 2009, is incomplete as it includes the signatures of only two of the three parties conveying property and Exhibit A is omitted. The court will not take judicial notice of the third deed.

3. Defendants’ Objections: Defendant makes evidentiary objections to portions of plaintiffs’ opposition. The court does not take evidence on demurrer. Nedlloyd Lines B.V. v. Superior Court, 3 Cal.4th 459, 478 n4 (1992); SKF Farms v. Superior Court, 153 Cal.App.3d 902, 905 (1984). Therefore, the court will not rule on evidentiary objections.

To the extent that defendant argues that plaintiffs are offering facts outside the complaint and matters of which the court takes judicial notice, the objections are unnecessary as the court will confine its analysis to the facts alleged in the complaint as summarized above.

4. Demurrer Standards: The court treats “the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law”; considers “matters which may be judicially noticed”; and gives “the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” Evans v. City of Berkeley, 38 Cal.4th 1, 6 (2006) [internal quotation marks and citations omitted]. The court also considers the reasonable inferences that may be drawn from the properly pleaded material facts. Reynolds v. Bement, 36 Cal.4th 1075, 1083 (2005).

“A demurrer tests only the sufficiency of the pleading and lies only where the defect appears on the face of the pleading or from matters judicially noticed by the court.” Fiorito v. Superior Court, 226 Cal.App.3d 433, 437 (1990). “[A]ny allegations that are contrary to the law or to a fact of which judicial notice may be taken will be treated as a nullity.” C.R. v. Tenet Healthcare Corp., 169 Cal.App.4th 1094, 1102 (2009).

“When a written instrument which is the foundation of a cause of action or defense is attached to a pleading as an exhibit and incorporated into it by proper reference, the court may, upon demurrer, examine the exhibit and treat the pleader’s allegations of its legal effect as surplusage.” Weitzenkorn v. Lesser, 40 Cal.2d 778, 785-786 (1953) [internal quotations and citation omitted]. “While the ‘allegations [of a complaint] must be accepted as true for purposes of demurrer,’ the ‘facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence.’” Brakke v. Econ. Concepts, Inc., 213 Cal.App.4th 761, 767 (2013) [citations omitted].

5. Statute of Limitation: Defendant demurs to the entire complaint on the ground that it is time-barred by CCP § 318, which reads: “No action for the recovery of real property, or for the recovery of the possession thereof, can be maintained, unless it appear that the plaintiff, his ancestor, predecessor, or grantor, was seized or possessed of the property in question, within five years before the commencement of the action.”

Defendant argues: “the last deeds which show ownership by Walter and James, recorded with the Santa Barbara County Recorder’s Office, are dated in 2009 the five-year period of limitations began to run at that time and has passed as of 2014 and any cause of action seeking relief based on recovery of the real property is time barred.”

Defendant appears to contest the entire action because plaintiffs Walter J. and James have not had title for over five years. But this ignores the fact that RLC is a plaintiff and defendant concedes that RLC has title. The owner of the legal title to the property meets the requirement of seisin or possession as CCP § 318 is construed. Tobin v. Stevens, 204 Cal.App.3d 945, 949 (1988).

The court overrules the demurrer to the entire complaint based on the statute of limitation.

6. Declaratory Relief: Defendant argues there is no actual and immediate controversy that has arisen and now exists. He bases this solely on the contention that RLC is the record owner of Parcel 21.

CCP § 1060 provides that any person may ask the court for a declaration of its rights or duties “in cases of actual controversy relating to the legal rights and duties of the respective parties.” A “cardinal rule of pleading is that only the ultimate facts need be alleged” and the ultimate facts in a declaratory relief action “are those facts establishing the existence of an actual controversy. A party need not establish that it is also entitled to a favorable judgment.” Ludgate Ins. Co. v. Lockheed Martin Corp., 82 Cal.App.4th 592, 606 (2000).

Plaintiffs seek a declaration that they, including RLC, own certain parcels free and clear of any ownership or possessory interest of defendants, including Parcel 21. They also seek a declaration that Ramirez’s continued occupancy of Parcel 21 with John’s consent is unlawful. Defendant does not suggest that they agree that Ramirez’s occupancy of Parcel 21 with defendant’s consent is unlawful. Therefore, there is an actual controversy relating to the legal rights of the parties.

6. Walter J. and James’s Standing: Defendant demurs to the second, third, and fourth causes of action as to Walter J., individually and as trustee of the two trusts, and James because they lack standing. Defendant again emphasizes that RLC is the owner of Parcel 21. In their opposition, plaintiffs agree that only RLC is entitled, at present, to maintain the second, third, and fourth causes of action against defendants. [Opposition 9:8-11]

Defendant appears to argue the RLC cannot maintain these causes of action because of provisions of the Operating Agreement attached to the complaint. The RLC Operating Agreement provides: “No act shall be taken, sum expended, decision made, obligation incurred, or power exercised by any Co-Manager on behalf of the Company except by the consent of all Membership interests with respect to … (v) schedules and daily operations of the business of the including functions and location of operation.” [Operating Agreement ¶5.6] Defendant states: “Plaintiff has not plead any facts in their complaint showing that all three members of the LLC voted to allow the managers to occupy the real property or to exclude either Defendant from the LLC property or to allow the Managers to have exclusive use and control of the property.” [Demurrer 11:21-25]

This provision of the Operating Agreement is ambiguous because the next sentence reads: “If agreement of sixty five percent of all Membership cannot be obtained and the Co-Managers cannot come to a unanimous agreement the Co-Managers agree to submit the matter to Mediation and the Arbitration to settle the matter.” It is not clear if unanimous consent of all members is necessary or consent of 65%. That is an issue that cannot be resolved on demurrer.

It appears that the second, third, and fourth causes of action can be asserted as to RLC but not Walter J. and James. The court sustains the demurrer as to Walter J. and James but overrules it as to RLC. Since plaintiffs concede that Walter J. and James do not have standing, the court will sustain the demurrer as to them without leave to amend.

7. Ejectment: Defendant demurs to the second cause of action because RLC has not been “ousted.” Defendant relies on Payne v. Treadwell, 5 Cal. 310 (1855). “The action of ejectment is merely a possessory action, and is confined to cases where the claimant has a possessory title; that is to say, a right of entry upon the lands. To support it, four things are necessary, viz: title, lease, entry, and ouster.” Id. at 310. Defendant then relies on this quote from a case not involving an ejectment cause of action: “An ouster, in the law of tenancy in common, is the wrongful dispossession or exclusion by one tenant of his cotenant or cotenants from the common property of which they are entitled to possession.” Estate of Hughes, 5 Cal.App.4th 1607, 1612 (1992).

A subsequent Payne v. Treadwell decision more clearly states what is necessary to plead ejectment:

It seems to us that the substance of a complaint in ejectment under our practice is this: “A owns certain real property, or some interest in it; the defendant has obtained possession of it, and withholds the possession from him.” If the defendant’s holding rests upon any existing right, he should be compelled to show it affirmatively, in defense. The right of possession accompanies the ownership, and from the allegation of the fact of ownership–which is the allegation of seizin in “ordinary language”–the right of present possession is presumed as a matter of law. We do not think, therefore, any allegation beyond that of possession by the defendant is necessary, except that he withholds the possession from the plaintiff. Payne v. Treadwell, 16 Cal. 220, 244 (1860).

Plaintiff RLC has sufficiently pled “ouster” as an entity and an adverse individual cannot occupy the same space at the same time.

In his reply, defendant argues that he, as opposed to Ramirez was in possession of the premises. Defendant did not argue this point in his demurrer. It is not proper to raise new issues in a reply. “Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.” Varjabedian v. City of Madera, 20 Cal.3d 285, 295 n11 (1977). That case involved a reply filed on appeal but the principle applies equally here.

Moreover, defendant made the opposite argument in the demurrer: “Plaintiff has not plead any facts alleging that the Defendants have excluded the LLC from parcel 21. Instead, as representative for the estate of Carolyn Winther, a member of the LLC, John Henning’s presence shows that the LLC has not been excluded at all.” [Demurrer 10:23-25] Defendant cannot have it both ways, arguing that he is in possession and that he is not.

The court overrules the demurrer to the second cause of action as to RLC.

8. Trespass: Defendant argues that RLC has not stated a cause of action for trespass because John Henning had permission to enter Parcel 21.

The elements of a common law trespass are (1) the plaintiff’s ownership or control of the property; (2) the defendant’s intentional, reckless, or negligent entry on the property; (3) lack of permission to enter the property, or acts in excess of the permission; (4) actual harm; and (5) the defendant’s conduct as a substantial factor in causing the harm. CACI No. 2000; Ralphs Grocery Co. v. Victory Consultants, Inc., 17 Cal.App.5th 245, 262 (2017).

Defendant again refers to the Operating Agreement and says: “Plaintiff has not plead any facts in their complaint showing that all three members of the LLC voted or approved or failed to grant permission to the Defendants to use or access the property.” [Demurrer 12:21-23] Assuming a unanimous vote of three members is required, affirmative permission would require three members to agree to grant permission to enter the property. By pleading lack of permission, RLC is asserting no such affirmative grant of permission exists.

Defendant argues that RLC, “as an entity, on behalf of the Managers, owes a fiduciary duty to the other members of the Rancho Las Cruces, LLC and the LLC itself. [Corp. Code, § 17704.09.] Specifically, this means that the Managers on behalf of the LLC owe a duty of care, a duty of loyalty and a duty to act in good faith and with fair dealing.” Defendant contends that the managers and RLC have breached their fiduciary duty to the Estate of Carolyn Winther by bringing an action for trespass. [Demurrer 13:1-7]

Under Corp. Code § 17704.09(a), a member’s duty to the LLC and other members is limited to the duties of loyalty and care under subdivisions (b) and (c). The duties under subdivision (b) are to account to the LLC and hold as trustee for the LLC any property, profit, or benefit derived by the member (subdivision (b)(1)); to refrain from dealing with the LLC as or on behalf of a person having an interest adverse to the LLC (subdivision (b)(2)); and to refrain from competing with the LLC (subdivision (b)(3)). Under subdivision (c), “A member’s duty of care to a limited liability company and the other members in the conduct and winding up of the activities of the limited liability company is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.”

Nothing in the complaint indicates RLC’s managers breached these limited duties by bringing this cause of action.

In the reply, defendant argues that plaintiffs have not pled that defendant, as opposed to Ramirez, entered the property. Again, defendant cannot raise new issues in a reply.

The court overrules the demurrer to the third cause of action as to RLC.

9. Waste: The fourth cause of action is for waste under CCP § 732, which reads: “If a guardian, conservator, tenant for life or years, joint tenant, or tenant in common of real property, commit waste thereon, any person aggrieved by the waste may bring an action against him therefor, in which action there may be judgment for treble damages.”

Defendant demurs to this cause of action because plaintiffs have not alleged a rental, lease, or tenancy agreement between RLC and defendants. Plaintiffs plead this cause of action in the alternative to the trespass cause of action to the extent that defendants assert a lawful right to possession of the property. (Ironically, defendant argues that he has a present one-third interest in the property. [Reply 3:27-4:1] That would make him a joint tenant or tenant-in-common.)

The court overrules the demurrer to the fourth cause of action as to RLC.

10. Order: For reasons discussed above, the court sustains the demurrer of defendant John Mogens Henning, individually and as personal representative of the Estate of Carolyn Jane Winther, to the second, third, and fourth causes of action in plaintiffs’ complaint, as to plaintiff Walter J. Henning, individually and as trustee of the Walter C. Henning Trust and as trustee of the Caroline Henning Trust, and as to plaintiff James E. Henning, without leave to amend. The court overrules the demurrer in all other respects.

Motion to Strike: Defendant moves to strike ¶¶18, 22, 27, 31, 32, 33, 34, 38, 39, 42, 46, 47, 48, 49, 51, and 55 from the complaint on the grounds that they are untrue statements based on language of the deeds, a probate ruling in Case No. 1167259, and/or RLC’s operating agreement. Defendant also contends that some paragraphs should be stricken because they are legal conclusions. Plaintiffs oppose the motion without specificity, simply stating that defendant improperly seeks to have the court test the truth of allegations of the complaint.

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” CCP § 436. “A motion to strike, like a demurrer, challenges the legal sufficiency of the complaint’s allegations, which are assumed to be true.” Blakemore v. Superior Court, 129 Cal.App.4th 36, 53 (2005).

As discussed above, defendant has failed to provide the court with a copy of any documents from court files. The court has not taken judicial notice of the order to which defendant refers. Defendant appears to rely solely on the order’s alleged characterization of portion of APN 81-080-21 as the only separate property conveyed to Walter C.’s trust. To the extent that it is material to the case, that can be addressed on the evidence at trial or dispositive motion.

While the court does not accept the allegations of legal conclusions as true, there is no prohibition against stating a legal conclusion in a complaint. Every complaint contains allegations of the ultimate legal conclusion of liability. The court will not strike allegations that state legal conclusions.

Defendant lists various paragraphs, stating that they are untrue statements based on the language of deeds, the probate order, or the operating agreement. Defendant does not say what the paragraph alleges or how it is contradicted by some other document.

A memorandum in support of a motion “must contain a statement of facts, a concise statement of the law, evidence and arguments relied on, and a discussion of the statutes, cases, and textbooks cited in support of the position advanced.” CRC 3.1113(b). “Issues not supported by citation to legal authority are subject to forfeiture.” People ex rel. Alzayat v. Hebb, 18 Cal.App.5th 801, 831 n10 (2017) (applying similar CRC 8.204(a)(1)(B) applicable to appeals). “A point which is merely suggested by [a party’s] counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion.” In re Steiner, 134 Cal.App.2d 391, 399 (1955).

For the foregoing reasons, the court denies defendant John Mogens Henning’s motion to strike portions of plaintiffs’ complaint.