2011-00095046-CU-PO

Sean Suh vs. Sunrise Lodge, LLC

Nature of Proceeding: Hearing on Demurrer

Filed By: Chadbourne, Sueanne D.

Defendants Fair Oaks Residential Elderly Care (“FOREC”), et al.’s demurrer to
Plaintiffs Sean Suh et al. First Amended Complaint (“FAC”) is ruled upon as follows.

Defendants’ request for judicial notice is granted.

In this elder abuse action, Plaintiffs allege that decedent Kyong Hui Duncan was
abused and neglected while she was a resident of Fair Oaks Residential Elderly Care.

In October 2013, Plaintiffs obtained an ex parte OST for a motion to amend the initial
complaint to add two causes of action for fraudulent conveyance and constructive trust
related to defendants’ Myung and Jay Kim’s (“Kim Defendants”) alleged transfer of real
property. Prior to the hearing on the motion to amend, the parties stipulated to allow
Plaintiffs to file a first amended complaint. The Court issued an order granting the
motion pursuant to the parties’ stipulation and ordering the FAC be filed no later than
December 2, 2013. The FAC was not filed until December 13, 2013, and also the
version that was filed contained additional allegations not contained in the pleading
that was the subject of the motion to amend. Defendants now bring the instant
demurrer.

Demurrer to entire FAC

Defendants’ demurrer to the entire FAC on the basis that it violates the Court order on
the motion for leave to amend because it added allegations that were not in the
proposed FAC is overruled. Defendants’ cite to the line of authority which holds that
“[f]ollowing an order sustaining a demurrer…the plaintiff may amend his or her
complaint only as authorized by the court’s order.” (Harris v. Wachovia Mortg. (2010)
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185 Cal.App.4 1018, 1023.) However, the FAC was filed not following an order
sustaining a demurrer but rather following an order on a motion for leave to amend.
Therefore, this line of authority is not applicable.

The Court recognizes, however, that the rationale is analogous given that there is no
dispute that the FAC filed contains additional allegations (though relatively few) not in
the proposed FAC. However, the inclusion of additional allegations does not render
the entire FAC subject to demurrer. Indeed, the additional allegations (FAC ¶¶ 14-20)
relate to the fraudulent conveyance and constructive trust causes of action which
causes of action Plaintiffs were given leave to include in the FAC, despite Defendants’
contention that these allegations were essentially added to every cause of action (the
Court assumes that Defendants are referring to the fact that each cause of action
incorporates all preceding allegations), and related requests for relief. While these
might be the proper subjects of a motion to strike, they do not render the entire FAC
subject to demurrer. Nor does the delay in filing the FAC render the FAC subject to
demurrer.

Seventh and Eighth Causes of Action (Fraudulent Conveyance and Constructive
Trust) Defendants’ demurrer is sustained with leave to amend. Plaintiffs allege that the Kim
Defendants fraudulently conveyed property to their adult sons Adam and Andrew Kim
for the sole purpose of evading creditors. However, these causes of action seek the
imposition of a constructive trust on property held by non-parties as neither Adam nor
Andrew Kim have been named in this action. The transferee of an alleged fraudulent
transfer is a necessary party defendant in an action to set aside a fraudulent transfer.
(TWM Homes, Inc. v. Atherwood Realty & Inv. Co. (1963) 214 Cal.App.2d 826, 848.)
Thus the demurrer to the seventh and eighth causes of action on the basis that
Plaintiffs failed to name the transferees is sustained with leave to amend.

The demurrer to the eighth cause of action on the basis that it is “not pled with any
factual specificity and this is subject to demurrer” is overruled. Other than the quoted
language, Defendants offer no argument as to the deficiencies in the eighth cause of
action. In any event, the eight cause of action for constructive trust incorporates the
allegations from the seventh cause of action for fraudulent conveyance, sets forth a
basis for constructive trust over the allegedly fraudulently conveyed property and is
adequately pled.

Third, Fourth, and Fifth Causes of Action As Against Jay Kim (Elder Abuse, Fraud and
Wrongful Death)

Defendant Jay Kim’s demurrer to the Third, Fourth and Fifth causes of Action on the
basis that they are not pled with the requisite factual specificity is overruled.

Of course, a demurrer admits the truth of all properly pled material allegations without
regard to the difficulty of proof. The allegations of the complaint must be liberally
construed with a view to attaining substantial justice among the parties

To state a cause of action a plaintiff need only “set forth the essential facts of his case
with reasonable precision and with particularity sufficient to acquaint a defendant with
the nature, source and extent of his cause of action.” ( Youngman v. Nevada Irrigation
Dist. (1969) 70 Cal.2d 240, 245.)

With respect to the third cause of action for elder abuse, Defendant, in conclusory
fashion, argues that the FAC does not include any allegations that would show he
“engaged in individualized specific acts or recklessness, oppression, fraud and malice
towards Mrs. Duncan or any plaintiff. In fact, no individual conduct by JAY KIM is
singled out within the [FAC]. This is inadequate pleading of elder abuse against JAY
KIM.” However, Plaintiffs alleged that Myung Kim and Jay Kim operated FOREC, that
“Defendants [which includes Jay Kim] “had the responsibility to implement and enforce
policies to prevent the reckless, malicious, oppressive and fraudulent conduct
described in the [FAC]”, that “Defendants [again including Jay Kim] and their
employees misrepresented the care Decedent would be provided, and that Defendants
[again including Jay Kim], ratified their employees’ gross misconduct which consisted
of failing to monitor Decedent, allowing Decedent to endure painful falls, depriving
Decedent of adequate hydration and nutrition, restraining Decedent through use of
psychotropic medication and violently shaking Decedent as she sat in her wheelchair.
(FAC ¶¶ 5, 10, 12, 24, 41, 44-48.) Contrary to Defendant’s conclusory claim, the Court
finds that Plaintiffs have adequately alleged facts showing he engaged in specific
conduct directed towards Decedent and the demurrer to the Third Cause of Action is
overruled.
As it relates to the Fourth Cause of Action for Wrongful Death, Defendant Jay Kim
argues that cause of action must be plead with factual specificity because the right to
bring such an action is limited to those persons identified in the wrongful death statute.
Essentially they reason that given that the cause of action is based on statute, it must
be pled with specificity. The demurrer on this ground is overruled. The “elements of
the cause of action for wrongful death are the tort (negligence or other wrongful act),
the resulting death, and the damages consisting of the pecuniary loss suffered by the
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heirs.” (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4 1256, 1263.) Here,
Plaintiffs pled those elements. Specifically, they alleged that as a result of
Defendants’ (including Jay Kim) “negligent and/or intentional physical abuse of
[Decedent], the Decedent suffered injuries…all leading to and causing her
death.” (FAC ¶ 56.) They also alleged that they have been deprived of Decedent’s
companionship, etc. to their damage. (FAC ¶ 57.) Further, as discussed above,
Plaintiffs alleged Jay Kim’s individual involvement in the conduct at issue in this action.
(FAC ¶¶ 5, 10, 12, 24, 41, 44-48.) The demurrer to the Fourth Cause of Action is
overruled.

Regarding the Fifth Cause of Action for Fraud, Defendant Jay Kim simply states
without any analysis, that “plaintiffs are again required to plead specific facts against
Jay Kim individually. The FAC fails to do so…” The Court again disagrees. Indeed,
Plaintiff alleged that “facility, management, staff, and agents of Defendants
misrepresented to the family members that [FOREC] would be able to adequately care
for Decedent.” (FAC ¶ 59.) They also alleged that Defendants omitted to tell Plaintiffs
material facts about prior regulatory citations regarding resident care which would have
influenced their decisions of where to place Decedent. (FAC ¶ 61.) Again,
“Defendants” includes Jay Kim and thus Plaintiffs have alleged Jay Kim’s individual
involvement in the fraud cause of action. His demurrer to the Fifth Cause of Action is
overruled.

Fifth and Sixth Causes of Action As Against All Defendants (Fraud and Unfair Bus. &
Prof. Code § 17200)

Defendants’ demurrer is overruled.

Defendants first argue that the Sixth Cause of Action for violations of Bus. & Prof.
Code § 17200 is inadequately pled because Plaintiff failed to allege that they have no
adequate remedy at law. However, this supposed requirement is not contained in the
statute and instead is found only in a non-binding federal decision. (Heighly v. J.C.
Penny Life Ins. Co. (2003) 247 F.Supp.2d 1241, 1259-1260.) Here, not only does the
statute not contain a requirement that Plaintiffs allege an inadequate remedy at law,
but Plaintiffs are not seeking injunctive relief and any failure to allege a lack of
adequate remedy does not render their cause of action deficient. Further, Defendants’
argument is inconsistent with well-established principles under Bus. & Prof. Code §
17200. Indeed, Bus. & Prof. Code § 17200 borrows violations of other laws and treats
them as independently actionable under Section 17200. (Farmers Ins. Exch. v.
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Superior Court (1992) 2 Cal.4 377, 383.) In fact, Section 17200 allows a remedy
even where the underlying statute itself provides no private right of action. (California
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Med. Assn. v. Aetna U.S. Healthcare of Calif., Inc. (2001) 94 Cal.App.4 151, 169.)
Further, remedies under 17200 are cumulative to remedies provided by the borrowed
underlying statute. (Bus. & Prof. Code § 17205.) Thus, Defendants’ demurrer to the
fifth cause of action on the basis that Plaintiffs failed to allege an inadequate remedy at law is overruled.

Defendants next demur to the Fifth and Sixth Causes of Action on the basis that
Plaintiffs failed to allege inducement and justifiable reliance. The demurrer is
overruled. Defendants argue that Plaintiffs failed to allege a misrepresentation as to a
past or existing fact but rather only a purported promise to provide care which meets
statutory and regulatory standards. This argument, however, overlooks the allegations
of the FAC which allege that at the time of Decedent’s admission, “Defendants’ facility,
management, staff and agents” represented that they would provide Decedent
adequate care, they knew the representations were false. (FAC ¶¶ 59, 60.) Plaintiffs
allege that Defendants knew such representations were false when made because
they had yet to evaluate Decedent at the time they made the representations. (FAC ¶
61.) In addition, they alleged that Defendants not only made affirmative
misrepresentations, but also omitted material facts about prior regulatory citations
regarding resident care which would have influenced their decisions of where to place
Decedent. (FAC ¶ 61.) Defendants allegedly made the representations to retain
Decedent as a patient. (FAC ¶ 62.) Plaintiffs alleged that they reasonably relied upon
Defendants representations by deciding that Defendants’ facility was capable of caring
for the Decedent. (FAC ¶ 64.) The Court finds Plaintiff adequately alleged that
Defendants made intentional misrepresentations to induce Plaintiffs to place Decedent
in their facility and that Plaintiffs justifiably relied on those representations. The Court
therefore rejects the argument that Plaintiffs failed to allege inducement and justifiable
reliance on the basis that they alleged nothing more than a misrepresentation as to a
future promise to provide care. The Court declines to consider Defendants’ argument
raised for the first time in reply, that the fraud cause of cause of action was not pled
with the requisite specificity. Defendants only argued in the moving papers that the
fraud cause of action was deficient because Plaintiffs failed to alleged inducement and
justifiable reliance. Although the foregoing principle is generally applicable to appeals,
it appears appropriate to confirm that arguments first raised in a reply brief will not be
considered, absent a showing of good cause for the delay. “Consistent with well-
established authority, absent justification for failing to present an argument earlier, we
will not consider an issue raised for the first time in a reply brief.” (Save the Sunset
Strip Coalition v. City of West Hollywood (2001) 87 Cal.App.4th 1172, 1181, fn. 3.)

As a result, Defendant Jay Kim’s demurrer to the Third, Fourth, and Fifth Causes of
Action is overruled. All Defendants’ demurrers to the Fifth and Sixth Causes of Action
are overruled. All Defendants’ demurrer to the Seventh and Eighth Causes of Action
are sustained with leave to amend.

Plaintiffs may file and serve and amended complaint no later than April 7, 2014.
Defendants shall file and serve their responses within 10 days thereafter, 15 days if
the amended complaint is served by mail. (Although not required by any statute or
rule of court, Plaintiffs are requested to attach a copy of the instant minute order to the
amended complaint to facilitate the filing of the pleading.)

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or
other notice is required.