Violet Swan v.Christy Yohanan

Case Name: Swan v. Yohanan, et al.
Case No.: 1-14-CV-262444

Defendants Christy Yohanan (“Yohanan”) and Avalon Labels, Inc. (“Avalon”) (collectively, “Defendants”) demur to the complaint filed by plaintiff Violet Swan. Yohanan also moves to strike portions of the complaint.

Defendants’ demurrer on the ground of uncertainty is OVERRULED. The complaint is not so unclear that Defendants cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against each defendant. (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616 [As a general matter, demurrers based on uncertainty are generally disfavored and will be sustained only where the allegations of the complaint are so unintelligible that the defendant cannot reasonably respond to them.].)

Avalon’s demurrer on the ground that the complaint fails to state facts sufficient to constitute a cause of action because of improper alter ego allegations is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. Plaintiff alleges that Avalon’s liability is derivative of Yohanan’s actions. (Complaint, ¶ 10.) “The two requirements for applying the alter ego doctrine are that (1) there is such a unity of interest and ownership between the corporation and the individual or organization controlling it that their separate personalities no longer exist, and (2) failure to disregard the corporate entity would sanction a fraud or promote injustice.” (Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892.) Plaintiff alleges that she is “informed and believes that Defendant Avalon Labels, Inc. is a mere shell, instrumentality, conduit and agent for Defendant Yohanan.” (Complaint, ¶ 10.) Plaintiff further alleges that Avalon was wholly owned and/or controlled by Yohanan and is therefore the alter ego of Yohanan, as Yohanan completely controlled, dominated, managed and operated Avalon. (Id.) While Plaintiff has alleged the legal elements of alter ego in her complaint, Plaintiff has provided no facts supporting these elements that, if true, would show that alter ego liability should be imposed. Such bare conclusory allegations are insufficient to justify the court in disregarding the corporate entity in the absence of allegations of facts from which it appears that justice cannot otherwise be accomplished. (See Vasey v. California Dance Co. (1977) 70 Cal. App. 3d 742, 749.)

Yohanan’s demurrer to the first cause of action for breach of fiduciary duty is OVERRULED. “The elements of a cause of action for breach of fiduciary duty are: (1) existence of fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.” (Mosier v. Southern California Physicians Insurance Exchange (1998) 63 Cal.App.4th 1022, 1044; see also CACI, No. 605.) “While breach of fiduciary duty is a question of fact, the existence of legal duty in the first instance and its scope are questions of law.” (Kirschner Brothers Oil, Inc. v. Natomas Co. (1986) 185 Cal.App.3d 784, 790.) “A fiduciary or confidential relationship can arise when confidence is reposed by persons in the integrity of others, and if the latter voluntarily accepts or assumes to accept the confidence, he or she may not act so as to take advantage of the other’s interest without that person’s knowledge or consent.” (Oates v. City of Lincoln (2001) 93 Cal.App.4th 25, 35.)

Yohanan argues that Plaintiff fails to allege the existence of a fiduciary relationship. Here, Plaintiff alleges that Yohanan wrongfully acted as Plaintiff’s attorney-in-fact after Plaintiff appointed Yohanan as her springing power of attorney which was only to come into effect if Plaintiff became mentally incapacitated. (Complaint, ¶ 14.) As Plaintiff correctly notes, an attorney-in-fact is deemed to owe a fiduciary duty to her principal. (See Prob. Code, § 4230.) Accordingly, Plaintiff sufficiently alleges the existence of a fiduciary relationship between Plaintiff and Yohanan.

Yohanan’s demurrer to the third and fourth causes of action for fraud and negligent misrepresentation, respectively, is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. Fraud must be pleaded with specificity, i.e., the plaintiff must plead facts which show how, when, where, to whom, and by what means the misrepresentations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Although Plaintiff alleges that Yohanan misrepresented to third parties that she had the authority to lease Plaintiff’s property and manage Plaintiff’s financial accounts (Complaint, ¶¶ 36, 44.), Plaintiff does not allege when the misrepresentations were made, to which “third parties” the misrepresentations where made, and the means by which the misrepresentations were made. Accordingly, these causes of action have not been pleaded with specificity.

Yohanan’s demurrer to the fifth cause of action for intentional infliction of emotional distress (“IIED”) is OVERRULED. Yohanan argues that the acts which she is alleged to have committed do not rise to the level of extreme and outrageous. In order to state a claim for IIED, the conduct alleged to be outrageous must “be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Cervantez v. J.C. Penney Co. (1979) 24 Cal.3d 579, 593.) Plaintiff alleges that Yohanan served her with letters, notices, and documentation, all of which were made to appear like official court documents but were in fact not as such. (Complaint, ¶ 17.) Plaintiff further alleges that Yohanan personally served her with a document titled “Notice of Default,” when there has never been any such default entered against Plaintiff’s property. (Complaint, ¶ 18.) These allegations are sufficient to constitute extreme and outrageous conduct.

Yohanan’s demurrer to the sixth cause of action for negligent infliction of emotional distress (“NIED”) is OVERRULED. “Negligent infliction of emotional distress is not an independent tort; it is the tort of negligence to which the traditional elements of duty, breach of duty, causation, and damages apply.” (Ess v. Eskaton Properties, Inc. (2002) 97 Cal.App.4th 120, 126.) Yohanan argues that this is a duplicative cause of action, as Plaintiff already alleges a negligence claim. While this cause of action may be redundant, it states facts sufficient to constitute a cause of action.

Yohanan’s demurrer to the seventh cause of action for conversion is OVERRULED. First, Yohanan argues that Plaintiff has only pleaded legal conclusions and not factual allegations. However, Plaintiff has alleged that Yohanan has taken specific items and monies from her, and that Yohanan has converted these items and monies for her own use. (Complaint, ¶¶ 65, 66.) These allegations contain sufficient facts to state a conversion claim. Second, Yohanan contends that this claim has not been sufficiently alleged because Plaintiff’s allegations are contradictory, i.e., alleging that “Defendant was both the power of attorney for Plaintiff…and was not the power of attorney for Plaintiff.” (Demurrer, p. 10.) Yohanan misunderstands the allegations. Plaintiff alleges that Yohanan was appointed to be Plaintiff’s agent, pursuant to a springing power of attorney, which was to be exercised only upon Plaintiff’s mental incapacitation. (Complaint, ¶ 13.) Plaintiff further alleges that Yohanan wrongfully exercised her power of attorney duties and wrongfully acted as Plaintiff’s agent because Plaintiff has never been mentally incapacitated. (Complaint, ¶ 14.) There is nothing contradictory about these allegations, and therefore Yohanan’s argument fails.

Yohanan’s demurrer to the eighth and ninth causes of action for elder abuse and constructive fraud, respectively, is OVERRULED. Yohanan makes the same argument here that she does for the conversion claim above, i.e., these claims have not been sufficiently alleged because Plaintiff’s allegations regarding the power of attorney are contradictory. As discussed in the previous paragraph, there is nothing contradictory about Plaintiff’s allegations. Thus, this argument lacks merit.

Yohanan’s demurrer to the tenth cause of action for negligence is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. Plaintiff alleges that Yohanan failed to exercise reasonable care and skill in performing her agent duties for Plaintiff. (Complaint, ¶ 87.) However, there are no facts specifying what duties were breached and how they were breached.

The motion to strike paragraphs 29, 41, 48, 56, 70, 77, 84, and paragraph 7 from the Prayer for Relief is GRANTED WITH 10 DAYS’ LEAVE TO AMEND, as Plaintiff fails to allege a civil penalty or fine such that she is entitled to treble damages under Civil Code section 3345. (See Clark v. Superior Court (2010) 50 Cal. 4th 605, 610 [the treble penalty authorized by Civil Code section 3345 when a senior citizen or disabled person is harmed applies only when a civil penalty or fine designed to punish is imposed].)

The motion to strike paragraph 3 from the Prayer for Relief is GRANTED WITHOUT LEAVE TO AMEND, as “no claim for exemplary damages shall state an amount or amounts.” (Civ. Code, § 3295, subd. (e).)

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