2017-00215393-CU-OR

John J. DeGrace, Jr. vs. Brad (Bradford) McCarty

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

Filed By: Sawamura, Michael A.

If requested, oral argument will take place on Monday January 22, 2018 at 2:00 p.m. in Department 53. If that date is not convenient, the parties may meet and confer on a later date and inform the court clerk of the date no later than 4:00 p.m. on January 18, 2018.

Defendant Bradford McCarty’s Demurrer to the First Amended Complaint (“FAC”) is sustained with leave to amend for failure to state facts sufficient to constitute a cause of action, for uncertainty, and for defect (non-joinder) of parties.

Plaintiffs are seeking to quiet title against the claims of Defendant Brad (Bradford) McCarty (“McCarty”) as “Co-Trustee” of the Lorinza Laster Family Trust. Plaintiffs allege they are the fee simple owners of property located at 461 Morrison Avenue, Sacramento, CA 95838 pursuant to a Purchase Agreement and Trust Transfer Deed dated August 4, 2016 in which Lorinza Laster purported to transfer the property to plaintiffs from a Family Trust. (FAC Ex. 1 and 2) Plaintiffs further allege the existence of two “Quitclaim Deeds” to the same property dated May 4, 2017 and May 16, 2017. (FAC Exhibit “5” and “6”) The Quitclaim Deeds were executed by McCarty as an “ostensible agent” for Lorinza Laster. Plaintiffs allege McCarty falsely Quitclaimed the interest of Lorinza Laster in the same real property to a family trust. ( FAC ¶ 7) Plaintiffs allege that Lorinza Laster did not at any time after February 22, 2017 have the mental condition or capacity to sign, consent to, or acknowledge the Quitclaim Deeds or authorize any person or persons to do so.

Plaintiffs contend they were already owners of the property pursuant to the August 4, 2016 purchase agreement and Trust Transfer deed of that date, that was later recorded January 17, 2017. (FAC ¶ 8) Plaintiffs allege that the Quitclaim Deeds dated May 4, 2017 and May 16, 2017 are invalid, illegal and voidable because decedent,

Lorinza Laster was not on the title to the house at the time, due to the fact that the property had been transferred to plaintiffs on August 4, 2016 and because Lorinza lacked capacity to execute any Legal documents after February 17, 2017. (See FAC Ex.5 and 6) (“FAC ¶ 15) Lorinza Laster died on June 7, 2017. (FAC ¶ 4) McCarty caused a Notice to Quit premises to be served on the plaintiffs after the filing of the May 2017 Quit claim deeds, causing them emotional distress. (FAC ¶¶ 52, 53)

Plaintiffs allege the following causes of action” 1st cause of action Cancellation of Quitclaim Deeds, 2nd cause of action for Quiet Title, 3rd cause of action for Deed Procured by Fraud, 4th cause of action Deed Procured by undue influence, 5th cause of action Fraud, 6th cause of action Intentional Infliction of Emotional Distress, 7th cause of action Negligent Infliction of Emotional Distress, and 8th cause of action for Elder Abuse of Lorinza Laster.

Defendant demurs to the entire complaint as a whole on the ground of uncertainty, and further contends that each cause of action fails to state facts sufficient to constitute a cause of action, is uncertain, that plaintiffs lack standing to bring the claims, and that there is a defect or misjoinder of parties.

Defendant further contends that the claims for punitive damages fail to state facts sufficient to constitute a cause of action. A motion to strike, not a demurrer, is the proper procedural mechanism for challenging a claim for relief. Hillard v A.H. Robins (1983) 148 Cal.App.3d 374, 391. A demurrer is properly brought against the entire complaint or against an entire cause of action or defense, not to a part of a cause of action. (CCP §430.50; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047.) Punitive damages are merely incident to a cause of action, and can never constitute the basis thereof. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 163-164.)

The Court construes the demurrer to the punitive damages claims as a motion to strike and the motion is granted.

1st cause of action Cancellation of Quitclaim Deeds, 2nd cause of action for Quiet Title

The demurs to the above causes of action are sustained with leave to amend on the bases of failure to state facts sufficient to constitute a cause of action, defect or misjoinder of parties, and uncertainty. The allegations of the Complaint are inconsistent with the Exhibits attached to the Complaint. Plaintiffs allege that the property was transferred to them from a Family Trust on August 4, 2016. However, the real property was not included in the Attachment A to the Family Trust signed August 4, containing a description of the property that was placed in the Trust. (See FAC Exhibit 7, Attachment A). Plaintiff’s also rely on an August 4, 2016 Affidavit of Death executed by Lorinza Laster on August 4, 2016 in which his deceased spouse’s interest was transferred to Lorinza as an individual and not to a family trust. (FAC ¶ 28) Exhibit 10 is a long form deed of trust dated August 4, 2016 which lists Lorinza Laster, A Widower, as the Beneficiary, not a Trust. (FAC Ex 10) Plaintiff’s rely on the Trust Transfer document to support their alleged fee simple ownership of the property, yet according to their allegations, read in conjunction with the Exhibits to the FAC, the property was not in the Trust and, if this is so, the Trust Transfer Deed could not have transferred property from the trust to the plaintiffs. It bears noting that the Court may take notice of exhibits attached to the complaint. If facts appearing in the exhibits contradict those alleged in the complaint, the facts in the exhibits take precedence. (

Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 567-568.)

The applicable statute of frauds in the Probate Code provides that a trust in relation to real property is not valid unless evidenced by one of the following methods:(a) By a written instrument signed by the trustee, or by the trustee’s agent if authorized in writing to do so. (b) By a written instrument conveying the trust property signed by the settlor, or by the settlor’s agent if authorized in writing to do so. Probate Code Section 15206: In Osswald v. Anderson (1996), 49 Cal. App. 4th 812, the Court held that two trusts established by the mother and stepfather of the intended beneficiary were invalid because they failed to comply with the statute of frauds (Prob C § 15206). The intended beneficiary was not entitled to the proceeds of the real property involved because the first trust instrument indicated the trust property was in “schedule A,” but the schedule was not attached. Although their attorney testified that the mother and stepfather intended that their home was to be the trust property, the statute of frauds forbids the creation of an express trust in real property by verbal declaration of the owner. Osswald v. Anderson (1996), 49 Cal. App. 4th 812, 818.

While it is a general rule that facts alleged in a complaint are accepted as true for purposes of ruling on a demurrer, courts will not accept as true allegations of fact that are inconsistent either with attached documents or specific allegations set forth in other areas of the pleading. ” [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.” Dodd v. Citizens Bank (1990) 222 Cal.App.3d 1624, 1627, emphasis added. (See also Software Design & Application Ltd. v.Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 484 (finding that “allegations in a complaint must yield to contrary facts found in exhibits to the complaint.”); Del E. Webb Corp v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604). Similarly, if a plaintiff alleges general conclusory allegations, “but also avers specific additional facts which either do not support such conclusion, or are inconsistent therewith, such specific allegations will control.. ..” Careau & Co. v Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1390-91. Thus, although plaintiffs allege that their claim to quiet title and cancellation of deeds is based on a purchase and sale agreement and a Trust Transfer Deed dated August 4, 2016, the exhibits to the Complaint are inconsistent with these allegations, as it appears the Trust instrument did not place the house in the trust and that, at the time of the transfer, the property was owned by Lorinza Laster, not the Trust, and therefore the Trust Transfer could not have transferred property that was not previously placed in the trust.

A demurrer may be sustained on the ground of a defect or misjoinder of parties. CCP 430.10(d). A defect (or non-joinder) of parties exists when some third person or entity is a “necessary” or “indispensible” party to the action, and hence must be joined before the action may proceed. See Rutter Group, Weil & Brown, Civil Procedure Before Trial, section 7:78 -7:80. A defect (non-joinder) is apparent on the face of the FAC.

The FAC alleges wrongdoing on behalf of the defendant as an individual only. However, McCarty is also sued in his capacity as purported trustee of the trust, and plaintiffs seek to challenge a Quitclaim deed to McCarty as trustee of a Trust regarding property that is being held in the Trust. Thus, plaintiffs have failed to join an indispensable party, McCarty, in his capacity as Co-Trustee of the Family Trust. A person is an indispensable party when the judgment to be rendered necessarily must affect his rights. Hartman Ranch Co. v. Associated Oil Co. (1937) 10 Cal 2d 232. Further, the Court rejects the assertion that decedent Lorinza Laster is an

indispensable defendant in this case. Plaintiffs are alleging claims on his behalf, not against him.

Plaintiffs are given leave to amend to cure the defects.

3rd cause of action Fraud, 4th cause of action Undue Influence, 5th cause of action Fraud, 8th cause of action Elder Abuse as to Lorinza Lester.

Sustained with leave to amend for failure to state facts sufficient to constitute a cause of action. These causes of action belong to decedent, Lorinza Lester, not the plaintiffs. The fraud, undue influence, and elder abuse are alleged to have been committed against a deceased person, not the plaintiffs. Plaintiffs have not alleged any facts to support standing on behalf of decedent’s estate (either as personal representatives or successors in interest under CCP 377.30) Plaintiffs in opposition allege that they are the successors in interest. This, however, is not an allegation in the operative complaint and defendant contends plaintiffs have not filed the required declaration under CCP 377.32.

A demurrer may be sustained on the ground of a defect or misjoinder of parties. CCP 430.10(d). A defect (or non-joinder) of parties exists when some third person or entity is a “necessary” or “indispensible” party to the action, and hence must be joined before the action may proceed. See Rutter Group, Weil & Brown, Civil Procedure Before Trial, section 7:78 -7:80. A defect (non-joinder) is apparent on the face of the FAC.

A defect (non-joinder) is also apparent on the face of the FAC. The FAC has named only McCarty in his individual capacity. However, the allegations of the FAC implicate McCarty individually as well as in his capacity of purported trustee of the trust. Therefore, it appears that plaintiff has failed to join an indispensable party, McCarty in his capacity as Co-Trustee of the Family Trust.

6th cause of action Intentional Infliction of Emotional Distress, 7th cause of action for Negligent Infliction of Emotional Distress.

Plaintiffs claims for emotional distress are based on McCarty’s serving them a Notice to Quit the premises they claim to own. Due to the uncertainty arising from the conflicting exhibits, plaintiffs have not alleged facts to support a claim for emotional distress against McCarty because they have not alleged facts to support their fee ownership of the property.

An claim for intentional infliction of emotional distress requires outrageous conduct, which “[m]ust be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” KOVR-TV V. S.Ct (1995) 31 Cal.App.4th 1023, 1028. “Liability for intentional infliction of emotional distress does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.” Hughes v. Pair (2009) 46 Cal.4th 1035, 1051. It is not enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by malice, or a degree of ‘aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Cochran v. Cochran (1998) 65 Cal.App.4th 488,496. Given the inconsistencies in the FAC regarding the ownership of the property, which must be construed against plaintiff, the allegations of

the complaint are not sufficiently outrageous.

As to the claim for negligent infliction of emotional distress, there is no independent cause of action for negligent infliction of emotional distress; rather, this is a species of negligence. Delfino v. Agilent Technologies, Inc. (2007) 145 Cal.App.4th 790,818. Plaintiffs have alleged no facts to support any duty in negligence on behalf of the defendant.

The Motion to Strike punitive damages language is granted, with leave to amend.

Plaintiffs’ opposition fails to adequately address the points made in the moving papers that, based on the contents of the exhibits, the real property was not conveyed to the trust as required by the Probate Code, and that therefore it could not have been conveyed to the plaintiffs pursuant to a Trust Transfer Deed.

Plaintiffs may file and serve a Second Amended Complaint on or before January 31, 2018. Response to be filed within 30 days of service of the Second Amended Complaint, 35 days if served by mail.