Case Name: George Aberth, et al. v. Alice Aberth, et al.
Case No.: 18CV322275

This is a dispute between Plaintiffs George Aberth, Susan Aberth and Diane Hazelwood (“Plaintiffs”), the adult children of decedent William Aberth (“Decedent”) and Defendant Alice Aberth, Decedent’s second wife who is unrelated to Plaintiffs. In general Plaintiffs allege that Defendant exerted undue influence over Decedent in his final years such that he altered his estate plan at Defendant’s urging and Plaintiffs did not receive what they expected (and what they allege Decedent intended) from the estate upon Decedent’s death on September 10, 2017. This dispute is also the subject of an action in the Probate division of this Court, case no. 18PR183155. In this action, Defendant is being sued in her individual capacity, as the alleged “personal representative” of Decedent, and as the Trustee of the 2004 Aberth Family Trust dated December 13, 2004 and restated on January 24, 2011 (the “2011 Restatement”) and June 30, 2017 (the “2017 Restatement”).

Plaintiffs’ original complaint in this matter was filed on January 24, 2018. Defendant then filed a petition to determine the validity of the Trust in the Probate division on April 3, 2018. Plaintiffs filed an opposition to that Petition on June 13, 2018. Plaintiffs’ operative pleading in this action, the First Amended Complaint (“FAC”), was filed on July 31, 2018. Plaintiffs allege that they are named beneficiaries of the Trust and successors-in-interest to Decedent’s Estate. (FAC at ¶ 11.)

Currently before the Court are two matters: 1) Defendant’s demurrer to 18 of the 20 causes of action alleged in the FAC (the first through sixth, eighth through twelfth, and fourteenth through twentieth causes of action), and; 2) Defendant’s motion to strike portions of the FAC. Defendant has submitted a request for judicial notice in support of both the demurrer and motion to strike.

Request for Judicial Notice
A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)

As an initial matter, the Court on its own authority takes judicial notice of the docket in case no. 18PR183155 pursuant to Evidence Code § 452(d). The Court notes that a hearing on Defendant’s Petition to Determine the Validity of the Trust is set for December 12, 2018, the day after the hearing on this demurrer and motion to strike.

Defendant, “[p]ursuant to Evidence Code § 452(d)(1),” asks the Court to take judicial notice of three documents (exhibits A-C to the request) and “the absence” of two other documents. The request for judicial notice of the absence of documents is DENIED. Notice of Exhibit A (a copy of the FAC) is DENIED as unnecessary. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn.1 [denying as unnecessary a request for judicial notice of pleading under review on demurrer].) Notice of exhibit B (a copy of the Defendant’s Petition to Determine Validity of Trust filed in case no. 18PR183155 on April 3, 2018) and Exhibit C (a copy of Decedent’s June 2017 Will, attached as exhibit H to the Defendant’s Petition in Case no. 18PR183155) is GRANTED. As neither document is a court order or judgment they are noticed only and to their existence and filing dates and not as to the truth of their contents or the contents of attached exhibits.

Defendant’s further request that, “[p]ursuant to Evidence Code § 452(d)(e)(1)” the Court take judicial notice of copies of Local Probate Rules 1A and 1C1 (exhibit D to the request) is DENIED as unnecessary. These local rules do not control the jurisdiction of this Court in the manner Defendant asserts in her demurrer and motion to strike.

Demurrer to the FAC
In ruling on a demurrer the Court treats it as “admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214.)

Allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. Similarly, facts appearing in exhibits attached to the complaint (part of the “face of the pleading”) are given precedence over inconsistent allegations in the complaint. See Holland v. Morse Diesel Int’l, Inc. (2001) 86 Cal App 4th 1443, 1447; Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474 [rejecting allegation contradicted by judicially noticed facts]. However, a demurrer cannot be turned into an evidentiary hearing through attempts to have the Court take judicial notice of contents of documents. “For a court to take judicial notice of the meaning of a document submitted by a demurring party based on the document alone, without allowing the parties an opportunity to present extrinsic evidence of the meaning of the document, would be improper. A court ruling on a demurrer therefore cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer. In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114-115, internal citations omitted.)

First Cause of Action (Breach of Contract)
The first cause of action alleges in pertinent part that Decedent and Plaintiff George Aberth entered into an oral contract “when George Aberth was a college student. In exchange for maintaining and improving the property located at 1425 Alma St., Palo Alto, CA, [Decedent] promised to leave the real property to George Aberth upon his death. This contract was evidenced by the 2011 Restatement. George Aberth continuously maintained the Alma Property until [Decedent’s] death, completely performing his agreement with [Decedent].” (FAC at ¶ 22, brackets added.) Prior allegations in the FAC state that George Aberth was a college student in the late 1970’s, that he moved into the Alma Property in 1985 and that he has resided there ever since, paying rent first to Decedent and then to Defendant after Decedent’s death. (See FAC at ¶¶ 13-15.)

As an initial matter, Defendant’s demurrer to this cause of action on the ground of uncertainty (Demurrer at p. 2:2) is OVERRULED. Not only is this ground for demurrer not supported by any argument in Defendant’s papers, but it is readily apparent from Defendant’s other arguments that Defendant understands what the first cause of action alleges and that there is no true uncertainty.

Defendant initially argues that the claim is barred by the statute of frauds. At the time the oral contract was allegedly made (the late 1970s, prior to the 1983 revisions of statutes governing wills and intestate succession) an agreement to devise or bequeath property, or to make any provision for any person by will, had to be in writing pursuant to former Civil Code § 1624(6). “A general demurrer may be interposed when the complaint shows on its face that the agreement sued on is within the statute of frauds and does not comply with its requirements.” (Parker v. Solomon (1959) 171 Cal.App.2d 125, 136.)

Defendant’s demurrer to the breach of contract claim on the ground that it fails to state sufficient facts because it violates the statute of frauds is OVERRULED. While the statute of frauds applies to the alleged contract the facts alleged in the FAC are sufficient to establish that at the pleading stage Defendant is estopped from asserting the statute of frauds. An oral agreement subject to the statute of frauds will still be held binding in the absence of a writing “if (a) the plaintiff, in reliance upon it, has so changed his or her position that unconscionable injury would be suffered, or (b) the defendant, having accepted the benefits if the oral contract, would be unjustly enriched by nonenforcement.” (See 1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts, §410, pp. 435-436 citing among others Monarco v. Lo Greco (1950) 35 Cal.2d. 621, 623.) Following the Monarco decision the allegations of the FAC, assumed to be true for purposes of demurrer, are sufficient to demonstrate the possibility of unconscionable injury to Plaintiff George Aberth and unjust enrichment of Decedent’s Estate and Defendant if the oral agreement is not found binding.

Defendant’s argument that the first cause of action fails to state sufficient facts because of a lack of consideration is unpersuasive and the demurrer on that basis is OVERRULED. This argument is predicated on the FAC’s sixteenth cause of action for breach of contract, which alleges that Decedent and his first wife (Theresa Aberth) “mutually agreed that the first spouse who died would leave his or her estate to the surviving spouse in exchange for the promise that the surviving spouse would leave the combined estate to their children.” (FAC at ¶ 141.) That Decedent allegedly had an agreement with his first wife to leave their combined assets to their children did not obligate Decedent to specifically leave the Alma property to Plaintiff George Aberth.

Defendant’s additional argument that this claim would place inconsistent obligations on the Trustee (Defendant) does not describe a failure to state sufficient facts nor does the argument that the claim seeks improper damages. The claim (and the FAC in general) asserts that Decedent lacked capacity in June 2017 and that the 2017 Restatement is the product of fraud and undue influence by Defendant. That Plaintiffs may not be able to recover damages “in the amount of six-sevenths the value of the Alma Property” (FAC at 23) does not establish a failure to adequately allege damages proximately caused by the breach of contract. Plaintiffs adequately allege that they have been damaged by not receiving what they assert Decedent wished them to have upon his death.

Finally Defendant’s argument that the first cause of action fails to state sufficient facts because Defendant is not a party to the alleged oral contract is not a basis for sustaining the demurrer. A cause of action against a decedent may only be asserted against the decedent’s personal representative or, to the extent provided by statute, against the decedent’s successor in interest. (Code Civ. Proc., § 377.40.). A personal representative is an executor, administrator, administrator with the will annexed, special administrator, successor personal representative, public administrator acting pursuant to Probate Code section 7660, or a person who performs substantially the same duties under the law of another jurisdiction. (Prob. Code, § 58.) The FAC at ¶ 9 alleges that Defendant is Decedent’s named personal representative and that allegation is accepted as true on demurrer.

Second though Fifth Causes of Action (Inducing Breach of Contract, Intentional Interference with Contractual Relations, Intentional Interference with Prospective Economic Relations, Negligent Interference with Prospective Economic Relations)
Defendant’s demurrer to these four cause of action on the ground that they fail to state sufficient facts is OVERRULED.

Defendant’s argument that this Court lacks jurisdiction over these four claims and that they can only be brought in the Probate Division of the Court is incorrect. Lack of subject matter jurisdiction means a total absence of power by a court to hear or determine a case. (Cummings v. Stanley (2009) 177 Cal.App.4th 493, 503 citing Totten v. Hill (2007) 154 Cal.App.4th 40, 46.) Thus, “[t]he principle of ‘subject matter jurisdiction’ relates to the inherent authority of the court involved to deal with the case or matter before it.” (Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1343-44 (Harnedy).) Typically, a California court only lacks subject matter jurisdiction when the action arises from claims where federal courts exercise exclusive jurisdiction. (See, e.g., Lockwood v. Sheppard, Mullin, Richter & Hampton (2009) 173, Cal.App.4th 675, 683-684 [state courts lack subject matter jurisdiction over patent matters]; Ross v. Universal Studios Credit Union (2002) 95 Cal.App.4th 537, 542 [state courts lack subject matter jurisdiction over matters arising out of bankruptcy].)

The superior courts of California are vested with jurisdiction to hear and determine matters regarding the administration of trusts. (See Harnedy, supra, 110 Cal.App.4th at p. 1345 [“Probate Code sections 17000 and 17001 … were enacted [ ] to make clear that the probate departments of the California superior courts could exercise the full and complete jurisdiction of a regular superior court when hearing and deciding a probate matter.”].) In making this argument Defendant confuses subject matter jurisdiction with the decision of the superior court to organize itself into multiple departments. There is no separate subject matter jurisdiction between the different departments of a superior court. (B.F. v. Super. Ct. (2012) 207 Cal.App.4th 621, 628 [the distinction between a juvenile department and a probate department is administrative and does not change subject matter jurisdiction].) The division of the superior court into departments is a matter of convenience, and does not impact the subject matter jurisdiction of the court as a whole. (Ibid; Estate of Bowles (2008) 169 Cal.App.4th 684, 695 (Bowles).) The question of whether an action has been filed in the wrong department does not implicate a court’s power to hear the case and act. (See Bowles, supra, 169 Cal.App.4th at p. 695; see also Harnedy v. Whitty, supra, 110 Cal.App.4th at p. 1344.) Even if it were assumed that these claims, as currently pleaded, involved the internal affairs of a Trust such that exclusive jurisdiction over the claims lies with the probate division (see Probate Code §§ 17000 and 17200, subd. (b)(12)), this Court does not lack fundamental subject matter jurisdiction over the claims as the probate division of the Santa Clara County Superior Court has “primary” jurisdiction and this Court has “secondary” jurisdiction. (See Harnedy, supra, 110 Cal.App.4th at pp. 1342-45 [finding that by hearing a matter within the probate court’s exclusive jurisdiction, a trial court in equity acts merely in excess of jurisdiction, not without jurisdiction]; see also Fisher v. Super. Ct. of Ventura County (1937) 23 Cal.App.2d 528, 531; Dowdall v. Super. Ct. of San Francisco (1920) 183 Cal. 348, 353.)

Defendant’s argument that the second through fifth causes of action fail to state sufficient facts because the claims only protect alleged business relationships and not testamentary relationships is unpersuasive. “[A] careful reading of the cases shows that no such blanket prohibition was ever set forth.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1055.) Defendant’s related argument that the fourth and fifth causes of action fail to state sufficient facts because, being based on a testamentary relationship, they fail to allege a probable expectancy of economic benefit also fails to present a basis for sustaining the demurrer. “As Prosser and Keaton points out, there is no essential reason ‘refusing to protect such non-commercial expectancies, at least where there is a strong probability that they would have been realized.’ . . . [U]nlike the chance of winning at trial or the chance of winning a horserace, the chance of inheriting is not inherently speculative.” (Id. at p. 1056, internal citation omitted, emphasis in original.)

Defendant’s further argument that the second and third causes of action fail to state sufficient facts because the underlying contract is invalid is unpersuasive. As discussed above in the discussion of the first cause of action, Defendant has failed to establish at the pleading stage (where the FAC’s factual allegations are assumed to be true) that the alleged contract between Decedent and Plaintiff George Aberth is invalid.

Sixth Cause of Action (Intentional Interference with Expected Inheritance)
Defendant’s demurrer to this cause of action (“IIEI”) on the ground that it fails to state sufficient facts is SUSTAINED WITHOUT LEAVE TO AMEND.

California generally recognizes the tort of IIEI (contrary to Defendant’s argument), but prohibits such a claim where there is an adequate probate remedy available. (See Beckwith, supra, 205 Cal.App.4th at 1051052 [“By applying a . . . last recourse requirement to the tort in California, the integrity of the probate system is protected because where a probate remedy is available, it must be pursued.”]) Here the judicially noticed facts (the existence of case no. 18PR183155 and Plaintiffs’ filing of an opposition to the Petition in case no. 18PR183155 on June 13, 2018) demonstrate that Plaintiffs have an adequate probate remedy – Plaintiffs can and have asserted in the Probate action that the wills and trusts submitted by Defendant should be found invalid.

Eighth Cause of Action (Breach of Fiduciary Duty)
Defendant’s demurrer to this cause of action on the ground that it fails to state sufficient facts because Plaintiffs lack standing to sue on behalf of Decedent is OVERRULED. A demurrer does not lie to only part of a cause of action. The claim is in part based on the alleged fiduciary duty Defendant owed to Decedent as co-Trustee. There is California authority supporting Plaintiffs’ standing to sue on behalf of Decedent. The California Supreme Court has found that “after the settlor has died and can no longer protect his own interests, the beneficiaries have standing to claim a violation of the trustee’s duty to the settlor to the extent that violation harmed the beneficiaries’ interests.” (Estate of Giraldin (2012) 55 Cal.4th 1058, 1071, emphasis in original.) “Code of Civil Procedure section 377.30 is not the exclusive designation of standing when it comes to claims for breach of a trustee’s duty to a deceased settlor. . . . To be sure, ‘[a]s a general rule, the trustee is the real party in interest with standing to sue and defend on the tryst’s behalf.’ But this general rule does not extend to an action alleging the trustee itself breached a duty.” (Id. at 1075-1076, internal citations omitted.)

Further, the FAC repeatedly alleges that Decedent lacked mental capacity in the last years of his life and particularly in June 2017. (See FAC at ¶¶ 7, 17, 20, 28.) These factual allegations, including that in June 2017 Decedent was often unable to recognize his daughter and could not understand anything but rudimentary instructions, are accepted as true on demurrer. Accordingly, at least at the pleading stage, Defendant cannot establish that Plaintiffs lack standing because of the terms of any document executed by Decedent in June 2017, including the June 30, 2017 Will and the June 30, 2017 Trust Restatement, as these documents are alleged to be the products of undue influence, fraud and elder abuse.

Ninth, Eleventh and Twelfth Causes of Action (Conversion, Undue Influence, Fraud by Concealment)
Defendant’s demurrer to these three causes of action on the ground that they fail to state sufficient facts because Plaintiffs lack standing is OVERRULED.

While Estate of Giraldin does not clearly apply to these claims Defendant’s argument that Plaintiffs lack standing to bring these claims is again based on documents executed by Decedent at a time when the FAC alleges he lacked mental capacity. The FAC’s allegations regarding Decedent’s lack of capacity are accepted as true on demurrer.

Tenth Cause of Action (Constructive Trust)
A constructive trust is an equitable remedy, not a cause of action in and of itself, which can be imposed against one who wrongfully detains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act. (See Civ. Code, §§ 2223 and 2224; see also Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1332; PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398; Meister v. Mensinger (2014) 230 Cal.App.4th 381, 399.)

Defendant’s demurrer to the tenth cause of action on the basis that it fails to state sufficient facts because a constructive trust is a remedy and not a cause of action is SUSTAINED WITHOUT LEAVE TO AMEND as it is unopposed by Plaintiffs. “Plaintiffs agree with Defendant’s position that the claim should be regarded not as an independent causes of action, but rather as a remedy to other causes of action.” (Plaintiffs’ Opp. at p. 17:2-3.)

Fourteenth Cause of Action (Equitable Estoppel)
Defendant’s demurrer to the fourteenth cause of action on the ground that it fails to states sufficient facts is SUSTAINED with 10 days’ leave to amend. Defendant’s sole argument is that equitable estoppel is not an independent cause of action, citing Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768. Plaintiffs state in their opposition that their intention was to allege promissory estoppel and leave to amend is granted on that basis.

“The elements of a cause of action for promissory estoppel are (1) a promise, (2) the reasonable expectation by the promisor that the promise will induce reliance or forbearance, (3) actual reliance or forbearance, and (4) the avoidance of injustice by enforcing the promise.” (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1412.) A claim for promissory estoppel may be pled in the alternative to a breach of contract claim when the pleader is in doubt as to what actually occurred (Ibid; see also Moncada, supra, 221 Cal.App.4th at pp. 777-780.)

Fifteenth through Twentieth Causes of Action (Unjust Enrichment, Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Equitable Estoppel, Unjust Enrichment and Conversion
Defendant’s demurrer to these causes of action collectively on the ground that they fail to state sufficient facts because the Court lacks jurisdiction and/or Plaintiffs lacks standing is OVERRULED for the reasons stated above relating to the second through fifth and ninth, eleventh and twelfth causes of action.

Defendant’s demurer to the Sixteenth through Twentieth causes of action collectively on the ground that they all fail to state sufficient facts because they are time-barred by various statutes of limitation is SUSTAINED with 10 days’ leave to amend. These five claims were all newly added in the FAC filed July 31, 2018. The sixteenth through nineteenth causes of action are all based on alleged wrongdoing by Decedent that the FAC alleges occurred by no later than May 4, 2000. (See FAC at ¶¶ 146, 164.) Even assuming Plaintiffs have standing to bring these claims, they are all clearly time-barred on their face and the FAC fails to allege any delayed discovery of the facts supporting the claims.

“In order to rely on the discovery rule for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’ In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to ‘show diligence’; ‘conclusory allegations will not withstand demurrer.’” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808, internal citations omitted, emphasis added.) To be entitled to the benefit of the delayed discovery rule a plaintiff must specifically plead the time and manner of discovery and show the following: 1) Plaintiff had an excuse for late discovery; 2) Plaintiff was not at fault in discovering facts late; 3) Plaintiff did not have actual or presumptive knowledge to be put on inquiry; 4) Plaintiff was unable to make earlier discovery despite reasonable diligence. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1319, 1324-1325.)

The twentieth cause of action for “conversion by commingling trust funds” is governed by the three year statute of limitations in CCP § 338(c) and the FAC admits on its face that the alleged conversion took place “in October 2011.” (FAC at ¶ 192.) The boilerplate allegation in the FAC at paragraph 198 that the alleged conversion “remained concealed from the Plaintiffs until after the commencement of this action” is insufficient to satisfy the specific pleading standard for the delayed discovery rule. If Plaintiffs cannot sufficiently amend the sixteenth through twentieth causes of action to satisfy the delayed discovery rule without contradicting existing factual allegations the claims will not survive a further demurrer.

In addition the demurrer to the eighteenth cause of action (another claim for equitable estoppel) is also SUSTAINED for the same reason as the fourteenth cause of action (to allow Plaintiffs to re-label it as a claim for promissory estoppel). Assuming the delayed discovery rule can be satisfied through amendment, leave to amend is granted to allow Plaintiffs to state a claim for promissory estoppel instead.

Motion to Strike portions of the FAC
As with a demurer, in ruling on motion to strike portions of a pleading, the court reads the targeted pleading as a whole, all parts in their context, and assuming the truth of all well-pleaded allegations. (See Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63, citing Clauson v. Super. Ct. (1998) 67 Cal.App.4th 1253, 1255 [“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.”].)

Defendant’s motion to strike portions of the FAC, specifically portions of paragraphs 59 (part of the seventh cause of action), 67 (part of the eighth cause of action) and portions of the FAC’s Prayer (paragraphs 25-29) on the basis that the targeted allegations “are irrelevant and improperly pleaded because they cannot determined by this Court in this action,” (Defendant’s memorandum of points & authorities at p. 2:4-5) is DENIED. As explained above in the ruling on Defendant’s demurrer the Probate Division does not have exclusive jurisdiction over the matters alleged.