Camilla La Mer vs Robert James DeLoreto

Case Number

23CV00369

Case Type

Hearing Date / Time

Fri, 02/09/2024 - 10:00

Nature of Proceedings

Demurrer and Motion to Strike

Tentative Ruling

(1) For all reasons set forth herein, the demurrer of defendant is sustained as to the third cause of action alleged in plaintiff’s first amended complaint, with leave to amend, and as to the fourth and fifth causes of action alleged in the first amended complaint, without leave to amend. Except as otherwise herein sustained, the demurrer is overruled.

(2) For all reasons set forth herein, defendant’s motion to strike the fourth and fifth causes of action alleged in plaintiff’s first amended complaint is denied.

(3) Plaintiff shall file and serve her second amended complaint, if any, on or before February 20, 2024.

(4) At the hearing on defendant’s demurrer and motion to strike, the parties shall be prepared to discuss, in accordance with this ruling, consolidation of the present action with case number 23PR00275.

Background:

On January 27, 2023, plaintiff Camilla La Mer (La Mer) filed a complaint against defendant Robert James DeLoreto as Trustee of the John R. DeLoreto Revocable Trust (the Trustee), alleging five causes of action: (1) breach of contract; (2) constructive trust; (3) fraud; (4) determine invalidity of trust clause; and (5) accounting. (Note: Due to common familial surnames, the court will refer to John R. DeLoreto and named defendant by their first names. No disrespect is intended.) On May 10, 2023, La Mer filed a first amended complaint (FAC) against the Trustee alleging the same five causes of action. As alleged in the FAC:

Plaintiff is the former spouse of John R. DeLoreto (John). La Mer is also a beneficiary of the John R. DeLoreto Revocable Trust Dated April 15, 2014 (the trust), as amended by the First Amendment to the Trust executed on August 5, 2020 (the first trust amendment), and the Second Amendment to the Trust executed on December 30, 2021 (the second trust amendment). John was the Trustor of the trust and the Trustee is the present Trustee of the trust. John died on June 17, 2022.

La Mer and John separated on July 30, 1994. As part of their separation, La Mer and John signed a Marital Settlement Agreement on February 26, 1997 (the MSA), which was incorporated into a final judgment of dissolution entered on August 7, 1997 (the final judgment). Pursuant to the MSA and final judgment, John was required to maintain two insurance policies issued by State Farm Insurance Company (State Farm), each of which insured John’s life and named La Mer as a designated beneficiary. Policy number LF09714112 had a face amount of $50,000 and policy number 10519615 had a face amount of $350,000 (the court will refer to the insurance policies collectively). John was required to maintain the insurance policies in effect for as long as John was obligated to pay spousal or child support to La Mer.

The MSA further provides that “[i]n the event of lapse of the [insurance] policies because of [John’s] default in the payment of premiums, [La Mer] shall be entitled to payment from [John’s] estate of the full amount of all death benefits to which [La Mer] would have been entitled but for the lapse of the [insurance] policies.” (FAC, ¶ 9 & Exh. 3 [MSA, Section F].)

La Mer contacted State Farm about the insurance policies and was told that one policy had lapsed because John ceased paying premiums on May 11, 2019, and the other policy either changed to a beneficiary other than La Mer or was decreased in amount from that which John was required to maintain pursuant to the MSA.

The second trust amendment, which is the last amendment to the trust, provides that La Mer shall receive the amount of $100,000 provided that La Mer makes no claim for any life insurance benefits purportedly due under the MSA. Based on John’s breach of the MSA by allowing the insurance policies to lapse or change without La Mer’s consent, La Mer asserts that she is entitled to payment from the trust equal to the death benefits La Mer would have been entitled to but for the lapse of or change in the insurance policies.

Court records reflect that on May 24, 2023, La Mer filed as case number 23PR00275, a petition to administer the estate of John (the probate matter). On June 9, 2023, the court ordered the probate matter related to the present action. (See June 9, 2023, Minute order.)

The Trustee has filed a demurrer to the FAC on the grounds that each cause of action alleged in the complaint fails to state facts sufficient to constitute a cause of action and is uncertain. In the demurrer, the Trustee contends that La Mer improperly seeks to impose civil liability against the Trustee for claims that La Mer has against John and that the claims asserted by La Mer in this action must be raised in a verified petition filed with the probate court.

The Trustee has also filed a motion to strike the fourth and fifth causes of action alleged in the FAC on the same or substantially the same grounds as those asserted by the Trustee in the demurrer.

La Mer opposes the demurrer and motion to strike.

Analysis:

(1) The Demurrer

On demurrer, the court determines whether the complaint states a cause of action. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) “The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also ‘give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]’ [Citation.] [¶] If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (Quelimane).)

The court is “not limited to [plaintiff’s] theory of recovery in testing the sufficiency of [the] complaint against a demurrer, but instead must determine if the [f]actual allegations of the complaint are adequate to state a cause of action under any legal theory. The courts of this state have, of course, long since departed from holding a plaintiff strictly to the ‘form of action’ he has pleaded and instead have adopted the more flexible approach of examining the facts alleged to determine if a demurrer should be sustained.” (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103; accord, City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 870.)

The Trustee’s special demurrer:

A party may object by special demurrer on the grounds that the subject pleading is uncertain. (Code Civ. Proc., § 430.10, subd. (f).) A plaintiff must “set forth in his complaint the essential facts of his case with reasonable precision and with particularity sufficiently specific to acquaint the defendant of the nature, source, and extent of his cause of action.” (Smith v. Kern County Land Co. (1958) 51 Cal.2d 205, 209, internal quotation marks and citation omitted.) “ ‘[U]ncertain’ includes ambiguous and unintelligible.” (Ibid.) Consequently, “[a]s against special demurrers, the facts must be alleged with sufficient clarity to inform defendants of the issues to be met.” (Dumm v. Pacific Valves (1956) 146 Cal.App.2d 792, 799.)

The Trustee asserts that the FAC is ambiguous and unintelligible. (See Notice at p. 2, ¶¶ 1-6; Memorandum at p. 4, l. 18; p. 7, ll. 3-4; p. 8, ll. 22-24; p. 12. l. 13.) “A special demurrer on the ground that [a pleading] is (a) ambiguous, (b) unintelligible, or (c) uncertain is insufficient unless the demurrer points out specifically wherein the pleading is ambiguous, uncertain or unintelligible.” (Coons v. Thompson (1946) 75 Cal.App.2d 687, 690.

In addition, California Rules of Court, rule 3.1113(b), requires that a memorandum in support of a motion “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.” A party’s failure to comply with rule 3.1113(b) constitutes sufficient grounds to deny the party’s motion. (Cal. Rules of Court, rule 3.1113(a); Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 51-52.)

The special demurrer of the Trustee does not point out specifically where or how the FAC is ambiguous or unintelligible. In addition to failing to include any meaningful factual or legal authority with respect to how the FAC is uncertain as required by California Rules of Court, rule 3.1113(b), there exist procedural problems with the demurrer.

Furthermore, the memorandum submitted in support of the demurrer includes factual matters which are not pleaded expressly or by inference in the FAC. (See Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer].)

Moreover, the Trustee’s recitation of essential facts alleged in the FAC demonstrates that the FAC is not unintelligible or ambiguous and that the Trustee understands the issues and the nature of La Mer’s causes of action. (See Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245 [“[e]ven as against a special demurrer a plaintiff is required only to 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”].)

For all reasons discussed above, the Trustee has failed to meet his burden, with reasoned argument, to demonstrate that the FAC is uncertain. Therefore, the court will overrule the special demurrer.

The Trustee’s demurrer to the first and third causes of action alleged in the FAC:

In the first cause of action for breach of contract, La Mer alleges that John breached the MSA by failing to keep La Mer as beneficiary of the insurance policies, by failing to pay premiums, and by allowing the insurance policies to lapse. (FAC, ¶ 28.) La Mer further alleges that John’s breach of the MSA caused La Mer to lose her beneficiary interest in the death benefits provided under the insurance policies which La Mer asserts should have been distributed to her upon John’s death. (Id. at ¶ 30.) As a result, La Mer effectively asserts, she is entitled to payment from the trust in an amount equal to the death benefits she would have received under the insurance policies. (Id. at ¶ 31.)

The Trustee contends that La Mer has failed to allege the elements of a breach of contract against the Trustee, including the existence of any contract with the Trustee. In response, La Mer asserts that she has sufficiently alleged a contractual relationship between La Mer and John under the MSA, that La Mer did all of the things the MSA required of her, that John breached the MSA by failing to keep the insurance policies in place, and that the breach of the MSA by John was a substantial factor in causing damage to La Mer. Therefore, La Mer argues, she has alleged a valid cause of action for breach of contract against John, who is the Trustor of the trust.

La Mer further asserts that the alleged breach of the MSA by John entitles her to assert a claim for the purpose of recovering the proceeds of the insurance policies based on the Trustee’s obligation to pay all just debts due under the trust. Because there exist only trust assets and no probate assets and because the Trustee has not opened a probate claim, La Mer contends that she has a valid claim against the trust for breach of contract of the MSA by John.

In the FAC, La Mer alleges that the property against which she asserts her breach of contract claim in the present action is held in a revocable trust. (See FAC, ¶¶ 2, 3 & Exhs. 1, 2.) There are no allegations that show, expressly or by inference, that La Mer asserts a sole claim for breach of contract against John’s estate. To the extent the demurrer reaches only part of the first cause of action for breach of contract with respect to any claims asserted against John’s estate, the demurrer cannot be sustained. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047 (Kong) [a demurrer cannot be sustained to part of a cause of action].)

Regarding La Mer’s claims against the trust, “[t]he Trust Law is contained in division 9 of the Probate Code. [Citation.] The 1991 Legislature added part 8 to division 9, to provide for the payment of claims, debts, and expenses from the revocable trusts of deceased settlors who died on or after January 1, 1992. [Citation.] The procedures established by the new statute are similar to those providing for the handling of creditors’ claims in the administration of decedents’ estates. [Citation.] However, unlike probate administration, trust creditor claims proceedings are not mandatory. [Citation.] Only trustees and trust beneficiaries are authorized to initiate trust creditor claims proceedings. [Citation.]” (Valentine v. Read (1996) 50 Cal.App.4th 787, 792 (Valentine); see also Prob. Code, § 19000 et seq. [setting forth creditors’ claims procedures appliable to revocable trusts where a petition to administer the probate estate has not been filed].)

“Property held in a revocable living trust is not subject to probate administration after the settlor dies.” (Valentine, supra, 50 Cal.App.4th at p. 792.) The court further notes that “[t]he trustee need not initiate creditor claims proceedings, and may not be held liable for failing to do so.” (Id. at p. 793.) “If there is no proceeding to administer the probate estate of the deceased settlor, and if the trustee does not file a proposed notice to creditors pursuant to Section 19003 and does not publish notice to creditors pursuant to Chapter 3 (commencing with Section 19040), then the liability of the trust to any creditor of the deceased settlor shall be as otherwise provided by law.” (Prob. Code, § 19008; see also Embree v. Embree (2004) 125 Cal.App.4th 487, 494.)

Giving the complaint a reasonable interpretation, and accepting as true facts that may be implied or inferred from those expressly alleged, La Mer does not assert a claim for breach of contract against the Trustee in his personal capacity. (See McMahon v. Craig (2009) 176 Cal.App.4th 1502, 1509.) The Trustee has also failed to demonstrate, with reasoned argument, that the first cause of action fails to allege a claim for breach of contract against John.

In addition, there exist no allegations or matters of which the court may take judicial notice that indicate that the Trustee published or filed a notice to creditors. (See StorMedia Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 [“[i]n ruling on a demurrer a court may consider facts of which it has taken judicial notice”].) Based on the allegations of the FAC further discussed above, the present proceeding concerns the trust. Therefore, La Mer may assert a claim for breach of contract in the present civil action pursuant to the provisions of Probate Code section 19008. For this additional reason, the court will overrule the demurrer to the first cause of action for breach of contract.

The same analysis applies with respect to the third cause of action for fraud. To the extent the Trustee contends that La Mer has failed to allege a cause of action for fraud against the Trustee, the court will overrule the demurrer for all reasons discussed above.

The Trustee also asserts that La Mer has failed to state facts sufficient to allege a cause of action for fraud against John. “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] … [¶] This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ [Citation.]” (Id. at p. 645, original italics, internal quotation marks omitted.)

In the FAC, La Mer alleges that though John represented that he would meet and abide by the obligations of the MSA, John did not meet or abide by those obligations. (FAC, ¶¶ 40, 41.) La Mer also alleges that the purpose of a provision in the second trust amendment which provides the sum of $100,000 to La Mer was to “get around” John’s legal obligations “as a form of fraud”. (Id. at ¶ 44.) La Mer further asserts that John unlawfully placed assets into the trust to delay and avoid La Mer as a creditor. (Id. at ¶ 51.)

La Mer further alleges, in a general and conclusory manner, that John “concealed and suppressed material facts that [John] was bound to disclose under the [MSA and judgment].” (Id. at ¶ 46.) The concealment or suppression of material facts by John was done with the intent to defraud La Mer. (Id. at ¶ 47.)

Though the element of intent may, for pleading purposes, be set forth by a “simple and direct” allegation that a fraudulent representation was made with the requisite intent, La Mer has failed to plead facts demonstrating how, when, and by what means any representations were tendered by John. (See City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803 [“[a]llegations of the defendant’s knowledge and intent to deceive may use conclusive language”].) For example, though La Mer alleges that John did not abide by the terms of the MSA, this fact alone is insufficient to plead a cause of action for fraud. In addition, the allegations regarding the placing of assets into the trust are also conclusory and therefore insufficient.

La Mer also fails to allege specific facts demonstrating whether or which misrepresentation was made by John in connection with the MSA or the second trust amendment, and that John knew any specific representation was false at the time the representation was made.

La Mer has filed a response to the Trustee’s reply brief addressing the demurrer to the first and third causes of action for breach of contract and fraud. The response filed by La Mer is not statutorily authorized and improper. (See Code Civ. Proc., § 1005, subd. (b).) Therefore, the court will disregard the response to the Trustee’s reply brief.

For all reasons further discussed above, apart from asserting general and conclusory allegations regarding John’s failure to comply with the terms of the MSA and John’s placing of assets into the trust by means of the second trust amendment, La Mer fails to allege facts establishing, with specificity, each necessary element of a cause of action for fraud as against John with the exception of the element of intent. Therefore, the court will sustain the Trustee’s demurrer to the third cause of action, with leave to amend. (Eghtesad v. State Farm General Insurance Company (2020) 51 Cal.App.5th 406, 411 [denial of leave to amend is an abuse of discretion unless the complaint is incapable of amendment].)

The Trustee’s demurrer to the second of action alleged in the FAC:

In the second cause of action alleged in the FAC, La Mer requests that the court impose a constructive trust on John’s assets. The Trustee contends that a request to impose a constructive trust is not a cause of action but an equitable remedy. The Trustee further contends that even if a constructive trust was a cognizable cause of action, there exists no identifiable property on which to impose a constructive trust. Therefore, the Trustee argues, La Mer fails to state a viable cause of action.

A constructive trust is not an independent cause of action but a type of “equitable remedy that compels a wrongdoer—one who has property or proceeds to which he is not justly entitled—to transfer same to its rightful owner.” (Shoker v. Superior Court of Alameda County (2022) 81 Cal.App.5th 271, 278; Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3.) If a pleading “prays for relief to which the [pleader] is not entitled, or fails to seek the proper relief,” is it nevertheless good against a general demurrer “if it pleads facts sufficient to show that the pleader is entitled to some equitable relief.” (Woodley v. Woodley (1941) 47 Cal.App.2d 188, 190-191; see also Moropoulos v. C.H. & O.B. Fuller Co. (1921) 186 Cal. 679, 688 [“[t]he prayer for damages itself is not a part of the complaint, subject to demurrer, and the fact that plaintiff has prayed for exemplary damages, or any other relief to which he may not be entitled does not affect the sufficiency of his complaint”].)

The demurrer to the second cause of action challenges only whether La Mer may plead a constructive trust as an independent cause of action and whether there exists sufficient property to provide a remedy by imposing a constructive trust. However, “a demurrer cannot rightfully be sustained to … a particular type of damage or remedy.” (Kong, supra, 108 Cal.App.4th at p. 1047; see also Quelimane, supra, 19 Cal.4th at p. 38.)

Because the constructive trust that La Mer seeks to impose in the FAC is an equitable remedy and not an independent cause of action, the court will overrule the demurrer of the Trustee to the second cause of action alleged in the FAC.

The Trustee’s demurrer to the fourth and fifth causes of action alleged in the FAC:

In the fourth and fifth causes of action alleged in the FAC, La Mer, as an alleged primary beneficiary of the trust, seeks to contest the provisions of the second trust amendment on the grounds that the provisions are void, unlawful, unconscionable, and contrary to public policy. (FAC, ¶¶ 61, 68.) In the fifth cause of action, La Mer seeks an accounting with respect to insurance proceeds, “assets, receipts, distributions, transactions, and activities which have occurred during the time [the Trustee] has acted as Trustee [of the trust].” (FAC, ¶ 71.)

The Trustee contends that La Mer may challenge the internal affairs of the trust including the validity of the trust provisions and seek an accounting from the Trustee only by filing a verified petition under Probate Code sections 1020, 1021, and 17000 et seq.

A superior court having jurisdiction over a trust “has exclusive jurisdiction of proceedings concerning the internal affairs of [the trust].” (Prob. Code, § 17000, subd. (a).) Proceedings concerning the internal affairs of a trust include those whose purpose is to determine “questions of construction of a trust instrument” or “the validity of a trust provision”, to “[s]ettl[e] the accounts and passing upon the acts of the trustee”, and to compel the trustee to account to a beneficiary, among other things. (Prob. Code, § 17200, subd. (b)(1), (3), (5) & (7).)

For all reasons discussed above, the claims alleged in the fourth and fifth causes of action concern the internal affairs of the trust. Therefore, the court will sustain the demurrer to the fourth and fifth causes of action alleged in the FAC.

La Mer bears the burden to demonstrate a reasonable possibility that the defects in the fourth and fifth causes of action can be cured by amendment. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) In her opposition to the demurrer, La Mer has failed to demonstrate how the fourth and fifth causes of action can be amended to state a claim that does not involve the internal affairs of the trust or seek an accounting from the Trustee. La Mer instead requests that the court “transfer this entire matter … to be heard on a probate calendar as a civil and probate claim … along with the probate matter….” (Opp. At p. 20, ll. 8-12.) To the extent La Mer intends to commence proceedings concerning the internal affairs of the trust or for the purpose of accounting to La Mer as a beneficiary of the trust, or any other appropriate purpose, La Mer may petition the court in a procedurally appropriate manner.

Because La Mer has failed to demonstrate any reasonable possibility that the defects in the fourth and fifth causes of action can be cured by amendment, the court will sustain the demurrer to these causes of action without leave to amend. The court’s ruling is without prejudice to the future filing of any procedurally and substantively appropriate petition that may be filed by La Mer.

(2) The Motion To Strike

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof[.]” (Code Civ. Proc., § 435, subd. (b)(1).) In ruling on a motion to strike, a court may “strike out any irrelevant, false, or improper matter inserted in any pleading” or “strike all or part of any pleading not filed in conformity with applicable law, court rules, or an order of the court” (Code Civ. Proc., §436.) The grounds for a motion to strike must appear on the face of the pleading or from matters which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).)

The Trustee’s motion to strike the fourth and fifth causes of action is brought on the same or substantially the same grounds as those asserted in the Trustee’s demurrer to the fourth and fifth causes of action alleged in the FAC, further discussed above. Though the same analysis applies, “it is improper for a court to strike a whole cause of action of a pleading under Code of Civil Procedure section 436…. Where a whole cause of action is the proper subject of a pleading challenge, the court should sustain a demurrer to the cause of action rather than grant a motion to strike.” (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281.)

As the motion to strike is directed to the whole of the fourth and fifth causes of action alleged in the FAC and as the Trustee has also filed a demurrer to these same causes of action which the court will sustain, the court will deny the Trustee’s motion to strike.

(3) Additional Matters

At the hearing on the demurrer and motion to strike of the Trustee, La Mer and the Trustee shall be prepared to discuss whether the present action should be consolidated with the probate matter.