ON N ON LLC vs Hershel Mikaelian

Case Number

24CV06813

Case Type

Hearing Date / Time

Mon, 09/29/2025 - 10:00

Nature of Proceedings

Case Management Conference; Demurrer to Cross Complaint

Tentative Ruling

On N On LLC v. Hershel Mikaelian                              

Case No. 24CV06813

           

Hearing Date: September 29, 2025                                                   

HEARING:              Demurrer By Cross-Defendants To Cross-Complainant’s Verified Cross-Complaint

ATTORNEYS:        For Plaintiff and Cross-Defendant On N On LLC, and Cross-Defendant Sharon Nunez: Marcus J. Kocmur, Natalie N. Mutz, Fauver Large Archbald & Spray LLP

For Defendant and Cross-Complainant Hersel Mikaelian: John J. Thyne III, Thyne Taylor Fox Howard, LLP

TENTATIVE RULING:

The demurrer of cross-defendants to the cross-complaint of cross-complainant Hersel Mikaelian is granted as to the second, third, and fourth causes of action only, with leave to amend. On or before October 13, 2025, cross-complainant shall file and serve an amended cross-complaint, if any, which shall be designated as a first amended cross-complaint. Except as granted herein, the demurrer is otherwise overruled.

Background:

On December 6, 2024, plaintiff On N On LLC (Plaintiff) filed a verified complaint against defendant Hersel Mikaelian (Mikaelian) alleging four causes of action: (1) quiet title; (2) declaratory relief; (3) slander of title; and (4) cancellation of instruments. (Note: The record reflects or suggests that defendant’s name is spelled incorrectly in the caption of the complaint.) As alleged in the complaint:

Plaintiff is the owner of real property (the Property) located in the vicinity of Brosian Way in the County of Santa Barbara, California. (Compl., ¶ 1.) The basis of Plaintiff’s title is a grant deed (the Deed) recorded on June 27, 2018, in the official records of the County of Santa Barbara. (Ibid.)

On June 9, 2003, Mikaelian recorded a Notice of Pending Action (the NPA) in Superior Court of Santa Barbara County case number 0104406 (the Litigation) between Mikaelian and Oscar Nunez (Oscar), who is one of Plaintiff’s predecessors in interest to the Property. (Compl., ¶ 7 & Exh. 2 [NPA].) (Note: Due to common surnames as further described below, the court will refer to the parties by their first names to avoid confusion. No disrespect is intended.) Mikaelian litigated his claims against Oscar to judgment in or around July 2003, as reflected in the public records for the Litigation. (Compl., ¶ 8.) Mikaelian took no valid steps to renew that judgment prior to its expiration in July 2013. (Compl., ¶ 10.)

On July 1, 2013, and June 30, 2023, Mikaelian recorded in the official records of Santa Barbara County as, respectively, document numbers 2013-0044307 and 2023-0018959, copies of an “Order Of Dissolution Of Partnership And Partition And Sale Of Property; Vacate Damage Trial” (the Order) which was filed in the Litigation on July 18, 2003. (Compl., ¶ 11 & Exhs. 3-4.) Plaintiff has been prevented from completing a sale of the Property due to the cloud that Mikaelian placed on title by the recording of the NPA and the Order. (Compl., ¶ 13.)

Mikaelian has refused Plaintiff’s request that Mikaelian clear title to the Property. (Compl., ¶ 14.) Plaintiff believes that Mikaelian’s purpose in refusing to clear title is to force Plaintiff to sell it to Mikaelian for less than its market value. (Ibid.)

On March 7, 2025, Plaintiff filed errata to the complaint to correct the document number of the Deed and to submit a copy of the correct Deed alleged in the complaint. The Deed attached to the errata identifies Sharon Lynn Nunez (Sharon), Trustee of The Sharon Lynn Nunez 2018 Living Trust, dated April 27, 2018, as the grantor, and Plaintiff as the grantee. (Errata, Exh. 1.)

On April 1, 2025, Mikaelian filed an answer to Plaintiff’s complaint, and a verified cross-complaint against Plaintiff and Sharon. As alleged in Mikaelian’s cross-complaint:

The Property is a vacant parcel of land in Santa Barbara County. (Cross-Compl., ¶ 4.) In 2000, Mikaelian and Oscar entered into a partnership to acquire, improve, and sell the Property as 50 percent owners with title taken in Oscar’s name. (Cross-Compl., ¶¶ 14-15, & Exh. B [deed reflecting Oscar as grantee and a single man].)

On June 9, 2003, Mikaelian initiated the Litigation to dissolve the partnership with Oscar, and recorded the NPA. (Cross-Compl., ¶¶ 16-17.) Sharon, who at the time was dating Oscar, testified in the Litigation that she knew Mikaelian was a 50 percent owner of the Property. (Cross-Compl., ¶¶ 17 & 24.)

Pursuant to the Order, which was entered on July 11, 2003, the court found that the partnership between Mikaelian and Oscar should be dissolved, that the Property should be sold, and that Mikaelian should receive an accounting and one-half of the proceeds from the Property’s sale. (Cross-Compl. at p. 4, ll. 12-15 & ¶ 18.) The court further ordered the parties to work with Robert Egenolf (Egenolf), the partition referee who would oversee the transaction. (Cross-Compl. at p. 4, ll. 15-16.)

When Mikaelian and Oscar met with Egenolf to arrange for the sale of the Property, Mikaelian and Oscar agreed not to dissolve the partnership and instead to continue to keep the Property as 50 percent owners with a plan to sell the Property and split the profits. (Cross-Compl. at p. 4, ll. 17-18.) ¶ 19.) Mikaelian maintained the NPA and recorded the Order to put others on notice of the existence of the partnership between Mikaelian and Oscar. (Cross-Compl., ¶ 20.)

Evidence that Mikaelian and Oscar were partners in the co-ownership of the Property includes that Mikaelian and Oscar applied as partners to the Assessment Appeals Board to challenge the assessment of the Property. (Cross-Compl., ¶ 21 & Exh. C.) A January 23, 2006, summary of a meeting of the Santa Barbara Local Agency Formation Commission also identifies Mikaelian and Oscar as owners of the Property. (Cross-Compl., ¶ 21.) Mikaelian, whom Oscar entrusted with Property records, engaged in efforts to begin the process of subdividing the Property and paid one-half of the taxes for the Property through 2008. (Cross-Compl., ¶ 22.) After Oscar failed to list and sell the Property, Oscar allowed Mikaelian to cease contributing towards the taxes because Oscar admitted that the delays in selling the Property were caused by Oscar. (Cross-Compl., ¶ 23.)

On September 4, 2015, Oscar transferred the Property, by Grant Deed, to Oscar and Sharon as Trustees of the Nunez Family Trust Dated September 4, 2015 (the marital trust). (Cross-Compl., ¶ 25.) Mikaelian and Oscar continued to discuss the development of the Property. (Cross-Compl., ¶ 26.) After Oscar transferred the Property to the marital trust, Oscar passed away. (Cross-Compl., ¶ 27.) Sharon did not contact Mikaelian or inform Mikaelian that Oscar had died. (Cross-Compl., ¶ 27.)

On June 12, 2018, and without consulting Mikaelian, Sharon transferred the Property from the marital trust to Sharon, and from Sharon to Plaintiff, and recorded a Grant Deed on June 27, 2018. (Cross-Compl., ¶ 28.) Mikaelian asserts that these transfers did not affect Mikaelian’s 50 percent ownership because the marital trust owned only 50 percent of the Property. (Ibid.) Following the transfer of the Property to Plaintiff, Mikaelian again recorded the Order to make others aware that Mikaelian remained in partnership with Plaintiff as a 50 percent owner of the Property. (Cross-Compl., ¶ 30.)

In the cross-complaint, Mikaelian alleges seven causes of action: (1) quiet title; (2) conversion; (3) constructive fraud; (4) breach of fiduciary duty; (5) unjust enrichment/restitution/implied contract; (6) equitable estoppel; and (7) accounting.

On May 2, 2025, Plaintiff and Sharon (collectively, Cross-Defendants) filed a demurrer which is made on the grounds that the cross-complaint of Mikaelian is barred by applicable statutes of limitations and the legal doctrine of adverse possession, fails to state facts sufficient to constitute any cause of action, and is uncertain.

Mikaelian opposes the demurrer.

Analysis:

“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “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).)

Special demurrer for uncertainty:

A party may object by special demurrer on the grounds that the subject pleading is uncertain. (Code Civ. Proc., § 430.10, subd. (f).) “ ‘[U]ncertain’ includes ambiguous and unintelligible.” (Smith v. Kern County Land Co. (1958) 51 Cal.2d 205, 209.) “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.)

Though the demurrer generally argues that the cross-complaint is uncertain, Cross-Defendants fail to point out specifically where the cross-complaint is uncertain.

In addition, Cross-Defendants include in their demurrer a general description of the allegations of the cross-complaint, including those which give rise to each cause of action. The recitation of these allegations by Cross-Defendants indicates that the cross-complaint is not so unintelligible or ambiguous that Cross-Defendants cannot understand the issues or the nature of the claims alleged by Mikaelian. (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245 [“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”].)

The allegations of the cross-complaint described above are not so incomprehensible that Cross-Defendants cannot reasonably respond. (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.) Therefore, and for all reasons discussed above, the court will overrule the special demurrer of Cross-Defendants to each cause of action alleged in the cross-complaint.

Demurrer to the first through seventh causes of action based on a purported failure of Mikaelian to allege the existence of a partnership:

As a threshold matter, Cross-Defendants argue that the cross-complaint fails to plead facts that would support the existence of a partnership between Mikaelian and Oscar, and that the absence of any facts showing the existence of this partnership defeats each cause of action alleged in the cross-complaint.

Subject to exceptions which do not appear to apply here, “the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” (Corp. Code, § 16202, subd. (a).) “The existence or nonexistence of a partnership is primarily a question of fact for the trial court to determine from the facts as established by the evidence and the inferences to be drawn therefrom....” (Pearson v. Norton (1964) 230 Cal.App.2d 1, 11.)

As further detailed above, the cross-complaint alleges that, after and notwithstanding the entry of the Order in the Litigation, Mikaelian and Oscar agreed to keep and to develop the Property for sale and share in the profits of that sale. The cross-complaint also references the Order attached to the complaint, and recites the findings set forth in the Order, including that the Property is an asset of the partnership which Mikaelian alleges was formed in 2000. (Cross-Compl., ¶ 18; see also Compl., Exh. 3, ¶ 3 [stating that “[a]s a means of dividing the assets of the partnership, the sale of the [Property] and division of the proceeds would be more equitable than division of the [P]roperty”].)

For all reasons discussed above, the allegations of the cross-complaint are sufficient to show, expressly and by inference, that a partnership was formed between Mikaelian and Oscar after the entry of the Order, to develop the Property for sale and to share in the profits, and that the Property is an asset of that partnership. (Schefski v. Anker (1932) 216 Cal. 624, 625 [finding that “there can be no doubt that the parties intended to enter a partnership as to” agreement to erect an apartment house under which lot was to be purchased by investor and “deeded under his name” and both parties were to receive equal salaries and profits]; Koyer v. Willmon (1907) 150 Cal. 785, 787 (Koyer) [“partnership for the purpose of ... holding, and selling lands may be formed by an agreement”]; see also Corp. Code, § 16204, subd. (c) [“[p]roperty is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership”].)

Even if the court were to assume without deciding that the allegations of the cross-complaint are sufficient to show that Oscar was dissociated from any partnership formed after the entry of the Order based on Oscar’s death (Corp. Code, § 16601, subd. (7)(A)), the court also accepts as true the allegation that Mikaelian had no notice of this event. Cross-Defendants fail to address whether or to what extent these allegations show that the partnership remained bound by any act of Oscar. (See, e.g., Corp. Code, § 16702.)

The cross-complaint also includes no allegations showing that the partnership was wound up following Oscar’s death. Cross-Defendants do not address this issue, including whether the cross-complaint shows expressly or by inference that Mikaelian could continue the business of the purported partnership with respect to the Property notwithstanding Oscar’s death. (See, generally, Corp. Code, § 16701 et seq.)

For all reasons discussed above, to the extent the demurrer to each cause of action is made on the grounds that the cross-complaint fails to allege a partnership, or that the Property is an asset of that partnership, the demurrer will be overruled.

Demurrer to the first through seventh causes of action based on applicable statutes of limitation:

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403.) “If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment ….’ [Citation.]” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324-325, italics omitted.)

Though Cross-Defendants contend that it is unclear what bearing Oscar’s death had on the running of any statute of limitations, Cross-Defendants assert that the transfer of the Property to the martial trust on September 4, 2015 was “an overtly adverse gesture of which Mikaelian was aware.” (Demurrer at p. 18, ll. 19-23.) Cross-Defendants further assert that the post-transfer discussions by Mikaelian and Oscar alleged in the cross-complaint show that Mikaelian was aware of the deed transfers, and that these publicly recorded transfers might have triggered a reasonable person to take action to preserve any interest in the Property. For these reasons, Cross-Defendants argue, the statutes of limitation applicable to each cause of action accrued upon Oscar’s transfer of the Property to the marital trust, or upon the death of Oscar. Cross-Defendants further argue that the cross-complaint alleges no facts justifying the tolling of any applicable statute of limitations based on delayed discovery.

Cross-Defendants do not dispute that the accrual of each cause of action “is postponed until [Mikaelian] either discovers or has reason to discover the existence of a claim, i.e., at least has reason to suspect a factual basis for its elements.” (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1528-1529.)

“As a general rule in testing a pleading against a demurrer the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.) The cross-complaint expressly alleges that the first time Mikaelian discovered that Plaintiff held title to the Property was in 2024, when counsel for Cross-Defendants demanded that Mikaelian remove the NPA. (Cross-Compl., ¶ 41.) The cross-complaint further alleges that Mikaelian was never notified of Oscar’s death, which was purportedly concealed from Mikaelian. (Cross-Compl., ¶¶ 15 & 41.) For all reasons discussed above, the court accepts these allegations as true.

There are no allegations which show, on their face, why Mikaelian had any reasonable ground to suspect that the Property had been transferred to the marital trust, Sharon, or Plaintiff prior to 2024. The allegations also do not necessarily show that Mikaelian communicated with Oscar until Oscar’s death as Cross-Defendants contend. Further, though Cross-Defendants assert that there is “no doubt” Mikaelian would have become aware of Oscar’s death, these assertions are speculative considering the absence of any allegations showing to what extent Mikaelian continued communicating with Oscar prior to his death. (See Demurrer at p. 16, ll. 9-12.)

For all reasons discussed above, the cross-complaint does not clearly or affirmatively show on its face that Mikaelian had any reason to discover the existence of any claim prior to 2024, or that each cause of action accrued when the Property was first transferred out of Oscar’s name or when Oscar died. Further, the allegations of the cross-complaint raise some question as to whether Cross-Defendants are estopped from asserting the bar of any statute of limitations based on any purported concealment of Oscar’s death or the transfers of the Property. (Getty v. Getty (1986) 187 Cal.App.3d 1159, 1171-1172 [general discussion of estoppel to assert statute of limitations].)

For all reasons discussed above, and notwithstanding whether the cross-complaint shows that a cause of action may be barred, the cross-complaint does not, on its face, clearly and affirmative show that each of the causes of action are necessarily barred by any applicable statute of limitations. Therefore, the court will overrule the demurrer to first through seventh causes of action to the extent it is made on statute of limitations grounds.

Demurrer based on the doctrine of adverse possession:

Cross-Defendants assert that the doctrine of adverse possession also bars each cause of action because the cross-complaint shows that Mikaelian paid no property tax from 2009, that title to the property was held by Oscar for six years, and that Mikaelian did not object to Oscar’s transfer of the Property.

As further discussed above, the cross-complaint does not disclose on its face that Mikaelian knew of the transfers of title to the Property from Oscar to the marital trust, or to Plaintiff. Further, the cross-complaint shows that the Property is an undeveloped or vacant parcel of land. (See, e.g., Cross-Compl., ¶¶ 1, 4 & Exh. D.) Mikaelian also alleges no facts showing the identity of any individual who paid taxes for the Property after 2008.

For all reasons discussed above, Cross-Defendants have failed to show why the cross-complaint shows on its face that is barred by the doctrine of adverse possession. (See Mehdizadeh v. Mincer (1996) 46 Cal.App.4th 1296, 1305 [elements of adverse possession include, among other things, “actual, open, and notorious. occupation of the premises” and “payment of all taxes assessed against the property during the five-year period”]; In re Wasson (1921) 54 Cal.App. 269, 273-274 [general discussion of “isolated” acts of possession].) Therefore, and for all reasons discussed above, the court will overrule the demurrer to the first through seventh causes of action to the extent it is made on the grounds of the doctrine of adverse possession.

Demurrer to the second cause of action:

Cross-Defendants contend that the second cause of action for conversion fails because the Property is not personal property of Mikaelian. In the second cause of action, Mikaelian alleges that Cross-Defendants acted in concert to deprive Mikaelian of his 50 percent ownership of the Property by failing to inform Mikaelian of Oscar’s death and of the transfers of the Property alleged in the cross-complaint. (Cross-Compl., ¶¶ 40-42.)

“Conversion is generally described as the wrongful exercise of dominion over the personal property of another. [Citation.] The basic elements of the tort are (1) the plaintiff’s ownership or right to possession of personal property; (2) the defendant’s disposition of the property in a manner that is inconsistent with the plaintiff’s property rights; and (3) resulting damages.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)

As the allegations of the cross-complaint show that the Property consists of a vacant parcel of real property as further discussed above, the cross-complaint fails to allege any facts showing any conversion of personal property of Mikaelian. For these and all further reasons discussed above, the court will sustain the demurrer to the second cause of action for conversion.

As the cross-complaint is effectively an original pleading, and to the extent the cross-complaint does not necessarily show that it cannot be amended to allege a wrongful exercise of dominion over any other personal property of Mikaelian, the court will grant Mikaelian leave to amend. (Eghtesad v. State Farm General Ins. Co. (2020) 51 Cal.App.5th 406, 411.)

Demurrer to the third and fourth causes of action:

Cross-Defendants contend that the fourth cause of action for breach of fiduciary duty alleged in the cross-complaint fails to state facts showing the existence of a partnership between Mikaelian and Cross-Defendants, or giving rise to any fiduciary duties owed by Cross-Defendants to Mikaelian.

In the fourth cause of action, Mikaelian alleges that the parties are in a partnership requiring Cross-Defendants to protect Mikaelian’s interest in the Property. (Cross-Compl., ¶ 53.) Mikaelian further alleges that Cross-Defendants breached their duties by attempting to sell the Property without Mikaelian’s knowledge or consent and or arranging to pay Mikaelian 50 percent of its value. (Cross-Compl., ¶ 55.)

“ ‘[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law. [Citations.]’ [Citation.] ‘Fiduciary duties are imposed by law in certain technical, legal relationships such as those between partners or joint venturers [citation], ... trustees and beneficiaries, principals and agents, and attorneys and clients [citation].’ [Citation.]” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140 (Hasso).)

In addition, “[a] fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’ [Citation.]” (Hasso, supra, 227 Cal.App.4th 107, 140.) “ ‘The law defines a confidential relation as any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter’s knowledge or consent.’ ” (Herbert v. Lankershim (1937) 9 Cal.2d 409, 483.)

A “ ‘confidential relationship’ may be founded on a moral, social, domestic, or merely personal relationship as well as on a legal relationship. [Citations.] The essence of a fiduciary or confidential relationship is that the parties do not deal on equal terms, because the person in whom trust and confidence is reposed and who accepts that trust and confidence is in a superior position to exert unique influence over the dependent party.” (Barbara A. v. John G. (1983) 145 Cal.App.3d 369, 382-383.)

Mikaelian argues that the cross-complaint alleges a “de facto” partnership between the parties. This term “is not one found in any California case. A partnership is defined by statute, as it was at common law, as an association of two or more persons to carry on as co-owners a business for profit....” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1157.)

As further discussed above, the cross-complaint includes allegations which are sufficient to show the existence of a partnership between Mikaelian and Oscar as further discussed above and that the Property is an asset of that partnership, and which also show that Oscar transferred the Property to the marital trust, that Oscar passed away, and that the Property was thereafter, through a series of transactions, transferred to Plaintiff. These allegations are insufficient to show the existence of any agreement between Mikaelian and Cross-Defendants to carry on as co-owners of a business in regard to the development of the Property.

In addition, though the cross-complaint alleges that Sharon is Oscar’s spouse, there are no allegations showing that Mikaelian had any communications or interactions with Sharon. For these reasons, the cross-complaint does not allege facts which show the existence of any relationship between Sharon and Mikaelian, including a confidential relationship sufficient to give rise to a fiduciary duty. (Hasso, supra, 227 Cal.App.4th at p. 140.) For these and all further reasons discussed above, the court will sustain the demurrer to the fourth cause of action, with leave to amend.

As to the third cause of action, constructive fraud is defined under Civil Code section 1573 as “any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him” or “[i]n any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.” (Civ. Code, § 1573.) “The elements of the cause of action for constructive fraud are: (1) fiduciary relationship; (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation).” (Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498, 517, fn. 14.) As with actual fraud, a cause of action for constructive fraud must be pleaded with specificity. (Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 960-961.)

To support the third cause of action for constructive fraud, Mikaelian alleges in the cross-complaint that Cross-Defendants are in a “joint venture” with, and owe fiduciary duties to, Mikaelian, which Cross-Defendants breached by failing to disclose that Oscar passed away and that title to the Property was conveyed amongst Cross-Defendants, among other things. (Cross-Compl., ¶¶ 45-46.) As these are effectively the same allegations which give rise to the fourth cause of action for breach of fiduciary duty further discussed above, the same reasoning and analysis apply. For all reasons discussed above, the court will also sustain the demurrer to the third cause of action for constructive fraud, with leave to amend.

Demurrer to the first, fifth, sixth, and seventh causes of action:

Apart from the arguments further discussed above, Cross-Defendants advance no further reasoned legal or factual arguments showing why the first, fifth, sixth, or seventh causes of action fail to state facts sufficient to constitute causes of action, respectively, to quiet title, for unjust enrichment, for equitable estoppel, and for an accounting. Therefore, the same reasoning and analysis apply.

The court further notes that “ ‘ “[p]artnership is a fiduciary relationship, and partners are held to the standards and duties of a trustee in their dealings with each other. ‘ “ ‘[I]n all proceedings connected with the conduct of the partnership every partner is bound to act in the highest good faith to his copartner and may not obtain any advantage over him in the partnership affairs by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.’ ” ’ ” ’ [Citation.] ‘[A] partner who seeks a business advantage over another partner bears the burden of showing complete good faith and fairness to the other’ (i.e., that the advantage was not procured by misrepresentation, concealment, threat or adverse pressure). [Citation.]” (Agam v. Gavra (2015) 236 Cal.App.4th 91, 112-113.)

As further discussed above, Mikaelian has alleged in the cross-complaint facts which are sufficient to show that Oscar and Mikaelian were “in confidential relations toward each other, with respect to the [Property]” and that Oscar and Mikaelian “[e]ach occupied the position of a trustee to the other with regard to all the partnership transactions, including the transactions contemplated by the firm, and constituting the object or purpose for which the partnership was formed.” (Koyer, supra, 150 Cal. at p. 787.)

The cross-complaint also alleges that, when Mikaelian and Oscar formed their partnership, Oscar undertook to hold title to the Property in his name. (See Cross-Compl. at p. 4, ll. 3-4.) For present purposes, these allegations are sufficient to show that Oscar “was acting as agent and trustee of [Mikaelian], and, in contemplation of law, [Mikaelian] was the beneficiary of that trust, with relation to his portion of the [P]roperty.” (Koyer, supra, 150 Cal. at p. 787.) To the extent Mikaelian proves the allegations discussed above, the cross-complaint shows or suggest that Oscar was precluded from “appropriat[ing] the [Property] to his own use” or “deal[ing] with it otherwise than for the benefit of the partnership.” (Ibid.)

Mikaelian also alleges that Sharon was aware of Mikaelian’s interest in the Property, and testified in the Litigation. To the extent Mikaelian proves the truth of these allegations, a reasonable trier of fact could find or infer that Sharon knew the Property was an asset of the alleged partnership between Mikaelian and Oscar further discussed above. Cross-Defendants do not address whether the cross-complaint alleges facts which are sufficient to show or suggest whether Sharon was aware of the entry of the Order notwithstanding Sharon’s purported knowledge of or participation in the Litigation.

“A constructive trust may be imposed when a party has acquired property to which he is not justly entitled, if it was obtained by actual fraud, mistake or the like, or by constructive fraud through the violation of some fiduciary or confidential relationship.” (Mazzera v. Wolf (1947) 30 Cal.2d 531, 535.) Cross-Defendants do not address whether the cross-complaint alleges facts sufficient to support the imposition of a constructive trust, notwithstanding whether the cross-complaint fails to allege the existence of any partnership with Sharon. (Koyer, supra, 150 Cal. at p. 788 [general discussion of constructive trust, noting that defendant in that case “could not take the property without allowing the plaintiff to share therein according to the partnership agreement...”].)

As to the fifth cause of action which ostensibly includes a claim for restitution, “[a]n individual is required to make restitution if he or she is unjustly enriched at the expense of another. [Citations.] A person is enriched if the person receives a benefit at another’s expense. [Citation.] Benefit means any type of advantage.” (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662.)

Considering the allegations described above with respect to Sharon’s knowledge that the Property was an asset of the partnership and the transfer of title to the Property made by Oscar, the cross-complaint includes allegations which, for present purposes, are minimally sufficient to support a claim for restitution. (Quelimane, supra, 19 Cal.4th at p. 38.)

The fifth cause of action also ostensibly includes a claim for unjust enrichment which “ ‘is not a cause of action.’ It is ‘just a restitution claim.’ [Citation.]” (De Havilland v. FX Networks, LLC (2018) 21 Cal.App.5th 845, 870.) For this reason, the same reasoning and analysis apply. Further, to the extent the demurrer to the fifth cause of action is directed only to part of claims alleged, or a type of damage or remedy sought by Mikaelian, it “cannot rightfully be sustained....” (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047.)

The cross-complaint also alleges that Cross-Defendants “aided and abetted” the commission of the purported wrongful acts which include depriving Mikaelian of his interest in the Property. (See Cross-Compl., ¶¶ 7, 9 & 40.) Though Cross-Defendants fail to address these allegations, the court notes that “[d]isgorgement based on unjust enrichment is an appropriate remedy for aiding and abetting a breach of fiduciary duty.” (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1483; see also Aghaian v. Minassian (2020) 59 Cal.App.5th 447, 459 [discussing allegations “sufficient to state a cause of action for aiding and abetting a fraudulent transfer”].)

Further, to the extent the allegations are sufficient to permit an inference that Cross-Defendants actively participated in any alleged misconduct or breach of fiduciary duty by Oscar as further discussed above, these allegations are also sufficient to support an equitable proceeding for an accounting. (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th 425, 442-443 [general discussion].) Noted above, Cross-Defendants do not address allegations that show or suggest Cross-Defendants’ participation in the conduct alleged in the cross-complaint.

“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) For all reasons discussed above, the demurrer fails to show why show why the cross-complaint does not state facts sufficient to constitute causes of action to quiet title, for restitution, or for an accounting. Therefore, the court will overrule the demurrer as to the first, fifth, and seventh causes of action alleged in the cross-complaint.

As the court will overrule the demurrer to first, fifth, and seventh causes of action, the court will also overrule the demurrer to the sixth cause of action for equitable estoppel. (Central National Ins. Co. v. California Ins. Guarantee Assn. (1985) 165 Cal.App.3d 453, 460 [“estoppel ... must be pleaded ... as a part of the cause of action”].)

Cross-Defendants’ request for judicial notice:

Cross-Defendants submit in support of their demurrer a request for judicial notice of: (1) the Order; (2) an Affidavit of Death of Trustee (the Affidavit) recorded in the official records of the County of Santa Barbara on June 23, 2016; (3) a Grant Deed recorded in the official records of the County of Santa Barbara as instrument no. 2018-0026909; (4) a Grant Deed recorded in the official records of the County of Santa Barbara as instrument no. 2018-0026910; and (5) a document titled “Entity Information” for Plaintiff showing a formation date of December 13, 2016. (RJN at p. 2, ll. 7016 & Exhs. 1-5.)

The Order is attached to the complaint filed by Plaintiff in this action, and is also recited in the cross-complaint. For these reasons, the Order is part of the present record. The additional records for which Cross-Defendants request judicial notice are not necessary to the court’s disposition of the issues presented in the demurrer as reflected in this ruling. For all reasons discussed above, the court will deny Cross-Defendants’ request for judicial notice of the Order, the Affidavit, the Grant Deeds described above, and the Entity Information. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.)