Wardwell v. Vertical Infill CA4/1 ( 2022 )

Filed 2/23/22 Wardwell v. Vertical Infill CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
DEBORAH M. WARDWELL, D077908
individually and as trustor, etc.
Plaintiff and Appellant,
(Super. Ct. No. 37-2019-
v. 00003035-CU-NP-CTL)
VERTICAL INFILL, INC. et al.,
Defendants and Respondents.
APPEALS from judgments of the Superior Court of San Diego County,
Randa M. Trapp, Judge. Affirmed in part; reversed in part with directions.
Swierenga Law & Mediation and Kimberly M. Swierenga, for Plaintiff
and Appellant.
Much Shelist, Issac R. Zfaty, Kaeleen E.N. Korenaga, and Ryan Burns,
for Defendants and Respondents.
Deborah M. Wardwell sued Vertical Infill, Inc. (Vertical); its real estate
broker Preferred Group Properties, Inc., doing business as Harcourts Prime
Properties (Harcourts); Vertical founder and Harcourts agent Dean Lloyd
Welsh; and Vertical attorneys Simis Law Group and Micole Elliot Simis
(collectively, Simis) for financial elder abuse (Welf. & Inst. Code, § 15610.30)
and other claims.1 Wardwell alleged that Vertical wrongfully obtained title
to her residence by purchasing it from her son Brian Burns (Brian), who had
no authority to sell it. Wardwell also sued her son Brian, his wife, and his
law firm, but Wardwell’s claims against them are not part of this appeal.
Vertical, Welsh, and Simis demurred to Wardwell’s complaint. Vertical
primarily argued that it was a bona fide purchaser for value (BFP) and could
not be liable for financial elder abuse regardless of Wardwell’s alleged
interest in the property. It also argued that Wardwell had not alleged facts
sufficient to constitute any other cause of action, including conversion and
intentional infliction of emotional distress. Welsh and Simis argued that
they were not the purchasers of the property and Wardwell had not alleged
any basis for their liability. The trial court agreed with Vertical, Welsh, and
Simis. It sustained the demurrer without leave to amend. Harcourts moved
for judgment on the pleadings based on similar arguments. The trial court
granted its motion as well.
Wardwell appeals. She contends she alleged facts sufficient to show
that Vertical was not a BFP; Welsh, Simis, and Harcourts are liable as
Vertical’s agents; and her causes of action are viable. We agree, in part.
Wardwell has alleged sufficient facts to show Vertical was not a BFP. The
trial court therefore erred by sustaining Vertical’s demurrer to Wardwell’s
cause of action for financial elder abuse. Otherwise, however, Wardwell has
not shown she alleged any other cause of action or demonstrated a reasonable
possibility she could amend her complaint to do so. We therefore affirm the
judgments in part, reverse in part, and remand with directions.
1 Subsequent statutory references are to the Welfare and Institutions
Code unless otherwise stated.
2
FACTUAL AND PROCEDURAL BACKGROUND
Consistent with our standard of review, we draw our summary of the
historical facts from the properly pleaded allegations of Wardwell’s operative
complaint and its exhibits. (See Moore v. Regents of University of California
(1990) 51 Cal.3d 120, 125; Nolte v. Cedars-Sinai Medical Center (2015)
236 Cal.App.4th 1401, 1406.)
Wardwell and her husband purchased the residence in 2003 and began
living there. As Wardwell’s husband’s health declined, her son Robert Scott
Burns (Scott) and his wife Candace Leenheer (Candace) moved into the
residence and helped care for him. Wardwell’s husband died in 2014, and
Wardwell obtained title to the residence in a settlement with her husband’s
estate. The next year, Brian asked Wardwell to transfer title of the residence
to him “for tax planning purposes,” which would allow Brian and his wife to
avoid approximately $16,500 per year in taxes. Brian promised he would
hold title for only one or two years and would return it whenever Wardwell
requested. Wardwell executed a quitclaim deed transferring title to the
residence to Brian. The deed noted that the transfer was for “[n]o
consideration” and was a “[p]arent & child transfer.” It was notarized and
recorded. Wardwell continued to live at the residence and did not pay rent.
Two years later, Brian signed a letter memorializing their agreement.
The letter stated that the residence was “in the name of Brian Burns for tax
purposes only. I do not own the home, as upon the death of our mother it is
going to be sold and the proceeds will be split between Brian Burns and
Robert Scott Burns 50/50. In the event of my death, the home will go into the
name of Robert Scott Burns.” Wardwell and Brian’s wife signed the letter as
well.
3
The next year, after the roof and ceiling in the residence began to leak,
Wardwell discovered that Brian had drained her bank accounts of money.
Wardwell demanded that Brian reimburse her and reconvey title to the
residence back to her. Brian promised he would do so, but he did not follow
through.
Instead, without informing Wardwell, Brian sold the residence to
Vertical “for far under market value.” Brian and his wife signed deeds
transferring the residence to Vertical. A realtor served Candace with a
“Notice to Quit” claiming that PDQ Investments LLC owned the home.
Candace told the realtor that the residence belonged to Wardwell, who
resided there with Candace and Scott. Candace called Simis, who was listed
on the Notice to Quit, and left voicemails informing Simis that Wardwell was
the owner of the residence, she was having a title dispute with her son Brian,
and she was pursuing financial elder abuse claims against him. Candace also
emailed Simis the letter agreement between Brian, his wife, and Wardwell.
Simis talked with Candace the next day, thanked her for the information,
and said he would look into the dispute. In response to a follow-up email
requesting the names of the residence’s occupants, Candace identified herself,
her husband Scott, their children, and Wardwell.
A few days later, Simis “caused to be posted” a “ ‘60 Day Notice to
Terminate Tenancy’ ” addressed to Candace, Scott, and “ ‘all unknown
occupants.’ ” It did not identify Wardwell. The notice listed Vertical as the
owner of the residence. Candace emailed Simis again asking why neither
Vertical nor its agents tried to investigate Wardwell’s competing property
claim or her elder abuse allegations.
Vertical, Welsh, Simis, and Harcourts knew that Wardwell (and others)
lived at the residence, that Wardwell had transferred title to Brian for no
4
consideration, and that it took multiple deeds to transfer title to Vertical
(from Brian and his wife). The purchase price was $550,000, which was
“hundreds of thousands of dollars below fair market value.”
For her financial elder abuse claim, Wardwell alleged that Vertical,
Welsh, Simis, and Harcourts violated the statute “by taking, secreting,
appropriating, obtaining, and/or retaining Plaintiff’s property (specifically,
Plaintiff’s property rights including, but not limited to, her rights to the
HOME title, use of the HOME, and possession of the HOME) for a wrongful
use, or with intent to defraud, or by undue influence.” They “willfully and
negligently” ignored Wardwell’s property rights, failed to investigate her
elder abuse claims, and eventually evicted Wardwell from her home in an
unlawful detainer action. They did not return Wardwell’s property on
demand and instead used it for their own benefit.
For her intentional infliction of emotional distress cause of action,
Wardwell incorporated her prior allegations regarding defendants’ conduct.
She said that Vertical, Welsh, Simis, and Harcourts “intended to cause
serious emotional distress to Plaintiff, or they knew and disregarded the risk
that, by their conduct, they would be inflicting serious emotional injury upon
her.”
Wardwell alleged a cause of action for conversion against Vertical but
not the other defendants at issue here. She alleged that Vertical “committed
conversion by receiving the real property from Brian and [his wife]—who did
not have the right to give it away—and retained it and exercised dominion
and control over it, and ultimately sold it to a third party, with the intention
or purpose of keeping the sale proceeds for itself.”
Wardwell also alleged three causes of action based on theories of
constructive trust, unjust enrichment, and equitable estoppel. Wardwell’s
5
prayer for relief included requests for various declarations regarding
ownership of the residence, general and special damages, double and treble
damages, exemplary damages, restitution, and attorney fees.
As noted, Vertical, Welsh, and Simis demurred to Wardwell’s
complaint. Welsh maintained that the complaint identified him as the chief
executive officer of Vertical and an agent for Harcourts, but it did not allege
any facts that would impose liability on him personally. Simis contended the
complaint alleged only that he acted as legal counsel to Vertical, not that he
was subject to liability in his personal capacity. Vertical primarily contended
it was a BFP and therefore could not be liable for financial elder abuse. It
also argued that it could not be liable for conversion because that tort applies
only to personal property, not real property. Vertical, Welsh, and Simis
asserted that Wardwell’s cause of action for intentional infliction of emotional
distress was defective because their alleged acts were not extreme or
outrageous, and Wardwell had not alleged facts showing an intent to cause
emotional distress or reckless disregard of the risk of doing so. Lastly, they
argued the various remedies that were alleged as causes of action were
unavailable or not independently viable.
In opposition, Wardwell argued that Vertical was not a BFP because
Wardwell resided at the property at the time of the purchase, so Vertical had
a duty to inquire about her potential rights to the property. Vertical had also
purchased the property at a price “substantially below market value,” which
put Vertical on notice that Brian’s title was defective. Wardwell claimed that
Welsh and Simis were liable because they conspired with Vertical to
wrongfully obtain and retain Wardwell’s property. She claimed Vertical,
Welsh, and Simis had acted in an extreme and outrageous manner after
6
purchasing the residence, and her conversion claim was based on the theft of
proceeds from the sale of her home.
After hearing argument, the trial court sustained the demurrer. In a
written order, the court found that Wardwell had not pled facts to show that
Vertical had actual or constructive notice of her competing claim to the
property. Likewise, there were no facts pled against Welsh and Simis other
than the bare conclusion that they were conspirators. Wardwell had failed to
allege facts sufficient to state any claim. The court dismissed Wardwell’s
complaint with prejudice and entered judgment accordingly.
Harcourts answered the complaint and filed a motion for judgment on
the pleadings. It argued that Wardwell’s complaint failed to state a cause of
action for substantially the same reasons as the earlier demurrer. The court
granted the motion and entered judgment against Wardwell.2
DISCUSSION
I
Standards of Review
“The sustaining of a demurrer without leave to amend is reviewed de
novo. The reviewing court exercises its independent judgment as to whether
a cause of action has been stated as a matter of law.” (Los Altos El Granada
Investors v. City of Capitola (2006) 139 Cal.App.4th 629, 648.) “A motion for
judgment on the pleadings is equivalent to a demurrer and is governed by the
2 Harcourts moved for sanctions on the ground that Wardwell’s
complaint against Harcourts was frivolous and maintained for an improper
purpose. (See Code Civ. Proc., § 128.7.) The trial court granted the motion
and awarded sanctions against Wardwell’s counsel in the amount of $8,690.
This court previously informed the parties that this appeal does not include
review of the sanctions order because the notices of appeal filed by Wardwell
and her counsel did not identify that particular order. (See Colony Hill v.
Ghamaty (2006) 143 Cal.App.4th 1156, 1171.)
7
same de novo standard of review.” (Adams v. Bank of America, N.A. (2020)
51 Cal.App.5th 666, 670 (Adams).)
“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. [Citation.]
When a demurrer is sustained, we determine whether the complaint states
facts sufficient to constitute a cause of action. [Citation.] And when it is
sustained without leave to amend, we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can be, the trial
court has abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm. [Citations.] The burden of proving such
reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985)
39 Cal.3d 311, 318 (Blank); see Adams, supra, 51 Cal.App.5th at pp. 670-
671.)
We adopt “a liberal construction of the pleading” and draw “all
reasonable inferences in favor of the asserted claims.” (Candelore v.
Tinder, Inc. (2018) 19 Cal.App.5th 1138, 1143.) But “[w]here a pleading
includes a general allegation, such as an allegation of an ultimate fact, as
well as specific allegations that add details or explanatory facts, it is possible
that a conflict or inconsistency will exist between the general allegation and
the specific allegations. To handle these contradictions, California courts
have adopted the principle that specific allegations in a complaint control
over an inconsistent general allegation. [Citations.] Under this principle, it
is possible that specific allegations will render a complaint defective when the
8
general allegations, standing alone, might have been sufficient.” (Perez v.
Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1235-1236.)
“ ‘Even when our review on appeal “is de novo, it is limited to issues
which have been adequately raised and supported in [the appellant’s
opening] brief. [Citations.] Issues not raised in an appellant’s brief are
deemed waived or abandoned.” ’ ” (Golden Door Properties, LLC v. County of
San Diego (2020) 50 Cal.App.5th 467, 554-555.) “ ‘A judgment or order of the
lower court is presumed correct. All intendments and presumptions are
indulged to support it on matters as to which the record is silent, and error
must be affirmatively shown. This is not only a general principle of appellate
practice but an ingredient of the constitutional doctrine of reversible error.’ ”
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
“To demonstrate error, appellant must present meaningful legal
analysis supported by citations to authority and citations to facts in the
record that support the claim of error. [Citations.] When a point is asserted
without argument and authority for the proposition, ‘it is deemed to be
without foundation and requires no discussion by the reviewing court.’ ”
(In re S.C. (2006) 138 Cal.App.4th 396, 408 (S.C.).) “ ‘We are not bound to
develop appellants’ arguments for them. [Citation.] The absence of cogent
legal argument or citation to authority allows this court to treat the
contention as waived.’ ” (Cahill v. San Diego Gas & Electric Co. (2011)
194 Cal.App.4th 939, 956 (Cahill).)
II
Financial Elder Abuse
The Elder Abuse and Dependent Adult Civil Protection Act (§ 15600
et seq.) provides remedies for elders and dependent adults who are subjected
to financial abuse. (§ 15657.5.) Financial abuse occurs when, among other
9
things, a person or entity “[t]akes, secretes, appropriates, obtains, or retains
real or personal property of an elder or dependent adult for a wrongful use or
with intent to defraud, or both.” (§ 15610.30, subd. (a)(1).) A person or entity
may also be liable for assisting in such conduct. (§ 15610.30, subd. (a)(2).)
Under the statute, “a person or entity takes, secretes, appropriates,
obtains, or retains real or personal property when an elder or dependent
adult is deprived of any property right, including by means of an agreement,
donative transfer, or testamentary bequest, regardless of whether the
property is held directly or by a representative of an elder or dependent
adult.” (§ 15610.30, subd. (c).) A “ ‘representative’ ” includes an “attorney-in-
fact of an elder or dependent adult who acts within the authority of the power
of attorney.” (§ 15610.30, subd. (d)(1).)
The requirement of “wrongful use” is deemed satisfied where the
person or entity “knew or should have known that this conduct is likely to be
harmful to the elder or dependent adult.” (§ 15610.30, subd. (b).) The harm
contemplated by the statute includes financial harm; it need not be physical
harm or mental suffering. (Mahan v. Charles W. Chan Insurance Agency,
Inc. (2017) 14 Cal.App.5th 841, 866; Bonfigli v. Strachan (2011)
192 Cal.App.4th 1302, 1316.)
Vertical demurred to this cause of action on the ground that it was a
BFP of Wardwell’s residence. Setting aside whether Vertical could be liable
for financial elder abuse even if it were a BFP, we conclude Wardwell’s
allegations do not establish that Vertical was a BFP. Instead, they
sufficiently allege the opposite.
“ ‘It is “black-letter law” that a bona fide purchaser for value who
acquires his or her interest in real property without knowledge or notice of
another’s prior rights or interest in the property takes the property free of
10
such unknown interests.’ [Citations.] Conversely, ‘it is an equally well-
established principle of law that any purchaser of real property acquires the
property subject to prior interests of which he or she has actual or
constructive notice.’ [Citation.] ‘Actual notice is defined as “express
information of a fact,” while constructive notice is that “which is imputed by
law.” ’ ” (Vasquez v. LBS Financial Credit Union (2020) 52 Cal.App.5th 97,
107.) The determination of whether a party is a BFP is ordinarily a question
of fact. (Id. at p. 109.)
“[T]he two elements of being a BFP are that the buyer (1) purchase the
property in good faith for value, and (2) have no knowledge or notice of the
asserted rights of another.” (Melendrez v. D&I Investment, Inc. (2005)
127 Cal.App.4th 1238, 1251.) For purposes of this appeal, at least, Wardwell
does not appear to dispute that Vertical purchased the residence for value.
Wardwell primarily argues that Vertical cannot satisfy the second element,
the absence of knowledge or notice of the rights of another. We agree.
Wardwell alleges she lived in the residence, and believed she was still
its owner, when Vertical purchased the property. Wardwell’s possession of
the residence was sufficient to put Vertical on notice of her property rights.
“As a general rule, possession of real property is constructive notice to any
intending purchaser or encumbrancer of said property. This rule is so well
established that citation of authority is hardly necessary. . . . This rule
applied even in the case of a grantor remaining in possession after execution
and delivery of a deed to his vendee.” (J.R. Garrett Co. v. States (1935)
3 Cal.2d 379, 381; accord, Pell v. McElroy (1868) 36 Cal. 268, 273 [“The
simple, independent fact of possession is sufficient to raise a presumption of
interest in the premises on behalf of the occupant.”].)
11
“ ‘The possession required to impart notice to a subsequent purchaser
must be open, notorious, exclusive and visible, and not consistent with the
record title.’ [Citation.] If either a tenant or a stranger is in possession of
leased premises, the purchaser is charged with all those facts which might
have been ascertained had a reasonably diligent inquiry been made.
[Citations.] ‘ “Possession is notice not only of whatever title the occupant has
but also of whatever right he may have in the property, and the knowledge
chargeable to a person after he is put on inquiry by possession of land is not
limited to such knowledge as would be gained by examination of the public
records.” ’ ” (Claremont Terrace Homeowners’ Assn. v. United States (1983)
146 Cal.App.3d 398, 408-409 (Claremont Terrace).) “The circumstances of
each case dictate whether an inquiry should be made, a determination which
ordinarily involves a question of fact.” (Gates Rubber Co. v. Ulman (1989)
214 Cal.App.3d 356, 366.)
Liberally construing Wardwell’s complaint, we conclude she sufficiently
alleged that she was in open, notorious, exclusive, and visible possession of
the residence. She had lived there for many years, with her son Scott and his
wife Candace, and she was engaged in an active dispute with her other son
Brian over title to the property. Vertical claims, without citation to
authority, that Wardwell’s allegations are insufficient because Wardwell did
not allege that Vertical or its agents knew Wardwell was in possession of the
property. Vertical’s claim is unpersuasive because such knowledge is not
required. It is possession itself that imparts notice, which is why it must be
open, notorious, exclusive, and visible. (Claremont Terrace, supra,
146 Cal.App.3d at pp. 408-409; accord, In re Gulino (9th Cir. 1985) 779 F.2d
546, 550 & fn. 2.) “A purchaser may not[,] by failing to acquaint herself with
the open and clearly discernible possession and use of the land by another
12
than her prospective vendor[,] avoid making inquiry on the subject, and
thereby evade the rule in regard to notice as well as its consequences.
[Citation.] The buyer . . . was bound to know who was in possession of the
property and is chargeable with notice of the occupants’ title.” (Taylor v.
Ballard (1919) 41 Cal.App. 232, 238.)3
As one leading treatise explains, “A purchaser or encumbrancer is
required to inspect the property to be transferred or which will become
collateral and is charged with knowledge of information that would be
revealed by a reasonable inspection of the property. ‘One who purchases real
estate is bound to know who is in possession thereof and is chargeable with
notice of the occupant’s title.’ ” (4 Miller & Starr, Cal. Real Estate (4th ed.
2015) § 10:84, fns. omitted.)
Wardwell’s possession was also inconsistent with the record title, which
listed only Brian as the owner. Vertical argues that Wardwell’s possession
was consistent with the title because she was Brian’s mother. It does not cite
any authority supporting this argument. At this stage, Wardwell’s
allegations are sufficient. The fact that Wardwell is the mother of the record
owner does not conclusively demonstrate that her possession is consistent
with the title. The parent-child relationship does not preclude the possibility,
as here, of a dispute over property rights. Indeed, many such disputes might
arise in the context of related individuals. The rule that possession imparts
3 Although her pleading is somewhat unclear, Wardwell claims in her
briefing that she alleged Vertical, Welsh, Simis, and Harcourts knew
Wardwell was living on the property at the time of the sale. Thus, even if
knowledge were a requirement, we would allow Wardwell leave to amend to
clarify and confirm such an allegation.
13
constructive notice serves the same purpose in this situation as in non-family
contexts.4
Our conclusion is supported by Wardwell’s allegation that Vertical
purchased the residence for considerably less than market value. “While
mere inadequacy of consideration may not be sufficient to deprive one of his
position as a purchaser for value, an offer by a vendor to sell for a grossly
inadequate price is a circumstance which should place the purchaser on his
guard and may be such as to require that he make a reasonable inquiry as to
the title of the vendor not disclosed by the records. If the sum which the
vendor is willing to take is grossly disproportionate to the value of the thing
which is the subject of the negotiation, it is strong proof of a defective title,
and sufficient to put a prudent person upon inquiry, and if the purchaser
neglects to prosecute such inquiry diligently, he may not be awarded the
standing of a bona fide purchaser.” (Rabbit v. Atkinson (1941) 44 Cal.App.2d
752, 757-758.)
Vertical disputes Wardwell’s allegation with evidence that the home
was not in good condition. However, this evidence is not fatally inconsistent
with Wardwell’s allegation. The residence could have been sold for less than
market value even considering its poor condition. We must credit Wardwell’s
4 Vertical references the concepts of “hostile” or “adverse” possession, but
it does not cite any authority or offer any cogent legal argument that such
concepts are relevant to the question of inconsistency of title. Vertical also
emphasizes Wardwell was “a complete stranger” and neither Vertical nor its
agents had any relationship with her. Such a relationship is not required.
Possession imparts notice to a prospective purchaser even in the absence of a
preexisting relationship. “ ‘It is a general rule that possession of real
property is constructive notice to any intending purchaser or encumbrancer of
the property of all the rights and claims of the person in possession which
would be disclosed by inquiry.’ ” (Claremont Terrace, supra, 146 Cal.App.3d
at p. 408, italics added.)
14
allegations. “At this pleading stage of the case, we must accept those
allegations as true. [Citation.] We do not question petitioners’ ability to
prove them.” (Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 483.)
Vertical also focuses on whether it purchased the property for value at all,
but that inquiry is relevant to the first element of the BFP analysis, rather
than this second element.
Vertical argues that Wardwell’s financial elder abuse cause of action
fails because Wardwell has not alleged “wrongful use” under the statute. The
primary basis for Vertical’s argument appears to be its status as a BFP.
Because Wardwell’s allegations do not require a finding that Vertical was a
BFP, Vertical’s argument is unpersuasive. It is unclear whether Vertical
argues that Wardwell’s allegations are insufficient, separate and apart from
the BFP issue. To the extent we can discern such an argument, it is
unpersuasive. Vertical cites Paslay v. State Farm General Ins. Co. (2016)
248 Cal.App.4th 639, 657-658, but that opinion considered a contractual
dispute where an insurance company acted under a good faith interpretation
of its rights under the contract. Vertical’s purchase of Wardwell’s residence,
under circumstances where it had constructive notice of her competing
property right, is not comparable.
Our conclusions regarding Vertical do not automatically apply to the
other defendants, however. Welsh, Simis, and Harcourts did not purchase
Wardwell’s residence. Wardwell asserts that they are liable because they
acted “in conspiracy with” Vertical to wrongfully obtain and retain
Wardwell’s property. Beyond this bare conclusion, Wardwell does not
support her assertion with reasoned legal argument or citation to authority.
It is therefore waived. (See Cahill, supra, 194 Cal.App.4th at p. 956; S.C.,
supra, 138 Cal.App.4th at p. 408.) Wardwell also contends Welsh, Simis, and
15
Harcourts are vicariously liable because they are Vertical’s agents. But the
authority cited by Wardwell establishes only that a principal may be liable
for its agent’s torts. (See Balfour, Guthrie & Co. v. Hansen (1964)
227 Cal.App.2d 173, 192.) It does not discuss whether and under what
circumstances an agent may be liable based on his participation in his
principal’s torts, and neither does Wardwell.
Wardwell argues that the “Respondents” ratified or had “imputed
knowledge of” a fraud committed by Welsh and Simis. Wardwell fails to
show, however, that she sufficiently alleged any such fraud. (See Lazar v.
Superior Court (1996) 12 Cal.4th 631, 638, 645.) Nor does she show how any
such fraud relates to the elements of financial elder abuse under the
circumstances here. Additionally, as to Harcourts, Wardwell cites its duty as
Vertical’s broker to “disclose reasonably obtainable material information.”
(Field v. Century 21 Klowden-Forness Realty (1998) 63 Cal.App.4th 18, 25.)
But this duty runs to Vertical, not to Wardwell. Wardwell has not shown
that the alleged violation of this duty supports a cause of action by Wardwell.
In general, although an agent is always liable for his own torts (see,
e.g., Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003)
107 Cal.App.4th 54, 68), Wardwell has not shown she alleged the basis for
any liability here. We therefore conclude the trial court erred by finding that
Wardwell had not stated a claim against Vertical, but it did not err as to
Welsh, Simis, or Harcourts.5
5 In light of our conclusion, and our standard of review, we need not
consider whether the trial court improperly relied on prior orders in its BFP
analysis.
16
III
Wardwell’s Other Tort Causes of Action
Wardwell contends she has alleged or could allege facts sufficient to
state a cause of action for intentional infliction of emotional distress, based
on (1) Vertical’s purchase of Wardwell’s residence; (2) its decision (in
cooperation with Welsh and Simis) to pursue unlawful detainer proceedings
to evict Wardwell, after they had actual notice of Wardwell’s dispute with her
son; (3) a misrepresentation in their unlawful detainer complaint that a
$3,000 monthly lease existed for the property; and (4) the subsequent sale of
the residence to a third party for profit.
“The elements of a prima facie case for the tort of intentional infliction
of emotional distress are: (1) extreme and outrageous conduct by the
defendant with the intention of causing, or reckless disregard of the
probability of causing, emotional distress; (2) the plaintiff’s suffering severe
or extreme emotional distress; and (3) actual and proximate causation of the
emotional distress by the defendant’s outrageous conduct.” (Cervantez v.
J.C. Penney Co. (1979) 24 Cal.3d 579, 593 (Cervantez).) “Conduct to be
outrageous must be so extreme as to exceed all bounds of that usually
tolerated in a civilized community.” (Ibid.)
Wardwell does little to support her contention other than cite
Cervantez. In that opinion, our Supreme Court approved of a claim for
intentional infliction of emotional distress where, among other things, the
plaintiff alleged that an off-duty police officer working as a security guard
arrested him “either with knowledge that plaintiff had not committed any
offense or with reckless disregard for whether he had or not.” (Cervantez,
supra, 24 Cal.3d at p. 593.)
17
The allegations in Cervantez are not comparable to the allegations at
issue here. The defendants were not actually aware of Wardwell’s competing
claim until after Vertical purchased the residence. When Wardwell asserted
her claim, Vertical brought the dispute to the courts. To the extent Vertical
made a misrepresentation, Wardwell has not shown it was material. After
Vertical prevailed in the unlawful detainer action, it sold the property. The
conduct Wardwell alleges is not extreme, outrageous, or intolerable in a
civilized community. Her allegations are insufficient to state a claim.
(See Yu v. Signet Bank/Virginia (1999) 69 Cal.App.4th 1377, 1398 [“An
assertion of legal rights in pursuit of one’s own economic interests does not
qualify as ‘outrageous’ under this standard.”]; Kruse v. Bank of America
(1988) 202 Cal.App.3d 38, 67 [“A party is not subject to liability for infliction
of emotional distress when it has merely pursued its own economic interests
and properly asserted its legal rights.”]; see also Quinteros v. Aurora Loan
Servs. (E.D.Cal. 2010) 740 F.Supp.2d 1163, 1172 [“The act of foreclosing on a
home (absent other circumstances) is not the kind of extreme conduct that
supports an intentional infliction of emotional distress claim.”].)
Wardwell also contends she alleged facts sufficient to state a cause of
action against Vertical for conversion. Her allegations run afoul of the
general rule that “[t]he tort of conversion applies to personal property, not
real property.” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1295.)
Citing Gherman v. Colburn (1977) 72 Cal.App.3d 544, 568 (Gherman),
Wardwell argues she has a valid claim for conversion of personal property,
i.e., the proceeds from Vertical’s sale of the property to a third party. We
disagree. Gherman considered a specific situation: a joint venture in which
one party held title to certain real property on behalf of the venture. (Ibid.)
When that party repudiated the joint venture relationship and claimed the
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entire property for itself, it “became obligated to pay plaintiffs damages in the
form of money. In our view that constitutes a conversion in equity.” (Ibid.)
Gherman based its holding on the principle that a “ ‘partnership interest held
by a copartner is treated in equity as personalty,’ ” even if the property at
issue is realty. (Ibid.) Thus, the party holding title “converted plaintiffs’
personal property [i.e., their interest in the joint venture] to their own use
and benefit.” (Id. at p. 569.) No similar situation exists here.6
IV
Wardwell’s Remedy Causes of Action
Wardwell’s complaint includes causes of action for constructive trust,
unjust enrichment, and equitable estoppel. The latter two remedies are not
independent causes of action. (See Melchior v. New Line Productions, Inc.
(2003) 106 Cal.App.4th 779, 793 [unjust enrichment]; Moncada v. West Coast
Quartz Corp. (2013) 221 Cal.App.4th 768, 782 [equitable estoppel].)
Wardwell has not shown the court erred by finding that these purported
causes of action were insufficient.
A constructive trust may be alleged as an independent cause of action.
(Higgins v. Higgins (2017) 11 Cal.App.5th 648, 658-659; but see Glue-
Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3.)
Wardwell argues that Vertical “hold[s] the profit from its quick sale of the
property, as does Harcourts,” but she does not cite any authority or make any
cogent legal argument that her allegations are sufficient to impose a
6 Wardwell’s opening brief contains a quotation that she attributes to
Gherman but which does not appear in that opinion. It comes instead from
an unpublished federal district court order. (See Jacot v. Miller (D. Guam,
Sept. 28, 2017, No. 16-00074) 2017 WL 4320322, at *4.) The order makes
clear that Gherman’s holding applies to “cases featuring ventures involving
real property” and followed it in that context. (Ibid.)
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constructive trust on either defendant. Wardwell does not identify the
elements of a constructive trust or explain how they are satisfied. Her
treatment is insufficient to support reversal. (See Cahill, supra,
194 Cal.App.4th at p. 956; S.C., supra, 138 Cal.App.4th at p. 408.) Our
conclusion is without prejudice to such a remedy on remand, should
Wardwell prove liability on a different cause of action.
V
Leave to Amend
Wardwell contends the trial court abused its discretion by denying
leave to amend her complaint. But she does not identify any new factual
allegations, let alone explain how the new allegations would be sufficient to
state a cause of action. She has not met her burden of showing a reasonable
possibility that the defects in her complaint can be cured. (See Blank, supra,
39 Cal.3d at p. 318; see also Rakestraw v. California Physicians’ Service
(2000) 81 Cal.App.4th 39, 43-44.) She has not shown the trial court abused
its discretion by denying leave to amend.
DISPOSITION
The judgments in favor of Welsh, Simis, and Harcourts are affirmed.
The judgment in favor of Vertical is reversed with the following directions.
On remand, the trial court shall (1) vacate its order sustaining Vertical’s
demurrer, (2) enter a new order overruling the demurer as to Wardwell’s
financial elder abuse cause of action and otherwise sustaining the demurrer
without leave to amend, and (3) conduct further proceedings consistent with
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this opinion. In the interests of justice, the parties shall bear their own costs
on appeal.
GUERRERO, J.
WE CONCUR:
IRION, Acting P. J.
DATO, J.
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