McDowell v. Wedgewood, LLC CA2/5 ( 2024 )

Filed 9/9/24 McDowell v. Wedgewood, LLC CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
KEVIN R. MCDOWELL et al., B330350
Plaintiffs and (Los Angeles County
Appellants, Super. Ct. No.
23STCV02140)
v.
WEDGEWOOD, LLC, et al.,
Defendants and
Respondents.
APPEAL from a judgment of the Superior Court of the
County of Los Angeles, Michael L. Stern, Judge. Reversed and
remanded with instructions.
Kevin R. McDowell, self-represented litigant, for Plaintiffs
and Appellants.
Meghan E. Turner, for Defendants and Respondents.
I. INTRODUCTION
Plaintiff Kevin McDowell, as successor trustee of the
Mattie B. Evans Family Trust, dated June 7, 2016, and
individually, appeals from the trial court’s order sustaining
without leave to amend a demurrer to the first amended
complaint against defendants.1 We conclude that the court erred
in sustaining the demurrer to the conversion cause of action, but
that it did not abuse its discretion by denying plaintiff leave to
amend the complaint. We therefore reverse the judgment with
instructions to enter a new order overruling the demurrer to the
conversion cause of action.
II. FACTUAL BACKGROUND2
A. Properties
Plaintiff’s mother, Mattie Evans, owned two properties in
the City of Los Angeles, one located on Don Porfirio Place (the
Porfirio property) and the other located on Don Lorenzo Drive
(the Lorenzo property). In 2016, she transferred those properties
1 Defendants are Wedgewood LLC (Wedgewood),
Breckenridge Property Fund 2016, LLC (Breckenridge), and
Redwood Holding, LLC (Redwood).
2 We state the facts in a manner consistent with the
standard governing our review, accepting as true all well-pleaded
material allegations, but not contentions, deductions or
conclusions of fact or law, and we also consider matters which
may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311,
318.)
2
by quit claim deed into the “Mattie B. Evans Family Trust, dated
June 7, 2016” (living trust). The living trust instrument named
plaintiff as successor trustee.3
B. Trustee Sales
In September 2020, the trustee on a deed of trust executed
by Evans encumbering the Porfirio property conducted a trustee
sale at which Redwood acquired title to the property. In
November 2020, the trustee on a deed of trust executed by Evans
encumbering the Lorenzo property conducted a trustee sale at
which Breckenridge acquired title to that property.
Evans passed away on December 30, 2020.
C. Unlawful Detainer Actions/Writs of Possession
On January 5, 2021, in an unlawful detainer action that it
filed against Evans, as trustor of the living trust, Breckenridge
obtained a default judgment concerning the right to possession of
the Lorenzo property. That same day, Breckenridge obtained a
writ entitling it to possession of Lorenzo. On February 10, 2021,
the Los Angeles County Sheriff’s Department served a copy of the
writ and posted it at the Lorenzo property.
3 The trust instrument attached to the first amended
complaint appears to be incomplete. Specifically, the table of
contents, under “Distributions to Beneficiaries,” shows shares of
trust proceeds being divided among plaintiff, three siblings, and
the issue of two deceased siblings as beneficiaries. But the pages
of the trust instrument referred to in the table are missing from
the attached document.
3
On January 15, 2021, in an unlawful detainer action that it
filed against Evans, as trustor of the living trust, Redwood
obtained a default judgment concerning the right to possession of
the Porfirio property. On February 8, 2021, Redwood obtained a
writ of possession for Porfirio. On February 17, 2021, the
Sheriff’s Department served a copy of the writ and posted it at
the Porfirio property.
The writs for both properties provided notice that any
personal property remaining on the premises would be sold or
otherwise disposed of in accordance with Code of Civil Procedure
section 1174 (section 1174) unless the owner paid “the judgment
creditor the reasonable cost of storage” and took possession of the
personal property not later than 15 days after the time the
judgment creditor took possession of the premises.
D. Storage and Sale of Personal Property
Upon receiving the notice, plaintiff, who was then residing
at the Lorenzo property, moved what belongings he could to the
Porfirio property, leaving behind furnishings worth $18,000 and
other property including a refrigerator, a television, and a sound
system. Plaintiff then spoke with Wedgewood’s attorney who, in
turn, put him in touch with Breckenridge representative Olivia
Reyes. Reyes advised plaintiff that he would have 15 days to call
her and schedule a time to pick up his belongings.
Because he was unable to get someone to help him move
his belongings, plaintiff left his personal belongings at both
properties. He did so believing that his belongings would not be
disposed of without his knowledge and that, if they were
auctioned, there would be a surplus of sales proceeds after
4
deducting the auction costs. Plaintiff estimated that he left
approximately $84,000 worth of furniture and other belongings at
the Porfirio property.
In June or July 2021, plaintiff attempted to ascertain the
status of the personal property that he had left at the Porfirio
property. His attorney contacted the attorney for the trustee who
had conducted the sale of the Porfirio property and was assured
that the property would not be sold.
In October 2021, plaintiff contacted Sam Chandra, the
attorney who represented Redwood and Breckenridge in the
unlawful detainer proceedings, who referred him to Wedgewood
representative Reyes. Reyes told plaintiff that Wedgewood was
responsible for the disposition of his personal property, the
property had been auctioned, he would need to contact the
auction company regarding any surplus, and he should not call
her again. Plaintiff tried calling the auction company, but was
unable to speak with anyone. He then spoke to Chandra who
advised that he was not representing defendants regarding the
disposition of plaintiff’s personal property and that they had a
different attorney handling that matter.
In response to demand letters that plaintiff sent to
defendants, he received an April 22, 2022, cover letter from
attorney Chandra enclosing a letter to plaintiff from Redwood
detailing the disposition of the property left at Porfirio and
confirming that no auction had been conducted as to Lorenzo.
The enclosed letter set forth an accounting of the property left at
Porfirio. It indicated that the storage of plaintiff’s property began
on February 26, 2021—the day following the “Sheriff’s Lockout”—
and ended on April 8, 2021—the date plaintiff’s property was
auctioned. The accounting included an amount for 41 days of
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storage, $9,566.53, and indicated that the amount remitted from
the auction, after deduction of fees and expenses, was $2,811.20.
The accounting showed that, due to the storage costs, there was a
negative balance due of $6,755.33, which did not include the
additional sum of $32,666.20 in holdover damages.
III. PROCEDURAL BACKGROUND
A. First Amended Complaint
On February 15, 2023, plaintiff, individually and in his
capacity as the successor trustee of the living trust, filed a
verified first amended complaint against defendants asserting
three causes of action for (1) “[w]illful [n]egligence and [f]raud” in
violation of Civil Code section 1983, subdivisions (a) through (c);
(2) embezzlement in violation of Civil Code section 1988 and
Penal Code section 484; and (3) “[c]onversion and [u]njust
[e]nrichment”4 in violation of Civil Code section 1983. The
complaint attached 17 exhibits, including a portion of the living
trust instrument.
4 Unjust enrichment is not a cause of action; it is a claim for
restitution. (De Havilland v. FX Networks, LLC (2018) 21
Cal.App.5th 845, 870.) Accordingly, we will refer to this cause of
action as one for conversion only.
The complaint also asserted, as a fourth cause of action, a
request for punitive damages.
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B. Demurrer
On March 21, 2023, defendants filed a demurrer to the first
amended complaint, arguing that plaintiffs had failed to allege
facts sufficient to state any of the three claims for relief. They
argued that the disposition of personal property left at a premises
after a judgment debtor is placed in possession under a writ of
possession is governed by section 1174, which requires a notice in
conformance with Civil Code section 1983.5 Because the notice
posted at the two properties by the Sheriff’s Department
conformed with the requirements of section 1174 and Civil Code
section 1983, defendants maintained that plaintiff was not
entitled to any further or separate notice.
As to the negligence and fraud claim, defendants argued
that their compliance with section 1174 demonstrated that they
did not breach any duty of care to plaintiff. On the embezzlement
claim, defendants asserted that they did not violate Civil Code
section 1988—which requires the balance of the sales proceeds
after auction to be deposited with the county treasurer—because
their documentation showed there was no balance to deposit and
that there is no private right of action under Penal Code section
484. And, as to the conversion claim, defendants argued that, to
the extent it was based on their failure to auction the property
left at the Lorenzo property, plaintiff failed to allege that it was
worth more than $700 as required under Civil Code section 1988.
Finally, defendants contended that leave to amend should
be denied because the documents attached to the complaint
5 Civil Code section 1983, subdivision (a) requires notice to
“the tenant and to any other person the landlord reasonably
believes to be the owner of the property.”
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demonstrated that they had complied with the law governing the
disposition of plaintiff’s property, such that there was no
reasonable probability that plaintiff could truthfully amend to
cure the deficiencies.
On April 10, 2023, plaintiff, in propria persona, filed an
opposition to the demurrer. He conceded on the demurrer to his
first cause of action for negligence and fraud, but opposed the
demurrer to the second cause of action for embezzlement and
third cause of action for conversion. According to plaintiff,
defendants “clearly converted” his personal property in violation
of Civil Code section 1988 because that property was worth more
than $700 and defendants therefore had an obligation to store
and auction the property and remit any balance after storage
costs and auction expenses.
On behalf of the living trust, plaintiff also requested leave
to amend to state a claim for an accounting.
Defendants filed a reply.
C. Ruling
At the April 24, 2023, hearing, which was not transcribed
by a court reporter, the trial court heard argument and took the
matter under submission. That same day, the court issued a
minute order sustaining the demurrer without leave to amend.
The court noted that plaintiff could not represent the living trust
in propria persona unless he was the sole settlor and beneficiary.
The court further noted that the trust documents showed there
were other sibling beneficiaries, a fact plaintiff acknowledged at
the hearing. Although plaintiff claimed at the hearing that his
siblings were no longer interested in “serving as trustees,” the
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court found that he did not show by probate order or written
documents that “these co-trustees [had] abandoned their trustee
duties or ceded such responsibilities to [plaintiff].” The court
therefore sustained the demurrer to all the living trust’s claims
without leave to amend.
As to plaintiff’s individual claims, the trial court concluded
that because plaintiff was not entitled to a separate notice under
Civil Code section 1983, the demurrer must be sustained without
leave to amend. In the alternative, the court concluded that
plaintiff’s “allegations of the [f]irst [a]mended [c]omplaint ha[d]
no factual nexus with any of the causes of action” and therefore
sustained the demurrer to all claims without leave to amend on
that basis as well.
IV. DISCUSSION
A. Demurrer Standards
We review a trial court’s sustaining of a demurrer de novo.
(Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) “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.]” (Ibid.)
If we conclude that the complaint does not state a cause of
action, “we must decide whether there is a reasonable possibility
9
the plaintiff could cure the defect with an amendment.
[Citation.] If we find that an amendment could cure the defect,
we conclude that the trial court abused its discretion and we
reverse; if not, no abuse of discretion has occurred. [Citation.]”
(Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
Ordinarily, “leave to amend is liberally allowed as a matter
of fairness, unless the complaint shows on its face that it is
incapable of amendment.” (City of Stockton v. Superior Court
(2007) 42 Cal.4th 730, 747.) “If we see a reasonable possibility
that the plaintiff could cure the defect by amendment, then we
conclude that the trial court abused its discretion in denying
leave to amend.” (Campbell v. Regents of University of California
(2005) 35 Cal.4th 311, 320.)
B. Analysis
1. Living Trust’s Claims
The trial court correctly sustained the demurrer to the
complaint as to the living trust’s claims. The documents attached
to the complaint indicated that plaintiff, who was appearing in
propria persona, was not the sole beneficiary of the trust. And,
plaintiff did not provide the court with any documentation
showing that one or more of the beneficiaries had relinquished
their rights to a share of the trust proceeds. Therefore, plaintiff
could not represent the interests of the trust. (See Aulisio v.
Bancroft (2014) 230 Cal.App.4th 1516, 1519 [“[I]n actions
involving the trust corpus, a trustee generally may not appear in
propria persona ‘“because in this capacity [he or she] would be
representing interests of others and would therefore be engaged in
10
the unauthorized practice of law. [Citation.]”’ [Citation.] But if
a sole trustee is also the trust’s sole settlor and beneficiary, the
rationale of these cases ceases to apply: no interests are at stake
except those of one person”].)
2. Individual Claims
We also conclude that the trial court correctly sustained the
demurrer to plaintiff’s negligence and fraud claims. Plaintiff
conceded below that he failed to state a negligence or fraud claim.
Indeed, plaintiff did not allege either that defendants owed him a
duty of care or that they induced him to leave the property at
both locations by falsely assuring him that it would not be
disposed of without his knowledge and consent.
As to the embezzlement claim, there is no private right of
action under Penal Code section 484, and plaintiff failed to
adequately allege a tort claim cognizable at common law based on
the elements of criminal embezzlement. (See Ferrick v. Santa
Clara University (2014) 231 Cal.App.4th 1337, 1347
[“‘Embezzlement requires conversion of trusted funds [or
property] coupled with the intent to defraud’”].)
But, as to the conversion claim, to the extent it was based
on defendants’ failure to auction the personal property left at the
Lorenzo property as required under Civil Code section 1988,
plaintiff alleged that the property he left behind was worth more
than $700.6 Specifically, he alleged that he had moved what
6 At oral argument, defendants asserted for the first time
that Civil Code section 1988 did not apply to their disposition of
the property left behind at Lorenzo because plaintiff did not
adequately allege that he was a tenant at that premises. We do
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property he could from Lorenzo to the Porfirio property and
alleged the value of the property that he left behind at Lorenzo
was in excess of $18,000. And, defendants’ letter explaining the
disposition of the property left at Lorenzo admitted that it was
not sold at a public auction. Therefore, plaintiff sufficiently
alleged a violation of Civil Code section 19887 and, therefore, a
claim for conversion because defendants allegedly disposed of his
personal property left at Lorenzo in a manner that was
inconsistent with his rights under section 1988. (Fremont
not reach arguments raised for the first time at oral argument.
(McMillin Homes Construction, Inc. v. National Fire & Marine
Ins. Co. (2019) 35 Cal.App.5th 1042, 1056, fn. 7.) But even if we
were to reach the new argument, we would reject it as based on a
faulty premise. As explained below, the requirements of Civil
Code section 1988 are not limited to the personal property of the
tenant at the premises; they apply to anyone the landlord
reasonably believes to be the owner of the property.
7 As noted, the notice provisions of Civil Code section 1983
apply where personal property remains at the premises after a
tenancy is terminated and the premises is vacated by the tenant.
In such circumstances, notice of intent to sell must be given, not
only to the tenant, but also to any person the landlord reasonably
believes to be the owner of the personal property.
Section 1988 provides that, after such persons are notified
of the landlord’s intent to sell it at auction, the property “shall be
sold at public sale by competitive bidding,” unless its value is less
than $700, in which case the landlord “may retain the property
for his or her own use or dispose of it in any manner.”
Subdivision (c) requires that, “[a]fter deduction of the costs of
storage, advertising, and sale, any balance of the proceeds of the
sale which is not claimed by the former tenant or an owner other
than such tenant shall be paid into the treasury of the
county . . . .” (Italics added.)
12
Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th
97, 119 (Fremont) [“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. [Citation.]”].)
3. Leave to Amend
“‘A showing that the complaint can be amended to state a
cause of action “need not be made in the trial court so long as it is
made to the reviewing court.” If there is a reasonable possibility
that a plaintiff can amend [her] complaint to cure the defects,
leave to amend must be granted.’ [Citation.] Still, ‘on appeal the
plaintiff does bear the burden of proving there is a reasonable
possibility the defect in the pleading can be cured by amendment.
[Citation.] “‘. . . Plaintiff must show in what manner [she] can
amend [her] complaint and how that amendment will change the
legal effect of [her] pleading. . . .’ [Citation.]” [Citation.]’
[Citation.]” (Velez v. Smith (2006) 142 Cal.App.4th 1154, 1175.)
Plaintiff argues that he should be allowed, on behalf of the
living trust, an opportunity to retain a lawyer to represent the
trust and, presumably, that lawyer should then be given leave to
amend the trust’s claims against defendants. We disagree.
Because we have held that plaintiff, acting in propria
persona, cannot represent the living trust, we conclude that he
cannot request, on behalf of the living trust, leave to amend. We
express no opinion on whether plaintiff, if later represented by
13
counsel, could then move, as successor trustee of the living trust,
to reassert claims on its behalf.
As to whether plaintiff, in his individual capacity, could
amend the complaint to state one or more other viable claims,
plaintiff argues only that he should have been granted leave to
amend his complaint as to the conversion claim. Because we
have concluded that the trial court erred in sustaining the
demurrer to the conversion claim as stated, his argument is moot.
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V. DISPOSITION
The judgment is reversed with directions to enter a new
order (1) granting the demurrer to as to each of the living trust’s
causes of action without leave to amend; (2) granting the
demurrer to plaintiff’s first and second individual causes of action
without leave to amend; and (3) overruling the demurrer as to
plaintiff’s third individual cause of action for conversion.
Plaintiff is awarded costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KIM, J.
We concur:
BAKER, Acting P. J.
MOOR, J.
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