Stordahl v. Johnson CA2/4 ( 2024 )

Filed 1/18/24 Stordahl v. Johnson CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FOUR
TIM STORDAHL, B324765, B326356
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. 20STCV23395)
v.
JERRY JOHNSON et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Jon R. Takasugi, Judge. Affirmed.
Robert D. Feighner; Hitchcock, Bowman & Schacter and Robert
Schacter for Plaintiff and Appellant.
Jones, Bell, Abbott, Fleming & Fitzgerald, Kevin K. Fitzgerald and
Catherine L. Dellecker for Defendants and Respondents Wells Fargo Clearing
Services, LLC dba Wells Fargo Advisors and Sean Bryant.
The Maloney Firm, Patrick M. Maloney, Carl I. S. Mueller and Gary A.
Varnavides for Defendant and Respondent Jerry Johnson.
After opening four multiple-party bank accounts with Wells Fargo
Clearing Services, LLC dba Wells Fargo Advisors (Wells Fargo), Michael
Swoope designated his nephew, Richard Swoope, as a joint account holder
with express rights of survivorship to each account.1 Before he died, Michael
removed Richard as a joint account holder and designated his close friend,
Jerry Johnson, in the same role. Following Michael’s death, Johnson
retained the funds held in the Wells Fargo accounts.
Michael’s grandson, Tim Stordahl, commenced this action against
Johnson, Wells Fargo, and Sean Bryant, a Wells Fargo financial advisor
named on each account, for breaches of fiduciary duty. The operative fourth
amended complaint (4AC) alleged Michael created an express oral trust in
which Johnson was to hold funds in the Wells Fargo accounts as trustee and,
upon Michael’s death, was to distribute the funds to “relatives and certain
third parties.”
Stordahl appeals from the judgment of dismissal following orders
sustaining demurrers to the 4AC without leave to amend. He contends the
4AC placed at issue Johnson’s statutory right of survivorship under the
California Multiple-Party Accounts Law (Prob. Code, § 5100 et seq.;
CAMPAL). He also contends the 4AC adequately alleged an enforceable oral
trust on which each cause of action for breach of fiduciary duty is based.
We conclude the 4AC failed to allege an enforceable trust with readily
ascertainable beneficiaries. As this pleading error is fatal to each cause of
action for breach of fiduciary duty, we find no abuse of the trial court’s
discretion in sustaining the demurrers without leave to amend. We affirm.
1 Michael and Richard Swoope share the same last name. For clarity
and ease of reading, we refer to Michael and Richard by their first name.
2
BACKGROUND
A. Allegations in the Fourth Amended Complaint
Stordahl commenced this action in June 2020. Following several
rounds of pretrial motions, including a motion to quash service of summons
and several demurrers, Stordahl filed the operative 4AC in May 2022. The
4AC contained various allegations pertaining to three joint tenancy
brokerage accounts and one pay on death (P.O.D.) brokerage account that
Stordahl’s late grandfather, Michael, opened with Wells Fargo. In total, the
accounts Michael opened held approximately $1.2 million.
The 4AC set forth many of the following allegations based upon
information and belief. At some point, Michael designated his nephew,
Richard, as the joint account holder in the joint tenancy accounts and the pay
on death beneficiary in the P.O.D. account. Despite designating Richard as
joint account holder or pay on death beneficiary with express rights of
survivorship, Michael verbally instructed Richard to hold the funds in trust
for certain relatives and other related third parties.
Prior to his death, Michael removed Richard as the joint account holder
and pay on death beneficiary and replaced him with Johnson, Michael’s close
friend.2 Intending to keep the funds held in the Wells Fargo accounts in
trust, Michael advised Johnson “the funds in such Wells Fargo . . . accounts
would be distributed to certain relatives and certain third parties outside
probate administration.” The 4AC further alleged Michael intended the
2 The 4AC attached various financial records as exhibits. In three joint
tenancy accounts, the names of Michael and Johnson were listed with the
notation “JT WROS.” The parties agree this notation refers to “joint tenants
with right of survivorship.” (Accord, Placencia v. Strazicich (2019) 42
Cal.App.5th 730, 734 (Placencia) [“‘JT WROS,’ . . . appears to stand for joint
tenants with right of survivorship”].)
3
Wells Fargo accounts to be held in trust “for the benefit of certain relatives
and other third parties,” “specific relatives and third parties,” and “certain
third parties.” “The intent of Michael” was to have Richard, and later
Johnson, act as a trustee. Michael stated these wishes to Johnson, Wells
Fargo, and Bryant, a Wells Fargo financial advisor and stockbroker.
Stordahl was Michael’s grandson and “one of the individuals/parties for
whom the funds were intended to be held in trust and to whom the funds
were to be distributed.”
Following Michael’s death on February 13, 2018, Johnson took sole
ownership of the Wells Fargo accounts and withheld funds from Stordahl
“and other relatives and interested third parties.” As executor of Michael’s
estate, Johnson filed several inventories and appraisals of probate assets in
Michael’s estate. The inventory and appraisals did not list the Wells Fargo
accounts.
In October 2019, Johnson filed a petition for approval of settlement in
Michael’s estate following mediation between Johnson, Johnson’s wife, and
Michael’s children and remaining heirs, Aimee Brennan and John Douglas
Swoope.3 The settlement agreement, attached as an exhibit to the 4AC,
stated that Johnson had disclosed “all assets and liabilities of Michael . . .
outside and inside of the estate . . . to all parties.” The agreement provided
that Johnson was “to retain the funds that were held jointly” in each Wells
Fargo account.
3 According to Johnson’s demurrer, Brennan is Stordahl’s mother.
4
B. The Causes of Action
The 4AC asserted three causes of action for (1) breach of fiduciary duty
and (2) resulting trust against Johnson; and (3) breach of fiduciary duty
against Wells Fargo and Bryant.4 The first and second causes of action
alleged Johnson breached a fiduciary duty to Stordahl by wrongfully
retaining funds held in each Wells Fargo account. The 4AC sought a
resulting trust and a constructive trust for “the full amount of the Wells
Fargo . . . accounts.”
The third cause of action for breach of fiduciary duty alleged Wells
Fargo and Bryant owed fiduciary duties to Michael as his financial advisors.
In addition, the 4AC alleged Wells Fargo and Bryant “colluded in breaching
[Johnson’s] fiduciary duties, . . . so as to allow [Johnson] to wrongfully retain
the funds” held in each account.
C. The Demurrers
Johnson filed a demurrer to the 4AC, arguing the probate settlement
and CAMPAL statutes barred both causes of action against him. Johnson
also argued the 4AC failed to plead facts establishing (1) Michael’s intent to
create a trust through writing, and (2) reasonably ascertainable beneficiaries
of the alleged trust.
In their own demurrer, Wells Fargo and Bryant argued the 4AC failed
to establish a fiduciary relationship between themselves and Stordahl.
Assuming such relationship existed, Wells Fargo and Bryant argued the 4AC
failed to plead a breach of duty.
4 In the trial court and on appeal, Stordahl abandoned the first two
causes of action against Wells Fargo and Bryant.
5
In opposition to Johnson’s demurrer, Stordahl argued the probate
settlement and CAMPAL statutes did not bar his causes of action, which
were based on an express oral trust. Stordahl further argued he was not
required to plead facts establishing a writing evidencing Michael’s intent to
create a trust or to specify the beneficiaries to whom Michael sought to
distribute funds.
In opposition to the Wells Fargo/Bryant demurrer, Stordahl argued he
had standing to sue them as an intended beneficiary of Michael’s oral trust.
He also argued the 4AC adequately alleged a breach of duty by Wells Fargo
and Bryant for providing Michael unreasonable advice, “which resulted in
[Johnson] walking off with funds belonging to [Stordahl] and other persons.”
Finally, Stordahl argued Wells Fargo and Bryant had “the duty . . . not only
to [Michael] but also to [Stordahl] (and ‘relatives’) entitled to the funds in the
account.”
D. Trial Court Rulings
Following hearings on both demurrers, the trial court sustained the
demurrers without leave to amend. As to Johnson, the court found the 4AC
failed to allege the creation of an enforceable trust. Absent an enforceable
trust, Stordahl could not maintain either cause of action against Johnson.
The court also found the 4AC failed to allege a fiduciary relationship
between Stordahl and Wells Fargo/Bryant. On any claim Stordahl could
raise on Michael’s behalf, the court found no allegation Wells Fargo or Bryant
gave Michael bad investment advice or withheld money from Michael.
Following notice of entry of each order, the court issued a written judgment
dismissing the action against defendants. Stordahl timely appealed.
6
DISCUSSION
Stordahl contends the 4AC placed Johnson’s presumptive right of
survivorship at issue and alleged causes of action for breach of fiduciary duty.
Before we reach the merits of these contentions, we note Stordahl offered no
argument or theory on his second cause of action for resulting trust in the
trial court. And while he might have provided a new argument or theory on
appeal (see Alfaro v. Community Housing Improvement System & Planning
Assn., Inc. (2009) 171 Cal.App.4th 1356, 1396), he did not do so. He has,
therefore, forfeited any argument on his cause of action for resulting trust.
(See Alborzi v. University of Southern California (2020) 55 Cal.App.5th 155,
184 [appellants abandoned several causes of action “by not addressing them
on appeal”]; Rakestraw v. California Physicians’ Service (2000) 81
Cal.App.4th 39, 43–44.) We limit our review to the first and third causes of
action for breach of fiduciary duty.
A. Standard of Review
On appeal from an order sustaining a demurrer without leave to
amend, we apply a de novo standard of review to determine whether the
allegations state a cause of action. (Villafana v. County of San Diego (2020)
57 Cal.App.5th 1012, 1016 (Villafana).) We assume the truth of all facts
properly pleaded, judicially noticeable facts, or facts within exhibits attached
to the complaint. (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001)
25 Cal.4th 809, 814; Hoffman v. Smithwoods RV Park, LLC (2009) 179
Cal.App.4th 390, 400 (Hoffman).) The plaintiff need not aver presumptions
of law when pleading a particular cause of action. (Johnson v. Clark (1936) 7
Cal.2d 529, 535 (Johnson).)
7
“If the [complaint] is insufficient on any ground specified in a
demurrer, we will uphold the order sustaining it, even if it is not the ground
relied upon by the trial court.” (Villafana, supra, 57 Cal.App.5th at p. 1017;
see Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 880, fn. 10
[appellate court will affirm demurrer ruling “even if the trial court relied on
an improper ground”].) Where the trial court sustains a demurrer without
leave to amend, the appellant must establish a reasonable probability the
complaint can be cured by amendment. (Hoffman, supra, 179 Cal.App.4th at
p. 400.)
B. Devoid of Allegations Establishing an Ascertainable Class of Trust
Beneficiaries, the 4AC Failed to Allege a Breach of Johnson’s Fiduciary Duty
Stordahl contends the trial court erred by sustaining his first cause of
action for breach of fiduciary duty against Johnson. He asserts the 4AC
adequately pleaded an enforceable oral trust placing Johnson’s statutory
right of survivorship at issue and establishing a fiduciary relationship
between Johnson and himself. Assuming Stordahl’s former contention to be
correct, we conclude the FAC failed to allege facts establishing an enforceable
trust on which to base his claim for breach of fiduciary duty.
1. Statutory Right of Survivorship Under CAMPAL
In 1990, CAMPAL became the governing law for “multiple-party” bank
accounts, including P.O.D. accounts and joint accounts with or without rights
of survivorship. (Estate of O’Connor (2017) 16 Cal.App.5th 159, 165; see Fin.
Code, § 1402; Prob. Code, §§ 5130, 5132, 5140.) Among the various CAMPAL
statutes are provisions governing “beneficial ownership” between parties to a
multiple-party account or any account beneficiaries. (Prob. Code, § 5201,
subd. (a).)
8
Probate Code section 5302 governs the rights to any sums remaining on
deposit at the death of a party to a multiple-party account. Subdivision (a) of
this section provides: “Sums remaining on deposit at the death of a party to a
joint account belong to the surviving party or parties as against the estate of
the decedent unless there is clear and convincing evidence of a different
intent.” (See id., § 5302, subd. (b) [same provisions govern survivorship
rights in P.O.D. accounts].) “In other cases, the death of any party to a
multiparty account has no effect on beneficial ownership of the account other
than to transfer the rights of the decedent as part of the decedent’s estate.”
(Id., § 5302, subd. (d).)
Section 5302 “is the same in substance as [s]ection 6-104 of the
Uniform Probate Code (1987), except that [s]ection 5302 omits the UPC
requirement that the intent that there be no rights of survivorship exist ‘at
the time the account is created.’” (Cal. Law Revision Com. com., 53 West’s
Ann. Prob. Code, supra, foll. § 5302, p. 61.) The catchall provision “stated in
subdivision (d) applies to an account where there is clear and convincing
evidence of an intent not to have a right of survivorship.” (Id. p. 62, italics
added.) In other words, section 5302, subdivision (d) provides that whenever
there is clear and convincing evidence of an intent not to have a right of
survivorship, the decedent’s rights become part of the decedent’s estate.
2. Placencia, supra, 42 Cal.App.5th 730Relying extensively on Placencia, Stordahl contends the 4AC placed at
issue Johnson’s presumptive right of survivorship under section 5302. The
court in Placencia did not address the burden of pleading around this
statutory right. Instead, the court inquired whether the facts in that case
established clear and convincing evidence of the decedent-depositor’s intent
9
to revoke the right of survivorship to a multiple-party account. (Placencia,
supra, 42 Cal.App.5th at pp. 733–735.) Considering “all evidence” of the
decedent’s intent, the court found clear and convincing evidence of the
decedent-depositor’s intent to negate the right of survivorship of the joint
account holder (the decedent’s daughter). (Id. at p. 740.)
In light of this conclusion, the court then questioned how to properly
dispose of the decedent’s ownership interest in the account. (Placencia,
supra, 42 Cal.App.5th at p. 742.) Finding no evidence of the decedent-
depositor’s intent to transfer his ownership interest out of the account, the
court invoked the catchall provision in section 5302, subdivision (d). As a
result, the court determined that any ownership interest in the account was
subject to probate administration as part of the decedent-depositor’s estate.
(Id. at p. 743, citing Prob. Code, § 7001.)
3. Assuming Johnson’s Right of Survivorship Was Placed at Issue,
the 4AC Failed to Allege an Enforceable Oral Trust With
Ascertainable Beneficiaries
Stordahl relies heavily on Placencia for the proposition his breach of
fiduciary duty claim against Johnson is not barred by the survivorship rights
codified in section 5302. We need not consider this contention, as we assume
for the sake of argument the 4AC adequately placed Johnson’s survivorship
rights at issue. (See Johnson, supra, 7 Cal.2d at p. 535 [complainant need
not aver legal presumptions].) We nevertheless conclude the 4AC failed to
allege an adequate cause of action against Johnson for breaching a fiduciary
duty as trustee of an alleged oral trust.
The elements of breach of fiduciary duty are (1) the existence of a
fiduciary relationship from which a fiduciary duty arises; (2) a breach of that
duty; and (3) resulting damages. (Meister v. Mensinger (2014) 230
10
Cal.App.4th 381, 395.) As alleged, the fiduciary duty at issue here is based
entirely on a trustee-beneficiary relationship. In turn, this type of
relationship depends on an enforceable trust. (See Penny v. Wilson (2004)
123 Cal.App.4th 596, 603; Prob. Code, §§ 16000, 16002, subd. (a), 16006,
16009, 16081, subd. (a).)
We agree with Stordahl “[a]n oral trust in personal property is valid
and may be proved by parol evidence.” (Estate of Gardner (2010) 187
Cal.App.4th 543, 552.) The existence and terms of an oral trust of personal
property must be proved “by clear and convincing evidence. [¶] The oral
declaration of the settlor, standing alone, is not sufficient evidence of the
creation of a trust of personal property.” (Prob. Code, § 15207, subds. (a), (b).)
To plead an enforceable trust, the plaintiff must allege facts establishing
(1) trust intent, (2) res, (3) trust purpose, and (4) an identifiable beneficiary
or class of beneficiaries. (Prob. Code, §§ 15201–15205.)
To establish an identifiable beneficiary or class of beneficiaries, the
plaintiff must plead facts establishing a beneficiary or class thereof “that is
ascertainable with reasonable certainty or that is sufficiently described.”
(Prob. Code, § 15205, subd. (b)(1); Cal. Law Revision Com. com., 54 West’s
Ann. Prob. Code (1991 ed.), foll. § 15205, p. 527 [a particular “class of
beneficiaries can satisfy the[se] requirements . . . if the class is ascertainable
presently or in the future”].) A class of beneficiaries is indefinite “if the
identity of the individuals comprising its membership cannot be ascertained.”
(Rest.3d Trusts, § 46, com. a, p. 204.) Depending on how the complaint
pleads an alleged class of beneficiaries, “it may be impossible to determine all
of the persons who fall within it. In such a situation, the class or group is
indefinite.” (Ibid.; § 45, com. (d) [“If it is shown that, in using the word
‘relatives,’ the settlor intended to create a trust for all individuals who are
11
related to the designated person, the intended class is not sufficiently
ascertainable to sustain a trust”].) In such a scenario, no trust is created
because “it is impossible to make [any] distribution among all of the
members” of an indefinite class. (Id., § 46, subd. (1) & com. (b).)
Here, we conclude the 4AC failed to allege an ascertainable class of
beneficiaries, and by extension, an enforceable oral trust. As alleged, Michael
advised Johnson to distribute funds held in the Wells Fargo accounts upon
his death to “certain relatives and certain third parties outside probate
administration,” “certain relatives and other third parties,” “specific relatives
and third parties,” and/or “certain third parties.” These allegations do not
sufficiently identify persons who fall within the intended class, nor do they
provide any directives on how to distribute account funds to these people.
(Accord, Estate of Gaines (1940) 15 Cal.2d 255, 258–262, 266 [“The most that
can possibly be inferred from the evidence is that the decedent may have
intended to create a trust [out of funds held in a joint tenancy account], for
some purpose, or for someone’s benefit, but failed to disclose that purpose, or
the beneficiary, and therefore failed to create the trust”]; In re Vance’s Estate
(1931) 118 Cal.App. 163, 164 [same].)
Reagh v. Kelley (1970) 10 Cal.App.3d 1082 (Reagh), on which Stordahl
relies, is inapposite. There, the court found a written declaration of trust
sufficiently identified an ascertainable class of beneficiaries by
“enumerat[ing] beneficiaries [as the decedent’s son], certain named nieces
and nephews, the husband and children of [decedent’s niece], and any
relatives of decedent, to the third degree, ‘found living on the Continents of
Europe, Asia and Africa within 20 years of the creation of this trust.’” (Id. at
p. 1088.)
12
The distinction between Reagh and this case is significant. In Reagh,
specific individuals (a son, nieces and nephews, and others) and a concretely
defined group (relatives of the third degree living on specified continents at a
particular time) comprised a class of ascertainable beneficiaries. The
allegations in this case identify neither a particular individual nor a defined
group. They simply refer to “certain relatives” and/or “third parties” of which
Stordahl may be part.
Had Michael identified Stordahl or other identifiable persons in a
manner consistent with Reagh, presumably by now Stordahl would have
included that information in his 4AC. But he did not do that. “Indeed, the
inference would be natural and reasonable that his failure arose from the
want of facts rather than from lack of skill in stating them.” (Loeffler v.
Wright (1910) 13 Cal.App. 224, 232.)
Without a readily ascertainable class, the 4AC failed to allege an
enforceable oral trust, and therefore failed to allege facts supporting a
fiduciary relationship between Johnson as trustee and Stordahl as
beneficiary. Consequently, any funds held in the Wells Fargo accounts
belonged to Johnson through his rights of survivorship (Prob. Code, § 5302,
subds. (a), (b)), or became part of Michael’s estate subject to probate
administration (id., §§ 5302, subd. (d)). (Accord, Placencia, supra, 42
Cal.App.5th at p. 743.)5
5 In light of the foregoing, we do not consider the effect of the probate
action and settlement.
13
C. The 4AC Failed to Allege a Breach of Fiduciary Duty Claim
Against Wells Fargo and Bryant
Regarding Wells Fargo and Bryant, Stordahl contends the 4AC
adequately alleged a cause of action for either (1) aiding and abetting
Johnson’s breach of fiduciary duty, or (2) directly breaching a fiduciary duty
owed to Stordahl himself.
Our conclusion above disposes of Stordahl’s first theory of recovery.
Because Stordahl has not stated a cause of action for breach of fiduciary duty
as to Johnson, he has also failed to state a cause of action for aiding and
abetting a breach of any duty. (See Nasrawi v. Buck Consultants LLC (2014)
231 Cal.App.4th 328, 343 [aiding and abetting breach of fiduciary duty
requires “a third party’s breach of fiduciary duties owed to plaintiff”].)
We disagree with Stordahl’s remaining contention as to any purported
breach of fiduciary duties owing him. Stordahl identifies no allegation in the
4AC establishing any relationship, fiduciary or otherwise, between himself
and Wells Fargo or Bryant. Bereft of any fiduciary relationship, Wells Fargo
and Bryant owed him no fiduciary duty. (City of Hope National Medical
Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 386.)
To the extent Stordahl contends he may litigate a breach of fiduciary
duty claim on behalf of Michael, we disagree. “[T]he scope of [a] broker’s
fiduciary duty depends on the nature of the broker-customer relationship.”
(Apollo Capital Fund LLC v. Roth Capital Partners, LLC (2007) 158
Cal.App.4th 226, 245.) The FAC does not allege any fact demonstrating more
than an ordinary financial advisor-client relationship between Wells Fargo
and/or Bryant on the one hand and Michael on the other. As the trial court
aptly noted, any obligation Wells Fargo/Bryant owed Michael ended with the
disbursement of funds to Johnson under each contract of deposit. (See Das v.
14
Bank of America, N.A. (2010) 186 Cal.App.4th 727, 741 [contractual
relationship with depositor imposes no implied duty on financial institution
to supervise the account or “‘inquire into the purpose for which the funds are
being used’”]; Fin. Code, § 6661 [financial institutions must “honor
withdrawal applications and shall . . . deliver the property to or upon the
order of the person for whose account the property is held”].)
D. Leave to Amend
Where, as here, a demurrer is sustained without leave to amend, we
must decide whether there is a reasonable possibility any defect in pleading
can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
“The burden of proving such reasonable possibility is squarely on the
plaintiff.” (Ibid.) In so deciding, we may consider the nature of any pleading
defects and previous, unsuccessful attempts to plead valid causes of action.
(Ruinello v. Murray (1951) 36 Cal.2d 687, 690; Tola v. Bryant (2022) 76
Cal.App.5th 746, 756–757 (Tola).)
Stordahl contends he would “amend [the complaint] consistent with the
assertions contained in [his appellate briefs].” This statement is insufficient
to obtain leave to amend. (Shaeffer v. Califia Farms, LLC (2020) 44
Cal.App.5th 1125, 1145; Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636.)
This case has been pending for more than three and a half years with ongoing
discovery. Stordahl has received five prior opportunities to plead adequate
causes of action and still has not identified facts to support his causes of
action. Even the allegations assumed to be true on appeal have been pleaded
based largely upon information and belief. Stordahl has not met his burden
of showing a reasonable possibility the defects in the 4AC can be cured by a
15
fifth amendment. (See Tola, supra, 76 Cal.App.5th at pp. 756–757.) The
court did not abuse its discretion in denying leave to amend.
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
ZUKIN, J.
We concur:
CURREY, P. J.
COLLINS, J.
16