Filed 10/7/26 Bagdasaryan v. Valian 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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(a). This
opinion has not been certified for publication or ordered published for purposes of rule 8.1115(a).
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
ARA BAGDASARYAN, et al., B350188
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No.
v. 24STCV32500)
NAIRA VALIAN, et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Virginia Keeny and Alison Mackenzie, Judges.
Reversed in part and remanded with directions.
AJK Law Firm and Ara Joe Keropian for Plaintiffs and
Appellants.
By the Law, Barzin Barry Sabahat, and Lilian Truong for
Defendants and Respondents.
Plaintiffs Ara Bagdasaryan and Siranush Zohrabyan sued
defendants Naira Valian and A&D Consulting Group, Inc. (A&D)
for claims arising from transactions involving plaintiffs’
residential property. Plaintiffs appeal the judgment entered
after defendants successfully demurred to all causes of action.
We reverse the judgment as to the first, second, fourth, and
eighth causes of action and remand for further proceedings on
those claims.
BACKGROUND
I. Factual Allegations
Though the complaint is not a model of pleading, we
liberally construe it and make all reasonable inferences in
plaintiffs’ favor. (Robertson v. Saadat (2020) 48 Cal.App.5th 630,
639.) This summary makes reasonable inferences to fill gaps in
the complaint.
Plaintiffs owned and resided in a home in Glendale. After
defaulting on their mortgage, in March 2018 they sought help
from Valian, a real estate agent and A&D’s CEO. Valian advised
plaintiffs to convey the property to A&D “in oral express and
implied in fact trust to manage” it for plaintiffs’ benefit. Though
the complaint does not specify the transaction’s details, it does
not state plaintiffs sold the property to A&D. From plaintiffs’
allegation they “resided” at the property at “all times,” we infer
plaintiffs continued to reside at the property after the
conveyance.
Over the next three years, Valian and A&D entered a series
of transactions involving the property. Twice, they obtained
loans secured by the property: $840,000 in March 2018 and
$880,000 in September 2019. Defendants refinanced the
2
property in October 2020. They also incurred “phantom fees”
related to the property, including a $54,000 “Obligation Fee” to
non-party FCI Lender Services, Inc. In December 2021, they
forged Bagdasaryan’s signature on or deceived him into signing
an agreement to sell the property. The complaint does not
explain why A&D needed Bagdasaryan’s signature to sell
property to which it held legal title. When the sale closed, the
selling and listing agents were each paid $37,500 in commissions,
and Valian kept the net sale proceeds of $51,808.33. Throughout
these transactions, defendants did not share the associated
documents with plaintiffs.
In addition to the transactions involving the subject
property, the complaint alleges Valian bought and financed a
vehicle in Bagdasaryan’s name, then allowed it to be repossessed.
Plaintiffs allege defendants’ actions caused them over
$600,000 in damages.
II. Procedural History
In December 2024, plaintiffs filed a complaint against
defendants for eight causes of action: (1) breach of fiduciary duty,
(2) imposition of constructive trust, (3) conversion, (4) violation of
the Foreclosure Consultants Act, (5) intentional
misrepresentation, (6) suppression of facts, (7) negligent
misrepresentation, and (8) negligence.
Defendants demurred to the entire complaint. The court
sustained the demurrer and gave plaintiffs leave to file an
amended complaint within 30 days. Plaintiffs, however, did not
file an amended complaint. On defendants’ application, the court
dismissed the action with prejudice.
Plaintiffs timely appealed.
3
DISCUSSION
I. Legal Standard on Demurrer
On review of a judgment of dismissal entered after
demurrer, we “examine the operative complaint de novo to
determine whether it alleges facts sufficient to state a cause of
action under any legal theory.” (T.H. v. Novartis
Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) We accept
allegations of ultimate fact but do not accept contentions or
conclusions of law or fact. (Fox v. JAMDAT Mobile, Inc. (2010)
185 Cal.App.4th 1068, 1078.) We read the complaint “as a whole
and all its parts in their context.” (Moore v. Regents of University
of California (1990) 51 Cal.3d 120, 125.)
II. 1st Cause of Action for Breach of Fiduciary Duty
Plaintiffs allege sufficient facts for this cause of action. Its
elements “are the existence of a fiduciary relationship, its breach,
and damage proximately caused by that breach.” (Meister v.
Mensinger (2014) 230 Cal.App.4th 381, 395.) Both below and on
appeal, defendants challenge only the first element of this cause
of action, the existence of a fiduciary relationship.
Both here and below, the parties dispute whether plaintiffs
alleged sufficient facts supporting a claim that Valian, as a real
estate agent, had a fiduciary duty to plaintiffs. We do not reach
this issue because we conclude the complaint sufficiently alleges
a fiduciary duty on another basis.
The complaint alleges facts showing a fiduciary
relationship between defendants and plaintiffs with respect to
the subject property. In addition to formal relationships like
attorney/client or principal/agent, “[a] fiduciary duty under
common law may arise ‘when one person enters into a
4
confidential relationship with another.’ ” (Hasso v. Hapke (2014)
227 Cal.App.4th 107, 140.) “Such a relationship ordinarily arises
when one party reposes a confidence in the integrity of the other,
and the other voluntarily accepts that confidence.” (Brown v.
Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 960.)
“ ‘[T]he key factor in the existence of a fiduciary relationship lies
in control by a person over the property of another.’ ” (Apollo
Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158
Cal.App.4th 226, 246 (Apollo).)
Plaintiffs allege they “placed their trust and confidence in”
Valian, who convinced them to convey title to the property to
A&D. Plaintiffs further allege they “conveyed title to the subject
property to A&D in oral express and implied in fact trust to
manage the subject property for the benefit of [p]laintiffs.”
Defendants thus controlled plaintiffs’ property, establishing the
“ ‘key factor in the existence of a fiduciary relationship.’ ” (Apollo,
supra, 158 Cal.App.4th at p. 246.) Without legal title to the
property they resided in, plaintiffs had to rely on defendants’
integrity to manage the property for their benefit. At the
pleadings stage, these allegations suffice to show a common law
fiduciary relationship.
III. 2nd Cause of Action for Imposition of Constructive Trust
The complaint alleges sufficient facts to impose a
constructive trust. “An action to impose a constructive trust is a
suit in equity to compel a person holding property wrongfully to
transfer the property interest to the person to whom it rightfully
belongs.” (Higgins v. Higgins (2017) 11 Cal.App.5th 648, 658.)
The plaintiff must allege three elements: “(1) a specific,
identifiable property interest, (2) the plaintiff’s right to the
property interest, and (3) the defendant’s acquisition or detention
5
of the property interest by some wrongful act.” (Id. at p. 659.)
Constructive trusts are not limited to tangible or real property.
(Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th
1388, 1402 [“Funds may be recoverable under a constructive trust
theory where the plaintiff can trace the funds to monies in the
defendant’s possession”].)
The complaint adequately alleges a specific property
interest in the “equity funds obtained by [d]efendants.” Reading
the complaint as a whole, we infer that plaintiffs’ equity in the
subject property exceeded its encumbrances.
The complaint alleges facts showing plaintiffs had the right
to that equity and that defendants wrongfully detained it.
Though plaintiffs voluntarily transferred title to the property,
they did so “in oral express and implied in fact trust to manage
the subject property for [plaintiffs’] benefit.” In other words, the
parties agreed A&D would take legal title, but plaintiffs would
retain a beneficial interest in the property—most importantly by
continuing to live there. Despite plaintiffs’ equity in the property
and their beneficial interest in it, defendants kept all proceeds
from borrowing against and selling the property. Similar
circumstances often suffice to impose an involuntary trust. (See,
e.g., Fidelity National Title Ins. Co. v. Schroeder (2009) 179
Cal.App.4th 834, 847; Estate of Yool (2007) 151 Cal.App.4th 867,
874.)
IV. 3rd Cause of Action for Conversion
The complaint does not allege sufficient facts for
conversion. Conversion is “ ‘the wrongful exercise of dominion
over personal property of another.’ ” (Voris v. Lampert (2019) 7
Cal.5th 1141, 1150, italics added.) It does not apply to real
property. (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1295.)
6
The complaint alleges defendants converted plaintiffs’
equity in the subject property. Plaintiffs provide no authority for
the novel proposition that conversion applies to equity in real
property. Courts have expanded conversion’s scope beyond
tangible personal property to some forms of intangible personal
property. (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th
202, 209–211.) But conversion has not been applied to intangible
interests in the value of real property. Conversion does not apply
to “ ‘[i]ntangible interests in real property’ ” (Hernandez v. Lopez
(2009) 180 Cal.App.4th 932, 940) such as equity in real property.
The trial court correctly sustained defendants’ demurrer to
the third cause of action for conversion.
V. 4th Cause of Action for Violation of Foreclosure
Consultants Act
The complaint alleges sufficient facts for this cause of
action against Valian and A&D. The Legislature enacted the
Foreclosure Consultants Act (FCA) to protect homeowners facing
foreclosure from “consultants” who purport to assist them for a
fee. (Civ. Code, § 2945, subd. (a).) These consultants provide
nothing of value and leave homeowners worse off than if they had
simply obtained the excess proceeds after the foreclosure sale.
(Ibid.) The homeowners “often lose their homes, sometimes to
the foreclosure consultants who purchase homes at a fraction of
their value.” (Ibid.) The statute aims “[t]o require that
foreclosure consultant service agreements be expressed in
writing; to safeguard the public against deceit and financial
hardship; to permit rescission of foreclosure consultation
contracts; to prohibit representations that tend to mislead; and to
encourage fair dealing in the rendition of foreclosure services.”
(Id., subd. (c)(1).)
7
The complaint alleges sufficient facts showing Valian and
A&D were “foreclosure consultants” under Civil Code section
2945.1. The FCA defines “foreclosure consultant” as one who
solicits, represents, or offers homeowners paid services including
stopping or delaying foreclosure, obtaining forbearance from a
lender, or saving the owner’s residence from foreclosure. (Civ.
Code, § 2945.1, subd. (a)(1), (2), & (8).) The statute defines
“services” to include “[d]ebt, budget, or financial counseling of any
type” (id., subd. (e)(1)) and “[g]iving any advice, explanation, or
instruction . . . which in any manner relates to . . . postponement
or avoidance of” a foreclosure sale (id., subd. (e)(8)).
Plaintiffs allege that while in default on their mortgage,
they “met with” Valian seeking “advice and counsel” for “working
out” their “financial difficulties vis-à-vis the subject property.”
The complaint further alleges Valian and A&D manipulated and
persuaded plaintiffs to convey the subject property to A&D.
Liberally construing the complaint, these allegations amount to
Valian and A&D offering paid services to save plaintiffs’
residence from foreclosure and advising them on how to avoid
foreclosure.
The complaint further alleges facts constituting violations
of the FCA. The statute’s substantive provisions include
requiring consultants to enter written contracts with various
specified provisions. (Civ. Code, § 2945.3.) Plaintiffs allege
defendants provided services without a written contract. They
“conveyed title . . . to A&D in oral express and implied in fact
trust,” and defendants “fail[ed] to obtain a written agreement
from [p]laintiffs.”
The FCA also prohibits consultants from acquiring “any
interest in a residence in foreclosure from an owner.” (Civ. Code,
8
§ 2945.4, subd. (e).) The complaint alleges defendants acquired
title to the property.
VI. 5th–7th Causes of Action for Fraud by Intentional
Misrepresentation, Suppression of Facts, and Negligent
Misrepresentation
The complaint alleges insufficient facts for these causes of
action. Intentional misrepresentation requires: (1) a
misrepresentation of fact; (2) knowledge of falsity; (3) an intent to
defraud; (4) justifiable reliance; and (5) resulting damages.
(Ryder v. Lightstorm Entertainment, Inc. (2016) 246 Cal.App.4th
1064, 1079.) For a “suppression of facts” cause of action (i.e.,
fraud by concealment), instead of an affirmative
misrepresentation, the plaintiff must allege defendants concealed
a material fact they had a duty to disclose. (Boschma v. Home
Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) For negligent
misrepresentation, the defendants must have no “reasonable
ground for believing” the representation was true. (Apollo, supra,
158 Cal.App.4th at p. 243.)
Fraud claims “must be pled specifically.” (Lazar v.
Superior Court (1996) 12 Cal.4th 631, 645.) The principle of
liberally construing the complaint does not apply. (Ibid.) This
heightened standard of pleading applies to all elements of fraud.
(Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)
The complaint does not specifically allege any
misrepresentation of fact or any material fact defendants
concealed. Rather than identifying a misrepresentation, the fifth,
sixth, and seventh causes of action merely incorporate the prior
allegations and refer to “the aforesaid representations” or “such
representations.” These allegations do not satisfy fraud’s
heightened pleading requirements.
9
In their opening brief, plaintiffs argue defendants falsely
represented that they “would hold title to and manage the subject
property in trust for [plaintiffs’] benefit.” Even if plaintiffs’ legal
arguments could satisfy the requirement that the complaint must
specifically allege fraud’s elements, that would not establish the
first element of fraud. “[A]ctionable misrepresentations must
pertain to past or existing material facts.” (Cansino v. Bank of
America (2014) 224 Cal.App.4th 1462, 1469.) “Statements or
predictions regarding future events are deemed to be mere
opinions which are not actionable.” (Ibid.) Falsely representing
that defendants would manage the subject property to benefit
plaintiffs and concealing that they would instead exploit the
property for their own benefit is a statement or prediction about
the future, not a representation of past or existing material fact.
Plaintiffs also contend the complaint adequately alleges
constructive fraud, which applies only to fiduciaries and does not
require fraudulent intent. (Lazar v. Bishop (2024) 107
Cal.App.5th 668, 680.) But “[c]onstructive fraud, like actual
fraud, must be pleaded with specificity.” (Knox v. Dean (2012)
205 Cal.App.4th 417, 434.) The complaint does not specifically
plead constructive fraud. It alleges three other types of fraud and
does not refer to constructive fraud at all.
The trial court properly sustained defendants’ demurrers to
the fifth, sixth, and seventh causes of action.
VII. 8th Cause of Action for Negligence
Lastly, the complaint alleges sufficient facts to constitute
negligence. Negligence requires: (1) a duty of care, (2) breach of
that duty, and (3) damages proximately caused by the breach.
(Beacon Residential Community Assn. v. Skidmore, Owings &
Merrill LLP (2014) 59 Cal.4th 568, 573.) In their demurrer and
10
appellate brief defendants contend only that the complaint does
not allege facts constituting a breach.
The complaint alleges facts constituting breach of
defendants’ duty of care. “A ‘duty may arise through statute,
contract, or the relationship of the parties.’ ” (Lichtman v.
Siemens Industry Inc. (2017) 16 Cal.App.5th 914, 920.)
Defendants agreed to help plaintiffs avoid foreclosure by taking
title to the property and managing it for plaintiffs’ benefit.
Because of that transaction and relationship with plaintiffs,
defendants owed them a duty of care. They breached that duty
by using the property to benefit themselves, including by
borrowing against it, selling it, and keeping the proceeds. As a
result, defendants left plaintiffs with neither the property nor the
equity they once had in it. These allegations suffice for
negligence.
11
DISPOSITION
The judgment is reversed as to the first, second, fourth, and
eighth causes of action. The trial court is directed to enter an
order overruling defendants’ demurrer to those claims. The order
sustaining the demurrer to the third, fifth, sixth, and seventh
causes of action is affirmed. The case is remanded for further
proceedings on only the first, second, fourth, and eighth causes of
action. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
TAMZARIAN, Acting P. J.
We concur:
DAUM, J.
STRATTON, J.*
* Justice of the Court of Appeal, Second Appellate District,
Division Eight, assigned to Division Four, by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
12