Estate of Hiebert

Filed 3/26/08 Estate of Hiebert CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Fresno County. Mark W. Snauffer, Judge.

Downey Brand and Tory E. Griffin, for Petitioner and Appellant.

McCormick, Barstow, Sheppard, Wayte & Carruth, Lawrence E. Wayte and Nicholas C. Miller, for Claimant and Respondent.

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Executor Edwin Pyle appeals from a judgment entered against him after the superior court sustained respondent Jerry E. Henrys demurrer to Pyles third amended complaint. The superior court concluded: The plaintiff has failed to allege sufficient facts to state a cause of action for fraud. Specifically, plaintiff has not adequately alleged damages from defendants allegedly fraudulent conduct. Pyle contends that the superior court erred in concluding that his third amended complaint failed to state facts sufficient to state a cause of action for fraud. As we shall explain, we agree with appellant and will reverse the judgment.

FACTS

Certain background facts, though perhaps not clearly alleged in appellants third amended complaint, do not appear to be in dispute and help to place the allegations of the pleading in perspective. Anna Catherine Hiebert was the aunt of one Myron T. Jackson. Jackson made a will in 1991 leaving his estate to Hiebert. The named executor in Jacksons 1991 will was Adele Pyle, the wife of Hieberts son Edwin Pyle (appellant). Jackson made (or allegedly made) a second will in 1996 leaving his entire estate to Charles Collier, his uncle. The named executor in Jacksons 1996 will was Charles Pyle (brother of appellant Edwin Pyle). Jackson then died in 2001. In February of 2002 Hiebert filed a petition in the San Joaquin County Superior Court seeking to revoke the probate of Jacksons 1996 will.

In or about March of 2002 Hiebert retained respondent Jerry E. Henry, an attorney, to represent her interests in the San Joaquin County Superior Court matter. In or about March of 2003 that matter settled, with Jacksons aunt (Hiebert) and uncle (Collier) each receiving 50 percent of Jacksons estate.

In November of 2005 this civil action was filed against attorney Henry. Hiebert passed away in February of 2006. Appellant Edwin Pyle is the executor of Hieberts estate. The original complaint was stricken because it was filed by Edwin Pyle Attorney in Fact for Anna Catherine Hiebert on behalf of Anna Catherine Hiebert and Edwin Pyle is not an attorney. Henrys demurrer to a first amended complaint was sustained because that pleading was filed by Edwin Pyle, Proposed Executor of Hieberts estate.

Because Edwin Pyle had not yet been appointed the executor, the court found that he could state no cause of action against Henry. After Pyle was appointed executor, a demurrer to his second amended complaint was sustained. The court found that Pyle had failed to allege sufficient facts to state a cause of action for fraud and specifically that he has not adequately alleged damages from defendants allegedly fraudulent conduct. Henrys demurrer to a cause of action for breach of fiduciary duty was sustained without leave to amend, but the court granted Pyle leave to amend his pleading to attempt to state a cause of action for fraud.

As we have already mentioned, Henrys demurrer to Pyles third amended complaint (for fraud) was sustained without leave to amend, and judgment was entered in favor of Henry. We will describe the pertinent allegations in our analysis below of the superior courts ruling.

DAMAGES WERE ADEQUATELY ALLEGED

The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer , to the pleading on any one or more of the following grounds: [] [] (e) The pleading does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., 430.10.) The familiar terms general demurrer and special demurrer do not appear in the statutes. The name general demurrer is, however, universally applied to a demurrer raising the fundamental ground: The pleading does not state facts sufficient to constitute a cause of action. (C.C.P. 430.10(e).) (5 Witkin, Cal. Procedure (4th ed. 1997), Pleading,  904(3); see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007), 7:37 (Rev. #1 2007).)

On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. We give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]

Further, we treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law. [Citations.] 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. (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865; in accord, see also Reynolds v. Bement (2005) 36 Cal.4th 1075, 1083, Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126, Aubrey v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967, and Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Our review of the sufficiency of the complaint is de novo. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415; Zelig v. County of Los Angeles,supra, 27 Cal.4th at 1126.) We also consider matters that may be judicially noticed. (Reynolds v. Bement, supra, 36 Cal.4th at p. 1083; Zelig v. County of Los Angeles, supra, 27 Cal.4th at p. 1126; Serrano v. Priest (1971) 5 Cal.3d 584, 591.) The burden of demonstrating a reasonable possibility that the defect can be cured by amendment is squarely on the plaintiff. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318; Zelig v. County of Los Angeles, supra, 27 Cal.4th at p. 1126.)

Because a reviewing court will assume the truth of all well-pleaded factual allegations of the complaint (Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95, 101), the question of plaintiffs ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court. (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496.) It is not the ordinary function of a demurrer to test the truth of the plaintiffs allegations or the accuracy with which he describes the defendants conduct. A demurrer tests only the legal sufficiency of the pleading. (Committee on Childrens Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213.) Thus [w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer. (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-610.)

The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or scienter); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. [Citation.] (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; in accord, see also Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173.) Because damage is an element of the tort of fraud, [i]t is the rule that fraud without damage is not actionable . (Agnew v. Parks (1959) 172 Cal.App.2d 756, 769.)

The third amended complaint alleges that HIEBERT, by and through her attorney in fact, EDWIN L. PYLE , acting under power of attorney, retained defendant, HENRY, an attorney licensed to practice law in the State of California, to represent her in the probate matter of MYRON T. JACKSON . It alleges that Hiebert had already filed a Petition for Revocation of Purported Will, and that Henry was hired to litigate the matter. Henrys associate, an attorney named David Soldani, filed on Hieberts behalf a Petition for Removal of Personal Representative and Suspension of Powers Pending Hearing (the PRPRSP). The purpose of the filing of the PRPRSP was to attempt to remove Charles Pyle (the executor named in Jacksons 1996 will) as the personal representative of Jacksons estate. The pleading alleges that there was an egregious misappropriation of estate assets by Charles Pyle. This misappropriation included unauthorized distribution of gun collection, Silver Dollars, Jewel Tea Stone Ware, and other personal items that were cleared from decedents home right after his death. The third amended complaint further alleges that Henry at some point withdrew the PRPRSP. It alleges that Henry did tell HIEBERT and PYLE the court had found against PRPRSP and that the court had ruled against that petition. [Fn. omitted.] It alleges that Henry made those misrepresentations to cover up his intentional dropping

of the PRPRPS and that [t]he circumstances of dropping PRPRSP by defendant were totally unknown to HIEBERT and PYLE until January 5, 2004 when they learned of the dropping of the PRPRPS from another attorney involved in the matter. Hiebert suffered costs and fees of subsequent hearings in the approximate amount of $15,000 in efforts to undo the defendants negotiations based on fraudulent and misrepresentative statements .

The third amended complaint also alleges that [h]ad defendant pursued the removal of CHARLES E. PYLE, Hiebert would have prevailed and that [a]dditionally, the Jackson will under which Hiebert would have inherited the entire estate of Myron Jackson would have become the controlling will in the Jackson probate. The superior court appears to have been concerned with the lack of any specific allegation explaining how Henrys alleged dropping of the PRPRPS could have caused Hieberts failure to receive the entire Jackson estate, especially since the second Jackson will (the 1996 will) sought to leave that entire estate to someone other than Hiebert. Much of the argument presented by Henry to the superior court, and to this court, is argument that Hiebert could not have prevailed in having Jacksons earlier (1991) will found to be the valid will if the litigation over Jacksons estate had not settled. The trial court relied on Agnew v. Parks, supra, 172 Cal.App.2d 756, where the court stated: Damage to be subject to a proper award must be such as follows the act complained of as a legal certainty . (Id. at p.768; see also 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading,  687, pp. 147-149, where the author states: Whatever form it takes, the injury or damage must not only be distinctly alleged but its causal connection with the reliance on the representations must be shown.) (Id. at p. 147.)

The superior courts ruling stated in pertinent part:

The plaintiff has failed to allege sufficient facts to state a cause of action for fraud. Specifically, plaintiff has not adequately alleged damages from defendants allegedly fraudulent conduct. In order to allege a cause of action for fraud against an attorney, the plaintiff must allege specific facts showing that but for the attorneys fraudulent conduct, the plaintiff would have prevailed on her claims in the underlying action. [Citation.] The allegation of damage resulting from the fraud must be a legal certainty, and the damages must not be remote or speculative. [Citation.]

The alleged loss of the Jackson estate is not, however, the only loss or damage alleged in the pleading. The third amended complaint also alleges that Hiebert suffered costs and fees of subsequent hearings in the amount of $15,000 in efforts to undo the defendants negotiations based on fraudulent and misrepresentative statements . The alleged loss of $15,000 is not a remote or speculative loss. The allegation is an allegation of a loss of $15,000. We cannot agree with respondents characterization of this alleged loss as impossibly speculative. Regardless of what the outcome of the litigation over the Jackson estate would have been if the matter had not settled, appellants third amended complaint alleges that Hiebert actually spent $15,000 to attempt to have Charles Pyle removed as Jacksons personal representative after Henry, without Hieberts knowledge, dropped the petition seeking to have Charles Pyle removed and instead told Hiebert and appellant that the court had ruled against that petition. As we have already mentioned, [w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer. (Stevens v. Superior Court, supra, 180 Cal.App.3d at pp. 609-610.)

The case of Agnew v. Parks, supra, relied on by both the superior court and by respondent, appears to us to support our conclusion that the damages alleged are not remote or speculative. In Agnew the plaintiff had fallen and injured her hip, and was treated by a Dr. Larson. She later sued Dr. Larson for malpractice based upon his failure to take X-rays for injuries to her hip. (Agnew v. Parks, supra, 172 Cal.App.2d at p. 760.) A judgment of nonsuit was reversed on appeal. In a second malpractice trial, a defense judgment was reversed on appeal. In a third malpractice trial, Agnew obtained a $37,883.91 judgment against Larson, and this judgment was affirmed on appeal. (Id. at pp. 760-761.) While that third malpractice action was pending, however, she filed an action against various defendants, including a Dr. Parks, for conspiring to deprive her of expert medical testimony in her malpractice case. She alleged that Parks, intending to give biased and prejudicial testimony for the benefit of Larson, agreed with the Los Angeles County Medical Association to submit himself for appointment by the court as a disinterested witness in the trial of plaintiffs action, and falsely represented to her and the court that he was disinterested, did not know Larson and had not served on any hospital staff with Larson; that although Parks was well acquainted with Larson and at one time served on the staff of the California Hospital with Larson, he made contrary representations to mislead plaintiff, which she relied upon and employed Dr. Parks as an independent and impartial expert medical witness . (Id. at p. 767.) In her action against Dr. Parks, Agnew alleged that she had paid Parks $250 for his services in reliance upon his representations to her. Agnew also attempted to recover $2,500 for court costs and legal expenses incurred in connection with the first two malpractice trials and appeals. (Id. at p.767.) The court found the alleged $2,500 in damages to be too remote, speculative and uncertain (id. at p. 768), apparently because the plaintiff would not have been able to recover them without pleading and proving that absent the Parks fraud she would have won a judgment in those first two trials. (Id. at pp. 768-769.) But the court had no such difficulty concluding she had stated a good cause of action for fraud to recover the alleged $250 loss. She has alleged that in reliance on defendants knowingly false representations and believing them to be true, she retained Parks as an expert medical witness and paid him $250 for his services, which she would not have paid had she known the truth. [A]ssuming all of the allegations to be true, plaintiff thereunder would be entitled to compensatory damage in the amount of $250. (Id. at pp. 769-770.)

DISPOSITION

The judgment is reversed. The matter is remanded to the superior court with directions to overrule respondents demurrer to appellants third amended complaint. Costs on appeal to appellant.

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Ardaiz, P.J.

WE CONCUR:

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Harris, J.

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Levy, J.

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