Tunold v. Meints













Filed 4/26/13 Tunold v. Meints CA4/2













NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.







IN THE COURT OF APPEAL OF THE STATE OF >CALIFORNIA>



FOURTH APPELLATE DISTRICT



DIVISION TWO






>

GILLIAN TUNOLD, Plaintiff and Appellant, v. DEBORAH A. MEINTS, Defendant and Respondent.

E055725 (Super.Ct.No. INC10004568) >OPINION

APPEAL from the Superior
Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Riverside
County. Randall Donald
White, Judge. Affirmed in part and
reversed in part.

Shadek Reese, Ltd., Susanna T. Kintz
and John L. Shadek for Plaintiff and Appellant.

Roemer & Harnik, Mary E.
Gilstrap and Helene P. Dreyer Koch for Defendant and Respondent.

On December 6, 2011,
the trial court sustained the demurrer of defendant Deborah A. Meints to the
fourth amended complaint of plaintiff Gillian Tunold. The demurrer was sustained without leave to
amend and the action was dismissed.
Tunold appeals.

I

STANDARD OF REVIEW

A demurrer is used to test the sufficiency of the factual allegations
of the complaint to state a cause of action.
(Code Civ. Proc., § 430.10, subd. (e).) The facts pled are assumed to be true and the
only issue is whether they are legally sufficient to state a cause of
action. “In
reviewing the sufficiency of a complaint against a general demurrer, we are
guided by long-settled rules. ‘name=clsccl1>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. [Citation.]”
(Blank v. Kirwan (1985) 39
Cal.3d 311, 318.)

Our standard of review is de novo: “Treating as true all material facts properly
pleaded, we determine de novo whether the factual allegations of the complaint
are adequate to state a cause of action under any legal theory, regardless of
the title under which the factual basis for relief is stated. [Citation.]”
(Burns v. Neiman Marcus Group,
Inc. (2009) 173 Cal.App.4th 479, 486.)

II

GENERAL ALLEGATIONS OF THE
FOURTH AMENDED COMPLAINT

Tunold alleges that in March 2007, she was
a divorced mother with sole parenting responsibility for three minor
children. Suffering from depression, she
sought the services of Jerold Meints, a licensed marriage and family therapist
in Palm Desert.

At the time, Jerold Meints was the husband
of defendant Deborah Meints. Deborah was
also a licensed marriage and family therapist, and they both worked together
under the name “Village Counseling.”
They continue to work together under this name. The Meints were also joint owners of a
business known as “Sunshine Property Management.”

From March 2007 through August 7, 2007,
Jerold “preyed on [her] vulnerability” and otherwise manipulated Tunold into
believing she was in love with him.

On August 7, 2007, Jerold ended Tunold’s
therapy sessions in order to begin a sexual relationship with her. Jerold told Tunold he was going to leave his
wife; he told her he loved her and asked her to marry him. He also gave Tunold a diamond ring.

On September 6, 2007, Jerold convinced
Tunold to loan him $500,000 in order to obtain a divorce and buy out Deborah’s
50 percent interest in the Meints’s home (called “Space Ranch”) in Palm
Desert. Jerold promised Tunold that, “if
their relationship did not work out,” he would repay the money with
interest. Tunold then wrote a check for
$500,000, payable to Sunshine Property Management. Tunold alleges that Deborah was aware the
money had been so deposited, and she was a signatory on the Sunshine Property
Management bank account.

Between September 6 and September 14,
2007, Deborah became aware of the relationship between Tunold and Jerold. On September 14, 2007, the Meints deeded
Space Ranch, which had little or no equity, to Jerold as his separate property.

On or before September 15, 2007, the Meints
separated. They entered into a href="http://www.fearnotlaw.com/">marital settlement agreement (MSA) on
December 10, 2007, and were divorced in January 2008.

Tunold alleges that the MSA, an exhibit to
the complaint, was a sham document designed to prevent her from recovering the
$500,000 from Jerold.href="#_ftn1"
name="_ftnref1" title="">^[1] In addition to
dividing the real property, the MSA provided for an “equalizing payment” of
$500,000 from Jerold to Deborah. With
regard to community debts, the MSA allocated all identified community debts to
Jerold. All other debts “known to both
parties” were also assigned to Jerold.
However, unknown debts were the joint and equal responsibility of both
parties.

After the Meints separated on September
15, 2007, Tunold loaned Jerold an additional $140,000. Deborah personally received $500,000 on or
before October 31, 2008.

Jerold signed a confession of judgment
acknowledging the loan from Tunold. The confession of judgment, which is
attached to the complaint, was filed with the court on June 29, 2009. After attempts to collect the judgment from
Jerold were unsuccessful, this action was filed against Deborah on September 3,
2010.

Although not mentioned in the complaint,
the parties agree that Jerold filed a bankruptcy petition on November 5, 2010,
and was discharged on April 1, 2011.

Shortly after Jerold’s discharge in
bankruptcy, he obtained an uncontested court order in his divorce action (referred
to by the parties as “FOAH”).href="#_ftn2"
name="_ftnref2" title="">^[2] The order
states: “The Court will exercise its
continuing jurisdiction and carry out a post judgment division of assets and
liabilities. The Court makes a net equal
division of the unadjudicated community estate assets and debts by awarding
Petitioner, Jerold R. Meints, the unadjudicated $500,000 asset received in the
name of ‘Sunshine Property Management’ and also allocates to Petitioner, Jerold
R. Meints, the corresponding unadjudicated $500,000 debt in the name of
‘Sunshine Property Management.’”
(Capitalization omitted.)

III

TUNOLD’S ALLEGED FIRST TO FOURTH CAUSES OF ACTION

A. >Applicable General Principles.

The first
through fourth causes of action allege causes of action based on the Uniform
Fraudulent Transfer Act (the UFTA), Civil Code section 3439 et seq.href="#_ftn3" name="_ftnref3" title="">^[3] “A fraudulent conveyance under the UFTA involves ‘“a transfer by
the debtor of property to a third person undertaken with the intent to prevent
a creditor from reaching that interest to satisfy its claim.”’ [Citation.]”
(Filip v. Bucurenciu
(2005) 129 Cal.App.4th 825, 829.)

Our Supreme Court has held that “based on the policy considerations
underlying the UFTA and the Family Code provisions governing dissolution
judgments and settlements, . . . the UFTA applies to property
transfers under MSA’s.” (>Mejia v. Reed (2003) 31 Cal.4th 657,
669, fn. omitted.)

Thus, whether the debt was a debt due to operation of the community
property law or otherwise, it is still subject to the UFTA. (Fam. Code, § 851.)

“The California Legislature has a general
policy of protecting creditors from fraudulent transfers, including transfers
between spouses. A transfer
before dissolution can be set aside as a fraudulent conveyance. [Citations.]
A transfer after dissolution can be set aside under the clear terms of
the UFTA. When the court divides the
marital property in the absence of an agreement by the parties, it must divide
the property equally [citation], which provides some protection for a creditor
of one spouse only. In view of this
overall policy of protecting creditors, it is unlikely that the Legislature
intended to grant married couples a one-time-only opportunity to defraud
creditors by including the fraudulent transfer in an MSA.” (Mejia
v. Reed, supra, 31 Cal.4th at p. 668.)


It is therefore clear that the UFTA applies to transfers of joint and
separate property in a property settlement agreement. (Fam. Code, §§ 850, 851, 852, subd. (b);
Filip v. Bucurenciu, supra, 129
Cal.App.4th at p. 838.) Family Code
section 851 specifically provides that:
“A transmutation is subject to the laws governing fraudulent
transfers.” For example, since all
property acquired by a married person during marriage is generally community
property, a marital property agreement can change community property to
separate property and a transmutation can change the ownership of specific
property. (Fam. Code, §§ 760, 850.)

B. The
Alleged Causes of Action.

The first cause of action alleges that Jerold transferred the $500,000
that Tunold lent to Jerold to Deborah, that the transfer was in bad faith, and
that Jerold was insolvent at the time of the transfer or was made insolvent by
the transfer.

The first cause of action is based on section 3439.05. That section states: “A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor whose claim arose before the transfer was
made or the obligation was incurred if the debtor made the transfer or incurred
the obligation without receiving a reasonably equivalent value in exchange for
the transfer or obligation and the debtor was insolvent at that time or became
insolvent as a result of the transfer or obligation.”

The second and third causes of action are based on section 3439.04,
subdivision (a)(1) (actual fraud) and (a)(2) (constructive fraud),
respectively.

Section 3439.04, subdivision (a) states: “A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor, whether the creditor’s claim arose
before or after the transfer was made or the obligation was incurred, if the
debtor made the transfer or incurred the obligation as follows: [¶]
(1) With the actual intent to
hinder, delay, or defraud any creditor of the debtor. [¶]
(2) Without receiving a
reasonably equivalent value in exchange of the transfer or obligation
. . . .” Section 3439.04,
subdivision (b) lists factors to be used to determine actual intent under
subdivision (a)(1).

C. >The Demurrer and the Trial Court’s Decision.

Deborah’s demurrer to the first three causes of action was based on
the claim that Jerold received “reasonably equivalent value” in exchange for
giving Deborah a $500,000 equalizing payment in the MSA. She also alleged that “it is impossible for a
fraudulent transfer to have occurred from a transfer of assets between joint
debtors.”

Adopting this reasoning to all four causes of action, the trial court
ruled that: “It appears from the
pleadings that Jerold Meints received reasonably equivalent value in exchange
for giving Deborah Meints a $500,000 equalizing payment. A fraudulent transfer cannot occur between
alleged joint debtors.”

D. >The Trial Court Erred.

As noted above, the first cause of action is based on section
3439.05. That section requires a
transfer without receiving a reasonably equivalent value in exchange when the
debtor is insolvent, or is made insolvent by the transfer. As discussed below, these are questions of
fact which cannot be determined on demurrer.
On demurrer, the trial court was required to accept the allegation that
Deborah did not transfer assets of reasonably equivalent value as a result of
the transfer in the MSA. Applying the
provisions of the MSA to hold otherwise necessarily involves factual
determinations.

The second cause of action is based on actual fraud under section
3439.04, subdivision (a)(1). All that is
needed is proof of an actual intent to defraud.
(Reddy v. Gonzalez (1992) 8
Cal.App.4th 118, 123.) Intent is a
factual issue:
“[A] transfer made by a debtor is fraudulent under the UFTA if the
debtor made the transfer with the ‘actual intent to hinder, delay, or defraud
any creditor of the debtor.’ [Citation.] Whether a conveyance was made with fraudulent
intent is a question of fact, and proof often consists of inferences from the
circumstances surrounding the transfer.
[Citation.]” (>Filip v. Bucurenciu, supra, 129
Cal.App.4th at p. 834.)

The Filip
court goes on to note that section 3439.04, subdivision (b) was enacted
precisely to aid the trial court in making this factual determination. (Filip
v. Bucurenciu, supra, 129 Cal.App.4th at p. 834.) The existence of such a factual issue defeats
a demurrer under this subdivision.

A cause of action based on actual fraud
under section 3439.04, subdivision (a)(1) is independent of the showing of
constructive fraud required under section 3439.04, subdivision (a)(2). (Reddy
v. Gonzalez, supra, 8 Cal.App.4th at p. 123.) Since a finding of actual fraud would not be based on the concept of “reasonably equivalent value,”
the trial court’s decision under section 3439.04, subdivision (a)(2) does not
provide any basis for finding that Tunold has not stated a cause of action
under section 3439.04, subdivision (a)(1).

The third cause of action is based on
section 3439.04, subdivision (a)(2).
Under that subdivision, the question of whether there was a
“reasonably equivalent value in exchange” under the MSA or otherwise is clearly
a factual determination which cannot be resolved on demurrer.

In her reply brief, Tunold cites extensive authority to support her
argument that (1) a bankruptcy trustee has the rights of a secured creditor
under the applicable state fraudulent transfer law, including California’s
version of the UFTA (11 U.S.C.A. §§ 544(b), 548); (2) that under
bankruptcy law, the question of whether a spouse received equivalent value in
the property division is a material disputed fact (In re Kemmer (2001) 265 B.R. 224, 232); and (3) the factual
determination involves a comparison of the actual value of the property
transferred to the actual value of the property received (In re Jordan (2008) 392 B.R. 428, 441). For example, if real property is involved,
the appraised value must be determined and the encumbrances subtracted in order
to determine if equivalent value was exchanged.
This fairly obvious proposition is codified in Civil Code section
3439.01, subdivision (a)(1). (See also
Evid. Code, § 813, subd. (a).)

We need not go into depth on the issue as our Supreme Court has
clearly held that “[w]hether Husband here received
equivalent value in the property division is a material disputed fact
. . . .” (>Mejia v. Reed, supra, 31 Cal.4th at p.
670.) The court went on to note that the
question of solvency or insolvency at the time of transfer under section
3439.02, subdivision (a) is another factual issue. (Mejia,
at p. 670.) Tunold also argues
persuasively that the defense of “reasonably equivalent value” under section
3439.08, subdivision (a) also requires a finding of good faith, and good faith
is a third factual issue.

Since “reasonably equivalent value” is a factual issue, it obviously
cannot be determined from the face of the MSA.
Nor does it “appear[] from the pleadings . . . .” as the
trial court found.

Because of these factual issues, the trial court erred in sustaining
the demurrer to the first, second, and third causes of action.

E. >The Trial Court Also Erred in Its
Alternative Ground of Decision on the First Four Causes of Action.

The trial court also rested its decision on these three causes of
action on the statement that: “A
fraudulent transfer cannot occur between alleged joint debtors.”

In defense of the trial court's decision, Deborah cites >In re Jeffrey Bigelow Design Group, Inc.
(4th Cir. 1992) 956 F.2d 479,href="#_ftn4"
name="_ftnref4" title="">^[4] a case relied on by Tunold. The case states: “‘The focus is on the consideration received
by the debtor, not on the value given by the transferee. . . .’ [Citation.]
Hence, the proper focus is on the net effect of the transfers on the
debtor’s estate, the funds available to unsecured creditors. As long as the unsecured creditors are no
worse off because the debtor, and consequently the estate, has received an
amount reasonably equivalent to what it paid, no fraudulent transfer has
occurred.” (Id. at p. 484.)

Deborah cites the case to argue that the creditor here, Tunold, was no
worse off after the transfer because one of the joint debtors would still
possess the assets and they would therefore still be available to the
debtor. The allegations of the
complaint, taken as true, disprove Deborah’s argument. For example, if Family Code section 916 were
found to be applicable, as Deborah has argued, the creditor would certainly be worse
off after the interspousal transfer.

Application of the rule stated by the trial court would only raise
more factual issues which cannot be decided on demurrer, including the basic
issue of whether a creditor was worse off after the transfer.

We therefore conclude that the trial court erred in stating this
alternative ground for sustaining the demurrer on the first four causes of
action.

F. >The Fourth Cause of Action.

The fourth cause of action is for conspiracy to make a fraudulent
transfer. The trial court did not
discuss this cause of action separately.
The demurrer to the fourth cause of action should not have been
sustained on this ground because it was based on the same erroneous factual and
legal conclusions that were applied to the first three causes of action.

As discussed in connection with the fourth, sixth, and eighth causes
of action, Tunold can recover on a conspiracy theory if an underlying tort
violation of the UFTA is proven, even though it is not a separate cause of
action.

Deborah discusses the conspiracy causes of action of the fourth,
sixth, and eighth causes of action together, and we will do so also.

IV

TUNOLD’S FIFTH, SEVENTH, AND NINTH CAUSES OF ACTION

(FRAUD AND INTENTIONAL MISREPRESENTATION,

BREACH OF FIDUCIARY DUTY, AND NEGLIGENT
MISREPRESENTATION)

A. >The Alleged Causes of Action.

The fifth cause of action is for fraud and intentional
misrepresentation. While it makes a
number of allegations that Jerold committed fraud and made false
representations to Tunold, it notably does not make any allegations againt
Deborah, except that Jerold transferred Tunold’s $500,000 to Deborah.

The seventh cause of action is for alleged breach of fiduciary
duty. It asserts that Jerold owed a
fiduciary duty to Tunold because he held a position of trust and confidence
with her. The cause of action alleges
that Jerold and Deborah “assigned the debt owed to [Tunold] to [Jerold], but
distributed the proceeds of the debt to [Deborah] under the MSA in order to capitalize on
Section 916 of California Family Code to prevent [Tunold] from recovering her
money from [Jerold].” The only other
allegation against Deborah is that she received the $500,000 and Tunold is
entitled to recover it from her.

Similarly, the ninth cause of action alleges various
misrepresentations by Jerold. The only
allegation against Deborah is that Jerold transferred Tunold’s $500,000 to her.

B. >The Trial Court’s Decision.

The trial court sustained the demurrer to the fifth and ninth causes
of action because it found that Tunold had failed to allege any wrongful
conduct by Deborah. It sustained the
demurrer to the seventh cause of action on the ground that Tunold had not
alleged facts sufficient to show that Deborah owed Tunold a fiduciary duty.

C. >Tunold’s and Deborah’s Arguments.

On appeal, Tunold argues that the trial court erred. Tunold agrees that the three causes of action
are directed against Jerold, but contends that, once Jerold’s fraud, breach of
fiduciary duty, and misrepresentations have been proven, the title to the money
becomes voidable.href="#_ftn5" name="_ftnref5"
title="">^[5] Under each cause of action, Tunold seeks to
void the loan transaction and recover the money due from Deborah, assuming that
Deborah does not successfully assert a defense that she was a bona fide
purchaser for value.

Deborah argues that, even if Jerold breached his fiduciary duties, the
result would be that the loan transaction was voidable as to him. The same is true as to the fraud and
misrepresentation causes of action.
These predicate facts cannot be determined when Jerold is not a party to
this action. Deborah therefore argues
that the equitable remedy cannot be ordered in the absence of an indispensable
party.

D. >Discussion.

We agree with Deborah and the trial court. These three causes of action confuse the
factual issues (i.e., whether Jerold committed fraud and breached a fiduciary
duty) with the equitable remedy (i.e.,
whether the loan transaction should be voided and the money recovered from
Deborah).

The trial court properly sustained the demurrer to the fifth, seventh,
and ninth causes of action.

V

TUNOLD’S FOURTH, SIXTH, AND EIGHTH CAUSES OF ACTION

(CONSPIRING, AIDING AND ABETTING FRAUD, AND

INTENTIONAL MISREPRESENTATION)

A. >Applicable General Principles.

Both parties cite the seminal definition of conspiracy in >Applied
Equipment Corp. v. Litton Saudi Arabia Ltd. (1994)
7 Cal.4th 503, 510 and 511.

Our Supreme Court held that “[c]onspiracy is not a cause of action, but a legal doctrine
that imposes liability on persons who, although not actually committing a tort
themselves, share with the immediate tortfeasors a common plan or design in its
perpetration. [Citation.] By participation in a civil conspiracy, a
coconspirator effectively adopts as his or her own the torts of other
coconspirators within the ambit of the conspiracy. [Citation.]
In this way, a coconspirator incurs tort liability co-equal with the
immediate tortfeasors.” (>Applied Equipment Corp. v. Litton Saudi
Arabia Ltd., supra, 7 Cal.4th at pp. 510-511.)

Deborah cites Kidron v. Movie
Acquisition Corp. (1995) 40 Cal.App.4th 1571. The court described the fundamental
principles of civil conspiracy law. “To prove a claim
for civil conspiracy, Kidron was required to provide substantial evidence of
three elements: (1) the formation and
operation of the conspiracy, (2) wrongful conduct in furtherance of the
conspiracy, and (3) damages arising from the wrongful conduct.” (Id.
at p. 1581.)

“Accordingly, ‘[t]he
basis of a civil conspiracy is the formation of a group of two or more persons
who have agreed to a common plan or design to commit a tortious act.’ [Citations.]
The conspiring defendants must also have actual knowledge that a tort is
planned and concur in the tortious scheme with knowledge of its unlawful
purpose. [Citations.] [¶]
However, actual knowledge of the planned tort,
without more, is insufficient to serve as the basis for a href="http://www.mcmillanlaw.com/">conspiracy claim. Knowledge of the planned tort must be combined
with intent to aid in its commission. name=clsccl9>‘The sine qua non of a conspiratorial agreement is the
knowledge on the part of the alleged conspirators of its unlawful objective and
their intent to aid in achieving that objective.’ [Citations.]”
(Kidron v. Movie Acquisition
Corp., supra, 40 Cal.App.4th at p. 1582.)


“A civil conspiracy is not an independent
tort, but rather a means by which members of a conspiracy may be held
responsible without direct participation in the wrongful act; and there is no tort
unless a wrongful act has been committed and has caused damage. [Citation.]”
(3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 557, p. 706.)

The Witkin treatise also describes the
pleading of conspiracy: “The labeling of
an action as ‘complaint for conspiracy to defraud’ or conspiracy to commit some
other tort is misleading. Conspiracy
(the agreement) is ordinarily not actionable by itself. The cause of action arises out of some
wrongful act committed by one or more of the conspirators, and if that wrongful
act is set forth, the conspiracy averment is unnecessary to the statement of a
cause of action. [Citations.] [¶]
The plaintiff may therefore state a cause of action against several
persons by simply alleging that the named defendants committed the acts. The theory of recovery may or may not be a
conspiracy. [Citations.] As the court remarked in McPhetridge v. Smith (1929) 101 [Cal.App.] 122, 281 P. 419: ‘That the word “conspiracy” was not used in
nowise lessens the legal import of the acts nor if the word “conspiracy” had
been used would it have added anything to the legal significance of what was
done.’ [Citation.]” (5 Witkin, Cal. Procedure (5th ed. 2008) Pleading,
§ 921, pp. 335-336; see also 5 Witkin, Cal. Procedure, >supra, Pleading, §§ 922, 923, pp.
336-338.)

B. >The Alleged Causes of Action.

As discussed above, the fourth cause
of action is for conspiracy to make a fraudulent transfer under the UFTA.

The sixth cause of action alleges that Deborah had actual knowledge
that Jerold had defrauded Tunold. It
then states a number of ways in which Deborah assisted Jerold by participating
in a scheme to defraud Tunold.

The eighth cause of action also alleges Deborah had actual knowledge
of the loan and of Jerold’s breach of fiduciary duties, and that she assisted
Jerold and participated in his breach of fiduciary duties.

C. >The Trial Court’s Decision.

As discussed under the UFTA allegations of the first four causes of
action, the trial court erroneously found each of those causes of action
insufficient because the transfers were for a reasonably equivalent value.

The trial court found, as to the sixth and eighth causes of action,
that Tunold failed to sufficiently allege the underlying tort.

D. >Our Decision.

Since it is clear from >Applied Equipment Corp. that a
conspiracy allegation is not a separate cause of action, we are constrained to
find that the demurrers to the fourth, sixth, and eighth causes of action must
be sustained. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd., supra, 7
Cal.4th at pp. 510-511.)

E. >The Fourth Cause of Action.

Although the fourth cause of action
cannot stand on its own, it is nevertheless clear that a
claim that property that was fraudulently transferred under UFTA, if proven,
would be the basis for a conspiracy claim against Deborah if it can be shown
that she participated in the conspiracy.

“At issue in Applied Equipment was whether a contracting party could be held
liable in tort for conspiracy to interfere with its own contract. The Supreme Court answered that question in
the negative. [Citation.] The case before us, however, is not based in
contract. Defendants fail to recognize
that a claim under the UFTA in fact involves tortious conduct. In fraudulently transferring property, tortious
conduct occurred.” (Filip
v. Bucurenciu, supra, 129 Cal.App.4th at p. 837.)

The
trial court did not make a specific decision on the fourth cause of action, as
discussed above, but it did decide that the other two conspiracy causes of
action were insufficient because they failed to sufficiently allege the
underlying tort.

Considering the question of sufficiency as
to the fourth cause of action, we find that the conspiracy allegations are
based on the fraudulent transfers alleged in the general allegations and the
first two causes of action. Since the
conspiracy allegations are based on the UFTA torts alleged in the first two
causes of action, we regard the conspiracy allegations in the fourth cause of
action as an adjunct to the UFTA violations alleged in the first three causes
of action, and we find that they sufficiently define the tortious conduct
necessary to support the conspiracy allegations.

F. >The Sixth Cause of Action.

Even though the conspiracy allegations of the sixth cause of action cannot
state a cause of action, it is nevertheless clear that if the alleged
underlying tort (fraud) was committed, Deborah is liable as a coconspirator if
it can be shown at trial that she participated in a scheme to defraud Tunold of
the $500,000, whether or not she personally committed the fraudulent acts.

Considering the issue of whether the factual allegations were
insufficient to allege the underlying tort, we find that the sixth cause of
action incorporates the preceding allegations of the complaint. When the incorporated sections are considered
with the other factual allegations in the sixth cause of action, we find that
there are sufficient factual allegations of fraud and intentional
misrepresentation to state a cause of action.

G. >The Eighth Cause of Action.

In the eighth cause of action, Tunold
alleges Deborah participated in Jerold’s breach of fiduciary duty. In this regard, Deborah cites >Everest Investors 8 v. Whitehall Real Estate
Limited Partnership XI (2002) 100 Cal.App.4th 1102. That case held that a nonfiduciary defendant
cannot be liable for conspiring with a fiduciary duty defendant to breach
the fiduciary’s duty to plaintiff: “If the nonfiduciary is neither an employee nor agent of
the fiduciary, it is not liable to the plaintiff on a conspiracy theory because
a nonfiduciary is legally incapable of committing the tort underlying the claim
of conspiracy (breach of fiduciary duty).” (Id.
at p. 1104, fn. omitted.) Even if this
cause of action could be interpreted to as a nonconspiracy cause of action, it
is clear that this case would dispose of the eighth cause of action.

H. >Conclusion.

Since conspiracy is not an independent
cause of action, we affirm the trial court’s decision to sustain the demurrer
to the fourth, sixth, and eighth causes of action.

We emphasize, however, that this decision
does not prevent Tunold from introducing the requisite evidence at trial that
Deborah conspired with Jerold to commit a tortious violation of the UFTA. If proven, Deborah may be liable on a conspiracy
theory, regardless of whether she directly participated in the tortious act. “[W]here the
complaint charges a conspiracy and the commission of a wrongful act, the only
significance of the conspiracy charge is that each member may be held
responsible as a joint tortfeasor, regardless of whether that member directly
participated in the act.
[Citations.]” (5 Witkin, Summary
of Cal. Law (10th ed. 2005) Torts, § 45, pp. 111-112.)

Likewise, affirmance of the trial court’s
decision to affirm the demurrer to the sixth cause of action does not prevent
Tunold from introducing evidence of Jerold’s fraud and misrepresentation at
trial to show that Deborah conspired with Jerold in a conspiracy to defraud
Tunold. Nor does it prevent Tunold from
obtaining a judgment against Deborah on a conspiracy theory if the requisite
proof is made to the satisfaction of the trial judge or jury.

VI

TUNOLD’S TENTH AND THIRTEENTH CAUSES OF ACTION

(UNJUST ENRICHMENT AND CONVERSION)

A. >The Tenth Cause of Action.

The tenth cause of action is for unjust enrichment. It alleges that, because of various alleged
reasons, Deborah received the benefit of Tunold’s $500,000 and has refused to
return it to Tunold.

Tunold cites Peterson v. Cellco
Partnership (2008) 164 Cal.App.4th 1583:
“The elements of an unjust enrichment claim
are the ‘receipt of a benefit and [the] unjust retention of the benefit at the
expense of another.’ [Citation.] Here, plaintiffs received the benefit of the
bargain. ‘[T]he “mere fact that a person
benefits another is not of itself sufficient to require the other to make
restitution therefor.”’ [Citation.] ‘There is no equitable reason for invoking
restitution when the plaintiff gets the exchange which he expected.’ [Citation.]”
(Id. at p. 1593, fn.
omitted.) But, as shown in this case,
the question of whether there is a benefit is a question of fact which cannot
be determined on demurrer.

B. The
Thirteenth Cause of Action.

The thirteenth cause of action is for conversion. It alleges that the $500,000 Jerold
transferred to Deborah was Tunold’s money.
Further, “[Deborah] caused the $500,000 to be paid to her and at the
same time cause[d] the obligation to repay the Loan to be assigned to [Jerold]
under the MSA with the intent to defraud [Tunold].” It is also alleged that Deborah used the MSA
in an attempt to insulate the $500,000 from repayment by application of Family
Code section 916.

Deborah argues that there could be no conversion because her retention
of the money is not wrongful. She cites >Burlesci v. Petersen (1998) 68
Cal.App.4th 1062: “Conversion is the wrongful exercise of dominion over the
property of another. The elements of a
conversion claim are: (1) the
plaintiff’s ownership or right to possession of the property; (2) the
defendant’s conversion by a wrongful act or disposition of property rights; and
(3) damages. Conversion
is a strict liability tort. The
foundation of the action rests neither in the knowledge nor the intent of the
defendant. Instead, the tort consists in
the breach of an absolute duty; the act of conversion itself is tortious. Therefore, questions of the defendant’s good
faith, lack of knowledge, and motive are ordinarily immaterial. [Citations.]”
(Id. at p. 1066.)

But Burlesci
does not help Deborah. The ultimate issue
in the case is whether Deborah’s retention of the loan money is wrongful, i.e.,
whether she has a right to possession of the $500,000. Considering the incorporated allegations of
the cause of action, we find that sufficient facts are alleged to state a cause
of action for conversion.

C. The
Trial Court’s Decision.

In its ruling on the tenth and thirteenth causes of action, the trial
court decided: “It appears from the pleadings that Deborah Meints received an
equalizing payment from Jerold Meints in exchange for surrendering valuable
rights and property interests.” (Italics
added.)

D. >Conclusion.

Appearances can be deceiving.
As discussed in connection with the first and third causes of action,
appearances are not a substitute for a factual determination of equivalent
values. Because there are undetermined
factual issues, the trial court erred in sustaining the demurrer to the tenth
and thirteenth causes of action.

VII

TUNOLD’S ELEVENTH CAUSE OF ACTION

(BREACH OF CONTRACT)

The eleventh cause of action alleges that the loan agreement between
Tunold and Jerold was a valid oral contract between them. It further alleges that the loan was a
community debt under Family Code section 910, subdivision (a).href="#_ftn6" name="_ftnref6" title="">^[6]>

The MSA provides: “Those debts,
obligations, and liabilities known to both Parties and incurred prior to the
Separation Date (and not otherwise specifically assigned to a Party under this
Agreement), shall be paid by [Jerold].
Except as otherwise provided in this Agreement, any debt or claim
against the Parties, unknown to one or both Parties and incurred prior to the
Separation Date, shall be the joint and equal responsibility of the
Parties. Unless specifically provided
otherwise in this Agreement, debts, known or unknown, incurred after the Separation
Date shall be paid by the Party incurring the debt.”

Tunold argues that she alleged a valid contract between herself and
Jerold. She also contends that Family
Code section 916.2 does not apply to insulate Deborah from liability for this
jointly incurred community debt.href="#_ftn7"
name="_ftnref7" title="">^[7]>

Deborah argues that she is not liable for debts contracted for by
Jerold and assigned to her in the dissolution action. (Fam. Code, § 916, subd. (a)(2).)

The trial court decided:
“[Deborah and Jerold’s] request for Judicial Notice establishes that the
Family Law Court in Meints v. Meints (INC 094565) assigned the $500,000
asset and debt to Jerold Meints.
Pursuant to Family Code section 916[, subdivision] (a)(2), the
non-contracting spouse, Deborah Meints, cannot be held liable for the debt.”

The parties debate the effect of the trial court’s decision and the
applicability of Family Code section 916.2 under the MSA and the subsequent
court decision modifying the MSA.href="#_ftn8"
name="_ftnref8" title="">^[8]

However, we cannot apply the section to the facts here because the
facts are undeveloped. There are factual
issues as to whether the debt was known or unknown on the separation date under
the MSA paragraph quoted above. There is
also a factual question as to whether a substantially equal division of
property was achieved by the April 20, 2012, order in the dissolution
action. There are also factual questions
underlying applicability of Family Code section 916.2.

We note, however, the statement in >CMRE Financial Services, Inc. v. Parton (2010)
184 Cal.App.4th 263: “The only exception
to application of [Family Code] section 916 our courts have recognized is where
a creditor alleges a marital settlement agreement violates the separate
provisions of the Uniform Fraudulent Transfer Act, Civil Code sections 3439
through 3439.12 (UFTA). [Citation.] Significantly, in reaching that conclusion
the court noted that the legislative history of both [Family Code] section 916
and the UFTA shed no light on what the Legislature intended when a conflict
between the two statutes arose.
[Citation.] The court upheld
application of the UFTA solely because it found the antifraud policies of the
UFTA took precedence over the finality policies embodied in [Family Code]
section 916. [Citation.]” (Id.
at pp. 268-269.)

Due to the factual issues inherent in this cause of action, we find
that the trial court erred in sustaining the demurrer to the eleventh cause of
action.

VIII

TUNOLD’S TWELFTH CAUSE OF ACTION

(BREACH OF IMPLIED-IN-FACT CONTRACT)

The twelfth cause of action alleges an implied-in-fact contract
between Tunold, Jerold, and Deborah. The
alleged cause of action is based on section 1621.

Section 1621 states: “An
implied contract is one, the existence and terms of which are manifested by
conduct.”

The cause of action alleges various facts which are alleged to show
the existence of an implied-in-fact contract.
It also incorporated the earlier factual allegations of the complaint.

The trial court sustained the demurrer to this cause of action on the
ground of uncertainty.

In response, Tunold cites Khoury
v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612: “An oral contract
may be pleaded generally as to its effect, because it is rarely possible to
allege the exact words. [Citation.] A demurrer for uncertainty is strictly construed,
even where a complaint is in some respects uncertain, because ambiguities can
be clarified under modern discovery procedures.
[Citations.]” (>Id. at p. 616.)

Deborah cites Wal-Noon Corp. v. Hill (1975) 45 Cal.App.3d 605: “There cannot be a valid, express contract
and an implied contract, each embracing the same subject matter, existing at
the same time. [Citations.] The reason for the rule is simply that where
the parties have freely, fairly and voluntarily bargained for certain benefits
in exchange for undertaking certain obligations, it would be inequitable to
imply a different liability and to withdraw from one party benefits for which
he has bargained and to which he is entitled.
The resolution of the instant controversy by the extension of equitable
relief to plaintiffs would effectively deprive defendants of part of the
bargained-for consideration in the lease, i.e., the right of control over
repairs for which they are therein held responsible. ‘“While a court of equity may exercise broad powers
in applying equitable remedies, it may not create new substantive rights under
the guise of doing equity.”’
[Citations.]” (>Id. at p. 613.)

We agree with both parties.
When incorporated sections of the complaint are considered with the
allegations in the twelfth cause of action, we find that sufficient facts were
stated to overcome a demurrer for uncertainty.

However, we also agree that there cannot be an express contract and an
implied contract at the same time concerning the same subject matter. We therefore affirm the trial court’s
sustaining of the demurrer to the twelfth cause of action on this ground.

IX

CONCLUSION

For the reasons stated above, we reverse the trial court’s sustaining
of Deborah’s demurrer to the first, second, third, tenth, eleventh, and
thirteenth causes of action. The trial
court’s sustaining of Deborah’s demurrer to the remaining causes of action is
affirmed.

Since Tunold does not raise any objections to the sustaining of the
demurrers to the remaining causes of action without leave to amend, she has not
met her burden of showing a reasonable possibility that the defects can be
cured by amendment. (>Blank v. Kirwan, supra, 39 Cal.3d at p.
318.)

X

DISPOSITION

The trial court’s judgment and order of
dismissal filed on December 6, 2011, which incorporates the trial court’s
tentative rulings on 13 alleged causes of action in plaintiff’s fourth amended
complaint is reversed as to the first, second, third, tenth, eleventh, and
thirteenth causes of action. The trial
court’s rulings on all other causes of action are affirmed. Each party shall bear their own href="http://www.fearnotlaw.com/">costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL
REPORTS



RICHLI

J.



We concur:





HOLLENHORST

Acting
P. J.





KING

J.