NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION ONE

Plaintiff Benny Xian was a cofounder and an early investor of BeyondCore, Inc. (BeyondCore). After his employment was terminated, he recovered investments he had made in the company as cash payments with 5 percent interest rather than obtaining shares of BeyondCore stock under convertible promissory notes and a warrant. Several years later, BeyondCore was purchased by Salesforce, Inc. (Salesforce). Plaintiff filed a class action lawsuit against Arijit Sengupta, the founder of BeyondCore, and other defendants, alleging various causes of action related to the Salesforce acquisition, including a fraud claim alleging that Sengupta misrepresented and concealed material facts about the early capitalization of the company. Xian alleges that had he known those facts, he would have accepted shares in BeyondCore rather than a cash payout, and would have realized more than $7 million in profits after the Salesforce acquisition.

Xian now appeals from the judgment entered after the trial court sustained a demurrer to his third amended complaint without leave to amend. The trial court ruled that the three-year statute of limitations barred his fraud claim, because the allegations of his third amended complaint contradicted earlier allegations in his pleadings and Xian failed to sufficiently plead delayed discovery to postpone accrual of his claim to 2019. We conclude Xian sufficiently alleged delayed discovery of his fraud claim, and accordingly reverse the judgment.

I.

BACKGROUND[1]

A. Factual Background

Sengupta started BeyondCore in 2004, while he was earning his master of business administration degree from Harvard University. At all relevant times, Sengupta was BeyondCore’s majority and controlling shareholder and chief executive officer (CEO). Sengupta made no monetary investment in the company, but his wife provided a convertible loan of $30,000 in 2004. Two years later, Sengupta moved BeyondCore’s location to California.

Xian was a cofounder, employee, and early investor in BeyondCore. Xian invested $100,000 in BeyondCore in 2007 and received a convertible promissory note (2007 Note), allowing him to convert the note to BeyondCore shares beginning in 2012.[2] As part of that transaction, Xian also received a warrant as a companion instrument to the 2007 Note (Warrant). The Warrant entitled Xian to purchase 1,111 BeyondCore shares at the conversion price of the 2007 Note ($36 per share). In 2008, Xian invested a further $50,000 and received a convertible note (2008 Note), which also allowed Xian to convert his investment to shares in BeyondCore.

In May 2010, Sengupta terminated Xian’s employment with BeyondCore via e-mail without notice. By that time, BeyondCore had raised $605,000 in total capital investment since its inception in 2004, $405,000 of which had been obtained or personally invested by Xian.

Over two years later, on August 9, 2012, Jeffrey Harrell, counsel for BeyondCore, e-mailed Xian to notify him that his 2007 Note was scheduled to be “paid out” on October 26, 2012. Harrell outlined two options: (1) Xian could do nothing and receive a $125,000 payment, representing his $100,000 investment plus five years of 5 percent simple interest; or (2) he could convert the principal and accrued interest to BeyondCore shares based on the terms of the 2007 Note. If he accepted option (1), the Warrant would expire, and if he accepted option (2), he would retain the benefit of the Warrant for another year. Harrell ended the e-mail by asking Xian to “[p]lease let me know how you would like to proceed.”

Four days later, counsel for Xian, Paul Tauber, e-mailed Harrell, noting Xian had forwarded Harrell’s e-mail “regarding the promissory note that will mature shortly.” Tauber wrote: “In order to decide how to proceed, is there any update regarding the company, fundraising efforts, etc. that can be provided?” Harrell responded that he would “reach out to the company for an update.” The following week, Harrell wrote another e-mail stating: “I’ve confirmed with the company that BeyondCore plans to send out an overall status update to all investors by the end of the month or early next month. BeyondCore has been having certain acquisition and fundraising related conversations but the details of those conversations are currently confidential.”

Two weeks later, on September 3, 2012, Sengupta e-mailed Xian, copying both Harrell and Tauber. Sengupta wrote: “I wanted to give you a quick update on BeyondCore.” After noting BeyondCore had been selected “a Gartner Cool Vendor in Business Process Services” and describing a new product, Sengupta wrote: “We are considering raising some money this fall and have had some initial discussions with venture capitalists. Please feel free to ask me any questions. I will of course keep you updated on any major progress on the funding front.” By the end of the week, Tauber responded to Harrell that Xian would “go ahead and require payment on the due date.”

On October 16, 2012, Harrell sent an e-mail to Xian and Tauber with the subject line: “BeyondCore Update.” Harrell wrote: “In connection with the note you hold, BeyondCore wants to provide you with certain additional information.” Harrell explained that (1) BeyondCore’s new product “had additional revenue traction in the form of paid POCs but nothing very significant yet”; (2) BeyondCore was “having ongoing conversations with venture capital investors and potential acquirers though BeyondCore has not received any term sheets yet”; (3) “BeyondCore’s CEO fully believes in the future of BeyondCore as evidenced by the fact that the wife of BeyondCore’s CEO has invested more than $50,000 in the company in the last few months and that BeyondCore’s CEO continues to not draw any salary from the company”; and (4) BeyondCore had offered to extend the expiration date of the 2007 Note by a year, allowing Xian “an additional year to consider [his] options and avoid the cancellation of [the Warrant],” but noting that “[b]y asking for payment, [Xian was] specifically rejecting this offer.” Harrell concluded by confirming the note would be repaid if BeyondCore did not hear back from Xian by October 19, 2012.

Xian decided not to convert the promissory note or exercise his rights under the Warrant. Based on his “past experience” at BeyondCore, “including the inability of the company to pay [Xian] his unpaid wages until he signed a release” and the lack of news from BeyondCore, Xian concluded the company “was still chronically low on funds” and that “he would be fortunate just to get his invested capital returned with 5% interest.”

Xian alleges that unbeknownst to him, between September 2010 and August 2012, BeyondCore had raised $775,000 in investment capital from multiple investors. BeyondCore also concealed that within three days of the maturity date of the 2007 Note, BeyondCore raised an additional $150,000, bringing the latest fundraising efforts to $925,000. He asserts this information was material, both “in an absolute sense and relative to what took place prior to September 2010,” and represented “[a]ctual and more material financial developments” than Sengupta’s wife’s $50,000 investment and Sengupta’s salary deferral as reported by Harrell in his October 2012 e-mail. (Underscoring omitted.) At the time of these communications, Xian alleges he had no suitable alternative channel for information on BeyondCore’s finances.

The following year, Xian was evaluating whether to redeem or convert the 2008 Note. Despite Sengupta’s promise in his September 3, 2012 e-mail that he would “of course keep [Xian] updated on any major progress on the funding front,” Xian received no further updates after Harrell’s October 2012 e-mail. Having received no further updates, Xian and his attorney “assumed there were no material events” at BeyondCore. Xian’s attorney advised him “that he believed [BeyondCore] was out of money and he should get back his invested capital while he still had the chance.”

Xian alleges that Sengupta again concealed material financial information prior to the maturity date of the 2008 Note, including the fact that BeyondCore had raised $1 million after Xian left the company, $950,000 of which was not disclosed to him. In addition, Sengupta concealed that BeyondCore was in serious discussions and/or due diligence with Menlo Ventures, a Silicon Valley venture capital firm, which culminated in series A financing in BeyondCore by Menlo Ventures of $9 million in February 2014. Xian alleges that investment was significant in terms of the amount invested, the prestige of the venture capital firm, and the significant increase in BeyondCore’s valuation as a result of the series A financing.[3]

In September 2016, BeyondCore was acquired by Salesforce. Shares in BeyondCore were converted to shares in Salesforce at a conversion rate of 0.04059, or about 24.64 shares of BeyondCore for each share of Salesforce. BeyondCore shareholders were also provided with the opportunity for their newly converted shares to be sold. Xian alleges that had he exercised his rights under the 2007 Note, the 2008 Note, and the Warrant, he would have acquired 25,617 Salesforce shares as of September 2016. He further alleges he was economically damaged in the amount of $7,204,781 by Sengupta’s fraudulent concealment of material information, the difference between the cost of acquiring the shares and their market value upon conversion to Salesforce stock.

B. Procedural History

Xian filed a class action[4] complaint on October 8, 2019, followed by a first amended complaint. After the trial court sustained demurrers to the first amended complaint with leave to amend, Xian filed a second amended complaint (SAC). In his SAC, Xian included allegations specifically addressing his discovery of fraud after the Salesforce acquisition.

Sengupta demurred to the SAC, arguing among other things, that Xian’s fraud claim was barred by the three-year statute of limitations under Code of Civil Procedure[5] section 338. The trial court sustained the demurrer, finding that most of Xian’s claims were barred by the settlement agreement he entered with BeyondCore in September 2010 and the statute of limitations. However, the court allowed Xian leave to amend his causes of action for fraud and breach of fiduciary duty to address “alleged fraudulent omissions that occurred after September 3, 2010 regarding the sale of the note and the warrant, and only as alleged in Paragraphs 218, 219, and 220 of the Second Amended Complaint.” The trial court specifically directed Xian to “plead with specificity delayed discovery and justifiable reliance” as to those two causes of action.

Xian filed a third amended complaint (TAC), alleging only two causes of action for fraud and breach of fiduciary duty. With respect to delayed discovery of his claims, the TAC alleged that “n early September 2016,” Xian received e-mails from several friends regarding the Salesforce acquisition of BeyondCore. He searched and found online a press release about the prospective transaction. “On September 8, 2016,” Xian “contacted and engaged an attorney (not current counsel) to aid him in evaluating his situation [i]vis a vis [BeyondCore] and [Salesforce]. The attorney advised [Xian] to compile relevant documents he had from his [BeyondCore] tenure and to send them to him for review.”

Xian alleged he and his wife moved from Silicon Valley to Pasadena in September 2016, and he was not able to access his BeyondCore documentation for several weeks, but that “[a]fter getting moved into his Pasadena residence,” he started compiling BeyondCore documents he had stored and forwarded them to his attorney “in November and December 2016.” Xian’s attorney spent “two months on-and-off” assisting Xian with potential claims, but Xian alleged that the “documents compiled by [Xian] from his own sources were insufficient to uncover anything about [BeyondCore’s] financial situation” after Xian left BeyondCore in 2010 and he “was not yet aware of the substantial investments made in BeyondCore from September 2010 onward.” Xian “was also unable to determine financial details about [BeyondCore] other than what was disclosed in publicly filed documents concerning the [Salesforce] Acquisition.”

Xian alleged he was advised by new counsel in November 2017 to obtain Delaware corporate filings for BeyondCore, which led to a discovery that Sengupta had improperly issued himself shares of BeyondCore. “Throughout 2018 and through August 2019, [Xian] sought additional documents on [BeyondCore].” Xian alleged that “[w]hile researching online during at [sic] dealroom.co circa August 26, 2019 [Xian] discovered a listing in a schedule referring to a Series A investment of $9,000,000 in February 2014 from Menlo Ventures, venture capital firm.”

He further alleged that in July 2019, he “met with a prior investor” in BeyondCore. Xian had “attempted to meet with the investor a year earlier, but was unsuccessful because the investor was reluctant to discuss [BeyondCore] or provide any disclosure about [BeyondCore] until their own dealings were concluded with [BeyondCore].” The investor provided Xian with BeyondCore’s “capitalization table listing all investments made in [BeyondCore] through December 2012.” Xian attached the capitalization table to the TAC, and alleged “[t]his was the first time [Xian] was able to discover the existence and extent of investments” made in BeyondCore after he left.

Finally, Xian alleged he “was unable to discover the occurrence and nature of the causes of action alleged herein until the period of November 2017–August 2019 due to the non-public nature of the 2012 Cap Table and the Menlo Ventures Series A investment. The statute of limitations period for the fraud-based causes of action alleged herein did not start until [Xian’s] discoveries in July–August 2019 that tipped him off to the fraudulent concealment and misrepresentations” by Sengupta and BeyondCore.

Sengupta demurred to the TAC. Sengupta argued that Xian had failed to allege delayed discovery of his fraud claim because the allegations of the TAC did not show reasonable diligence. In particular, Sengupta focused on the fact that the TAC omitted allegations contained in the verified SAC regarding “anomalies in the press release” that Xian had noticed when reading in September 2016 about the Salesforce acquisition of BeyondCore.[6] (Boldface and italics omitted.) Sengupta argued that “[b]ased upon these alleged misgivings, Xian immediately contact[ed] and engage[d] an attorney on September 8, 2016 (over three years before filing the complaint),” but then moved and proceeded to wait a year before accessing public documents from BeyondCore’s corporate filings, then waited two more years to file suit. (Boldface, italics, and underscoring omitted.) Because “Xian was on inquiry notice as of September 2016” and “had publicly available documents accessible to him the entire time,” Sengupta argued he failed to demonstrate reasonable diligence and his claims should be dismissed. Xian opposed the demurrer, arguing he had adequately alleged delayed discovery and the fact that he had publicly available documents was irrelevant because the basis of the fraud cause of action was discovered only once he received the nonpublic capitalization table in July 2019.

Following briefing and a hearing, the trial court sustained the demurrer without leave to amend. The court concluded Xian had “not sufficiently pled delayed discovery to postpone accrual of the fraud and breach of fiduciary duty causes of action to 2019 when he obtained a copy of the BeyondCore 2012 Year-End Capitalization Table.” Observing that delayed discovery “does not postpone accrual of a cause of actual [sic] discovery of all facts, but earlier to when ‘[a] plaintiff has reason to discover a cause of action when he or she has reason at least to suspect a factual basis for its elements,’ ” the trial court concluded Xian had not sufficiently pled delayed discovery because his allegations in the TAC “contradict[ed]” his allegations in the SAC, and he had not sufficiently pled around the prior allegations.

Specifically, the trial court focused on the allegations that Xian “read the press release regarding the Salesforce acquisition in September 2016 and noticed the identification of two co-founders, Pathak and Chronis, whom he had never met and were never mentioned as prospective investors during his three-year tenure at BeyondCore.” The court observed that “[g]iven the allegations of the [SAC] the Court finds that [Xian] would have had ‘reason to at least suspect that a type of wrongdoing has injured him’ in September 2016 when he read the press release that identified Pathak and Chronis as co-founders who had not been mentioned as potential investors and as evidenced by his retention of counsel that same month.”

The trial court further noted that Xian omitted from his TAC allegations contained in the SAC that he and his counsel had communicated his misgivings to Sengupta in early 2017.[7] The court observed that Xian did not “allege the substance or result of any of those communications.” “Instead,” the trial court wrote, Xian’s TAC now alleged that his counsel “spent two months on-and-off until providing [Xian] with assistance concerning potential claims” against BeyondCore and Salesforce; that the documents compiled by Xian from his own sources were insufficient to uncover anything about BeyondCore’s financial situation after he left; that Xian “was not yet aware of the substantial investments made in [BeyondCore] from September 2010 onward”; and that he was unable to determine “financial details” about BeyondCore other than “what was disclosed in publicly filed documents” concerning the Salesforce acquisition.[8] The court found these allegations “contradict[ed] his knowledge and actions as pled” in the SAC. Concluding Xian had failed to allege delayed discovery and consequently that his claims were barred by the three-year statute of limitations, the trial court sustained the demurer without leave to amend.

This appeal followed.

II.

DISCUSSION

A. Standard of Review

“On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] . . . ‘ . . . t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory.’ ” ([i]Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966–967; Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810 (Fox).) We review the legal sufficiency of a complaint de novo. (Kahan v. City of Richmond (2019) 35 Cal.App.5th 721, 730.)

B. Delayed Discovery

Xian contends the trial court erred in determining his fraud claim is barred by the three-year statute of limitations under section 338, subdivision (d). Sengupta disagrees, and asserts Xian’s cause of action accrued at the latest in September 2016, when Xian learned of the Salesforce acquisition and hired a lawyer to explore his claims vis-à-vis BeyondCore and Sengupta.

The statute of limitations for a fraud claim is three years. (§ 338, subd. (d).) Under the delayed discovery rule, accrual of a cause of action for fraud is postponed until the plaintiff discovers, or has reason to discover, the cause of the action. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1318 (E-Fab).) The rule is expressly incorporated in the statute. (§ 338, subd. (d) [“The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”].)

“[U]nder the delayed discovery rule, a cause of action accrues and the statute of limitations begins to run when the plaintiff has reason to suspect an injury and some wrongful cause, unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action. In that case, the statute of limitations for that cause of action will be tolled until such time as a reasonable investigation would have revealed its factual basis.” (Fox, supra, 35 Cal.4th at p. 803, italics added.)

“In order to rely on the discovery rule for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’ ” (Fox, supra, 35 Cal.4th at p. 808.) “In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to ‘show diligence’; ‘conclusory allegations will not withstand demurrer.’ ” (Ibid.)

“ ‘Resolution of a statute of limitations issue is normally a question of fact.’ [Citation.] More specifically, as to accrual, ‘once properly pleaded, belated discovery is a question of fact.’ [Citation.] As our state’s high court has observed: ‘There are no hard and fast rules for determining what facts or circumstances will compel inquiry by the injured party and render him chargeable with knowledge. [Citation.] It is a question for the trier of fact.’ [Citation.] ‘However, whenever reasonable minds can draw only one conclusion from the evidence, the question becomes one of law.’ [Citation.] Thus, when an appeal is taken from a judgment of dismissal following the sustention of a demurrer, ‘the issue is whether the trial court could determine as a matter of law that failure to discover was due to failure to investigate or to act without diligence.’ ” (E-Fab, supra, 153 Cal.App.4th at p. 1320, italics added.)

This is not a case where reasonable minds could draw only one conclusion from the allegations of the TAC and the facts subject to judicial notice. As stated earlier, to successfully plead delayed discovery, Xian “ ‘must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’ ” (Fox, supra, 35 Cal.4th at p. 808.) We are satisfied that standard is met here. Xian alleges that he first became aware that Sengupta concealed material facts about substantial investments in the company between 2010 and 2013 when he received a copy of BeyondCore’s capitalization table in July 2019. He also alleges that the following month (August 2019) he learned that Menlo Ventures had invested $9 million in 2014. These allegations successfully plead specific facts regarding the time and manner of discovery of the misrepresentations and omissions on which his fraud claims are based. (See, e.g., E-Fab, supra, 153 Cal.App.4th at p. 1325 [plaintiff sufficiently pled time and manner of discovery where allegations showed plaintiff learned something it did not know before].)

As far as the inability to have made earlier discovery despite reasonable diligence, Xian pleads that he first learned that Salesforce had acquired BeyondCore in September 2016, and began investigating potential claims he might have. He hired a lawyer and began gathering documents from his time at BeyondCore, which he sent to his lawyer in November and December 2016. But the documents he compiled were insufficient to uncover anything about BeyondCore’s financial situation after he left, and he was unable to “determine financial details about [BeyondCore] other than what was disclosed in publicly filed documents” concerning the Salesforce acquisition. Xian continued to work with his lawyer and seek legal advice, and “throughout 2018 and through August 2019” sought additional documents on BeyondCore, finally obtaining the capitalization table in July 2019 and information about the series A financing the following month. Xian pleads he was unable to discover his fraud claim earlier “due to the non-public nature of the 2012 Cap Table and the Menlo Ventures Series A investment.” These are not mere conclusory allegations that he was reasonably diligent, but plead specific facts about the steps Xian took to discover his claims, and that he was unable to discover the facts supporting his fraud claim because of the nonpublic nature of the information. We must accept these allegations as true at this stage of the litigation; whether he will be able to prove them must be resolved another day. (Fox, supra, 35 Cal.4th at p. 811.)

Sengupta asks us to conclude, as did the trial court, that Xian was on inquiry notice because he learned of the Salesforce acquisition in September 2016 and had knowledge of an injury and probable wrongdoing as of that time. But our Supreme Court has instructed that injury and suspicion of wrongdoing triggers the statute of limitation, “unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action.” (Fox, supra, 35 Cal.4th at p. 803, italics added.) Here, that is what Xian has done. As explained above, whether those allegations are true or whether a reasonable investigation would have earlier revealed a factual basis for his fraud claim are questions we cannot determine at the pleading stage.

Nor do the allegations of the TAC “contradict” the allegations of the SAC so as to bar Xian’s claim. Sengupta contends Xian “alleged other facts that put him on inquiry notice, such as the identification [in the SAC] of two investors he supposedly did not know and other ‘anomalies.’ ” (Italics added.) But the TAC did not allege the 2016 press release named two investors; it identified two individuals as cofounders.[9] The alleged “anomalies” were “about the personnel involved at BeyondCore.” Sengupta does not explain how the listing of two unknown individuals as cofounders in the 2016 press release suggests Xian should have been on notice regarding monetary investments made in the company between 2010 and 2013. The TAC does not allege Pathak and Chronis were also investors or potential investors, nor are they listed among the investors on the capitalization table. These allegations do not compel a conclusion that Xian had a factual basis for his fraud claim. As our Supreme Court has explained, “It would be contrary to public policy to require plaintiffs to file a lawsuit ‘at a time when the evidence available to them failed to indicate a cause of action.’ [Citations.] . . . Indeed, it would be difficult to describe a cause of action filed by a plaintiff, before that plaintiff reasonably suspects that the cause of action is a meritorious one, as anything but frivolous. At best, the plaintiff’s cause of action would be subject to demurrer for failure to specify supporting facts [citation].” (Fox, supra, 35 Cal.4th at p. 815.)

In addition, as Xian argues, the mere fact that he hired a lawyer is not dispositive. Although Sengupta contends the fact that Xian engaged an attorney to advise him about his rights immediately after the Salesforce acquisition “reinforces the conclusion that Xian suspected something was wrong in September 2016,” the act of hiring counsel alone does not show Xian knew or suspected a factual basis for a fraud claim, particularly when Xian subsequently filed a class action against multiple defendants alleging 10 causes of action. (See, e.g., E-Fab, supra, 153 Cal.App.4th at p. 1323 [claims based on independent legal theories can accrue at different times]; Snow v. A.H. Robins Co. (1985) 165 Cal.App.3d 120, 131, 134–135 [patient’s awareness her contraceptive device failed her barred her personal injury claim but not her fraud claim, which accrued when she learned of the defendant’s misrepresentations].) As pleaded, the allegations indicate Xian first learned of facts to support his fraud claim in July 2019.

Finally, Sengupta’s attack on Xian’s delayed discovery allegations do not persuade us they are insufficient as a matter of law. Sengupta summarizes Xian’s “excuses for why he dragged his feet” and notes “none [of them] are particularly illuminating,” but the question of whether his investigation was diligent and reasonable may be decided as a matter of law only where one inference is possible. The allegations that Xian learned Salesforce had acquired BeyondCore, read a press release mentioning two cofounders he had never heard of, and hired a lawyer in September 2016 do not, standing alone, establish as a matter of law that he should have suspected fraud occurred in 2012 and 2013 with respect to investments he alleges he first learned about in 2019. (Geneva Towers Ltd. Partnership v. City and County of San Francisco (2003) 29 Cal.4th 769, 781 [“ ‘In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.’ ”].)

C. Other Bases for Demurrer

In the demurrer to the TAC, Sengupta raised several additional arguments regarding Xian’s inability to state a claim upon which relief could be granted, none of which the trial court addressed, and none of which Sengupta reasserts on appeal. Because we review the trial court’s ruling de novo, however, we will briefly address them.[10]

Sengupta argued in the trial court that he owed no duty to disclose the allegedly concealed financial information to Xian because he owed him no fiduciary duty. But a duty of disclosure can arise in transactional relationships even where there is no fiduciary or confidential relationship between the parties. (See, e.g., Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 826 [cause of action for nondisclosure of material facts may arise where the defendant makes representations but fails to disclose facts which materially qualify those disclosed, the facts are known or accessible only to the defendant and defendant knows they are not known or discoverable by the plaintiff, or the defendant actively conceals discovery from the plaintiff]; Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 613 [if one undertakes to speak despite not having duty to do so, one is bound to make a full and fair disclosure].) Here, regardless of whether Sengupta owed Xian a fiduciary duty, Xian alleges that Sengupta made misrepresentations and concealed material information about BeyondCore’s fundraising efforts, failed to respond fully and truthfully to his inquiries despite a promise to “keep [him] updated on any major progress on the funding front,” and was in possession of information not discoverable by Xian due to the nonpublic nature of the capitalization table and series A financing information.

Sengupta also asserted in his demurrer that Xian had not adequately pled concealment because the e-mail sent by Xian’s lawyer asking for an update on “ ‘fundraising efforts, etc.’ ” was a clearly a request regarding current efforts to raise future funds as opposed to past fundraising results, and Sengupta’s response fully answered the questions that were asked. But we do not think the meaning of the question is so clear. Nor can we say Sengupta’s response that “We are considering raising some money this fall and have had some initial discussions with venture capitalists,” together with an invitation to “Please feel free to ask me any questions,” forecloses a cause of action for fraudulent concealment. Simply put, this argument raises questions of fact not amenable to resolution on demurrer. (See, e.g., TracFone Wireless, Inc. v. County of Los Angeles (2008) 163 Cal.App.4th 1359, 1368 [“Questions of fact may be resolved on demurrer only when there is only one legitimate inference to be drawn from the allegations of the complaint.”].)

Finally, Sengupta argued that the TAC did not adequately allege justifiable reliance because (1) Sengupta and Xian were in an adversarial position in 2012, when the alleged concealment took place; (2) Xian could not have relied on Sengupta’s statements because he asked for his investment back in cash soon after receiving Sengupta’s e-mail; and (3) Xian’s counsel wrote in an e-mail rejecting the conversion option that Xian had “ ‘other projects that he is much closer to and he’d like to allocate those funds to those projects.’ ” (Boldface and underscoring omitted.) While all of these arguments suggest inferences that can be drawn from the allegations of the complaint, and while further discovery may reveal additional support for them, we cannot determine as a matter of law that Xian’s reliance was unreasonable at this stage of the litigation. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239 [“ ‘Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff’s reliance is reasonable is a question of fact.’ ”].)

In sum, we conclude Xian has adequately pled delayed discovery so as to survive demurrer. Because we cannot determine as a matter of law that Xian’s claim is barred by the statute of limitations, and none of Sengupta’s other arguments raised in the trial court defeat Xian’s fraud cause of action, the demurrer should have been overruled.

III.

DISPOSITION

The judgment is reversed and the action is remanded to the trial court for further proceedings consistent with this opinion. Xian is to recover costs on appeal.

Margulies, J.

WE CONCUR:

Humes, P. J.

Wiss, J.*

A162175

Xian v. Sengupta

[1] The facts are taken primarily from the allegations of the third amended complaint.

[2] At the time he invested, BeyondCore was out of money and might have gone out of business were it not for Xian’s investment.

[3] A search run by Xian on the web service, Dealroom.co, in August 2019, revealed that BeyondCore’s valuation estimate as of February 2014 was “$36m-$54m,” a value Xian alleges was “50-100x” the value Xian was led to believe was accurate when he evaluated the 2008 Note.

[4] Xian initially filed suit against a number of defendants, including BeyondCore and Salesforce, alleging 10 causes of action. Because the only claim at issue in this appeal is Xian’s fraud claim against Sengupta, we summarize only the procedural facts relevant to that claim.

[5] All further statutory references are to the Code of Civil Procedure.

[6] In the verified SAC, Xian alleged that he noticed “some anomalies in the press release about the personnel involved at BeyondCore; the press release listed as co-founders Rahul Pathak and Griffin Chronis” but omitted Xian. “[Xian] thought this unusual, as well as insulting, because [Xian] never met either one during his three-year tenure at BeyondCore . . . . The press release was also at odds with the Teknos valuation report dated February 2010 that only showed [Xian] and [Sengupta] as co-founders. Further, [Sengupta] made no mention of Pathak or Chronis to prospective investors while [Xian] was at BeyondCore.”

[7] Xian alleged that “[d]uring January to April 2017 [Xian] or his then-counsel exchanged several letters with [Sengupta and Salesforce] attempting to resolve potential legal issues brewing between them and [Xian] related to the [Salesforce] Acquisition.”

[8] We note substantially similar allegations were pled in the SAC, which stated: “[Xian’s] then-counsel spent two months on-and-off until providing [Xian] with assistance concerning potential claims against BeyondCore and [Salesforce]. The documents compiled by [Xian] from his own sources were insufficient to uncover or conclude about BeyondCore’s financials and investors since [Xian] left BeyondCore in 2010 and many material transactions occurred thereafter. [Xian] was not yet aware of the existence of substantial investments made in BeyondCore from 2011 onward. [Xian] was also unable to determine financial details of the [Salesforce] Acquisition other than what was disclosed in publicly filed documents.”

[9] As noted above, the SAC alleges that Xian “noticed some anomalies in the press release about the personnel involved at BeyondCore; the press release listed as co-founders Rahul Pathak and Griffin Chronis but omitted listing [Xian]. [Xian] thought this was unusual, as well as insulting, because [Xian] never met either one during his three-year tenure at BeyondCore . . . . The press release was also at odds with the Teknos valuation report dated February 2010 that only showed [Xian] and [Sengupta] as co-founders. Further, [Sengupta] made no mention of Pathak or Chronis to prospective investors while [Xian] was at BeyondCore.” (Italics added.)

[10] Xian addressed the arguments in his opening brief on appeal.

* Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

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

FIRST APPELLATE DISTRICT

DIVISION ONE

Plaintiff Barbara McBride alleges she became the successor trustee and/or successor in interest of her family trust following the death of her parents. She sued defendants National Default Servicing Corporation, Select Portfolio Servicing, Inc., and “Deutsche Bank National Trust Company”[1] for violations of Civil Code sections 2923.7 and 2920.7 after defendants initiated a foreclosure of the trust’s real property. The trial court sustained defendants’ demurrer to McBride’s fifth amended complaint based on the Legislature’s repeal of section 2920.7. (Civ. Code, former § 2920.7, subd. (o).) For the reasons detailed below, we agree with the trial court and affirm the order.

I.

BACKGROUND

In her fifth amended complaint, McBride alleged that in 2005 her parents, acting as trustees of the family trust, obtained a $650,000 loan secured by real property located in Benicia, California. The original lender and trustee of the deed of trust (Deed) assigned the Deed to defendant Deutsche Bank.

McBride’s parents died several years later. McBride attempted to assume the loan for the Benicia property as the successor in interest for the family trust. She alleges that defendants violated her rights under the California Homeowner Bill of Rights (HBOR; Civ. Code,[2] § 2923.4 et seq.) when they denied her loan assumption application despite her creditworthiness, and failed to provide information about the loan and foreclosure-prevention alternatives.

In the months following defendants’ denial of McBride’s loan assumption application, defendant National Default Servicing Corporation became the successor trustee to the Deed and executed and recorded a “Notice of Default and Election to Sell under Deed of Trust.”

McBride sued defendants for violating former section 2920.7 and section 2923.7 of the HBOR. At the time she first filed suit in April 2018, former section 2920.7 set forth a mortgage servicer’s obligations to a successor in interest to real property following the borrower’s death. It also provided the successor in interest with the same rights under section 2923.7 as those afforded to the borrower. (Former § 2920.7, subds. (a)–(d), (e)(1); § 2923.7.)

While McBride’s HBOR claims were pending, section 2920.7 expired per that statute’s sunset provision. Defendants demurred on the ground that the Legislature’s repeal of section 2920.7 was fatal to McBride’s HBOR claims. McBride argued she had adequately stated a section 2920.7 claim because it was irrelevant that the statute had sunset. The trial court agreed with defendants, sustained the demurrer without leave to amend, and dismissed the action. This appeal followed.

II.

DISCUSSION

We review an order sustaining a demurrer de novo, exercising our independent judgment as to whether, as a matter of law, the complaint states a cause of action. (See Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.) We assume the truth of all material factual allegations together with those matters subject to judicial notice. However, we will not assume the truth of contentions or conclusions of fact or law. Where the demurrer was sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment. The burden of proving the reasonable possibility is on the plaintiff. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

A. The Section 2920.7 Claim

We first determine whether the trial court erred in dismissing McBride’s section 2920.7 claim based on the statutory repeal rule. Section 2920.7 provided the basis for McBride’s first claim, in which she alleged that defendants improperly denied her request to assume the loan, and that defendants improperly recorded a notice of default on the property in Benicia. Section 2920.7 also gave her standing for her second claim, brought under section 2923.7, in which McBride alleged that the mortgage servicer failed to provide a single point of contact as required by that statute. Consequently, our starting point is deciding whether the trial court properly analyzed section 2920.7’s sunset provision.

When McBride initiated her action, section 2920.7, former subdivision (n) stated: “This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.” (Stats. 2016, ch. 838, § 2.) Senate Bill No. 1183 (2017–2018 Reg. Sess.) later amended section 2920.7, but kept the identical repeal language and date in the statute, only moving it to subdivision (o). (Stats. 2018, ch. 136, § 1; former § 2920.7, subd. (o).) Thus, since January 1, 2017, section 2920.7 has contained language explicitly identifying the date on which it would be repealed. Our research has not revealed, and neither party contends, that the Legislature enacted a new statute. We are therefore concerned only with the effect of the sunset provision on McBride’s section 2920.7 case, which was pending when the statute expired on January 1, 2020.

McBride argues the trial court erroneously dismissed her section 2920.7 claim for two reasons: First, she argues that the statute was not repealed, and second, that a saving clause preserved her claim. We disagree on both counts.

McBride first argues that her section 2920.7 claim is still valid because the statute expired pursuant to a sunset provision, rather than being repealed. McBride does not distinguish between the two. By its clear terms, the statute was automatically repealed on January 1, 2020, and it is of no material difference here whether McBride characterizes that language as a sunset provision or a repeal provision.

The rule regarding causes of action based on a repealed statute is well established: Even if the action is pending, the claims that are wholly dependent on a statute are abated by the repeal unless there is a saving clause. (Younger v. Superior Court (1978) 21 Cal.3d 102, 109.) “ ‘ “The justification for this rule is that all statutory remedies are pursued with full realization that the legislature may abolish the right to recover at any time.” ’ ” (Ibid.) As the trial court recognized, this principle is codified in Government Code section 9606, which states: “Any statute may be repealed at any time, except when vested rights would be impaired. Persons acting under any statute act in contemplation of this power of repeal.” If parties are presumed to know that a statute may be repealed at any time, they are on even greater notice when, as here, a statute expressly states its tentative date of repeal. (Beckman v. Thompson (1992) 4 Cal.App.4th 481, 489 (Beckman).)

In Beckman, the appellate court applied the statutory repeal rule to Code of Civil Procedure section 410.30, the inconvenient forum statute. In 1986, the Legislature temporarily modified that statute, making it easier for courts to dismiss an action if substantial justice warranted that the matter be heard outside of California. That amendment was temporary, however, and the last paragraph provided that it would “ ‘remain in effect only until January 1, 1992, and as of that date is repealed, unless a later enacted statute . . . deletes or extends that date.’ ” (Beckman, supra, 4 Cal.App.4th at p. 487, citing Stats. 1986, ch. 968, § 4, p. 3347.) The trial court dismissed the case consistent with the amendment’s last paragraph, and the order was appealed. Finding that the temporary provision was repealed by its own terms while the appeal was pending, the Court of Appeal applied the law as it was before 1986. It held that where a right does not exist at common law but is dependent on a statute, that statute’s repeal without a saving clause destroys that right, unless it has been reduced to a final judgment. (Beckman, at p. 489; see also Graczyk v. Workers’ Comp. Appeals Bd. (1986) 184 Cal.App.3d 997, 1006–1007.) The reviewing court must decide the case under the law that is in effect when its decision is rendered. (Physicians Com. for Responsible Medicine v. Tyson Foods, Inc. (2004) 119 Cal.App.4th 120, 125.)

Here, McBride’s two causes of action are wholly dependent on HBOR statutes and have no common law basis. The statute upon which her claims rest was repealed while her case was pending. Indeed, the statute expired even before her case had an operative complaint, precluding any argument that there had been a final judgment. McBride appears to argue that her claims should survive because they were brought before section 2920.7 was repealed. As discussed above, that argument must fail. McBride also distinguishes between a statute that is repealed by a sunset provision, with one that is effectively repealed by new legislation that contains terms that are irreconcilable with the older statute. (Governing Board v. Mann (1977) 18 Cal.3d 819, 828.) She argues that the latter situation indicates a legislative intent to apply the new legislation retroactively. However, the statute at issue here was not replaced with new statutory language and it does not contain any provision for retroactive application. We note that the repeal of a statutory right is distinct from the retroactive application of a statute. (Physicians Com. for Responsible Medicine v. Tyson Foods, Inc., supra, 119 Cal.App.4th at p. 125.) And a repeal may be applied to pending actions without triggering retroactivity concerns. (Zipperer v. County of Santa Clara (2005) 133 Cal.App.4th 1013, 1023.) We are not persuaded by McBride’s retroactivity argument.

McBride argues for the first time in her reply brief that her rights had vested under section 2920.7 at the time of the repeal. She has forfeited this argument since she failed to raise it in her opening brief. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1410.) Even assuming that the argument was timely made, it is still unavailing. McBride asserts that her rights under section 2920.7 vested when she notified defendants of her mother’s death. But a statutory remedy does not vest until final judgment, even in cases where a party has asserted a valid claim before the repeal. (South Coast Regional Com. v. Gordon (1978) 84 Cal.App.3d 612, 619.) When section 2920.7 was extinguished, any right McBride had to assume the loan had not been perfected and there had been no final judgment. She cannot be said to have had a vested interest. (Napa State Hospital v. Flaherty (1901) 134 Cal. 315, 317.)

We conclude that the sunset provision in section 2920.7 eliminated McBride’s rights under that statute absent a saving clause, and that the trial court committed no error on this point.[3]

McBride’s second argument asserts that Senate Bill No. 818 (2017–2018 Reg. Sess. (Senate Bill 818) contains a saving clause applicable to section 2920.7. (Stats. 2018, ch. 404, § 26.) Again, we disagree.

When the Legislature repeals a statute but intends to save the rights of litigants in pending actions, it may include a saving clause in the repealing act or in contemporaneous legislation. (Bourquez v. Superior Court (2007) 156 Cal.App.4th 1275, 1284.) The saving clause need not be express. But at a minimum the Legislature must “demonstrate its intention with sufficient clarity that a reviewing court can discern and effectuate it.” (In re Pedro T. (1994) 8 Cal.4th 1041, 1048–1049.)

Senate Bill 818 does not demonstrate a legislative intent to save pending claims brought under section 2920.7. Specifically, sections 25 and 26 of Senate Bill 818 contain saving clauses. (Stats. 2018, ch. 404, §§ 25, 26.) Neither saving clause is relevant here. Section 25 preserves claims arising under various sections being repealed or amended by Senate Bill 818 which, notably, does not include section 2920.7. (Stats. 2018, ch. 404, § 25; see id., §§ 1–24.) Section 26 saves claims brought under statutes enacted by Senate Bill No. 900 (2011–2012 Reg. Sess.) or Assembly Bill No. 278 (2011–2012 Reg. Sess.). (Stats. 2018, ch. 404, § 26.) But section 2920.7 was not enacted by either of those—it was enacted by Senate Bill No. 1150 (2015–2016 Reg. Sess.). (Stats. 2016, ch. 838, § 2.) Thus, section 2920.7 does not fall within the scope of the saving clause in section 26 of Senate Bill 818.

Without a saving clause, the repeal of section 2920.7 abated McBride’s first cause of action and she has not shown a reasonable possibility that these defects can be cured. The trial court did not err in sustaining defendants’ demurrer without leave to amend.[4]

B. The Section 2923.7 Claim

McBride argues that she sufficiently stated a cause of action under section 2923.7. We agree with defendants that McBride does not have standing to assert this claim as a successor in interest.

Section 2923.7 sets forth the rights of a “ ‘borrower,’ ” which it defines as a natural person who is a “mortgagor or trustor.” (§ 2920.5, subd. (c)(1).) McBride does not allege facts in her complaint showing that she is the mortgagor or trustor. She alleges only that she is the successor trustee or the successor in interest to the borrowers, her deceased parents. Under the plain language of the statute, McBride does not qualify as the “borrower” entitled to the protections offered by that statute.

Nevertheless, McBride argues that she has standing because former section 2920.7 provided that a successor in interest had the same rights as a borrower under section 2923.7. (Former § 2920.7, subd. (e)(1).) As discussed above, the Legislature repealed section 2920.7 without a saving clause. That extinguished McBride’s rights as a successor in interest, with the result that she does not have standing for purposes of section 2923.7.

McBride has not demonstrated that the trial court erred in sustaining defendants’ demurrer without leave to amend to her second cause of action for violations of section 2923.7.

C. Section 2924, Subdivision (c) Claim

At the end of her reply brief, for the first time, McBride asks this court to reinstate her claim under section 2924, subdivision (c). We decline to address an issue that was not raised in the opening brief. (Nolte v. Cedars-Sinai Medical Center, supra, 236 Cal.App.4th at p. 1410.)

III.

DISPOSITION

The order sustaining defendants’ demurrer is affirmed.

East, J.^*

WE CONCUR:

Humes, P. J.

Banke, J.

A161487

McBride v. National Default Servicing Corporation

[1] This defendant responded as “Deutsche Bank National Trust Company, as Trustee, on Behalf of the Holders of WAMU Mortgage Pass-through Certificates, Series 2005-AR11 [erroneously sued as ‘Deutsche Bank National Trust Company’].” We will refer to it hereafter as Deutsche Bank.

[2] All statutory references are to the Civil Code, unless otherwise indicated.

[3] In her reply brief, McBride argues that the repealed HBOR statutes govern events that occurred before they were repealed, citing for the first time to three federal district court decisions. We conclude that she has forfeited this argument because she failed to raise it in her opening brief, and the cited decisions are not binding. (Nolte v. Cedars-Sinai Medical Center, supra, 236 Cal.App.4th at p. 1410; People v. Neer (1986) 177 Cal.App.3d 991, 1000–1001.) Moreover, the cited decisions concern the statute which barred mortgage servicers from recording a notice of default while the borrower’s loan modification application was pending, former section 2923.6, subdivision (c). That statute has its own legislative history, distinct from the statute at issue here, and is not relevant to this matter.

[4] Since we find that the repeal of section 2920.7 abated McBride’s claim, we do not reach her argument that she alleged sufficient facts to state a claim under that statute.

* Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

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

FIRST APPELLATE DISTRICT

DIVISION THREE

A jury found Tyris Lamar Franklin guilty of first-degree murder and found true a firearm enhancement. At resentencing, the trial court struck the firearm enhancement pursuant to Penal Code[1] section 12022.53, subdivision (h), and resentenced Franklin to one term of 25 years to life and ordered him to pay a probation report fee.

On appeal, Franklin contends we should order the trial court to vacate the fee. He also argues the trial court erred by failing to credit him with all time served prior to resentencing. We agree on both counts, and shall remand to the trial court to modify the judgment accordingly.

BACKGROUND

In 2011, Franklin was charged with first-degree murder (Penal Code § 187), with an enhancement for personal use of a firearm (§ 12022.53, subds. (b)–(d).) Franklin was a minor at the time. A jury found him guilty of the charge and found true the firearm enhancement. The trial court sentenced him to 25 years to life for the murder and a consecutive 25-to-life term on the enhancement, for a total of 50 years to life in state prison.

In September 2018, the parties stipulated to holding a hearing pursuant to Proposition 57,[2] which entitled minors to a hearing before a juvenile court to determine whether it was appropriate for the minor to be charged in adult criminal court. (Welf. & Inst. Code, § 707, subd. (a)(1); People v. Superior Court (Lara) (2018) 4 Cal.5th 299, 305.)

After the Proposition 57 hearing, the juvenile court transferred Franklin’s case back to adult court, at which time the trial court set a resentencing hearing due to a recent amendment to section 12022.53 that provided trial courts the discretion to strike firearm enhancements imposed under that section.[3] (See § 12022.53, subd. (h).)

In October 2020, at the resentencing hearing, the trial court exercised its new discretion to strike the firearm enhancement, and it resentenced Franklin to a term of 25 years to life.

This appeal followed.

DISCUSSION

1. Assembly Bill No. 1869

The amended abstract of judgment filed after the resentencing hearing ordered Franklin to pay a probation report fee of $176 pursuant to section 1203.1b. Franklin contends this fee should be stricken under Assembly Bill No. 1869 (2019–2020 Reg. Sess.) and any unpaid debt eliminated. The Attorney General agrees, as do we.

Assembly Bill No. 1869 ensured that after July 1, 2021, any unpaid portion of fees imposed under section 1203.1b became “unenforceable and uncollectible and any portion of a judgment imposing those costs shall be vacated.” (§ 1465.9, subd. (a); see People v. Clark (2021) 67 Cal.App.5th 248, 259–260 [vacating probation supervision fee under Assembly Bill No. 1869]; People v. Lopez-Vinck (2021) 68 Cal.App.5th 945, 950, 953 [same for criminal justice administration fee].) The amendment applies to defendants serving both final and nonfinal sentences. (Ibid.)

Accordingly, any balance still owing of the $176 probation report fee imposed pursuant to section 1203.1b is now “unenforceable and uncollectible” and the portion of the judgment imposing this fee must be vacated. (§ 1465.9, subd. (a).)

2. Incorrect Credit Award

Franklin next contends the trial court erred by failing to calculate his actual presentence[4] and postsentence custody credits before his resentencing hearing. The Attorney General agrees the trial court should have awarded Franklin credit for all time he served in custody prior to his resentencing. The Attorney General’s concession is well taken.

“When . . . an appellate remand results in modification of a felony sentence during the term of imprisonment, the trial court must calculate actual time the defendant has already served and credit that time against the ‘subsequent sentence.’ ” (People v. Buckhalter (2001) 26 Cal.4th 20, 23 [italics in original]; see also § 2900.1 [when a sentence is modified while being served, the time already served “shall be credited upon any subsequent sentence [the defendant] may receive upon a new commitment for the same criminal act or acts”].) Thus, when the trial court modifies a defendant’s sentence on remand after an appeal, it must credit the defendant “with all actual days he had spent in custody, whether in jail or prison, up to that time.” (People v. Buckhalter, supra, at p. 37 [italics in original].)

Here, the abstract of judgment after resentencing does not include any custody credits, and there is no indication in the record that the trial court calculated Franklin’s custody credits prior to resentencing him. Franklin should be credited for all the time that he has been in custody, including time served after his original sentencing. We therefore direct the trial court to calculate all actual custody credits earned by Franklin up to the date of his resentencing, and to amend the abstract of judgment to reflect those credits.

DISPOSITION

The matter is remanded to the trial court with directions to vacate the $176 probation report fee and to modify Franklin’s abstract of judgment to reflect the custody credits he earned prior to his resentencing. The court shall forward a copy of the amended abstract of judgment to the Department of Corrections and Rehabilitation. In all other respects, the judgment is affirmed.

_________________________

Petrou, J.

WE CONCUR:

_________________________

Fujisaki, Acting P.J.

_________________________

Rodríguez, J.

A161194/People v. Franklin

[1] All statutory references are to the Penal Code, unless otherwise indicated.

[2] Proposition 57 took effect while Franklin’s prior appeal in this matter was pending. In that appeal, we affirmed the original judgment. (People v. Franklin (2014) 224 Cal.App.4th 296, 379, review granted and superseded by People v. Franklin (2014) 63 Cal.4th 261.) The Supreme Court also affirmed, but it remanded the case so that the trial court could hold a hearing to determine whether Franklin was afforded an adequate opportunity to make a record of information relevant to his youth offender parole hearing, as required by section 3051. (People v. Franklin (2016) 63 Cal.4th 261, 286–297.) The hearing was held the same day Franklin was resentenced.

[3] When the trial court first sentenced Franklin, section 12022.53 prohibited the court from striking any firearm enhancement required to be imposed under that section. (Former § 12022.53, subd. (h).)

[4] Under section 1237.1, a defendant cannot appeal from a judgment of conviction based on an error in the calculation of presentence custody credits without first making a motion for correction of the record in the trial court. (§ 1237.1.) However, that section does not require the defendant file a motion for correction to raise the issue on appeal where other issues are litigated on appeal. (People v. Acosta (1996) 48 Cal.App.4th 411, 427.) The Attorney General agrees that because this appeal concerns other issues, section 1237.1 does not preclude us from also addressing Franklin’s presentence custody credits.

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

FIRST APPELLATE DISTRICT

DIVISION FOUR

Barbara Epis, a person of considerable wealth and sophistication in real estate investing, entered into a number of business and real estate transactions with her attorney, Vernon Bradley, and her accountant, Scott Jolley. When the trio’s business relationship fell apart, litigation followed. This appeal is the latest chapter in the saga.

After losing close to a million dollars on certain transactions, Epis sued Bradley and Jolley for breach of contract, intentional and negligent misrepresentation, breach of fiduciary duty, financial elder abuse, and violation of the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.). Bradley cross-complained, asserting causes of action for, among other things, breach of contract (regarding a project known as the 96 Mt. Tiburon project or the Mt. Tiburon project), violation of the UCL, and declaratory relief. Most of the claims on both sides were tried to a jury, but the UCL and declaratory relief causes of action were tried to the court as equitable claims.

A bench trial on the equitable claims ended with entry of judgment for Bradley on his claim for declaratory relief as to title to a houseboat and on both UCL claims. Epis appealed the judgment, contesting the trial court’s findings but not the jury verdict. We reversed and remanded for reconsideration of certain issues. (Epis v. Jolley (Sept. 21, 2018, A143387) [nonpub. opn.] [2018 Cal.App.Unpub.LEXIS 6469, pp. *2, *19] (Epis I).) On remand, the trial court (Hon. Stephen Freccero) found in favor of Bradley on all remaining claims.[1]

Epis appeals the ensuing judgment. Specifically, Epis argues that the court erred by (1) ruling against her on her UCL cause of action against Bradley, (2) declining to consider on remand whether she has a right to void a purchase agreement under Probate Code section 16004, and (3) disregarding the law of the case set forth in our opinion in Epis I by awarding certain settlement funds held in trust to Bradley as the prevailing party on his claim for declaratory relief.

We reject each of these arguments and affirm the judgment.[2]

• I. BACKGROUND

We summarize only the events relevant to the issues presented by the current appeal. “In brief, the parties invested together in a series of real estate transactions in Marin County. Through shrewd real estate dealings over the course of 30 years, Epis had amassed a fortune of some $22 million. Bradley and Jolley used her as a ‘deep pocket’ investor in properties they planned to renovate and sell at a profit. Epis provided the cash required for down payments and certain other financial needs during development; Bradley managed the renovation and development of the properties they purchased; Jolley provided credit financing and funds for debt service and remodeling. It appears Jolley and Bradley also handled accounting and legal issues that arose.” (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, pp. *2–*3].)

Epis eventually sued both Jolley and Bradley on sundry contract, business tort, and statutory claims, and Jolley and Bradley brought counterclaims of the same genre. The case was assigned to Judge Mark Talamantes. At trial Epis took the position that the funds she provided were loans, but there was substantial evidence supporting the trial court’s finding that Epis was a joint venturer with Bradley and Jolley. At some point the arrangement foundered and money was lost. Then, as the trial court put it, the “ ‘former friends . . . turned on each other.’ ” (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, p. *3].)

Among the transactions out of which the parties’ claims and counterclaims arose was the one called the Mt. Tiburon project. The evidence surrounding that project, briefly summarized, was as follows.

1. The Mt. Tiburon Project

In early 2008, Bradley approached Epis with an investment opportunity to develop an empty lot with a hilltop view located at 96 Mt. Tiburon (Mt. Tiburon). Like in past deals, Epis would provide an initial down payment and financing for the project in exchange for a percentage of ownership. Bradley would oversee construction.

In January 2008, Epis and Bradley entered a contract to acquire the right to purchase the lot and build a house on it. Bruce Portner, one of the owners of the limited liability company (LLC) that held title, testified he read the purchase agreement to Epis three times and asked if she understood the agreement before she signed. He also testified Epis acknowledged she understood the agreement but wanted to negotiate a little more interest from Bradley. All the parties signed the purchase agreement. Epis and Bradley also signed a separate proposed business plan. Collectively, the agreements called for Epis to pay $259,932.06 in exchange for 50 percent ownership of the LLC that held title to the land. She was also required among other things to make monthly interest payments of $12,187.50 and to obtain a construction loan to finance the project within one year.

The proposed business plan contained the following attorney conflict waiver: “Vernon Bradley has represented Barbara Epis as an attorney and may continue to represent Barbara Epis in the future. If there is any conflict presented by this contract, Barbara will waive any conflict or claim of undue influence because of Vernon Bradley’s role as her existing and prior attorney.” The purchase agreement did not contain an attorney conflict disclosure.

Epis wrote a check to the LLC for the down payment postdated to February 19, 2008. The check was deposited on January 22, 2008. Soon after, Epis failed to make her first interest payment on February 1, 2008. Bradley found another investor, Alton Lomas, to advance funds towards the project on behalf of Epis in the short term because she was experiencing cash flow problems.

It appears Epis made no further payments towards the project and did not obtain a construction loan. The Mt. Tiburon project was ultimately abandoned when Bradley ran out of money to finish construction. According to the testimony of Bradley and Lomas, they were unable to obtain a construction loan or other financing due to the chaotic lending climate at the time and Epis’s unwillingness to cooperate. The partially developed lot was subsequently foreclosed.

At trial, Epis argued the down payment was intended only as a temporary loan until Bradley found another investor to replace her, but there was substantial evidence that Epis was a joint investor with Bradley in the Mt. Tiburon deal as in previous ventures.

2. Proceedings in the Trial Court

A two-week jury trial resulted in findings in favor of Bradley on Epis’s claims for negligent and intentional misrepresentation and financial elder abuse. The jury found Bradley had breached his fiduciary duty to Epis and violated former Rule 3‑300 of the Rules of Professional Conduct[3] (former Rule 3‑300),[4] but the jury found Epis was not harmed. The jury awarded Bradley $185,385.74 in damages on his cross-complaint for Epis’s breach of contract on the Mt. Tiburon deal. In a special verdict, the jury found that Bradley performed all, or substantially all, of his obligations under the Mt. Tiburon contract and that Epis had failed to do something that was required by the contract.

The equitable issues, including the UCL claims and request for declaratory relief, were then tried to the court. The court ruled in Bradley’s favor on all causes of action. Although the jury found Bradley had violated former Rule 3‑300, the court concluded a rules violation could not serve as the basis for a UCL claim. The court also found that Bradley was the legal and beneficial owner of the disputed houseboat.

Epis pursued an appeal challenging only the results of the bench trial, not the jury verdict. In the opinion resolving that appeal, we vacated the judgment and remanded to the trial court for reconsideration of specific issues. (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, pp. *2, *19].) We instructed the trial court to reconsider the evidence on Epis’s UCL claim (the fifth cause of action in her complaint) and determine as a factual matter (1) whether Bradley’s violation of former Rule 3‑300 amounted to an unlawful, unfair, or fraudulent practice under the UCL; and if so, (2) whether there was a causal connection between Bradley’s ethics violation and Epis’s financial losses. (Epis I, supra, A143387 [2018 Cal.App.Unpub. LEXIS 6469, pp. *8–*10].) As to Bradley’s claim for declaratory relief (the fifth cause of action in his cross-complaint), we held the trial court applied the wrong standard of proof in determining title to the houseboat. (Id. at p. *2.) We instructed the trial court to determine whether Bradley had rebutted, by clear and convincing evidence, the presumption of equitable ownership arising from Epis’s legal title to the houseboat. (Id. at pp. *16–*17.)

On remand, after Epis disqualified Judge Talamantes under Code of Civil Procedure section 170.6, the matter was reassigned to Judge Freccero. The parties agreed that evidence would not be reopened on remand.

Judge Freccero issued a judgment on remand and a statement of decision in February 2020. He concluded Bradley’s violation of the Rules of Professional Conduct did constitute an unfair and unlawful practice under the UCL, but that Epis did not suffer “injury in fact” and had failed to prove that she “lost money or property as a result” of the violation regarding the Mt. Tiburon contract. (See Bus. & Prof. Code, § 17204.) Separately, after applying the correct standard of proof, the court declared that Bradley was the owner of the houseboat and that his estate is entitled to $50,000 in settlement funds that are being held in trust following a foreclosure of the houseboat and a settlement with the foreclosing lender.

Epis now appeals the February 14, 2020 judgment.

• II. DISCUSSION

1. Epis’s UCL Claim

Epis contends the trial court erred in concluding she failed to show the requisite injury in fact and causation for her UCL claim concerning the Mt. Tiburon project. She claims she is entitled to restitution for the full amount of the down payment she made toward the project in 2008 under Business and Professions Code section 17203 as a remedy for Bradley’s UCL violation. She also claims a right to bar Bradley’s recovery of a jury award for breach of contract arising from the same transaction.

Business and Professions Code section 17200 defines unfair competition as “any unlawful, unfair or fraudulent business act or practice.” An action under the UCL may be brought by a private “person who has suffered injury in fact and has lost money or property as a result of” conduct that fits one of the categories of “unfair competition.” (Bus. & Prof. Code, § 17204.)

At trial (prior to the first appeal in this case), the jury found Bradley had violated the ethical rules governing attorneys by failing to fully disclose conflicts of interest resulting from his business investments with Epis and failing to secure adequate signed waivers of those potential conflicts as required by former Rule 3‑300. The trial court then concluded as a matter of law that an attorney’s rules violation could not serve as the basis for a UCL claim, and the court thus did not reach the issues of injury in fact or causation.

In Epis’s first appeal, we held an attorney’s rules violation can serve as the basis for a UCL claim. (Epis I, supra, A143387 [2018 Cal.App.Unpub. LEXIS 6469, pp. *7–*8].) We remanded to the trial court with instructions to reconsider the evidence supporting Epis’s UCL claim, and to determine (1) whether Bradley’s violation of the Rules of Professional Conduct constituted a violation of the UCL, and, if so, (2) whether Epis had proven that she suffered injury in fact and had lost money or property as a result of the UCL violation as required for UCL standing under Business and Professions Code section 17204. (Epis I, supra, A143387 [2018 Cal.App. Unpub.LEXIS 6469, pp. *9–*10].)

On remand, Epis had the burden of showing a causal connection between Bradley’s rules violation and her financial losses. In her brief in the trial court on remand, she invoked two prongs of the UCL, arguing Bradley’s failure to comply with former Rule 3‑300 constituted an “unlawful” and “unfair” practice that caused her to lose money by inducing her to participate in the Mt. Tiburon project. Epis argued that Bradley’s “wrongful acquisition” from her of the down payment at the outset was sufficient to satisfy both injury in fact and causation under the UCL. In her brief on remand, Epis claimed that “t is easily inferred that Epis did not want to participate in the deal” and that Epis was “somehow snookered” by Bradley.

It is well settled that causation is ordinarily a question of fact. ([i]Novak v. Continental Tire North America (2018) 22 Cal.App.5th 189, 197.) Whether Bradley’s failure to comply with former Rule 3‑300 induced Epis into entering a transaction that she would not have otherwise entered is a factual matter that was properly considered and implicitly rejected by the trial court when it determined she failed to establish causation. We conclude the trial court’s decision is supported by the evidence, and we are unpersuaded by Epis’s attempt to reframe causation as a legal issue.

We apply a substantial evidence standard of review to the trial court’s findings of fact. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings. (Ibid.) The testimony of a single witness may constitute evidence to support a finding. (Ibid.) “ ‘A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.’ ” (Ibid.) “ ‘[U]nder the doctrine of implied findings, the reviewing court must infer, following a bench trial, that the trial court impliedly made every factual finding necessary to support its decision.’ ” (Ibid.)

We conclude substantial evidence supports the trial court’s implied finding that Epis would have agreed to participate in the Mt. Tiburon project when Bradley first approached her with the opportunity in early 2008 even if Bradley had informed her in writing of her right to seek independent counsel and obtained an adequate conflict waiver as required by former Rule 3‑300.

The trial court found Epis relied on Bradley’s advice when making investment decisions and Bradley put his own financial interests before the interests of his client. The court, however, also described Epis as a sophisticated and very successful real estate developer, landlord and property owner who had amassed property holdings totaling over $22,000,000. Epis testified that she purchased her first investment property in 1968. Less than two years before she entered the Mt. Tiburon deal, she owned 16 rental properties around the Bay Area, evidenced by a loan application from May 2006. In the same application, Epis indicated she had been self-employed as a partner and property manager for a real estate investment firm for 37 years. Given her extensive transactional experience in real estate, it was reasonable for the trial court to infer that she was aware of her right to seek independent counsel and would have exercised her own judgment before deciding to invest.

In addition, Epis testified that Bradley was her attorney from around 2001 to 2008. In our first opinion, we found substantial evidence supported the trial court’s finding that Bradley and Epis were joint venturers who worked closely together as business partners to purchase and develop real estate. (Epis I, supra, A143387 [2018 Cal.App. Unpub.LEXIS 6469, p. *3].) According to Bradley’s testimony at trial, in some deals, Epis would loan him money in exchange for a note and deed of trust. In others, she would make a down payment and provide funding throughout the project in exchange for an equity share. Bradley testified that Epis earned significant profits from their previous joint ventures. Based on their past dealings and her active role in their joint ventures, the trial court could have reasonably inferred that Epis would have agreed to invest in the Mt. Tiburon project in the anticipation she would profit when the project was completed.

At trial, Epis and Bradley took opposite positions as to the enforceability of the Mt. Tiburon contract. Bradley argued they entered into a valid contract which Epis breached. In contrast, Epis testified her signature was forged on the purchase agreement and a subsequent modification agreement. The jury plainly resolved that credibility dispute against Epis, finding there was a valid contract and that Epis breached it. On appeal, Epis argues she was induced into turning over a check for the down payment and signing the Mt. Tiburon agreements because she relied on one or more misrepresentations by Bradley.

Again, the jury disagreed with her. In its special verdict, the jury found that Bradley did not make any false representations of important facts to Epis. The trial judge also made an adverse credibility finding against Epis. In support of his finding in favor of Bradley as to his claim for declaratory relief, Judge Talamantes stated in his statement of decision that “[j]ust as the jury did not believe her arguments during trial, this court finds her testimony lacks credibility.” It was appropriate for Judge Freccero, too, on remand, to decline to credit Epis’s factual assertions about the Mt. Tiburon transaction. We must defer to the trial court’s credibility assessment.

Our review of the record leaves no doubt that Judge Freccero carefully considered Epis’s various causation arguments and was unpersuaded by them. On appeal, Epis’s reiteration of her version of events does not persuade us there is a lack of substantial evidence supporting Judge Freccero’s decision. At oral argument, counsel for Epis argued the rules violation caused Epis to sign the papers for the Tiburon project and his conduct in doing so qualifies as both a “but for” cause and a “substantial factor” causing her loss of money on the deal. As we read the record, however, the trial court impliedly found that Bradley’s breach of former Rule 3‑300 was neither a “but for” cause nor a “substantial factor” cause of Epis’s loss. The record evidence supports that implied finding.

We conclude substantial evidence supports the trial court’s implied finding on remand that Epis would have suffered the same harm whether or not Bradley had complied with former Rule 3‑300, and thus failed to establish causation.

2. Judge Freccero Properly Declined To Consider Epis’s Probate Code Section 16004 Claim on Remand

Epis contends the trial court erred by declining to consider on remand whether she has a right to void the Mt. Tiburon contract under Probate Code section 16004 as part of her UCL claim. In her brief on remand, Epis claimed the entire judgment was vacated on appeal, including the jury verdict. With the entire judgment vacated, Epis argued she was entitled to void the contract at issue in the Mt. Tiburon project, and bar recovery of the jury award as a remedy for Bradley’s UCL violation. Judge Freccero declined to consider this claim, reasoning that it fell outside the scope of remand set forth in our Epis I opinion. Although the original judgment was vacated on appeal, Judge Freccero properly concluded that our Epis I opinion left the jury verdict intact and directed the trial court to address only specific issues on remand. In his statement of decision, Judge Freccero explained that he was only authorized to consider issues relevant to determining (1) Epis’s UCL claim and (2) Bradley’s quiet title claim.

An appellate court may limit or define the issues to be addressed on remand. (Rincon EV Realty LLC v. CP III Rincon Towers, Inc. (2019) 43 Cal.App.5th 988, 1001.) Based on his reading of the dispositional language in our Epis I opinion, Judge Freccero concluded that he lacked jurisdiction to address Epis’s claim seeking to void the Mt. Tiburon contract under Probate Code section 16004. “Whether the trial court correctly interpreted our opinion is an issue of law subject to de novo review. [Citations.] [¶] Our remittitur directions are contained in the dispositional language of our previous opinion. [Citation.] The trial court’s interpretation of those directions is not binding on us. [Citation.] We look to the wording of our directions to determine whether the trial court’s order comports with them. [Citation.] When, as in this case, the reviewing court remands the matter for further proceedings, its directions must be read in conjunction with the opinion as a whole.” (Ayyad v. Sprint Spectrum, L.P. (2012) 210 Cal.App.4th 851, 859.)

To support her contention that Judge Freccero should have considered the Probate Code section 16004 issue, Epis points to language in our prior opinion summarizing the background of her UCL cause of action. There, we listed four transactions, including, “(2) a contract to purchase a property located at 96 Mt. Tiburon, as to which the jury awarded Bradley $185,385.74, and Epis contends she is entitled to void the contract and thereby bar his recovery of the jury’s verdict.” (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, p. *5].) By referencing her claimed right to void the Mt. Tiburon contract as one of the transactions at issue under her UCL cause of action, Epis argues that we authorized the trial court to consider the Probate Code section 16004 issue on remand. We disagree.

The portion of our Epis I opinion she refers to is only a summary of the various transactions potentially at issue as briefed by the parties in the first appeal to provide context for our legal analysis. (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, p. *5].) Later in our opinion, we clearly outlined the scope of remand as to Epis’s UCL claim. Our remand directions authorized the trial court to reconsider whether Bradley’s former Rule 3‑300 violation amounted to an unlawful, unfair or fraudulent practice under the UCL, and whether Epis had suffered injury in fact and a loss of money or property as a result; they did not authorize the trial court to consider other statutory remedies potentially available for violations of former Rule 3‑300. (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, pp. *8–*10].)

The precise origin of Epis’s Probate Code section 16004 claim and its relationship to her UCL claim is unclear from the record. Probate Code section 16004 is a statutory complement to former Rule 3‑300 that establishes a rebuttable presumption that transactions between an attorney and client by which the attorney obtains an advantage are a breach of the attorney’s fiduciary duty and are the product of undue influence. (Prob. Code, § 16004, subd. (c); Ferguson v. Yaspan (2014) 233 Cal.App.4th 676, 684–685.) But Epis fails to explain how this independent basis of liability for an attorney’s rules violation relates to her UCL claim. In her opening brief in the present appeal, she appears to argue that because a violation of former Rule 3‑300 can serve as the basis for a claim under both statutes, they are necessarily related.

We are not persuaded. To bolster her argument, Epis cites Ferguson v. Yaspan, supra, 233 Cal.App.4th 676. The plaintiffs in Ferguson sought to set aside an agreement to sell an interest in their London flat to their attorney, claiming the agreement was the product of undue influence under Probate Code section 16004 because the attorney had failed to fully comply with former Rule 3‑300. (Ferguson, supra, at pp. 684–685.) But Ferguson does not aid her argument because the plaintiffs in that case did not allege a UCL cause of action.

Epis chose to assert a claim under the UCL, premised on a violation of former Rule 3‑300. She did not plead a violation of Probate Code section 16004. By declining to consider a claim that has no bearing on the merits of Epis’s UCL cause of action, Judge Freccero did no more than comply with our remand directions, and thus did not err.

3. Judge Freccero Did Not Disregard the Law of the Case

Epis contends Judge Freccero, by quieting title to the houseboat in favor of Bradley and awarding his estate a $50,000 settlement held in trust, misinterpreted or disregarded the law of the case as established by our Epis I opinion. We disagree.

“ ‘A reviewing court has authority to “affirm, reverse, or modify any judgment or order appealed from, and may direct the proper judgment or order to be entered, or direct a new trial or further proceedings to be had.” (Code Civ. Proc., § 43.) The order of the reviewing court is contained in its remittitur, which defines the scope of the jurisdiction of the court to which the matter is returned.’ [Citations.] ‘The trial court is empowered to act only in accordance with the direction of the reviewing court; action which does not conform to those directions is void.’ ” (Ayyad v. Sprint Spectrum, L.P., supra, 210 Cal.App.4th at p. 859.)

A trial court on remand must comply with the law of the case. (Rincon EV Realty LLC v. CP III Rincon Towers, Inc., supra, 43 Cal.App.5th at p. 997.) “ ‘ “The doctrine of ‘law of the case’ deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.” ’ ” (Leider v. Lewis (2017) 2 Cal.5th 1121, 1127.)

In the first trial, Judge Talamantes found Bradley was the beneficial owner of the houseboat but applied the wrong standard of proof and made no finding as to whether Bradley had paid off or assumed any outstanding loans on the houseboat. In the first appeal, Epis claimed Bradley should only have been awarded title subject to existing loans and other offsets owed to her. (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, pp. *17–*18].) We remanded for the trial court to apply the correct standard of proof. (Id. at pp. *18–*19.) And, if the court found Bradley was the beneficial owner again, we instructed the court to determine whether Bradley owed Epis any money or should have to assume any loans. (Ibid.)

At the time of the first trial, the outstanding loans on the houseboat totaled approximately $588,000. The houseboat was subsequently foreclosed and repossessed. By the time the matter reached Judge Freccero on remand, there were no outstanding loans to assume and no houseboat for which to quiet title. The parties nonetheless asked Judge Freccero to declare ownership of the houseboat because the prevailing party would be entitled to $50,000 held in trust pursuant to a settlement agreement from a collateral lawsuit. After applying the correct standard of proof, the trial court found Bradley had rebutted, by clear and convincing evidence, the presumption that Epis was the owner of the houseboat.

Adhering closely to our disposition of the first appeal, Judge Freccero turned next to the issue of whether Bradley should have to reimburse Epis for the down payment, mortgage installments or other payments she claimed to have made on his behalf. He found Bradley’s testimony that Epis was repaid in full when escrow on the houseboat closed more credible than Epis’s testimony that she was not repaid. On that basis, Judge Freccero concluded Bradley’s estate owes no further reimbursement to Epis for the down payment. Judge Freccero also found Bradley owed nothing as far as monthly mortgage payments because Epis did not present any evidence showing the amounts owed and waived her right to present additional evidence by agreeing not to reopen evidence on remand. In his statement of decision, Judge Freccero acknowledged that a judgment in favor of Bradley on his quiet title claim would necessitate a pay-off if there were any remaining loans or payments due. But having determined that all remaining loans had been extinguished by the foreclosure, the down payment repaid, and no offsets owed to Epis, Judge Freccero concluded that a pay-off was not possible. Accordingly, he declared Bradley the owner of the houseboat and his estate entitled to the remaining $50,000 held in trust.

On appeal, Epis does not challenge Judge Freccero’s finding that Bradley was the beneficial owner of the houseboat. Nor does she directly dispute the court’s finding that Bradley’s estate owes her no further reimbursement for the down payment or any other offsets as a result of the foreclosure or monthly mortgage payments. Her only contention is that by awarding the $50,000 held in trust to Bradley’s estate, Judge Freccero disregarded “the Appellate Court’s directive that there should be a ‘quid for the pro quo.’ ”

To support her claim, Epis points to a portion of our opinion that states, “Since Bradley was awarded title to the houseboat, he also should have been burdened with repaying the outstanding balance of any loans taken out to purchase or improve the floating home, or any such loans that inured to Bradley’s benefit rather than Epis’s. Assuming the trial court adheres to its finding on the title transfer point after applying the correct standard of proof—an issue on which we again emphasize we intimate no view—the logic of the transaction Bradley argues took place appears to carry a quid for the pro quo.” (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, p. *18].) Here, Epis contends the trial court was only authorized to quiet title in Bradley’s favor conditional upon her receiving something in return. We disagree.

The language of the Epis I disposition and opinion read as a whole establishes Judge Freccero did not disregard the law of the case and acted within the permitted scope of jurisdiction on remand. In Epis I, we stated in the disposition: “The judgment is vacated and the matter is remanded for further proceedings in accordance with this opinion.” (Epis I, supra, A143387 [2018 Cal.App.Unpub.LEXIS 6469, p. *19].) In the paragraph immediately preceding our disposition, we stated: “Upon remand, if the court again declares Bradley to be the owner of the houseboat, the court shall take evidence and argument as needed to determine the amount (if any) Bradley’s estate should be required to pay to Epis, given that (1) Epis paid the down payment and several monthly payments, and (2) the houseboat has since been foreclosed upon.” (Id. at pp. *18–*19, italics added, fns. omitted.) Our directions on remand permitted the trial court to take the steps necessary to determine the amount owed by Bradley’s estate “if any.” By including the qualifying phrase “if any,” we anticipated the possibility that Bradley’s estate would owe nothing to Epis after a final accounting. Thus the trial court had authority to quiet title in favor of Bradley without a pay-off to Epis.

• III. DISPOSITION

Affirmed. Costs on appeal to respondent.

STREETER, J.

WE CONCUR:

POLLAK, P. J.

BROWN, J.

[1] Vernon Bradley died on May 21, 2015, during the pendency of the prior appeal in this matter. (Epis I, supra, A143387 [2018 Cal.App.Unpub. LEXIS 6469, p. *19, fn. 9].) It appears no formal motion for substitution of parties was filed as required by California Rules of Court, rule 8.36(a), but in the prior appeal an attorney representing Kathryn Gant Bradley, the executor of Bradley’s estate, filed a notice of intent to file (and then did file) a respondent’s brief, and attorneys representing the executor have likewise filed a respondent’s brief in the present appeal, all without any objection by any other party. Although we expect parties to follow the rules governing substitution of parties, there has been no objection to the appearance of Bradley’s estate in this appeal, so we will in this case deem Kathryn Gant Bradley, as executor of Bradley’s estate, to have substituted as a defendant and respondent in place of Vernon Bradley.

Separately, the other defendant and respondent, Scott Jolley, was dismissed as a party to this appeal on September 3, 2021.

[2] We grant Epis’s unopposed request for judicial notice filed on October 18, 2021, pertaining to a complaint filed in related litigation.

[3] References to rules are to the Rules of Professional Conduct.

[4] The Rules of Professional Conduct have been renumbered subsequent to the original trial proceedings and the first appeal. The current rule that is analogous to former Rule 3‑300 is Rule 1.8.1. Former Rule 3‑300 provided as follows:

“A member shall not enter into a business transaction with a client; or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied:

“(A) The transaction or acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and

“(B) The client is advised in writing that the client may seek the advice of an independent lawyer of the client’s choice and is given a reasonable opportunity to seek that advice; and

“(C) The client thereafter consents in writing to the terms of the transaction or the terms of the acquisition.”

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

SIXTH APPELLATE DISTRICT

Two months after A.R.’s birth, the mother requested that A.R. be placed into protective custody. The juvenile court later sustained a petition filed by the Santa Clara County Department of Family and Children’s Services (the Department) pursuant to Welfare and Institutions Code section 300, finding that A.R. came within the jurisdiction of the juvenile court. C.G., with whom A.R.’s mother had an ongoing relationship, believed he was the father. Paternity testing, however, later excluded him as the biological father, instead establishing E.S. as the biological father. Both C.G. and E.S. filed petitions seeking presumed parent status. The juvenile court ultimately found that C.G. was not a presumed parent, and instead found that E.S. was a presumed parent. In the alternative, the juvenile court also found that even if C.G. was a presumed parent, a three‑parent finding was not appropriate and C.G. should nonetheless be excluded.

C.G. appeals, arguing that there was insufficient evidence to support the juvenile court’s finding that he was not a presumed parent. He also argues that there was insufficient evidence that E.S. was a presumed parent, and therefore it was erroneous to make a three‑parent finding. Finally, he contends that even if E.S. was properly considered a presumed parent, the trial court abused its discretion by not finding a three‑parent finding to be warranted.

We conclude that the juvenile court’s order finding C.G. was not a presumed parent was supported by substantial evidence.[1] Accordingly, we affirm the order.

I. Background

A. Factual Background

C.G. and the mother met in 2016. The two lived together in a tumultuous relationship marked by substance abuse, untreated mental health issues, and mutual verbal and physical violence. In early 2020, C.G. and the mother separated.

In February 2020, the mother began a relationship with E.S., and the two moved in together. The mother became pregnant. E.S. accompanied the mother to some of her prenatal appointments. At one such appointment at Stanford University, “the medical provider informed both [E.S.] and [the mother] that no heartbeat was found.” The mother was told she may have had a miscarriage. Believing she was no longer pregnant, the mother stopped going to prenatal appointments. E.S. also believed the mother was not pregnant. In May 2020, E.S. and the mother separated.

C.G. and the mother reestablished their relationship. In November 2020, C.G. called an ambulance to take the mother to the hospital because of intermittent pain and fluid coming out of her vagina. C.G. was not allowed into the hospital initially.

The next day, A.R. was born. After birth, the infant tested positive for methamphetamine, amphetamine, and opiates. The mother called C.G. to report “that we had a child.” C.G. was shocked. C.G. asked “an impulsive question,” “ ‘Is [the child] mine?’ ” The mother responded, “Yes, of course.” This was C.G.’s first child. He was “super happy. Very happy.”

A.R. was in the hospital for “[a]bout two weeks.” C.G. slept overnight at the hospital in the same room as A.R. and the mother. After A.R.’s birth, C.G. announced his birth on social media and identified A.R. as his son.

On the day of A.R.’s birth, based on the positive drug test, the Department received an initial referral of severe neglect and investigated. Because the mother and C.G. were unaware of the pregnancy, the allegation of severe neglect was found to be inconclusive. The mother and C.G. agreed to engage in voluntary family maintenance services.

In late December 2020, the mother was referred to residential substance abuse treatment at Parisi House on the Hill, where she could be treated while staying with A.R.

On January 8, 2021, C.G. tested positive for methamphetamine and amphetamine. C.G. confirmed the use of these substances less than a week earlier. C.G. agreed to a safety plan where visitation would be cancelled if C.G. was under the influence of substances. On January 9, 2021, the mother reported that C.G. attempted to visit A.R. despite his positive test the day before. The mother cancelled the visit.

On January 20, 2021, the mother tested positive for methamphetamine and amphetamine. She admitted to using methamphetamine four days earlier, and described the use as “an impulse.”

On January 21, 2021, the social worker spoke with C.G. by phone, and he recounted recently being with the mother, when “she exhibited bizarre and inappropriate behavior.” According to C.G., he was in a vehicle with A.R. while the mother was driving. The mother pulled the vehicle over after she received a phone call from the social worker. The mother asked C.G. to be quiet so that the social worker would not know C.G. was with her. During the phone call the mother was “irritated” and “verbally insulted and blamed” C.G. for the couple’s substance abuse and involvement with the Department. After the call, the mother began to speed and drive erratically. She “became increasingly agitated, impulsive and screamed, ‘I’m going to kill us all. Keep that bastard. I’m tired of this,’ ” while C.G. sat in the back seat with A.R. The mother then began to accelerate and brake, causing A.R.’s head to swing. The mother pulled over and started crying on the side of the freeway. She then drove to C.G.’s house, snorted methamphetamine in front of C.G., and drove home with A.R. still in the vehicle. C.G. did not call the police or intervene in any way because he “ ‘didn’t want her to get in trouble,’ ” and he thought “ ‘she might change.[’]”

On January 26, 2021, and January 28, 2021, the mother twice absconded without permission from her residential treatment program at Parisi House on the Hill. Despite this, the program director allowed the mother to remain in the treatment program.

On February 1, 2021, the mother tested positive for methamphetamine and amphetamine. Due to the two prior absconding incidents and the positive drug test, the mother was discharged from the residential treatment program. The mother admitted to using methamphetamines while at the facility. Although she reported finding them “ ‘under the . . . facilities stairs during the weekend,’ ” her peers at the facility reported that C.G. “ha[d] been visiting the facility and supplying the mother with drugs.”

After being discharged from the program, the mother requested that A.R. be placed into protective custody “because [she and C.G.] cannot provide for care and supervision of the child.” A.R. was placed in the home of a foster mother.

On February 2, 2021, the social worker met with the mother. She described her history of substance abuse, and stated she did not begin to use methamphetamine until she met C.G. She reported instances of domestic violence perpetrated by C.G. She stated she continued her relationship with C.G. because “she did not want [A.R.] to grow up without a father.”

The social worker interviewed C.G. the same day. He appeared “with dilated pupils, rapid, and pressured speech.” He admitted to using methamphetamine three days prior, but stated he was interested in substance abuse services and had been free of substances for three days. The social worker referred to A.R. by his name, and “[C.G.] said he did not know the child’s name was [A.R.] because [the mother] kept [A.R.] away from him.” C.G. stated he had last seen A.R. 15 days prior. On the issue of paternity, he “said he [was] open to taking a paternity test and regardless of the findings, he will continue to care for [A.R.] as his son.” He specifically denied providing the mother with drugs while she was at the residential drug treatment program.

On February 3, 2021, the Department filed a petition under Welfare and Institutions Code section 300, subdivision (b), alleging that A.R. had suffered or was at substantial risk of suffering serious physical harm.

On February 4, 2021, at the detention hearing, the mother and C.G. appeared with appointed counsel. The court found that a prima facie showing had been made and that continued detention was necessary. The mother and C.G. were permitted a maximum of two hours twice per week of supervised visitation. The court also ordered a paternity test to determine if C.G. was A.R.’s biological father.

On March 5, 2021, the results of the DNA paternity test were reported. The results excluded C.G. from paternity and established he was not A.R.’s biological father. Despite the results, C.G. indicated he would still seek presumed parent status since he and A.R. had bonded since birth.

On March 17, 2021, E.S. contacted the Department stating that he believed he was A.R.’s biological father and requested paternity testing. He stated that he had recently become aware that the mother believed that he was A.R.’s biological father.

E.S. admitted to a history of addiction with alcohol, heroin, cocaine, and methamphetamine. He was arrested in June 2020 for driving under the influence of alcohol, and thereafter engaged in treatment services with the Salvation Army. E.S. was scheduled to graduate from the six‑month program in May 2021. E.S. “proudly said he ha[d] maintained sobriety for 9 months” and “specifically described sobriety from methamphetamine [for] 9.5 months, cocaine for 10 month[s], heroin [for] 9 years . . . and alcohol since [his arrest].”

On May 4, 2021, E.S. filed a motion to establish presumed parent status. He stated that should DNA testing confirm that he is A.R.’s biological father, he “wants to have a relationship with him” and “to raise [A.R.] as his son.” He also stated he was “willing to do whatever it takes to have [A.R.] in his care, including family reunification services.” He reiterated that he was unaware of the mother’s pregnancy, and like her, had believed the pregnancy ended in a miscarriage. Prior to the presumed miscarriage, he stated that he “worked two jobs to support mother during the early stages of her pregnancy and accompanied mother to several prenatal appointments.” Paternity testing results later confirmed that E.S. was A.R.’s biological father.

E.S. was investigated by the Department. According to his pre‑trial services case manager, E.S. was under electronic monitoring supervision and was “ ‘doing great.’ ” E.S.’s Salvation Army case manager reported that E.S. was “doing exceptionally well, appeared motivated and [was] aware of what ‘he’s supposed to be doing and when he should be doing it.’ ”

C.G. continued to make in‑person visits to see A.R. at his foster home. According to reports of the visits, “[d]uring in person visits between [C.G.] and [A.R.], [C.G.] sings, talks and uses terms of endearment towards [A.R.]. [C.G.] pushed [A.R.] in the stroller while talking to him and [A.R.] responds to [C.G.] by cooing and making baby sounds. [A.R.] has been observed lifting his hands upward and [C.G.] becomes excited and believed [A.R.] reached out for him to pick [A.R.] up. [C.G.] brings toys during the visitations. At times, [C.G.] requires prompting, guidance and coaching on how to change [A.R.’s] diaper, listen to cues, and feed [A.R.].” C.G. reported that he “provided financial, emotional, physical support for [A.R.] and met his basic needs of shelter, clothing and food.” He also said “he provided material items such as [a] car seat, stroller, toys, clothes, blankets and diapers.”

The foster mother supervised brief (five to 10 minute) video calls between A.R. and C.G., and between A.R. and E.S. She reported both C.G. and E.S. would call in the evening to wish A.R. “ ‘good night’ ” or call in the morning. During a home visit, the foster mother observed C.G. engage A.R. by singing and talking to him. A.R. responded “very positively” and was observed “smiling, laughing, reaching his hands out and cooing at [C.G.’s] voice.” When A.R. hears C.G.’s voice on a video call “he immediately lights up” and is engaged with C.G. On one occasion, A.R. “became fussy because he was hungry.” The foster mother left A.R. alone in his crib. C.G. told the foster mother that he would watch A.R. The foster mother noted that C.G. was able “to engage [A.R.] even when he was fussy and crying for the bottle and demonstrated patience during [A.R.’s] cries.”

The foster mother also noted that E.S. called and engaged with A.R. during video calls. E.S. “is happy to see [A.R.] during video calls, however at times when [A.R.] becomes fussy or begins to cry, [the foster mother] noted [E.S.] would end the phone call so [she] could attend to [A.R.].” On one occasion, “when [A.R.] became fussy and cried [E.S.] told the [f]oster [m]other he would ‘let you . . . handle that’ and terminated the call.” The foster mother also reported, on another call, that E.S. “commented during a video call that [A.R.] ‘was not paying attention to me’ and terminated the call.” E.S. provided diapers and a rattle and offered to provide additional items as needed.

Supervised visits for both C.G. and E.S. continued through June and July 2021. On one particular visit, C.G. was physically affectionate and played with A.R., provided toys, fed him, and changed his diaper. C.G. rocked A.R. in his arms and played lullabies on his phone. C.G. was reminded by the social worker to change A.R.’s diaper at the end of the visit. C.G. blew air in A.R.’s face and A.R. smiled and laughed.

On another visit, E.S. talked to A.R., fed him, changed his diaper and held him. A.R. responded by smiling and rocking back and forth when being held. E.S. showed A.R. a book. E.S. played music on his phone and took photographs of A.R. A.R. fell asleep in E.S.’s arm and E.S. laid him on the couch to sleep. E.S. positioned himself to prevent A.R. from falling.

B. Paternity Hearings

At the initial paternity hearing on May 12, 2021, the mother testified that after A.R.’s birth she did not want to move in with C.G. because of the presence of marijuana and methamphetamines in his house. C.G. denied the presence of drugs in his house. C.G. testified that he bought supplies for A.R., including toys, formula, strollers, and diapers. C.G. stated that A.R. and the mother visited C.G.’s house during the day on occasion, and on one occasion stayed overnight. C.G. reported “[a]lways” going to A.R.’s doctor’s appointments. Since A.R. was placed into foster care, C.G. has visited “twice a week for two hours, and . . . [has] not missed any appointments.”

When asked whether he ever received a voluntary declaration of paternity during the first two weeks of A.R.’s life, C.G. testified he “never received any type of document.” C.G. said he did try “to go and get a birth certificate with my name on it as the father, but we didn’t go to do that because of personal things.” C.G. elaborated that he was referring to a no contact restraining order that was in effect between him and the mother. He acknowledged being at the hospital despite the restraining order, however, and maintained he “would have . . . sign[ed] [a voluntary declaration of paternity at] any time.”

At the next hearing on June 23, 2021, the juvenile court found that C.G. was a presumed parent. At the outset, the court noted the decision was “quite close in this case.” The court explained: “The child was never literally in [C.G.’s] home, as the child was in the hospital after birth. [C.G.] did testify, however, that he slept at the hospital for several weeks . . . with [A.R.], his baby. He claimed he went to several doctor’s appointments. He did care for [A.R.] at visits, including changing his diaper at least one time and feeding him. He did not provide, I would say, prenatal care, as he didn’t know that the mother was pregnant. He did take her to the hospital, but not because he knew she was pregnant at the time, but rather, for the benefit of her. He also, it appears, provided drugs to the mother while she was at House on the Hill, which would not seem to be in the baby’s best interest. He also apparently let the mother drive with [A.R.] after he had watched the mother ingest methamphetamine.”

The juvenile court concluded: “I will say while I’m not sure or I feel like it’s a close case whether at the time or soon after [A.R.’s] birth [C.G.] could meet the standard, the fact is he did hold [A.R.] out. He did visit with him. Since this case began, he has been visiting consistently. The reports indicate he has now formed a bond with [A.R.]. So I do believe there is that parental relationship now, and I’m going to find that he is a presumed father under [Family Code section] 7611(d).”[2] The court added, however, “I do it with some hesitation.”

The juvenile court turned to E.S.’s paternity claim. The court found that E.S. was the biological father based on the results of the DNA test. The court also found, based on the uncontested parentage motion and accompanying declarations, that E.S. met the standard to be a Kelsey S.[3] biological father. The court concluded, for those reasons, that E.S. was also a presumed parent.

The court proceeded to hear argument on whether to make a three‑parent finding. E.S. argued that as a Kelsey S. father, he should be considered “the equivalent of a statutorily presumed father because any other conclusion would render the Kelsey S. status meaningless.” Addressing C.G.’s paternity claim, E.S. argued that while C.G.’s “commitment to [A.R.] is really admirable, he’s not been involved in [A.R.’s] life for a substantial period of time.” He noted that C.G.’s interactions with A.R. have been supervised and limited to a few hours a week, and that A.R. was only eight months old. He asserted that this was not the type of “well‑developed, parent‑child relationship that the legislature was really concerned about preserving when they created the provision for the courts to recognize three parents.” E.S. noted that he had “been visiting with [A.R.] consistently” since the DNA test showed paternity, which authorized him to begin visitation. He also noted that he had engaged “in services and [was] very motivated to reunify with [A.R.].” He further noted that he “came forward as promptly as he could to assert his interest in having a relationship with [A.R.] and would have come forward sooner had he not been thwarted in his ability to do so.” In sum, he requested that the court decline to make a three‑parent finding.

C.G. argued that a Kelsey S. father was not the functional equivalent of a presumed parent under section 7611, subdivision (d). He noted that he was with A.R. in the hospital during the first two weeks of his life, and he had “made every effort before protective custody to see his child, was committed to his child, bought within his economic means supplies for the child, [and] executed parental care of the child.” He also noted his participation in medical appointments, the mother’s presence in his house “twice a week for hours at a time,” the many photos of him and A.R., and his efforts since protective custody to meet A.R.’s needs. He asserted it would be detrimental to A.R. to now remove the relationship from A.R.’s life. He acknowledged E.S.’s efforts, but asserted that while the efforts had been “excellent,” the efforts were “new” and “not established.”

At the conclusion of the hearing, the court proceeded to jurisdiction. The mother, E.S. and C.G. each waived their right to a trial and submitted the matter on the social reports and petition. The court found the allegations in the third amended dependency petition to be true and A.R. was made a ward of the court.

At the next hearing on July 23, 2021, the juvenile court indicated it had “a decision for you today that I think is going to be a little bit of a surprise.” The court stated it had become “quite troubled” by its prior finding that C.G. was a presumed parent, and after further research, had concluded, “I made the wrong decision.” Thus, the court stated, “I’m going to set aside that decision today and find that [C.G.] is not a [section] 7611(d) [presumed] father.” The court emphasized that it was making its decision “based just on the facts that the Court had before it [at the last hearing],” and was “not making my reconsideration based on any new facts.”

The juvenile court explained that C.G. had not “receive[d] the child into the home,” and “therefore . . . cannot meet the standard for a [section] 7611(d) father.” While C.G. “did testify that he slept [at the hospital], . . . that is not receiving [A.R.] into his home or the equivalent of it.” “When [A.R.] was released from the hospital, he lived with the mother and did not live with [C.G.].” The court acknowledged that “[w]hile the mother and baby may have visited a few times with [C.G.],” he “never had the baby in his home without the mother.” The court also noted that C.G. “[gave] inconsistent statements about his visitation prior to this case coming into dependency,” he visited the mother and A.R. “in violation of the restraining order,” “[h]e brought drugs to the mother at the House on the Hill,” “and he allowed the mother to drive with [A.R.] while she was under the influence of methamphetamine.”

The juvenile court continued that “[w]hile the standard is to be liberally construed, it must still demonstrate not the desire of a person to be a parent, . . . but an existing parental relationship.” “While [C.G.] [has] visited consistently since protective custody, . . . this is not the type of parental relationship meant by [section] 7611(d), where the test requires that the parent receive the child into the home.” The court acknowledged “that there are some cases which state that a child need not live with the parent for the parent to receive the child into their home,” but found those cases distinguishable. “In one [of those cases], the father visited the child several times a month for four and a half years.” “In another, the mother and child stayed with the father for weeks or months at a time, again, significantly more than the occasional overnight that [C.G.] testified to.”

Finally, the juvenile court noted that C.G. “did not sign a voluntary declaration of paternity prior to getting the DNA results, although he could have.” The court recognized that “through the visitation [C.G.] has developed some bond with [A.R.] and [A.R.] responds very positively to him . . . .” However, the court did not “believe [that] this is legally sufficient to meet the [statutory] standard” for presumed parent.

The juvenile court made alternative findings that even if C.G. was a presumed parent, then E.S. also qualified as a presumed parent for purposes of section 7612, subdivisions (b) and (c). The court proceeded to weigh each presumed parent’s claim. With regard to C.G., the court found that while he “is a loving and consistent visitor and has chosen to take on a fatherly role towards [A.R.], he’s never cared for [A.R.] outside the presence of the mother or outside the supervision of the hospital or the Department. He’s seen him only for two hours at a time in the last five months and has not had primary care of him. It’s not entirely clear why he wants to be a father to [A.R.], given that he’s no longer in a relationship with the mother and has no biological ties to [A.R.] or to any of [A.R.’s] biological family on either side. While it’s commendable that he has chosen to try and take on the role of father, and it’s commendable that he has been a consistent and loving presence to [A.R.], it is, I will say, somewhat surprising. It’s not clear to me what societal interest would be served by having him remain as a father to [A.R.]. There’s no nuclear family to preserve. He’s no longer in a relationship with the mother, and he’s never been in a full or primary parental role with respect to him. Allowing him to remain as a father would seem to me to be primarily for the benefit of [C.G.], as he wants to be [A.R.]’s father, rather than for [A.R.]’s benefit, which is what the Court must be concerned with.”

As for E.S., the court found that while he did not have a well‑established relationship with A.R. at this point, he had been “prevented from being involved in [A.R.]’s life and did not receive visitation until the DNA results were received. But since that time, he has remained steadfast in his desire to be a father to [A.R.], and he has been consistent and affectionate with him in visits. Given that he is the biological father who came forward as soon as he could and who has wanted to be a father, I think there are strong policy considerations in favor of maintaining this relationship.” The court noted that while “biology is not controlling,” “where neither father has a long or well‑developed relationship with the child, I find biological does outweigh the desire of [C.G.] to be a father. And I, therefore, find that [E.S.]’s paternity is the one with the stronger claim both in policy and logic.”

II. Discussion

A. Presumed Parent[4]

C.G. argues there was insufficient evidence to support the finding that he was not a presumed parent. Respondent E.S. contends that there was substantial evidence for the finding and urges this court to affirm the order. The Department has filed a letter brief in which it states, as it did in the juvenile court, it “[does] not intend to take a position in this appeal regarding the propriety of the juvenile court’s parentage order.”

1. Standard of Review

“ ‘The Uniform Parentage Act (UPA), Family Code section 7600 et seq., provides the statutory framework for judicial determinations of parentage, and governs private adoptions, paternity and custody disputes, and dependency proceedings.’ ” (In re D.A. (2012) 204 Cal.App.4th 811, 824.) With regard to paternity, the UPA distinguishes between “ ‘alleged,’ ” “ ‘biological,’ ” and “ ‘presumed’ ” fathers. (See Francisco G. v. Superior Court (2001) 91 Cal.App.4th 586, 595‑596.) “A man who may be the father of the dependent child but has not been established to be the natural or presumed father is an ‘alleged father.’ A man who has been established to be the biological father is a ‘natural father.’ A man who has held the child out as his own and received the child into his home is a ‘presumed father.’ ’’ (In re Jerry P. (2002) 95 Cal.App.4th 793, 801, fns. omitted (Jerry P.).) “Presumed father status ranks highest.” (Ibid.) Only a “ ‘statutorily presumed father’ ” is entitled to reunification services and custody of a child. (Ibid.)

Presumed parent status is governed by section 7611 of the UPA. In relevant part, a person is presumed to be the natural parent of a child if the person both receives the child into his home and openly holds the child out as his natural child. (§ 7611, subd. (d).) “ ‘ “ ‘[T]he statutory purpose [of section 7611] is to distinguish between those fathers who have entered into some familial relationship with the mother and child and those who have not.’ ” [Citation.] . . . “[T]he premise behind the category of presumed father is that an individual who has demonstrated a commitment to the child and the child’s welfare . . . is entitled to the elevated status of presumed fatherhood.” ’ ” (Jason P. v. Danielle S. (2017) 9 Cal.App.5th 1000, 1019.) Thus, “[a] person requesting presumed parent status under section 7611, subdivision (d) must have a ‘fully developed parental relationship’ with the child.” (In re M.Z. (2016) 5 Cal.App.5th 53, 63 (M.Z.).)

“Presumed fatherhood, for purposes of dependency proceedings, denotes one who ‘promptly comes forward and demonstrates a full commitment to his paternal responsibilities—emotional, financial, and otherwise.’ ” (Jerry P., supra, 95 Cal.App.4th at pp. 801‑802.) To determine whether a person qualifies for presumed parent status, “courts have looked to such factors as whether the [person] actively helped the mother in prenatal care; whether he [or she] paid pregnancy and birth expenses commensurate with his [or her] ability to do so; whether he [or she] promptly took legal action to obtain custody of the child; whether he [or she] sought to have his [or her] name placed on the birth certificate; whether and how long he [or she] cared for the child; whether there is unequivocal evidence that he [or she] had acknowledged the child; the number of people to whom he [or she] had acknowledged the child; whether he [or she] provided for the child after it no longer resided with him [or her]; whether, if the child needed public benefits, he [or she] had pursued completion of the requisite paperwork; and whether his [or her] care was merely incidental.” (In re T.R. (2005) 132 Cal.App.4th 1202, 1211.) The person claiming entitlement to presumed parent status has the burden of establishing, by a preponderance of the evidence, the facts supporting that entitlement. (M.Z., supra, 5 Cal.App.5th at pp. 64‑65.)

On appeal, we review a finding regarding presumed parent status under the substantial evidence standard. (M.Z., supra, 5 Cal.App.5th at p. 64.) In applying this standard, “[w]e view the evidence in the light most favorable to the ruling, giving it the benefit of every reasonable inference and resolving all conflicts in support of the judgment. [Citation.] We defer to the trial court’s credibility resolutions and do not reweigh the evidence. [Citation.] If there is substantial evidence to support the ruling, it will not be disturbed on appeal even if the record can also support a different ruling.” (R.M., supra, 233 Cal.App.4th at p. 780.) Put another way, we must affirm an order that is supported by substantial evidence even if other evidence, or other inferences from the evidence, would have supported a contrary ruling. (In re N.M. (2011) 197 Cal.App.4th 159, 168 (N.M.); In re Manuel G. (1997) 16 Cal.4th 805, 823.)

2. Substantial Evidence Supports the Juvenile Court’s Finding that C.G. Was Not a Presumed Parent

C.G. argues that he “met his burden to demonstrate that he held A.R. out as his own, and had the familial relationship with A.R. protected by section 7611, subdivision (d).” He argues that he “held A.R. out as his own from the moment he received the news that he had a son and called his family to tell them, and shared photos on social media.” He notes that he stayed with A.R. and the mother in the hospital, attended doctor’s appointments, and purchased a number of necessary items for A.R. He asserts that by “sing terms of endearment toward A.R., and talking and singing with him, [he] ‘entered into a familial relationship with the child’ and showed his ‘abiding commitment to the child and the child’s well‑being.’ ” C.G. also contends that the court erroneously focused on whether A.R. actually resided with him.

[u]In re A.R.; DFCS v. C.G.

H049342

[1] In light of this finding, we do not need to address C.G.’s other contentions on appeal.

[2] Unspecified statutory references are to the Family Code.

[3] In Adoption of Kelsey S. (1992) 1 Cal.4th 816, 827, the California Supreme Court held that “due process entitles a biological father a meaningful opportunity to qualify as a presumed father.” (In re Jesusa V. (2004) 32 Cal.4th 588, 601.) Under Kelsey S., “f an unwed father promptly comes forward and demonstrates a full commitment to his parental responsibilities—emotional, financial, and otherwise—his federal constitutional right to due process prohibits the termination of his parental relationship absent a showing of his unfitness as a parent.” ([i]Kelsey S., supra, at p. 849.) “While Kelsey S. was decided in the context of adoption, appellate courts have extended it to dependency proceedings.” (In re D.S. (2014) 230 Cal.App.4th 1238, 1244.)

[4] Effective January 2014, section 7611, subdivision (d) was amended to be gender neutral by referring to presumed parents, rather than presumed fathers. (R.M. v. T.A. (2015) 233 Cal.App.4th 760, 773, fn. 10 (R.M.).) While some cases we cite and parts of the record refer to presumed fathers, we use the current operative language.

[5] Because the juvenile court’s presumed parent finding was supported by substantial evidence, we need not address C.G.’s other arguments on whether a three‑parent finding was appropriate or whether, under the weighing process of subdivision (b) of section 7612, his or respondent E.S.’s status should control. (See M.Z., supra, 5 Cal.App.5th at p. 66.) We also do not address C.G.’s challenge to E.S.’s presumed parenthood, as he does not have standing to do so. (See In re Vanessa Z. (1994) 23 Cal.App.4th 258, 261; In re Frank L. (2000) 81 Cal.App.4th 700, 703.)