BCS Investments v. Lorenz CA4/1 ( 2013 )

Filed 10/31/13 BCS Investments v. Lorenz CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
BCS INVESTMENTS, INC. et al. D061999
Plaintiffs and Appellants,
v. (Super. Ct. No. 37-2011-00096327-
CU-FR-CTL)
MARGUERITE C. LORENZ,
as Successor Trustee, etc., et al,
Defendants and Respondents.
APPEAL from judgments of the Superior Court of San Diego County, Joan M.
Lewis, Judge. Affirmed.
Law Offices of Fred S. Pardes and Fred S. Pardes for Plaintiffs and Appellants.
Solomon, Ward, Seidenwurm & Smith, Tanya M. Schierling for Defendant and
Respondent Marguerite C. Lorenz.
John David Feher, Vekeno Kennedy for Defendant and Respondent First Security
Mortgage Home Loans, Inc.
Plaintiffs and appellants BCS Investments, Inc. and Fred S. Pardes, in his capacity
as trustee for the Fred S. Pardes and Michelle K. Pardes Family Trust, appeal from
judgments entered after the trial court sustained without leave to amend the demurrers of
defendants and respondents First Security Mortgage Home Loans, Inc. (First Security)
and Marguerite C. Lorenz (Lorenz), in her capacity as successor trustee of the William H.
Boehmler Trust (at times, the Boehmler trust). The trial court ruled plaintiffs' causes of
action were time-barred under Code of Civil Procedure1 section 366.2, which requires all
claims against a decedent to be filed within one year of death, and that they were also
barred by the statute of frauds. On appeal, plaintiffs challenge the constitutionality of
section 366.2 and its application to this action, as well as defendants' ability to assert it as
a defense.2 They further contend the trial court erred in its rulings because the statute of
frauds is not a defense to the action; they are entitled to a resulting trust; and liberally
construed, the complaint alleges facts sufficient to state causes of action. Finally,
plaintiffs contend the court erred by failing to grant them leave to amend. We affirm the
judgments.
1 All statutory references are to the Code of Civil Procedure unless otherwise
indicated.
2 Specifically, plaintiffs contend: (1) section 366.2 is unconstitutional absent
written notice of a decedent's death to creditors; (2) section 366.2 is inapplicable to this
action because it does not involve the personal misconduct of the former trustee; (3)
defendants should be equitably estopped from asserting section 366.2 as an affirmative
defense; (4) defendants' failure to institute probate proceedings precludes section 366.2's
application; and (5) the statute of limitations did not begin to run until their discovery of
defendants' fraud and negligence on April 1, 2010.
2
FACTUAL AND PROCEDURAL BACKGROUND
We assume the truth of the well-pleaded allegations of plaintiffs' operative first
amended complaint, as well as matters that are properly judicially noticeable (City of
Dinuba v. County of Tulare (2007) 41 Cal. 4th 859, 865), and we state the underlying
facts from these matters.3
In January 2004, First Security, at the request of the Boehmler trust, had Raymond
Taylor conduct an appraisal of a condominium, living unit H, located at 3920 Riviera
Drive, San Diego (the property), which is a heavily populated beach area. The written
appraisal report states the property has a two-car carport. In January 2005, First Security
and Boehmler in his capacity as trustee for the Boehmler trust entered into a written trust
deed service agreement that appointed First Security and its agent Paul Rios to service a
promissory note and deed of trust secured by the property. The trust deed, which was
recorded in January 2005, designated trustee Boehmler as the beneficiary, and Toni
Christiani and William Sullivan as the borrowers.
3 Under these principles, we disregard the legal conclusions and argumentative
allegations contained in plaintiffs' first amended complaint, including allegations that an
appraiser "negligently performed" an appraisal; that the "appraisal became part of the
contract between the Plaintiffs and the Trust"; that the plaintiffs "were under no
obligation to search the public records to confirm the information" in the appraisal;
payment of a commission "affirms [a party's] agency with the Trust"; that the agreement
for sale and purchase of the note and trust deed "is null and void"; that "there was a total
failure of consideration" as a result of the absence of carports; that a "resulting Trust
and/or Equitable Lien exists over the Trust assets"; that plaintiffs' claims "did not ripen"
until August 20, 2010, or August 24, 2010; that the lack of notice of a party's death
"equitably estops [defendants] from asserting Probate Code section 366.2 . . . as a defense
to this action"; any applicable statute of limitations is "equitably tolled"; and section
366.2 "is a taking of property without due process, making it unconstitutional."
(Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 768-769.)
3
In April 2007, plaintiffs met Bruce Douthit, an agent for the Boehmler trust, to
discuss the possibility of purchasing the note and deed of trust. During various telephone
conversations during April and May 2007, plaintiffs were told that the note and trust deed
were valuable and marketable as they were secured by property with two designated
carports. On April 17, 2007, Rios presented the appraisal report to plaintiffs through
delivery to Douthit, and Douthit gave plaintiffs the appraisal report two days later.
Relying on the appraisal report's accuracy, plaintiffs agreed to purchase the property.
In May 2007, Douthit delivered a written cashier's check payable to Boehmler, as
trustee, in the amount of $198,032.87. In a written memorandum, Rios acknowledged
receipt of those funds "acting on behalf of First Security . . . ." and signed the memo as an
"authorized agent." Boehmler signed the check and executed an assignment of the deed
of trust to plaintiffs. The assignment, which describes the property with reference to a
condominium plan recorded on August 23, 1973, was recorded on May 21, 2007.
Boehmler died on August 2, 2008.
In May 2009, Christiani and Sullivan defaulted on their obligations under the
promissory note. On April 1, 2010, plaintiffs discovered that the property did not have
two designated carports. Rather than continue to spend money on the property, they
decided it was best to let the property go into foreclosure, and they lost title to it on
August 24, 2010. On November 10, 2010, plaintiffs demanded in writing to rescind their
purchase of the note and trust deed, but defendants refused to rescind the transaction.
On February 24, 2011, plaintiffs filed a complaint for fraud, negligent
misrepresentation, rescission, breach of contract and negligence. First Security and
4
Lorenz each filed a demurrer. First Security asserted the complaint failed to state facts
sufficient to constitute a cause of action and its allegations were uncertain. Attaching the
deed of trust recorded on January 26, 2005, it pointed out the trust deed did not describe
the property as having any designated carport spaces. In part, it argued based on the trust
deed, as well as the recorded condominium plan for the property, that plaintiffs
discovered or should have discovered the absence of designated carports on or before
May 21, 2007, when the assignment was recorded. Accordingly, First Security argued,
plaintiffs' causes of action were barred by their respective statutes of limitation. First
Security further argued plaintiffs' complaint contained no specific facts as to it, and was
fatally uncertain.
Lorenz similarly argued plaintiffs' complaint failed to state facts sufficient to
constitute causes of action, but she additionally argued their causes of action were time-
barred by the one-year statute of limitations of section 366.2 given Boehmler's August 2,
2008 death, and were barred by the statute of frauds. Specifically, she argued plaintiffs
had not shown the existence of a writing subscribed by any trustee of the Boehmler trust;
the assignment of the trust deed did not mention any carports and could not constitute the
written agreement; and plaintiffs could not show a writing signed by any trustee that
authorized Douthit or any other person to act as an agent for the Boehmler trust.
Before the hearing on First Security's demurrer, the trial court sustained Lorenz's
demurrer with leave to amend and plaintiffs filed a first amended complaint containing
the same causes of action. In part, plaintiffs alleged defendants deliberately or
negligently made misrepresentations, or deliberately withheld information, concerning
5
the existence of carports in order to induce them to purchase the note and trust deed;
defendants breached the written assignment by failing to deliver a separate assignment of
the note and also by delivering an invalid assignment of the trust deed; and defendants
owed them a duty to accurately disclose information about the type and quality of the
property securing the note and deed of trust, and negligently disclosed inaccurate
information on May 21, 2007.
Lorenz and First Security refiled their demurrers, which the court sustained
without leave to amend. As to Lorenz, the court ruled plaintiffs' claims were barred by
the section 366.2 statute of limitations and the statute of frauds. It observed it had
previously permitted plaintiffs leave to amend and plaintiffs offered no argument as to
how future amendment would cure the defects in their pleading. As to First Security, the
court ruled the breach of contract cause of action was time-barred, and the entire first
amended complaint was barred by the statute of frauds. Plaintiffs appeal.4
DISCUSSION
I. Standard of Review
4 As to Lorenz, plaintiffs' notice of appeal states they are appealing a "[j]udgment of
dismissal after an order sustaining a demurrer," but the notice of appeal erroneously
identifies the court's April 13, 2012 order sustaining Lorenz's demurrer without leave to
amend, not the ensuing April 27, 2012 judgment. The April 13, 2012 order is not
appealable (Los Altos Golf and Country Club v. County of Santa Clara (2008) 165
Cal. App. 4th 198, 202), but because a judgment has actually been entered, we will
liberally construe the notice of appeal (ibid.; Cal. Rules of Court, rules 8.100(a)(2),
8.104), as from the judgment of dismissal entered April 27, 2012. (See also Doan v.
State Farm General Ins. Co. (2011) 195 Cal. App. 4th 1082, 1090, fn. 4.)
6
"On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, . . . [w]e give the complaint a reasonable interpretation, reading
it as a whole and its parts in their context. [Citation.] Further, we treat the demurrer as
admitting all material facts properly pleaded, but do not assume the truth of contentions,
deductions or conclusions of law." (City of Dinuba v. County of Tulare, supra, 41
Cal.4th at p. 865.) We review the complaint de novo and determine whether the pleading
alleges facts sufficient to state a cause of action. (McCall v. PacifiCare of Cal., Inc.
(2001) 25 Cal. 4th 412, 415.) When a demurrer is sustained without leave to amend, "we
decide whether there is a reasonable possibility that the defect can be cured by
amendment: if it can be, the trial court has abused its discretion and we reverse." (City of
Dinuba, at p. 865.) Plaintiffs may show that an amendment would cure the defect for the
first time to the reviewing court. (San Diego City Firefighters, Local 145 v. Board of
Administration etc. (2012) 206 Cal. App. 4th 594, 606.) If the judgment is correct on any
ground stated in the demurrer, we will affirm it regardless of the trial court's stated
reasons. (Id. at p. 605; Schuster v. Gardner (2005) 127 Cal. App. 4th 305, 312.)
II. Statute of Frauds
In ruling on both demurrers, the trial court ruled plaintiffs' complaint in its entirety
was barred by the statute of frauds. Plaintiffs contend the exhibits attached to their
complaint show sufficient writings to preclude its application. Alternatively, they argue
respondents should be equitably estopped from asserting the statute of frauds because
they have received the benefit of plaintiffs' full performance, and the statute does not
7
apply to a fully-executed oral agreement.5 The trial court did not provide reasoning for
its ruling, and we conclude it was incorrect.
Under the statute of frauds, certain contracts, including contracts for the sale of
real property or an interest in real property, "are invalid, unless they, or some note or
memorandum thereof, are in writing and subscribed by the party to be charged . . . ."
(Civ. Code, § 1624; Sterling v. Taylor (2007) 40 Cal. 4th 757, 761 & fn. 5.) The party to
be charged means " ' "the party to be charged in court with the performance to the
obligation, i.e., the defendant in the action brought to enforce the contract." ' " (Secrest,
supra, 167 Cal.App.4th at p. 553.) The statute of frauds "does not require a written
contract; a 'note or memorandum . . . subscribed by the party to be charged' is adequate.
[Citation.] . . . [I]n most instances it is not even necessary that the parties intended the
memorandum to serve a contractual purpose. [fn.] [Citations.] [¶] A memorandum
satisfies the statute of frauds if it identifies the subject of the parties' agreement, shows
that they made a contract, and states the essential contract terms with reasonable
certainty. [Citations.] 'Only the essential terms must be stated, " 'details or particulars'
5 Plaintiffs' assertion of estoppel is unavailing, as their only claim of performance is
payment of $207,000. It is true that a contract subject to the statute of frauds that lacks
the requisite writing can be enforced when a party has partially performed. (In re
Marriage of Benson (2005) 36 Cal. 4th 1096, 1108.) Part performance means the party
seeking enforcement of the contract changed position to "such an extent that the
application of the statute of frauds would result in an unjust or unconscionable loss,
amounting in effect to a fraud." (Secrest v. Security National Mortgage Loan Trust 2002-
2 (2008) 167 Cal. App. 4th 544, 555 (Secrest); see also Anderson v. Stansbury (1952) 38
Cal. 2d 707, 715.) But payment of money is not sufficient part performance to invoke
estoppel to assert the statute of frauds because the party paying money has an adequate
legal remedy. (Anderson v. Stansbury, at p. 716; Secrest, at p. 555.)
8
need not [be]. What is essential depends on the agreement and its context and also on the
subsequent conduct of the parties . . . ." ' " (Sterling v. Taylor, at p. 766.)
"[T]he writing requirement of the statute of frauds ' "serves only to prevent the
contract from being unenforceable" [citation]; it does not necessarily establish the terms
of the parties' contract.' [Citation.] Unlike the parol evidence rule, which 'determines the
enforceable and incontrovertible terms of an integrated written agreement,' the statute of
frauds 'merely serve[s] an evidentiary purpose.' " (Sterling v. Taylor, supra, 40 Cal.4th at
p. 766.) That is, the doctrine requires " 'reliable evidence of the existence and terms of
the contract and to prevent enforcement through fraud or perjury of contracts never in
fact made. The contents of the writing must be such as to make successful fraud unlikely,
but the possibility need not be excluded that some other subject matter or person than
those intended will also fall within the words of the writing. Where only an evidentiary
purpose is served, the requirement of a memorandum is read in the light of the dispute
which arises and the admission of the party to be charged; there is no need for evidence
on points not in dispute.' " (Id. at pp. 766-767, italics omitted.)
Lorenz's main position is that plaintiffs failed to allege a valid contract because the
written assignment lacks essential terms. She argues the assignment recorded on May 21,
2007, is not an agreement to convey a security interest in a condominium with two
carports; that the assignment "says nothing about any carports." And, she points out, the
appraisal report, which plaintiffs allege became a part of the contract, is neither signed by
Boehmler nor accompanied by anything in writing authorizing Taylor to be Boehmler's
agent. First Security makes a similar argument, citing authority for the proposition that
9
"[i]n the statute of frauds context, it is well accepted that an agreement for the sale of real
property must contain all essential elements of the agreement." It maintains the trial
court did not abuse its discretion in determining that the statute of frauds bars plaintiffs'
causes of action.
Respondents' arguments are unconvincing. It is a question of law whether a
memorandum, considered in light of the circumstances surrounding its making, complies
with the statute of frauds. (Sterling v. Taylor, supra, 40 Cal.4th at p. 772.) " 'The Statute
of Frauds was not enacted to afford persons a means of evading just obligations; nor was
it intended to supply a cloak of immunity to hedging litigants lacking integrity; nor was it
adopted to enable defendants to interpose the Statute as a bar to a contract fairly, and
admittedly, made. In brief, the Statute "was intended to guard against the perils of
perjury and error in the spoken word." Therefore, if after a consideration of the
surrounding circumstances, the pertinent facts and all the evidence in a particular case,
the court concludes that enforcement of the agreement will not subject the defendant to
fraudulent claims, the purpose of the Statute will best be served by holding the note or
memorandum sufficient even though it is ambiguous or incomplete.' " (Sterling v.
Taylor, supra, 40 Cal.4th at pp. 770-771.)
In Sterling v. Taylor, supra, 40 Cal. 4th 757, the California Supreme Court
explained that "[a] memorandum of a contract for the sale of real property must identify
the buyer, the seller, the price, and the property." (Id. at p. 772.) Here, the parties
entered into an assignment of all beneficial interest in the trust deed secured by real
property, not a contract for the sale of the property itself. But the assignment to plaintiffs
10
was in writing and executed by Boehmler as trustee of the Boehmler trust; the assignment
identified plaintiffs as the assignees; it states plaintiffs gave valuable consideration; and
the assignment contains the street address and a legal description of the real property at
issue. Furthermore, there need not be a single contract or even a contractual purpose on
the part of the parties, more than one memorandum can make up the agreement, the party
to be charged need not sign all of the documents, and extrinsic evidence is admissible to
explain any deficient description in the memorandum. (Sterling v. Taylor, supra, 40
Cal.4th at pp. 766, 768, 770, fn. 9 [discussing Brewer v. Horst & Lackmund Co. (1900)
127 Cal. 643, which interpreted two telegrams in light of the circumstances under which
they were made and held that together they constituted the memorandum and were
sufficient for purposes of the statute of frauds; Brewer "plainly endorsed the
consideration of extrinsic evidence not merely to 'define the limits' of the parties'
agreement, but to determine in the first instance whether the telegrams reflected a
contract with sufficient certainty to comply with the statute of frauds"]; Frost v. Alward
(1917) 176 Cal. 691; Derrick v. C.W.R. Ford Co. (1915) 27 Cal. App. 456.) Here, the
purchase price is reflected in Rios's May 18, 2007 handwritten acknowledgment of
receipt, attached as an exhibit to plaintiffs' complaint, and that receipt constitutes
evidence of the surrounding circumstances in the assignment's making that we are
entitled to consider to explain the term "a valuable consideration" (capitalization omitted)
referenced in the assignment. (See Sterling, at p. 767 [extrinsic evidence can be used "to
explain essential terms that were understood by the parties but would otherwise be
unintelligible to others"]; see also First Nat'l Mortg. Co. v. Federal Realty Inv. Trust (9th
11
Cir. 2011) 631 F.3d 1058 [applying California law, and explaining that "[t]he mere fact
that a lease term is 'essential' does not mean it has to be express in the contract"].)
We disagree with the argument that the existence of two designated carports was
an essential term of the assignment for purposes of applying the statute of frauds, and that
the absence of that term thus renders the assignment unenforceable. Of the two
authorities cited by First Security for this proposition, one was decided before Sterling
and the other—Patel v. Liebermensch (2007) 154 Cal. App. 4th 373—which involved the
remedy of specific performance of an option contract, was overruled in Patel v.
Liebermensch (2009) 45 Cal. 4th 344, 346-347. Rather, Sterling explains that " '[a]
written memorandum is not identical with a written contract [citation]; it is merely
evidence of it and usually does not contain all of the terms.' " (Sterling v. Taylor, supra,
40 Cal.4th at p. 766, quoting Crowley v. Modern Faucet Mfg. Co. (1955) 44 Cal. 2d 321,
323.) The fact the property securing the trust deed may or may not have had carports is
the sort of " ' " 'detail[] or particular[]' " ' " (Sterling, at p. 766) that need not be specified
for the doctrine's purpose, which is merely to "prevent enforcement through fraud or
perjury of contracts never in fact made." (Ibid.) We emphasize, as the Sterling court
observed, that the statute of frauds is not the same as the parol evidence rule, which
" 'determines the enforceable and incontrovertible terms of an integrated written
agreement . . . .' " (Ibid.)
In sum, given the nature of the written assignment at issue and its contents, the
statute of frauds does not bar plaintiffs' causes of action relating to its enforcement.
12
III. Application of Section 366.2
In demurring to plaintiffs' first amended complaint, Lorenz invoked the one-year
statute of limitation of section 366.2. Plaintiffs contend that limitations period does not
apply to their causes of action against her. Relying on Stoltenberg v. Newman (2009) 179
Cal. App. 4th 287 (Stoltenberg) and Estate of Yool (2007) 151 Cal. App. 4th 867 (Yool),
they argue their causes of action do not involve trustee Boehmler's personal misconduct,
but rather the misconduct of his agents, Rios, Douthit and/or First Security, to whom he
delegated his duties and obligations. Plaintiffs further maintain that, as pleaded, all five
causes of action did not accrue until August of 2010, when they first sustained damages
from losing the property to foreclosure.
"Section 366.2 is a 'general statute of limitations for all claims against a
decedent.' " (Dacey v. Taraday (2011) 196 Cal. App. 4th 962, 980, quoting Wagner v.
Wagner (2008) 162 Cal. App. 4th 249, 255.) Subdivision (a) of section 366.2 limits a
creditor's time for filing an action to one year after the date of death: "If a person against
whom an action may be brought on a liability of the person, whether arising in contract,
tort, or otherwise, and whether accrued or not accrued, dies before the expiration of the
applicable limitations period, and the cause of action survives, an action may be
commenced within one year after the date of death . . . ." (§ 366.2, subd. (a).)
Subdivision (b) of the statute provides: "The limitations period provided in this section
for commencement of an action shall not be tolled or extended for any reason except as
provided in" certain specifically enumerated situations, including for creditor claims in
13
the administration of estates of decedents.6 (§ 366.2, subd. (b); Dacey, at p. 980.) The
statute "is not concerned with possible claims against estate property. Rather, this statute,
when considered within the context of contracts, applies to claims against the estate on all
causes of action on a decedent's debts when the causes of action survive the decedent's
death. Thus, under the statute of limitations, a party has an obligation to file an action
when the party fails to perform as promised." (Dacey, at p. 982.)
Section 366.2 will not apply when the debt was not enforceable against the
decedent during his or her life. (Dacey v. Taraday, supra, 196 Cal.App.4th at p. 986
[holding section 366.2 did not apply where decedent did not breach the contract (a
dissolution agreement involving obligations contingent upon a settlement or victory in
certain litigation) before his death, and the breach was committed after the decedent's
death by the administrator of the decedent's estate].) But it will bar an action when the
breach or misconduct occurs before the decedent's death and the claim is not discovered
while the decedent is alive. (Id. at p. 983; see Wagner v. Wagner, supra, 162 Cal.App.4th
at p. 256; Bradley v. Breen (1999) 73 Cal. App. 4th 798, 800 [the statute "governs causes
6 In full, section 366.2, subdivision (b) states: "The limitations period provided in
this section for commencement of an action shall not be tolled or extended for any reason
except as provided in any of the following, where applicable: [¶] (1) Sections 12, 12a,
and 12b of this code. [¶] (2) Part 4 (commencing with Section 9000) of Division 7 of the
Probate Code (creditor claims in administration of estates of decedents). [¶] (3) Part 8
(commencing with Section 19000) of Division 9 of the Probate Code (payment of claims,
debts, and expenses from revocable trust of deceased settlor). [¶] (4) Former Part 3
(commencing with Section 21300) of Division 11 of the Probate Code (no contest
clauses), as that part read prior to its repeal by Chapter 174 of the Statutes of 2008."
14
of action against a decedent that existed at the time of death, 'whether accrued or not
accrued' "].)
Here, the gravamen of plaintiffs' causes of action for fraud, negligent
misrepresentation, rescission, breach of contract and negligence is that in April and May
2007, before his death, Boehmler, via his agents Rios, Douthit, and/or First Security,
intentionally or negligently made misrepresentations to plaintiffs about the property
securing the trust deed, causing them damages upon the property's foreclosure. The
misrepresentations were made in telephone conversations and meetings in Orange County
or via delivery of the January 2004 appraisal report, which was prepared at the request of
First Security. Plaintiffs generally allege that each defendant acted as the agent or
employee of the other defendants at all times, the defendants "did all things alleged here
within the scope and course of such agency or employment," and the defendants
"authorized and ratified" the acts of the other defendants. These are proper allegations of
agency giving rise to Boehmler's liability as a principal. (See C.R. v. Tenet Healthcare
Corp. (2009) 169 Cal. App. 4th 1094, 1110-1112 [agency allegations are subject to general
pleading requirements]; see Grigsby v. Hagler (1938) 25 Cal. App. 2d 714, 715 ["[A]
principal is liable to third parties . . . for the frauds or other wrongful acts committed by
such agent in and as a part of the transaction of [the principal's] business"].)
Plainly, "had [Boehmler] been alive, any [contract or] tort action arising out of the
acts alleged by plaintiffs would have been against him, either individually or as trustee, or
both; and trust assets as well as his personal assets might have been reached for his
15
liability." (Stoltenberg, supra, 179 Cal.App.4th at p. 295.) The fact their claims could
also be asserted against Boehmler's agents does not take this outside of a claim for
" '[l]iability of the person,' " which means " ' "[l]iability for which one is personally
accountable and for which a wronged party can seek satisfaction out of the wrongdoer's
personal assets." ' " (Dacey v. Taraday, supra, 196 Cal.App.4th at p. 982, quoting Yool,
supra, 151 Cal.App.4th at p. 875.)
Stoltenberg does not compel a different result. In Stoltenberg, decided on appeal
from a summary judgment, the plaintiffs sued a successor trustee of a trust for the alleged
fraud of the predecessor trustee, Newman, who died before the complaint was filed.
(Stoltenberg, supra, 179 Cal.App.4th at pp. 290-291.) Responding to the plaintiffs'
argument that their action was against the trust, and not the trustee (id. at p. 293), the
Court of Appeal held that section 366.2 applied to the action against the successor trustee
for the deceased predecessor's own communications on the trust's behalf concerning the
refinance of a retail center. (Stoltenberg, at pp. 290-291, 293, 295-296.) According to
the court, "Newman's communications that are the subject of this action were made as
trustee of the Newman Family Trust and on its behalf" (id. at p. 293) and thus plaintiffs'
claims were "for the personal misconduct of the settlor/trustee on behalf of and for the
benefit of the trust, that was completed entirely before the settlor/trustee died, and for
which the settlor/trustee could have been held personally liable." (Id. at p. 296.) Here, as
in Stoltenberg, the alleged misrepresentations were made and/or ratified by Boehmler or
his agents and they occurred before Boehmler's death. Thus, section 366.2 bars plaintiffs'
claims against Lorenz as the successor trustee for Boehmler's actions.
16
Nor does plaintiffs' reliance on Yool, supra, 151 Cal. App. 4th 867 assist them.
There, the decedent had bequeathed all of her property into a trust with her four children
as beneficiaries. (Id. at p. 870.) The decedent and her daughter had purchased a
residence together, but that property was not placed in the decedent's trust before her
death. (Ibid.) After the decedent's death, the daughter, via Probate Code petition,
asserted a claim for a resulting trust in her favor on the ground the decedent had not
provided consideration for the residence, never intended to take beneficial title, and
accepted legal title merely as an accommodation to facilitate financing. (Id. at p. 871.)
Her siblings asserted the petition was barred by section 366.2. (Ibid.)
The Yool court held that section 366.2 did not apply for two reasons. First, a claim
for a resulting trust, which arose under operation of law and did not implicate the
personal liability of the purported trustee, did not state a cause of action " 'on a liability of
the person' " as required to invoke section 366.2. (Yool, supra, 151 Cal.App.4th at pp.
875-876.) Second, at the time of the decedent's death, nothing had occurred to affect the
rights of her daughter; that is, the decedent never repudiated the agreement or showed
any resistance to conveying the property to the plaintiff before death. (Id. at p. 877.)
Accordingly, no cause of action, accrued or not yet accrued, existed at the time of the
decedent's death and thus no action that could have been commenced on that cause. (Id.
at pp. 876-877.) Indeed, the facts were that the decedent would have conveyed title to the
daughter had the daughter asked, and "[t]he legal issue of who owned the [residence] and
to whom it should be conveyed only arose after [the decedent's] death." (Ibid.)
17
IV. Arguments That Application of Section 366.2 Is Precluded
Anticipating our conclusion that section 366.2 bars their claims against Lorenz,
plaintiffs argue we should conclude (1) Lorenz is equitably estopped from asserting the
statute as a defense; (2) the statute is unconstitutional absent some requirement of written
notice to a decedents' creditors; (3) the trust's failure to institute probate proceedings
precludes its application; (4) the delayed discovery rule applies; and (5) Probate Code
section 19008 applies and entitles them to a resulting trust by operation of law,
precluding application of section 366.2.
A. Equitable Estoppel
Equitable estoppel, in the context of statutes of limitation, " ' "comes into play
only after the limitations period has run and addresses itself to the circumstances in which
a party will be estopped from asserting the statute of limitations as a defense to an
admittedly untimely action because his conduct has induced another into forbearing suit
within the applicable limitations period." ' Unlike the doctrine of equitable tolling, which
takes its life from the statute of limitations itself, the doctrine of equitable estoppel
' "takes its life . . . from the equitable principle that no man will be permitted to profit
from his own wrongdoing in a court of justice." ' " (Cordova v 21st Century Ins. Co.
(2005) 129 Cal. App. 4th 89, 96, fns. omitted, quoting Battuello v. Battuello (1998) 64
18
Cal. App. 4th 842, 847-848, superseded by statute as stated in Stewart v. Seward (2007)
148 Cal. App. 4th 1513, 1522, fn. 6.)7
"A party claiming an estoppel must prove four elements: (1) the party to be
estopped must know the facts; (2) the estopped party must intend that his conduct shall be
acted upon or must act in a way that causes the other party to believe that was his intent;
(3) the party asserting estoppel must be unaware of the true facts; and (4) he must
detrimentally rely on the other party's conduct. [Citation.] If an estoppel is established,
the estopped party is deprived of applicable rights or defenses. [Citation.] While
estoppel generally is a question of fact, if the facts are undisputed and only one
reasonable conclusion can be drawn from them, it becomes a question of law." (Estate of
Bonzi, supra, 216 Cal.App.4th at p. 1106.) Given these principles, the question of
equitable estoppel is generally inappropriate at the demurrer stage. (Ard v. County of
Contra Costa (2001) 93 Cal. App. 4th 339, 346-347.)
7 "The paradigmatic equitable estoppel arises where a prospective defendant induces
a prospective plaintiff not to protect his rights, and when the plaintiff attempts to assert
them, raises a defense that exploits the plaintiff's lapse. The classic example is the
assertion of a procedural bar, such as a statute of limitations, after the defendant has
induced plaintiff not to file suit within the allotted time. If the court is satisfied that the
facts and the equities justify application of the doctrine, it will hold the defendant
estopped to assert the defense, and the matter will proceed as if the claim had been
seasonably asserted." (City of Hollister v. Monterey Ins. Co. (2008) 165 Cal. App. 4th
455, 487.) The doctrine is codified in Evidence Code section 623, which states:
"Whenever a party has, by his own statement or conduct, intentionally and deliberately
led another to believe a particular thing true and to act upon such belief, he is not, in any
litigation arising out of such statement or conduct, permitted to contradict it." (Estate of
Bonzi (2013) 216 Cal. App. 4th 1085, 1105-1106.)
19
Our task is to determine if plaintiffs pleaded the elements of equitable estoppel
such that Lorenz would be barred as a matter of law to assert the section 366.2 statute of
limitations. But plaintiffs do not demonstrate they did so by reference to their pleadings.
Rather, they argue Lorenz's actual or constructive fraud, and her failure to notify the
trust's creditors or establish a probate, compels application of the doctrine. We infer the
trial court rejected application of the doctrine, and indulging all intendments and
presumptions in support of the trial court's ruling (Denham v. Superior Court (1970) 2
Cal. 3d 557, 564), we uphold it. We perceive nothing in plaintiffs' arguments
demonstrating that Lorenz should be precluded from asserting section 366.2 as a defense
because she engaged in some conduct inducing them to forebear filing suit within the
applicable limitations period. (Contra, Battuello v. Battuello, supra, 64 Cal.App.4th at p.
848; Embree v. Embree (2004) 125 Cal. App. 4th 487, 497 [finding no evidence of
misconduct by the beneficiaries, "or promises on their part that induced [the plaintiff's]
forbearance to file suit" so as to preclude assertion of the statute of limitations on
equitable estoppel grounds].)
B. Delayed Discovery
Plaintiffs contend the trial court erred by failing to rule that the statute of
limitations did not begin to run until their discovery of the fraud and negligence on April
1, 2010. As to the claims against Lorenz, which are subject to the section 366.2 statute of
limitations, the contention is without merit.
As we have pointed out above, the Legislature has expressly provided that the
one-year limitations period of section 366.2 applies to causes of action "whether
20
accrued or not accrued" (§ 366.2, subd. (a)) and "shall not be tolled or extended for any
reason . . . ." except in circumstances not applicable here. (§ 366.2, subd. (b), italics
added; see Bradley v. Breen, supra, 73 Cal.App.4th at p. 804.) "We . . . presume that the
Legislature was well aware of the usual rules on accrual of actions . . . when it amended
section 366.2" and thus it applies to bar plaintiffs' causes of action against Lorenz
regardless of whether they have accrued under ordinary rules applicable to such claims.
(Bradley, at pp. 804-805; see Battuello v. Battuello, supra, 64 Cal.App.4th at p. 847,
fn. 1.) This includes when a cause of action does not accrue until the plaintiff discovers,
or should discover, its existence. (See Fox v. Ethicon Endo-Surgery, Inc. (2005) 35
Cal. 4th 797, 807; Ferraro v. Camarlinghi (2008) 161 Cal. App. 4th 509, 554.) Thus,
where a defendant perpetrates a fraud of which a plaintiff is unaware, the decedent's
death triggers the limitations period prescribed by section 366.2, regardless of any accrual
rule otherwise governing the claim. (Ferraro, at p. 554.) "The result is to require would-
be claimants to seek out and assert any claims they might have against the decedent
within a year of his death, or suffer the loss of those claims." (Ibid.) Because the
Legislature has decided that the delayed discovery rule will not operate to avoid the
section 366.2 limitations period, plaintiffs may not apply it to their claims against Lorenz.
C. Constitutionality of Section 366.2
In somewhat disjointed arguments, plaintiffs challenge the constitutionality of
section 366.2. Pointing out it does not include a written notice requirement to creditors
of an estate, they contend the statute violates due process by "unfairly eliminat[ing]
legitimate and valuable property rights without giving the Creditor the right and
21
opportunity to be heard." They also argue application of section 366.2 against creditors
so as to eliminate a creditors' claim "constitutes a 'taking' of property in the constitutional
sense, since the Creditor loses his otherwise enforceable right without any prior notice."
Plaintiffs assert that the controlling authority is the United State Supreme Court's opinion
in North Georgia Finishing, Inc. v. DiChem, Inc. (1975) 419 U.S. 601.
We reject the contentions. As for plaintiffs' "takings" argument, they did not raise
it below and therefore did not preserve it for appeal. (Kuperman v. San Diego County
Assessment Appeal Bd. No. 1 (2006) 137 Cal. App. 4th 918, 930 [constitutional due
process challenge to limitations period was not preserved for appeal].)
Plaintiffs otherwise do not state a due process violation. "Long-established law
recognizes that statutes of limitations are within the jurisdictional authority of the state
Legislature." (Bettencourt v. City and County of San Francisco (2007) 146 Cal. App. 4th
1090, 1102.) "It is settled that the Legislature may enact a statute of limitations
'applicable to existing causes of action or shorten a former limitation period if the time
allowed to commence the action is reasonable.' [Citations.] [¶] Statutes of limitation are
'within the constitutional power of the legislature of a state' [citation]; they are 'vital to
the welfare of society and are favored by the law . . . to be viewed as statutes of repose,
and as such constitute meritorious defenses.' " (Scheas v. Robertson (1951) 38 Cal. 2d
119, 125-126.) This court has observed that " ' "[a] constitutional right is always subject
to reasonable statutory limitations as to the time within which to enforce it, if the
constitution itself does not provide otherwise. The power of the legislature to provide
reasonable periods of limitation, therefore, is unquestioned, and the fixing of time limits
22
within which particular rights must be asserted is a matter of legislative policy the
nullification of which is not a judicial prerogative." ' [Citations.] Statutes of limitations
further a public policy of 'promot[ing] repose by giving security and stability to human
affairs.' " (Kuperman v. San Diego County Assessment Appeal Bd. No. 1, supra, 137
Cal.App.4th at pp. 931-932.) And in enacting section 366.2 in particular, the Legislature
intended to protect decedents' estates from creditors' stale claims; the drafters believed
the one-year limitation period " 'serves "the strong public policies of expeditious estate
administration and security of title for distributees, and is consistent with the concept that
a creditor has some obligation to keep informed of the status of the debtor." ' "
(Collection Bureau of San Jose v. Rumsey (2000) 24 Cal. 4th 301, 308; see also Wagner v.
Wagner, supra, 162 Cal.App.4th at p. 255; Levine v. Levine (2002) 102 Cal. App. 4th
1256, 1263-1264.)
These important state interests defeat plaintiffs' constitutional due process
arguments. There is no question that "[t]he right to procedural due process guaranteed by
the United States and California Constitutions requires that an individual be afforded
notice and an opportunity for hearing before he is deprived of a significant property
interest." (Trihedron Internat. Assurance, Ltd. v. Superior Court (1990) 218 Cal. App. 3d
934, 946, citing Randone v. Appellate Department (1971) 5 Cal. 3d 536, 541.) But
plaintiffs provide no authority for the proposition that an unadjudicated claim in litigation
is a significant property interest to which the right of procedural due process guaranteed
by the United States and California Constitutions applies. North Georgia Finishing, Inc.
v. District-Chem, Inc., supra, 419 U.S. 601 does not stand for any such proposition.
23
North Georgia is distinguishable because it involved the prejudgment garnishment of a
bank account. In the context of traditional prejudgment creditors' remedies, the state has
no substantial interest to protect in providing plaintiffs with a prejudgment financial
advantage over defendants. (Trihedron Internat. Assurance, Ltd. v. Superior Court, at p.
947 [distinguishing North Georgia and other cases implicating due process].)
Here, as stated, the state has an interest in promoting repose and stability to human
affairs, as well as expeditious estate administration. (Kuperman v. San Diego County
Assessment Appeal Bd. No. 1, supra, 137 Cal.App.4th at pp. 931-932; Collection Bureau
of San Jose v. Rumsey, supra, 24 Cal.4th at p. 308.) On the foregoing grounds, we reject
plaintiffs' constitutional due process challenge to section 366.2.
D. Failure to Institute Probate Proceedings/Application of Probate Code Section 19008
Plaintiffs contend the Boehmler trust's failure to file a probate proceeding or give
timely notice of Boehmler's death to creditors "gives rise to an inference that the Trust
intended to mislead" them with respect to the time limitations for filing an action. They
continue, citing Valentine v. Read (1996) 50 Cal. App. 4th 787: "If no probate estate is
opened and neither the trustee of a revocable inter vivos trust nor any beneficiary thereof
causes trust creditors' claim proceedings to be instituted under [Probate] Code [sections]
19000 et seq., then the trust assets can be held liable to a creditor of the decedent under
otherwise applicable principles of law." (Some capitalization omitted.) In a somewhat
related but unclear argument, plaintiffs seem to argue they are entitled to a resulting trust
by operation of law under Probate Code sections 19001 and 19008. Plaintiffs conclude
that given these arguments, section 366.2 does not apply to this case.
24
Probate Code section 19000 et seq., governs claims procedures for revocable
trusts of deceased settlors. (Levine v. Levine, supra, 102 Cal.App.4th at p. 1260.)
Plaintiffs have neither alleged nor attached documents reflecting the type or nature of the
Boehmler trust, whether it is revocable or irrevocable. But plaintiffs' arguments are
meritless in any event, as they misread Probate Code section 19008.8
As the appellate court explained in Wagner v. Wagner, supra, 162 Cal. App. 4th
249, the practical effect of the provisions of Probate Code section 19000 et seq. " 'is
generally to shorten the time frame within which a claimant can assert a claim against a
decedent's estate or trust. If the trustee files the proposed notice to creditors with the
court under section 19003 of the Probate Code right after the settlor's death, and then
proceeds to immediately give the notices required in Probate Code sections 19040 and
19050, a creditor could have just over 30 days to submit a claim . . . .' " (Wagner, at p.
255, quoting Levine v. Levine, supra, 102 Cal.App.4th at p. 1261.) The Wagner court
then cited Probate Code section 19008 and summarized its impact: " 'If no probate or
trust claims procedure has been initiated, . . . the short limitations periods applicable to
claims filed in probate or trust claims proceedings do not apply; and the availability of
trust property to any creditor of the deceased settlor "shall be as otherwise provided by
law." ' [Citation.] Thus, absent a trustee's election to file a formal notice to claimants,
8 Probate Code section 19008 provides: "If there is no proceeding to administer the
estate of the deceased settlor, and if the trustee does not file a proposed notice to creditors
pursuant to [Probate Code s]ection 19003 and does not publish notice to creditors
pursuant to Chapter 3 (commencing with [Probate Code s]ection 19040), then the liability
of the trust to any creditor of the deceased settlor shall be as otherwise provided by law."
25
the time to assert a claim against a decedent's revocable trust is governed by the more
general statute of limitations for all claims against a decedent embodied in Code of Civil
Procedure section 366.2." (Wagner, at p. 255, in part citing Embree v. Embree, supra,
125 Cal.App.4th at p. 494 & Prob. Code, § 19008, italics added.) Contrary to plaintiffs'
arguments, Probate Code section 19008 compels application of the one-year limitations
period of Code of Civil Procedure section 366.2 in this case.
V. Void Transaction
Plaintiffs contend the assignment of the deed of trust without an assignment of the
promissory note renders the entire transaction void, and there is no time limit to attack a
void transfer. They maintain the trial court erred by failing to invalidate the transaction
under its "inherent equitable powers," including such powers under Probate Code
sections 850 and 856. Plaintiffs' argument and their allegation that the Boehmler trust did
not assign the note, however, is contradicted by the assignment of the deed of trust, which
expressly states that the Boehmler trust assigned its interest in the deed of trust "together
with the Promissory Note secured by said Deed of Trust . . . ." We are entitled to take
judicial notice of the assignment and rely on it in disregarding the contrary allegations in
the first amended complaint. (Accord, Fontenot v. Wells Fargo Bank, N.A. (2011) 198
Cal. App. 4th 256, 271 & fn. 10.)
Furthermore, plaintiffs do not explain in any meaningful way how these arguments
relate to their asserted causes of action, particularly their cause of action for rescission,
which would extinguish the contract (Civ. Code, § 1588), or how their first amended
complaint states facts constituting some other cause of action. Such arguments,
26
untethered to any facts alleged in plaintiffs' complaint, do not demonstrate that the
complaint is sufficient to state a viable cause of action, and we do not consider them.
(Mansell v. Board of Administration (1994) 30 Cal. App. 4th 539, 545-546 ["We are not
required to search the record to ascertain whether it contains support for [the plaintiffs']
contentions. [Citation.] . . . This court is not inclined to act as counsel for . . .
appellant . . . .' [Citation.] [¶] Because it is not this court's function to serve as
[plaintiff's] backup appellate counsel . . . the . . . contentions are waived"].) Nor have
plaintiffs shown on appeal that a potentially effective amendment is apparent. (Herrera
v. Federal Nat. Mort. Assn. (2012) 205 Cal. App. 4th 1495, 1501; Camsi IV v. Hunter
Technology Corp. (1991) 230 Cal. App. 3d 1525, 1542.)
VI. Plaintiffs' Claims Against First Security
As for plaintiffs' causes of action for fraud, negligent misrepresentation, breach of
oral contract and negligence against First Security, we conclude each is barred by their
respective statutes of limitation (§§ 338, subd. (d) [three-year limitations period for
fraud]; 339, subd. (1) [two-year limitations period for breach of oral contract]; 335.1
[two-year limitations period for general negligence]) and that the discovery rule, which
postpones accrual of a cause of action until the plaintiff "discovers, or has reason to
discover, the cause of action" (Fox v. Ethicon Endo–Surgery, Inc., supra, 35 Cal.4th at
pp. 806-807) does not apply.
"Under the discovery rule, suspicion of one or more of the elements of a cause
of action, coupled with knowledge of any remaining elements, will generally trigger the
statute of limitations period." (Fox v. Ethicon Endo–Surgery, Inc., supra, 35 Cal.4th at
27
p. 807.) The statute of limitations begins to run when the plaintiff has notice or
information that would put a reasonable person on inquiry. (Jolly v. Eli Lilly & Co.
(1988) 44 Cal. 3d 1103, 1110-1111.) "A plaintiff need not be aware of the specific 'facts'
necessary to establish the claim; that is a process contemplated by pretrial discovery.
Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she
must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is
clear that the plaintiff must go find the facts; she cannot wait for the facts to find her."
(Id. at p. 1111.) "[T]he delayed discovery rule has most often been described as an
equitable doctrine designed to achieve substantial justice in situations where one party
has an unfair advantage and it would be inequitable to deprive ' "an 'otherwise diligent'
plaintiff in discovering his cause of action." [Citations.]' [Citations.] It is normally
applied in situations where there is a 'fiduciary, confidential or privileged relationship'—
basically, where individuals hold 'themselves out as having a special skill, or are required
by statute to possess a certain level of skill' and it is manifestly unfair to deprive the
plaintiffs of their cause of action before they are aware that they have been injured."
(Brisbane Lodging, L.P. v. Webcor Builders, Inc. (2013) 216 Cal. App. 4th 1249, 1261-
1262.)
This court explained in Kline v. Turner (2001) 87 Cal. App. 4th 1369, 1374, that
" ' "[u]nder this rule constructive and presumed notice or knowledge are equivalent to
knowledge. So, when the plaintiff has notice or information of circumstances to put a
reasonable person on inquiry, or has the opportunity to obtain knowledge from sources
28
open to [her] investigation (such as public records or corporation books), the statute
commences to run." ' "
We reject application of the delayed discovery doctrine because at the time
plaintiffs received the assignment in May 2007, the condominium plan for the property,
which was recorded in August 1973 and specifically referenced in the assignment,
showed no designated carports for the property. Thus, under these circumstances
plaintiffs cannot plead facts showing they lacked the means of obtaining knowledge in
the exercise of reasonable diligence concerning the existence or absence of designated
carports for the property.
As for plaintiffs' breach of contract cause of action against First Security, we
conclude it fails to state facts sufficient to constitute a cause of action. Plaintiffs allege
defendants breached the assignment by failing to deliver a "separate proper assignment"
of the promissory note. But First Security was not a party to the written assignment,
which is attached to the complaint. And we have already concluded that the written
assignment states the note was assigned with the deed of trust, and on that basis we
disregard plaintiffs' contrary allegations. (Fontenot v. Wells Fargo Bank, N.A., supra,
198 Cal.App.4th at p. 271 & fn. 10.) Because this was the only theory alleged in support
of their breach of contract action, we conclude the trial court properly sustained First
Security's demurrer to it.
Plaintiffs otherwise make only few, cursory arguments that apply directly to the
causes of action against First Security. In particular, they contend the trial court
reversibly erred by failing to find their complaint sufficient or construe its allegations
29
liberally; the trial court erred by failing to find First Security breached its duty to disclose
facts; the assignment, which was not given to plaintiffs until after the close of escrow, is
vague and ambiguous as to the existence of carports; and First Security breached the
assignment by failing to prepare a "proper" assignment.
Even on a demurrer, we apply the settled appellate principles that the trial court's
judgment is presumed correct, and that plaintiffs must affirmatively show error.
(Denham v. Superior Court, supra, 2 Cal.3d at p. 564; see Dietz v. Meisenheimer &
Herron (2009) 177 Cal. App. 4th 771, 799.) Where plaintiffs do not support issues with
pertinent or cognizable legal argument we may deem them abandoned without
discussion. (Dietz, at p. 799; Landry v. Berryessa Union School Dist. (1995) 39
Cal. App. 4th 691, 699-700.) " 'It is not our place to construct theories or arguments to
undermine the judgment and defeat the presumption of correctness. When an appellant
fails to raise a point, or asserts it but fails to support it with reasoned argument and
citations to authority, we treat the point as waived.' " (Dietz, at p. 799.) Further, it is
plaintiffs' obligation to tailor their appellate arguments to the appropriate standard of
review. (People v. Foss (2007) 155 Cal. App. 4th 113, 126 ["When an appellant fails to
apply the appropriate standard of review, the argument lacks legal force"].)
The above-referenced principles lead us to conclude plaintiffs have not presented
sufficient arguments or legal authority to justify reversal. Disregarding the applicable
legal principles for appellate review of an order sustaining a demurrer, plaintiffs advance
mostly substantive arguments, and otherwise state only general principles. For example,
citing the general principle that a party to a business transaction has a duty to exercise
30
reasonable care to disclose true facts relating to the transaction, plaintiffs contend First
Security had a duty to clearly disclose there was no designated parking, and they had the
right to rely upon the appraisal report. They contend the assignment "was never shown to
[them] until after the close of escrow" and it is "vague and ambiguous as to whether
parking spaces were included," which ambiguity "must be construed against First
Security." They argue "First Security assumed the duty of preparing the Assignment"
and "[b]y that conduct, it formed an implied, if not actual, contract that First Security
prepare a proper Assignment" but did not, constituting a breach of contract subject to
the four-year statute of limitations. Plaintiffs argue, "The [trial court's] analysis in its
rulings . . . do not adhere to applicable legal criteria in allowing multiple amendments and
was totally arbitrary resulting in a gross miscarriage of justice."
These arguments on appeal do not focus on the elements of each of their causes of
action or the first amended complaint's allegations and their sufficiency. Even where our
review is de novo, appellants must present pertinent arguments on their behalf, or face
forfeiting the issues. Without pertinent argument as to how the allegations of the first
amended complaint are sufficient to state a cause of action, we have no basis to conclude
that pleading is sufficient to survive First Security's demurrer. On that ground alone, we
may affirm the judgment as to First Security.
VII. Leave to Amend
Plaintiffs argue strenuously that the trial court erred by failing to permit them
leave to amend, pointing out they had only one opportunity to amend as to Lorenz and
none as to First Security. However, they have not demonstrated how they can cure the
31
deficiencies in their complaint. We conclude the trial court did not abuse its discretion in
sustaining respondents' demurrers without leave to amend.
DISPOSITION
The judgments are affirmed.
O'ROURKE, J.
WE CONCUR:
McCONNELL, P. J.
AARON, J.
32