Opposition ObjectionsCal. Super. - 6th Dist.March 26, 2021MARGARET M. SCHNECK [SBN. 151695] LAW OFFICES OF MARGARET M. SCHNECK P.O. BOX 1701 San Jose, CA 95109 Telephone: (408) 753-1117 Facsimile: (408) 753-1326 Attorney for Plaintiff RITA KING SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA 10 12 13 RITA KING, vs. Plaintiff, Case No. 21CV381370 OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 14 15 16 MICHAEL E. HINGLE and DOES 1 to 10, Defendants. Date: 3/17/2022 Time: 9:00 a.m. Dept.: 19 Action filed: 3/26/2021 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION This Court previously sustained with leave to amend demurrers to Rita King's first cause of action for breach of contract, fourth cause of action for negligent misrepresentation and sixth cause of action for violation of the Rules of Professional Conduct. Plaintiff amended the complaint but defendant demurs again based primarily on the argument that the entire action is a disguised legal malpractice claim which Rita King has no standing to bring. Plaintiff Rita King was convinced by attorney Michael E. Hingle ("Hingle") to pay him increasing sums because he promised to get criminal charges against her grandson dismissed. The charges were not dismissed. The gravamen of this claim is not that Mr. Hingle breached his professional duty. It is that he misled plaintiff to get her to pay him, including falsely and wrongfully inducing her, a then 92-year-old great grandmother, to refinance her house and pay him the proceeds. OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT Electronically Filed by Superior Court of CA, County of Santa Clara, on 3/4/2022 3:26 PM Reviewed By: L. Nguyen Case #21CV381370 Envelope: 8437160 21CV381370 Santa Clara - Civil 10 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 28 Plaintiff's Verified First Amended Complaint ("FAC") adequately alleges breach of first party contract(s) between Rita King and Defendant. She pleads that Defendant's taking of her money deprived her of a property right which states a cause of action for financial abuse of an elder under Welfare k, Institutions Code section 15610.30. She contends he committed fraud, negligent misrepresentation and that he intentionally inflicted emotional distress when he fraudulently and unlawfully convinced her to pay him. Plaintiff has standing to assert these claims. And the FAC is sufficiently certain to withstand demurrer. Accordingly, defendant's demurrer should be overruled. II. FACTS FROM VERIFIED FIRST AMENDED COMPLAINT Rita King is an elder adult and the great-grandmother of Willie King. (FAC ttl) Willie King was charged with being an accessory to murder and was arraigned on July 20, 2017. (FAC $6) Rita King met Hingle that day and paid him $ 10,000. He promised to get the charges against Willie dropped. (FAC $7) She signed a written fee agreement to pay Hingle $20,000, but was not given the opportunity to first consult counsel and was not provided with a legible copy of the agreement. (FAC tt12) After Rita King made the agreement and paid Hingle, the charges against Willie were not dropped. (FAC $ 14) In December 2017, Willie King purportedly signed another fee agreement with Hingle which reflected that Hingle was paid more money, which came from Rita King. (FAC tt17) Rita King did not sign or receive a copy of the second agreement. (FAC tt18) Willie King was indicted shortly after the second agreement was made and additional funds paid, negating any need for a preliminary hearing. (FAC tt19) Hingle knew or should have known that would happen. (Id.) After the indictment, Hingle against promised Rita King he would get the charges dropped but presented Rita King with yet another fee agreement, entitled "Retainer Agreement for Trial" and induced her to pay another $ 135,000. (FAC tt20) This final agreement acknowledges that Rita King, who was 92 years old at the time, had to refinance her home to pay Hingle. (FAC $21) Rita King relied on Hingle's statments and was induced to take out a mortgage loan and to pay loan proceeds to Hingle. (FAC $23) The charges against Willie were never dropped. (FAC tt24) OPPOSITION TO DEMURRER TO VERIFIFD FIRST AMENDED COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. ARGUMENT A. Standard on Demurrer In ruling on a demurrer, the complaint should be construed "liberally ... with a view to substantial justice between the parties." (Code Civ. Proc., $ 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) A complaint which, considered as a whole, shows any right to relief will withstand a demurrer. (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.) Where a demurrer is granted, the court must specify the grounds. (Code Civ. Proc., $ 472d.) The Court should also liberally grant an opportunity to amend where there is any possibility of correcting the defect. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) B. Rita King has standing to allege breach of contract and negligent misrepresentation. Hingle claims Rita King lacks standing because this is essentially a legal malpractice claim. It is not. A "cause of action" is comprised of a "primary right" of the plaintiff, a corresponding "primary duty" of the defendant, and a wrongful act by the defendant constituting a breach of that duty. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.) The primary right is the plaintiffs right to be free from the particular injury suffered. It must therefore be distinguished from the legal theory on which liability for that injury is premised: "Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief." (Id.) "The nature of a cause of action does not depend on the label the plaintiff gives it or the relief the plaintiff seeks but on the primary right involved." (Khodayari v. Mashburn (2011) 200 Cal.App.4th 1184, 1190.) In Khodayari, the plaintiff sued his former criminal defense attorney who had represented him in prior victim restitution and related probation violation proceedings. (Khodayari, supra, 200 Cal.App.4th at p. 1186.) In addition to alleging legal malpractice, the plaintiff also alleged causes of action for fraud, intentional misrepresentation, concealment, deceit, constructive fraud, negligent misrepresentation, negligence, breach of fiduciary duty, intentional infliction of emotional distress, abuse of process, breach of contract, breach of the implied covenant of good faith and fair dealing, and unfair competition. (Id. at p. 1187.) Because "the primary right involved in all of [his] claims is 'the right to competent legal OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 10 representationI,]'... for application of the actual innocence requirement all are properly characterized as claims for legal malpractice." (Id. at p. 1190.) The outcome in Khodyari should not dictate the outcome here. First, unlike Rita King, plaintiff in that case was the client and alleged legal malpractice in addition to other causes of action. Second, the court there determined that it was appropriate to require plaintiff to prove actual innocence as a predicate to all his causes of action because they all had the same primary right. The case does not hold that every cause of action for breach of contract or negligent misrepresentation against a lawyer states a disguised claim for legal malpractice. The primary right of Rita King's claims is not acting below the standard of care or breaching duties in rendering legal services, i.e. legal malpractice. 1. Defendant's demurrer to Rita Kin 's breach of contract claim should be overruled. 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 28 Hingle argues Willie King was his only client and therefore Rita King cannot claim that he breached their agreements because she is a third-party payor and not a client or an intended beneficiary and she lacks standing to sue for malpractice. However, the primary right asserted by Rita King is her right to get what she was promised. A contract is an agreement to do or not to do a certain thing and gives rise to an obligation or legal duty that is enforceable in an action at law. (Civil Code ) 1549.) Rita King has alleged Hingle took consideration from her and agreed to get charges against Willie dismissed. She is a real party in interest in this direct agreement with Hingle, being a person possessing the legal or equitable right sued upon by reason of substantive law. (See, gillian v. Millard (1991) 228 Cal.App.3d 1601, 1605; County ofAlameda v. State Bd. ofControl (1993) 14 Cal.App.4th 1096, 1103.) Because Rita King is the only person who paid Hingle for this work, she is the only person who has the right to enforce any obligation to get what was paid for. Rita King has alleged first party agreements with Hingle, breach and damages and his demurrer to her first cause of action should be overruled. A lawyer is liable to a non-client when a non-lawyer would be in similar circumstances. (Restatement (Third): The Law Governing Lawyers, $56) The principal thrust of Rita King' breach of contract claim is not that legal services were deficient. The primary rights asserted in her OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 10 complaint are the rights to get what she paid for, be free from misrepresentations, fraud and elder abuse. If this were a claim against a non-lawyer who breached an agreement because he took money but did not deliver, Rita King could state a claim. Hingle cannot avoid enforcement of his separate financial responsibility agreement with Rita King just because he is a lawyer and/or just because he also owes professional responsibilities to Willie King. Hingle argues that Rita King's breach of contract claim really sounds in negligence for which he is not liable to her. She contends that she paid money because of a contract which was wrongfully made and breached because the case against Willie was never dismissed. Hingle's demurrer should be overruled. 2. The demurrer to Rita Kin 's ne li ent misre resentation claim should be overruled. 12 13 14 15 16 17 18 20 21 22 23 24 25 26 27 28 Regardless of whether an attorney-client relationship is required for a legal malpractice case, no such requirement exists for a negligent misrepresentation claim. An attorney may be liable to a non-client for negligent misrepresentation. The elements of negligent misrepresentation are that (1) a representation of material fact was made, (2) the representation was false, (3) the defendant made the representation without reasonable grounds for believing it to be true, (4) the representation was intended to induce the defendant to take some action in reliance upon it, (5) the plaintiff reasonably relied upon the truth of the representation, and (6) the plaintiff sustained damage as a result of that reliance. ( Civ. Code, $ 1709 bc 1710; Gagne v. Bertran (1954) 43 Cal. 2d 481, 487-488; Gonsalves v. Hodgson (1951) 38 Cal. 2d 91, 100-101.) A complaint sufficiently pleads the elements of a cause of action if the elements either are alleged expressly "or can be inferred by reasonable intendment from the matters which are pleaded" expressly. ( Krug v. Meeham (1952) 109 Cal. App. 2d 274, 277; Rosenfeld, Meyer Ck Susman v. Cohen (1983) 146 Cal. App. 3d 200, 223.) In Bily v. Arthur Young Ck Co. (1992) 3 Cal. 4th 370, the Supreme Court adopted the Restatement Second of Torts, section 552, subdivision (2), p.127, to define the class of persons who are entitled to protection from negligent misrepresentations (Bily, 3 Cal. 4th p. 414) made by attorneys, accountants, and other suppliers of commercial information (id., p. 410.) That subdivision provides that liability for such negligent misrepresentations "is limited to loss suffered OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 10 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 (a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and (b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction." ( Rest.2d Torts, ( 552, subd. (2), p. 127.) A defendant's intention to benefit the plaintiff is not dependent upon the subjective mental state of the defendant. Instead, the rule adopted by the Supreme Court "attempts to identify those situations in which the supplier undertakes to supply information to a third party whom he or she knows is likely to rely on it in a transaction that has sufficiently specific economic parameters to permit the supplier to assess the risk of moving forward." ( 8ily v. Arthur Young Ck Co., supra, 3 Cal. 4th at p. 409.) The existence of that knowledge is determined according to "an objective standard that looks to the specific circumstances (e.g., supplier-client engagement and the supplier's communications with the third party) to ascertain whether a supplier has undertaken to inform and guide a third party with respect to an identified transaction or type of transaction." (Id., p. 410, italics omitted.) The gravamen of Rita King's claim for negligent misrepresentation is that Hingle gave her false information to cause her to pay him additional funds. It is not a claim for legal malpractice, but a claim that he induced her to give him more money. After she paid him $20,000 pursuant to the first fee agreement, she paid him more money for what his second agreement describes as "representation necessary to process the case through preliminary examination." (FAC tt17) Rita King alleges that Hingle knew or should have known that Willie would be indicted and that there would not be any preliminary hearing. (FAC tt19) All the elements of negligent misrepresentation have been alleged, the claim is not one for disguised malpractice and therefore the demurrer to this cause of action should be overruled. C. Rita King states a claim for elder abuse. Allegations that a person retained the property of an elder for a wrongful use or with intent to defraud, is, by itself, sufficient to support a cause of action for financial elder abuse under Welfare 2 Institutions Code section 15610.30. (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 175.) Defendant deprived Rita King of a property right by taking and keeping her money OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT without earning it. This supports her cause of action for Financial Elder Abuse under Welfare & Institutions Code section 15610.30 and Hingle's demurrer should be overruled. Welfare & Institutions Code section 15610.30 states: (a) Financial abuse of an elder or dependent adult occurs when a person or entity does any of the following: (1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.... ~ * * (c) For purposes of this section, a person or entity takes, secretes, appropriates, obtains, or retains real or personal property when an elder or dependent adult is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult. (Welf. & Inst. Code, $ 15610.30.) 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The statute clearly states that "taking, secreting, appropriating, obtaining, or retaining property" includes taking money by means of an agreement. Rita King alleges Hingle took and kept her money without earning it, based on fraud and for a wrongful use. Her allegations state a cognizable claim under the Elder Abuse Act. (See California Assn. ofHealth Facilities v. Department ofHealth Services (1997) 16 Cal.4th 284, 295 [a remedial statute is to be "liberally construed on behalf of the class of persons it is designed to protect"].) Hingle argues that plaintiff does not plead willful misconduct or allege causation and that the elder abuse claim is a disguised legal malpractice claim, and being an elder does not change her status as a third-party payor. First, Rita King alleges that Hingle purposefully tricked her into paying unnecessary amounts which adequately pleads both willful misconduct and causation. Second, the gravamen of the claim is not malpractice, but misrepresentation for the purpose of taking her money. The Legislature enacted the Elder Abuse and Dependent Adult Civil Protection Act to protect elders by providing enhanced remedies to encourage private civil enforcement of laws against elder abuse and neglect. (Intrieri v. Superior Court (2004) 117 Cal.App.4th 72, 82.) Proscribed conduct includes financial abuse. "The financial abuse provisions are, in part, premised on the Legislature's belief that in addition to being subject to the general rules of contract, financial agreements entered into by elders should be subject to special scrutiny." (Bounds v. Superior Court (2014) 229 Cal. App. 4th 468, 478.) For this reason, Rita King's transactions should be subject to special scrutiny and Hingle's demurrer to the second cause of action for Elder Abuse should be overruled. OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 10 12 13 14 15 D. The causes of action for fraud and intentional infliction of emotional distress are not disguised legal malpractice claims and state complete claims. Hingle argues that plaintiff s fraud and intentional infliction of emotional distress causes of action are disguised claims of legal malpractice for which she lacks standing. The argument apparently rests of Khodayari v. Mashburn, supra 200 Cal.App.4'" 1184 in which a court found that a party who alleged legal malpractice, pleaded the same primary right for all his claims regardless of how they were styled and accordingly he was required to prove actual innocence which is required of criminal defendants, to proceed with each of his claims. As explained above, the gravamen of Rita King's claim is not legal malpractice, but purposeful misstatements to her to induce her to pay money. Khodayari does not hold that every cause of action against an attorney sounds in legal malpractice, or that there is only one primary right in every case. Even if this court determines that Rita King cannot maintain certain claims because she lacks standing, Khodayari is not authority to automatically dismiss all remaining claims. Plaintiff s causes of action for fraud and intentional infliction of emotional distress were previously allowed and the court should also permit them in the first amended complaint. 16 1. Rita Kin states a com lete and articular fraud claim. 17 1S 19 20 21 22 23 24 25 26 27 Hingle agreed in writing to perform services and took Rita King's money as payment, in one case when he knew no further services of the type he described were needed. She alleged she paid Hingle because he made her believe work was required for a preliminary hearing. (FAC $41) But the grand jury proceedings commenced the same day and Hingle knew or should have known that no preliminary hearing would be held. (FAC $42) Willie King was indicted two days later. (Id.) "All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that [her] complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of [her] cause of action." (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) Rita King' allegations are sufficient to state a fraud claim and to acquaint Hingle with the nature, source and extend of the claim. Hingle's demurrer should therefore be overruled. 2S 2. Rita Kin states a com lete claim for intentional infliction of emotional distress. OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 Rita King suffered emotional distress because Hingle took almost $200,000 from her, including inducing her to refinance her house even though she was 92 years old at the time. He made deliberate misrepresentations to cause her to pay him and he never got the charges against Willie dismissed. "Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiffs interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress." (Newby v. Alto Riviera Apavimenis (1976) 60 Cal.App.3d 288, 297.) Here, plaintiff has alleged facts within these parameters: she alleges that the defendant intentionally abused his position of counsel for her grandson to induce her to make unnecessary payments to him and without delivering on his promises. Plaintiff alleges that the defendant knew of her vulnerable position, intended to cause him harm and that she suffered emotional distress as a result of this. These allegations, if found to be true, constitute a cause of action for intentional infliction of emotional distress and Hingle's demurrer should be overruled. IV. CONCLUSION Plaintiff Rita King has standing to sue and adequately alleges all causes of action against Defendant, none of which are disguised claims for legal malpractice. She pleads that Defendant's taking of her money deprived her of a property right which states a cause of action for financial abuse of an elder. Her claims for fraud, negligent misrepresentation and intentional infliction of emotional distress are also properly stated. Accordingly, Defendant Michael Hingle's demurrers should be overruled. If the Court determines that there are defects in the Verified First Amended Complaint, Plaintiff respectfully requests further leave to amend. 23 24 25 Dated: March 3, 2022 Respectfully submitted, LAW OFFICE OF MARGARET M. SCHNECK 26 27 28 By: MARGARET M. SCHNECK Attorney for Plaintiff Rita King 9 OPPOSITION TO DEMURRER TO VERIFIED FIRST AMENDED COMPLAINT PROOF OF SERVICE King v Hingle, et al. Santa Clara County Superior Court Case No. 21CV3S1370 I, Margaret M. Schneck, declare: I am over the age of eighteen (18) years and not a party to the within entitled action. I am employed at 80 South Market Street, San Jose, California 95113. I am readily familiar with my office practice for collection and processing of documents for delivery by way of the service indicated below. On March 4, 2022, I served the following document(s): OPPOSITION TO DEMURRER TO VERFIED FIRST AMENDED COMPLAINT on the interested party(ies) in this action as follows: 10 Sidney C. Flores Law Offices of Flores 8c Barrrios 601 North First St. Ste, 200 San Jose, CA 95112 Attorney for Defendant 12 13 14 15 16 17 18 BY MAIL By placing said document(s) in an envelope or package for collection and mailing, addressed to the person(s) at the address(es) listed above, following ordinary business practices. I am readily familiar with the firm's practice for collection and processing of mail. Under that practice, on the same day that mail is placed for collection and mailing, it is deposited in the ordinary course of business with the U.S. Postal Service, in a sealed envelope or package with the postage fully prepaid. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on March 4, 2022, at San Jose, California. 19 20 21 Margaret M. Schneck 22 23 24 25 26 27 2S PROOF OF SERVICE