writing sample opening brief quick

2nd Civ. No.: B215277Superior Court No.: LP 013345

COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION P

IN THE MATTER OF: ) )

THE TESTAMENTARY TRUST OF ) )

SAMUEL D. BLOWITZ )____________________________________ )

_____________________________________________________________

APPELLANT’S OPENING BRIEF_____________________________________________________________

From an Order Granting Demurrer with Prejudice, and Dismissing the Matter with Prejudice, in the Superior Court for the County of Los Angeles, LASC Case No. LP

013345, Hon. James A. Steele, Judge Presiding________________________________________________________

Alan M. Goldberg (SBN: 136988)LAW OFFICE OF ALAN GOLDBERG, APLC

16000 Ventura Boulevard #500Encino, California 91436

(818) [email protected]

Attorneys for Appellant, Robert (Blowitz) Quick

1. APPELLANT’S OPENING BRIEF

I. STATEMENT OF FACTS

Appellant herein is the Petitioner in the trial court, Robert Quick. The Respondent

herein is the Respondent in the trial court, Andrea Pearson. Mr. Quick filed a Second

Amended Petition for Breach of Trust to which Ms. Pearson filed a Demurrer. The

Demurrer was sustained in the trial court without leave to amend (Clerk’s Transcript

(“CT”) 252). Mr. Quick timely filed his Notice of Appeal. After the Notice of Appeal

was filed by Mr. Quick, Ms. Pearson filed a Motion to Dismiss which was granted by the

trial court (Augmented Clerk’s Transcript (“ACT”) 1, 3.

This case pertains to a breach of trust by the Respondent Andrea Pearson who was

the trustee of the trust which is the subject of this case (CT 186:14). The trust is entitled

THE TESTAMENTARY TRUST OF SAMUEL D. BLOWITZ. Appellant, Robert Quick

is a beneficiary under the subject trust (CT 186:19) and was entitled to a 1/5 share of the

trust disbursements and benefits (CT 186:26).

Appellant was born on 4/18/65, three years prior to the death of the settlor of the

trust, Samuel D. Blowitz (CT 184:5). Samuel Blowitz was the father of J. Michael

Blowitz (“Michael”) who is the biological father of the Appellant herein (CT 184:6, 204).

Respondent herein, Andrea Pearson, is the sister of Michael (CT 184:16) and the aunt of

Appellant (CT 186:14). Appellant’s mother is Marilyn Scott (“Marilyn”) (CT

184:8). Appellant was born into a marriage between Marilyn and Robert Quick

(“Robert”) (CT 184:8). Although Robert Quick is not the biological father of Appellant

he raised Appellant until Appellant was 13 years old when Robert and Marilyn divorced

(CT 184:21).

Respondent and Marilyn were close friends prior to the birth of Appellant (CT


184:15). Marilyn married Robert 36 days prior to birth of Appellant (CT 184:8).

Respondent knew that her brother Michael was the biological father of Appellant (CT

204-05) and she was the maid of honor at Marilyn’s wedding (CT 184:15). Respondent

continued to maintain her close friendship with Marilyn for at least 20 years after

Appellant was born (CT 184:19).

Appellant did not know that Michael was his biological father until 1989 when

Appellant was 24 years old (CT 184:24). Appellant was told about his biological father

by Michael’s daughter (Appellant’s half sister) Shannon Lee Blowitz (CT 184:24).

Shortly thereafter Appellant met his biological father, Michael, and began to develop a

relationship with him (CT 184:26).

Appellant had no idea that he was a beneficiary of the trust until he was advised

of the trust by Michael’s son, Mickey Blowitz (“Mickey”), in early 2007 (CT 185:22). At

that time Appellant learned that the trust language conferred the benefits of the trust on

Samuel’s “grandchildren” not on individually named grandchildren (CT 185:22-26).

Upon learning that he may also be a beneficiary of the trust, Appellant began to research

the issue by obtaining a copy of the trust from the court and hiring a lawyer to help him

understand his relationship to the trust (CT 186:7). A copy of the trust (order) is found in

the record at CT 190. Appellant filed his Petition for Relief from Breach of Trust on

1/16/08, about one year after learning of his inheritance and well within the 3 year statute

of limitations (CT 186:11). The subject of this appeal is the Respondent’s Demurrer to

the Second Amended Petition for Relief from Breach of Trust (“SAP”) (CT 213).

The Appellant set forth facts which show that Respondent concealed the facts of

the existence of the trust from Appellant (CT 186:22, 187:2-11), failed to give Appellant


notice of the trust (CT 186:22, 187:2-11), failed to include Appellant in the distributions

under the trust (186:26, 187:8), refused to include Appellant in the benefits of transfers of

trust property (CT 186:14-25, 187:2-11), and, instructed the other grandchildren not to

inform Appellant of the existence of the trust (CT 186:1). The above actions on the part

of the Respondent constitute a breach of the trust (CT 187:1-11).

The facts set forth in the SAP show that, due the fraudulent concealment by

Respondent, Appellant was not on inquiry notice about the trust until early 2007, that he

benefits from the delayed discovery doctrine such that this case is not barred by either the

doctrine of Laches or the Statute of Limitations (Probate Code section 16460), and, that

the final judgment rule does not apply in this case.

II. THE STANDARDS ON REVIEW

Regarding the interpretation of the statute of limitations (Probate Code section

16460(a)(2) re breach of trust and CCP 338(d) for fraud), “[I]t is well settled that the

interpretation and application of a statutory scheme to an undisputed set of facts is a

question of law [citation] which is subject to de novo review on appeal." Bodell

Construction Co. v. Trustees of Cal. State University (1998) 62 CA4th 1508, 1515, 73

CR2d 450. Since there are no facts alleged in which Respondent denies that she withheld

information regarding the existence of the trust or Mr. Quick’s right to disbursements

there under, the facts are undisputed.

The sustaining of a demurrer, like a Motion for Judgment on the pleadings, is

reviewed de novo because the Appellate court will have to determine whether the

complaint states a cause of action. Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 91,

111 CR2d 711, Buller v. Sutter Health (2008)160 Cal.App.4th 981, 986 -- Cal.Rptr.3d --.


Denial of leave to amend, however, is reviewed by the Appellate court to

determine if the trial judge abused his/her discretion in denying amendment. Buller v.

Sutter Health (2008)160 Cal.App.4th 981, 986 -- Cal.Rptr.3d --, Lovejoy v. AT&T Corp.

(2001) 92 Cal.App.4th 85, 91, 111 CR2d 711.

The issue of laches is reviewed differently depending on the stage of the litigation

in which the trial judge is asked to make a ruling. For example, after a summary

judgment, a finding of laches is reviewed under a de novo standard. Bono v. Clark (2002)

103 Cal.App.4th 1409, 128 CR2d 31. After a trial the issue of laches is reviewed under

substantial evidence standard. Id. With this analysis in mind Appellant contends that the

appropriate standard in this case is the de novo standard because the sustaining of the

demurrer on the issue of laches was based on the trial court’s conclusion that Second

Amended Petition for Breach of Trust (“SAP”) fails to state a cause of action because Mr.

Quick “elected not to undertake any inquiry whatsoever.” (CT 252). Thus, because the

demurrer was sustained for failure to state a cause of action, like the above rule sustaining

a demurrer without leave to amend, it should be reviewed de novo. Buller v. Sutter

Health (2008)160 Cal.App.4th 981, 986 -- Cal.Rptr.3d --, Lovejoy v. AT&T Corp. (2001)

92 Cal.App.4th 85, 91, 111 CR2d 711.

III. A (GENERAL) DEMURRER CHALLENGES ONLY THE LEGAL SUFFICIENCY OF THE COMPLAINT NOT THE TRUTH OF THE FACTUAL ALLEGATIONS; SUFFICIENT FACTS NEED TO BE ALLEGED TO MERELY STATE A CAUSE OF ACTION, NOT PROVE ANY FACTS, THUS, THE TRIAL COURT’S RULING IS ERROR

A general demurrer challenges only the legal sufficiency of the complaint (in our

case, Second Amended Petition (“SAP”)), not the truth or the accuracy of the complaint's

factual allegations or the plaintiff's ability to prove those allegations. Amarel v. Connell


(1988) 202 CA3d 137, 140-41, 248 Cal.Rptr. 276. The Appellate Courts will, therefore,

treat as true all of the complaint's material factual allegations, but not contentions,

deductions or conclusions of fact or law. Id. at 141, Blank v. Kirwan (1985) 39 C.3d 311,

318, 216 Cal.Rptr. 718, Buller v. Sutter Health (2008)160 Cal.App.4th 981, 986 --

Cal.Rptr.3d --. In determining whether or not a complaint is sufficient to withstand a

general demurrer, the rule is that a demurrer admits all the material and issuable facts

properly pled, and if it appears that the plaintiff is entitled to any relief against the

defendant, under any theory, the complaint will be held good, even though the facts may

not be clearly stated. Gruenberg v. Aetna Ins. Co. (1973) 9 C.3d 566, 572, 108 Cal.Rptr.

480, Dicon Fiberoptics Inc. v. Franchise Tax Board (2nd Dist., 2009) ___ CA4th ___,

___, ___ CR3d ___ (slip opn. 5-6).

On appeal from a judgment of dismissal following the sustaining of a demurrer

without leave to amend, the reviewing court must accept as true not only those facts

alleged in the complaint but also facts that may be implied or inferred from those

expressly alleged. Marshall v. Gibson, Dunn & Crutcher (2nd Dist., 1995) 37 Cal.App.4th

1397, 1403, 44 CR2d 339. The facts taken into account include “those evidentiary facts

found in recitals of exhibits attached to a complaint.” Satten v. Webb (2002) 99

Cal.App.4th 365, 375. Accordingly, we must analyze the SAP and the exhibits.

IV. SUMMARY OF ARGUMENTS

A general demurrer challenges only the legal sufficiency of the complaint not the

truth of the allegations. Defendant’s demurrer is defective and should be reversed.

Respondent is and was a fiduciary to Appellant, and, Respondent breached her

fiduciary duties by failing to notify Appellant of the trust.

The doctrine of laches does not apply due to concealment by Respondent and lack


of inquiry notice on Appellant’s part.

The statute of limitations does not apply for want of inquiry notice.

Appellant satisfied all elements for concealment and delayed discovery.

Respondent’s trial court request for judicial notice is defective.

The dismissal after filing of the Notice of Appeal was improper.

V. THE DEFENDANTS’ DEMURRER IS FRAUGHT WITH DEFECTSREQUIRING IT TO BE OVERRULED AS A MATTER OF LAW

As a preliminary matter, the probate courts exist, in part, to protect the

beneficiaries of the trust. The law in California is that “[t]he power of the court is

invoked in probate matters, at least in substantial measure, to protect the estate and ensure

its assets are properly protected for the beneficiaries. Estate of Ferber (1998) 66

Cal.App.4th 244, 253, 77 CR2d 774. Mr. Quick is a beneficiary under the trust (CT

184:14, Ex. “B,” 185:17, 186:19-22, 187:2-11). Thus, he comes under the protection of

the probate court. The trial court judge, in sustaining the demurrer, committed reversible

error and denied Mr. Quick his right to participate in the trust as a beneficiary.

1. A statement of facts is improper and prejudicial and must not be considered. The trial court should have overruled the demurrer

Defendant (Respondent herein) improperly includes in her demurrer a

“Statement of Relevant Facts.” (CT 217). This is improper and renders the demurrer

subject to reversal on this ground alone because the statement of facts is highly

prejudicial to the plaintiff (Appellant) as it improperly prejudices the mind of the trier of

fact. (Cal. Evid. Code sec. 352). Extraneous provisions of information outside the 4

corners of the complaint are improper. Gould v. Maryland Sound Industries, Inc. (2nd

Dist., 1995) 31 CA4th 1137, 1144, 37 CR2d 718.


2. If the Petition can be amended to state a cause of action, leave should have been given by the trial court: it was error to sustain without leave

Appellant avers that his SAP is sufficient to survive a demurrer.

Therefore, the analysis provided in this section is not to be construed as an admission on

the part of the Appellant that he believes that an amendment is needed.

As to the demurrer to all causes of action and each of them, even where it appears

that the defect in a pleading is one of substance, a demurrer should not be sustained

without leave to amend if there is a possibility that a subsequent amendment will supply

the omitted allegations. Colvig v. RKO General, Inc. (1965) 232 CA2d 56, 70, 42 CR

473, 482.

Further, a demurrer should not be sustained if the complaint, liberally construed,

states a cause of action on any theory. Id. at 68, 42 CR at 489.

In the event that this court is inclined to hold that the sustaining of the demurrer to

the SAP was proper, then, Appellant prays that the matter be reversed to allow an

amendment. With the amount of the facts pled in the SAP and the inferences which the

court can draw there from, it is obvious that an amendment is justified.

3. The grounds for a demurrer do not appear in defendants’ papers

At CT 217:23 the defendant correctly states the grounds for a demurrer.

Defendant states “[W]hen any ground for objection to a complaint . . . appears on the

face thereof . . . the objection on that ground may be taken by demurrer to the pleading.”

(Emphasis added).

Respondent, in her demurrer, cites to case law which says:

When a complaint shows on its face that it is barred by the statute of limitations, a demurrer may be sustained and a judgment of dismissal may be entered (citation).


(CT 218:1, emphasis added). The SAP in this case does not show that it is barred by the

statute of limitations (or laches) on its face. Therefore, it cannot be decided at the

demurrer stage. TracFone Wireless, Inc. v. County of Los Angeles (2nd Dist., 2008)163

Cal.App.4th 1359 , -- Cal.Rptr.3d --, Amarel v. Connell (1988) 202 CA3d 137, 140, 248

Cal.Rptr. 276. A demurrer based on a statute of limitations will not lie where the action

may be, but is not necessarily, barred. Marshall v. Gibson, Dunn & Crutcher (1995) 37

Cal.App.4th 1397, 1403, 44 Cal.Rptr.2d 339, Moseley v. Abrams (1985) 170 CA3d 355,

359-360, 216 Cal.Rptr. 40. As is shown, Appellant avers that only one conclusion can be

drawn from the facts on the face of this SAP: that Mr. Quick was never put on inquiry

notice. At the very least, there is a dispute on the facts as to inquiry notice and that is

enough to overrule the demurrer. The trial court erred in sustaining the demurrer.

The SAP, on its face, states specifically that the 3 year statute of limitations

accrues on receipt by the beneficiary of an ‘interim or final account or other written

report’ by the trustee that provides ‘sufficient information so that the beneficiary …

reasonably should have inquired into the claim.” (CT 187:21-28). The SAP, on its face,

pleads that Mr. Quick was not on inquiry notice (CT 185.22, 187:2, 186:1, 186:26,

187:12). Thus, the face of the SAP shows that he did not violate the statute of limitations

or laches. As a matter of law there is no failure by Mr. Quick to act within the statutory

period of time. The trial court erred in sustaining the demurrer and erred in not granting

further leave to amend. The trial court should have overruled the demurrer based on the

statements as to lack of inquiry notice.

VI. THE TRUSTEE OF THE TRUST, ANDREA PEARSON, IS AND WAS A FIDUCIARY TO MR. QUICK AND BREACHED HER FIDUCIARY DUTIES BY FAILING TO GIVE NOTICE OF THE TRUST AND DISBURSEMENTS


It is settled in California law that the trustee of a trust stands in a fiduciary

capacity to the beneficiaries. The facts show that Ms. Pearson is the trustee of the trust at

issue (CT 186:14) and that Mr. Quick is a beneficiary of that trust (CT 184:14, Ex. “B,”

185:17, 186:19-22, 187:2-11). As such, Ms. Pearson breached her fiduciary duties to Mr.

Quick by failing to give him notice of the existence of the trust to which he is a

beneficiary and for failing to include Mr. Quick in the disbursements from the trust and

for failing to include him in the disbursements of the sale or transfer of properties from

the trust (CT 186:22-187:11). The law is clear as is shown below.

This court has enumerated some of the duties of a trustee of a trust to the

beneficiaries in the case of William R. Hearst II v. Victor F. Ganzi (2nd Dist., 2006) 145

CA4th 1195, 1208, 52 CR3d 473. That case states:

Trustees owe a duty to all trust beneficiaries, and must treat all equally. [Unless the trust instrument itself provides otherwise,] the trustee’s duty to each beneficiary precludes it from favoring one party over another. Thus, a trustee must act impartially with respect to all beneficiaries, doing his or her best for the entire trust as a whole. A trustee who violates his or her duties to deal impartially with all beneficiaries risks exposure to liability for breach of trust.

Id. at 1208 (italics in original). This court continues:

Trustees owe all beneficiaries, including the income beneficiaries herein, a fiduciary duty. A fiduciary relationship is a recognized legal relationship such as trustee and beneficiary, principal and agent, or attorney and client. (Citation). Where a fiduciaryrelationship exists, there is a duty ‘to act with the utmost good faith for the benefit of the other party.’

Id. See also, Probate Code sections 16002 (duty of loyalty), 16003 (duty to deal

impartially with the beneficiaries) and 16060 (duty to report and account).


Ms. Pearson breached all of these fiduciary duties: she favored the 4 other

grandchildren over Mr. Quick (CT 185:22, 186:26, 187:12); she showed no duty of

loyalty to Mr. Quick (CT 185:22, 186:1, 186:26, 187:12) and she failed to report or

disburse to Mr. Quick (CT 186:22, 187:1). Even though Respondent knew about Mr.

Quick from the time her good friend, Mr. Quick’s mother, Marilyn, became pregnant (CT

184:15, 186:19), Ms. Pearson did not act with the utmost good faith for the benefit of the

other party, that is, Mr. Quick.

Regarding the duty to report and account, specifically (PC 16060), guidance on

the fiduciary duties is provided by the Law Revision Commission. The analysis of the

Law Revision Commission is set forth in the case of Salter v. Lerner (2009) ___ CA4th

___, ___ CR3d ___. Here, the court quotes portions of the Law Revision Commission’s

comments:

Section 16060 provides: The trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration. The Law Revision Commission Comments to section 16060 explain, ‘The trustee is under a duty to communicate to the beneficiary information that is reasonably necessary to enable the beneficiary to enforce the beneficiary’s rights under the trust or prevent or redress a breach of trust.’ This duty is ‘consistent with the duty stated in prior California case law to give beneficiaries complete and accurate information relative to the administration of a trust when requested at reasonable times.’

Slip Opinion at page 3. Ms. Pearson failed to follow this rule. In fact, Ms. Pearson

affirmatively instructed other beneficiaries not to give information about the trust to Mr.

Quick (CT 186:1). Further, the duty imposed under section 16060 is not subject to waiver

under section 16064. Id. Thus, even if no request is made by a beneficiary under PC

16061 or 16062, the trustee is still obligated to provide trust information to all


beneficiaries equally and for their benefit. Id. at 3-4. This is because the duty to report

under PC 16060 “is independent of, and potentially even broader than, the duty to report

under . . . section 16061 or to account under . . . section 16062”. Id. at 4.

Another important breach of the duty of loyalty by Ms. Pearson is that there is no

evidence that she purchased missing beneficiary insurance to cover a beneficiary in the

event facts such as this arose. Considering that she knew of Mr. Quick since his

conception (CT 184:15, 186:19), the failure of Ms. Pearson to purchase the missing

beneficiary insurance is also a breach against Mr. Quick as well as the other beneficiaries.

Purchasing such insurance would have made this case an entirely different matter:

insurance would have been available to make Mr. Quick whole. By not purchasing

missing beneficiary insurance Ms. Pearson failed to act for the best interests of Mr. Quick

(and the other beneficiaries).

VII. THE DOCTRINE OF LACHES DOES NOT APPLY IN THIS CASE FOR SEVERAL REASONS, FOR EXAMPLE, DUE TO THE CONCEALMENT OF FACTS BY MS. PEARSON AND OTHER REASONS SET FORTH BELOW

The doctrine of laches is a defense which is applied only when a plaintiff has slept

on his rights. In re Marriage of Plescia (1997) 59 Cal.App.4th 252, 256, 69 CR2d 120. In

order for a person to “sleep on his rights” he or she must first know about those rights. In

order for the trial court to apply the doctrine of laches it must find 2 elements:

unreasonable delay and prejudice. Id., In re Marriage of Dancy (Black) (2000) 81 CA4th

1142, 1148, 98 CR2d 775. The rule is that “[l]aches may bar relief in equity to those who

neglect their rights, where such neglect operates to the detriment of others.” Bono v.

Clark (2002) 103 Cal.App.4th 1409, 1417, 128 CR2d 31 (emphasis added). The

important word in the application of the elements of laches in California is “neglected.”


The plaintiff would have to be culpable in some way, meaning that he would have to

have inquiry notice and fail to act on that notice. If the plaintiff has no inquiry notice,

then he cannot “neglect” his rights.

Whether or not the doctrine applies depends upon the circumstances of each

case.” Id. at 1418. As is shown throughout this brief the conduct of the respondent was

egregious in concealing information about the trust from Mr. Quick. If any case is

immune to a laches defense it is this case.

The doctrine of laches “is not technical and arbitrary and is not designed to punish

a plaintiff. It can only be invoked where a refusal would be to permit an unwarranted

injustice.” Id. at 1418. As is shown below there is no injustice or prejudice to the other

beneficiaries or Ms. Pearson: they never had a right to ¼ of the trust benefits, only 1/5.

The only person who suffered an injustice in the trial court is Mr. Quick.

Concealment by Ms. Pearson will toll the application of laches because

concealment on the part of the defendant makes any delay in asserting Mr. Quick’s rights

reasonable. In re Marriage of Modnick (1983) 33 C.3d 897, 908-10, 191 CR 629 (a case

in which the husband concealed assets of the estate which caused a delay in wife’s action,

court found laches did not apply).

California courts have long recognized the there are limits in the application of

laches as a defense. Laches is not strictly applied in cases between near relatives. Bono v.

Clark (2002) 103 Cal.App.4th 1409, 1418, 128 CR2d 31. Our case is a case between near

relatives. Mr. Quick is the son of Michael Blowitz as is at least two other grandchildren

beneficiaries: Mickey Blowitz (CT 185:22) and Shannon Lee Blowitz (CT 184:24). Mr.

Quick is the nephew of the respondent herein, as are other grandchildren beneficiaries


(CT 184:15-16).

The Bono court held that “[p]rejudice is never presumed; rather it must be

affirmatively demonstrated by the defendant in order to sustain his burdens of proof and

the production of evidence on the issue.” Bono v. Clark (2002) 103 Cal.App.4th 1409,

1420, 128 CR2d 31. In fact, in our case there can be no prejudice. The respondent admits

to 4 grandchildren (CT 217:17). However, the facts show that there are 5 grandchildren

counting Mr. Quick because Mr. Quick is a beneficiary (CT 184:14, Ex. “B,” 185:17,

186:19-22, 187:2-11). Thus, the grandchildren beneficiaries were not entitled to ¼ of the

trust. They were entitled, from the beginning, to 1/5. Ms. Pearson knew this. She

concealed the facts. Other beneficiaries knew about Mr. Quick (186:1-4). Thus, they

never expected a ¼ share. They knew that if their luck held out and Mr. Quick never

found out about the trust, they could “get away” with ¼ instead of 1/5. Thus, there can be

no prejudice because they had no rights to the extra portion at any time. Even if some of

the grandchildren beneficiaries did not know of Mr. Quick, Ms. Pearson did (CT 184:15)

and she failed to disclose that which she is obligated to disclose.

Therefore, laches should not apply in this case for 3 reasons: first, the delay in

discovery by Mr. Quick of the facts of the trust and his entitlement to its disbursements

was not unreasonable; second, there is no prejudice to the other family members as they

were not entitled to Mr. Quick’s portion; and, third, they are all near relatives. The trial

court erred to the extent that it relied upon the doctrine of laches in sustaining the

demurrer. The demurrer to the SAP should have been overruled and the case should have

continued in the trial court.

///


VIII. NEITHER THE STATUE OF LIMITATIONS NOR LACHES WERE SUFFICIENT GROUNDS TO SUSTAIN THE DEMURRER AS A MATTER OF LAW BECAUSE THERE IS NO EVIDENCE THAT MR. QUICK WAS ON INQUIRY NOTICE AND THIS QUESTION CANNOT BE RESOLVED AT THE DEMURRER STAGE OF THE LITIGATION

The analysis regarding laches is hereby incorporated herein as though

fully set forth.

As a preliminary matter, a “demurrer based on a statute of limitations will not lie

where the action may be, but is not necessarily, barred.” Marshall v. Gibson, Dunn &

Crutcher (2nd Dist., 1995) 37 Cal.App.4th 1397, 1403, 44 CR2d 339.

1. The statute of limitations is tolled until there is inquiry notice

The law in California is that the statute of limitations is tolled

until, and unless, the plaintiff has knowledge of facts sufficient to put him or her on

notice to inquire about the cause of action. California law is long clear on the concept of

inquiry notice. The Second Appellate District in the case of Vega v. Jones, Day, Reavis

& Pogue (2nd Dist., 2004) 121 CA4th 282, ___ CR3d ___ states:

Where no duty is imposed by law upon a person to make inquiry, and where under the circumstances ‘a prudent man’ would not be put upon inquiry, the mere fact that means of knowledge are open to a plaintiff, and he has not availed himself of them, does not debar him from relief when thereafter he shall make actual discovery. The circumstances must be such that the inquiry becomes a duty, and the failure to make it a negligent omission.

Id. at 298, fn. 15. The rule is clear: the statute of limitations commences to run “only after

one has knowledge of facts sufficient to make a reasonably prudent person suspicious of

fraud [or the knowledge of the trust], thus putting him on inquiry.” Id. “The means of

knowledge are equivalent to knowledge ‘only where there is a duty to inquire, as where

plaintiff is aware of facts which would make a reasonably prudent person suspicious.’”


Id.

As applied to our case, the trial court could not say, as a matter of law, that Mr.

Quick had knowledge of a scintilla of evidence that he was on inquiry notice of the

concealment by Respondent, the existence of the trust, the disbursements or the $7

million transaction prior to 2007. No such evidence was produced in the trial court and

the record on appeal is equally silent. The trial court based its sustaining of the demurrer

on mere allegations and presumptions. (CT at 219:17-221:15). The trial court’s ruling

must be reversed and remanded.

The trial court’s minute order states that the basis of its ruling was because the

petition specifically states that Petitioner

elected not to undertake any inquiry whatsoever. For these reasons and all those previously placed on the record, the court sustains the Demurrer without leave to amend.

(CT 252, emphasis added). First, the SAP does not state nor imply the italicized

language, only the Demurrer makes this unsupported statement (discussed in detail

below). It is clear that the trial court applied an incorrect duty of inquiry on Mr. Quick.

Mr. Quick cannot elect to do anything until he has some basis upon which to act. Neither

the statutes cited herein nor the case law speak of an election: the cases and statutes speak

of a duty upon the learning of some fact to put him on notice to inquire.

2. The very language of the statute of limitations applicable to our case supports the above analysis

Subdivision (a)(2) of section 16460 of the Probate Code provides:

If an interim or final account in writing or other written report does not adequately disclose the existence of a claim against the trustee for breach of trust or if a beneficiary does not receive any written account or report, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years


after the beneficiary discovered, or reasonably should have discovered, the subject of the claim." (Emphasis added).

This code section does not say “could have discovered” it says “should have discovered”

which makes a difference on the duty of inquiry. A duty under a “should have” burden

means that the plaintiff had knowledge of some fact which would put him on inquiry

notice. A duty under a “could have” burden implies that the plaintiff had to start “sniffing

around” and investigating just in case there might be something out there which would

put him on inquiry notice. The Respondent’s demurrer attempts to impose a “could have”

duty on Mr. Quick (CT 218:24-219:6).

To support her position Respondent cites to the case of Grisham v. Philip Morris

USA, Inc. (2007) 40 C.4th 623, 54 CR3d 735. However, Grisham is inapposite as relied

upon by Respondent.

Grisham is one of the law suits against the tobacco companies for claims of health

effects of long term cigarette smoking. In that case plaintiffs alleged 2 types of claims

“one for physical injury in the form of respiratory and other ailments caused by smoking,

and another for economic injury that resulted from becoming addicted as a minor to

cigarettes, and continually being compelled by the addiction to purchase them” (under

theories of unfair competition). Id. at 628. The court concluded that Ms. Grisham admits

in her complaint that she knew that she was addicted, thus, her claim for damages for the

addiction was time barred. Id. at 628-29. Note, that the language relied on by the

Respondent in Grisham has nothing to do with concealment, it pertains to affirmative

misrepresentations regarding false advertising. Id. at 638. Thus, Grisham does not apply

in our case.

The section of analysis by the California Supreme Court from which the


Respondent takes the quote on page CT 219:1-3 pertains to whether Ms. Grisham

benefits from the delayed discovery rule for her addiction.

The Grisham court states:

[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.' [Citation.]

Id. The court found that Ms. Grisham admitted in her complaint that she knew she was

addicted to cigarettes as far back as 1993. Id. Thus, the court found that she would not be

able to benefit from the delayed discovery rule because she should have made the

discovery earlier. Id.

Therefore, the context in which Respondent, Ms. Pearson, presents the quote at

CT 219:1-3 pertains to a person who already has knowledge of facts sufficient to put her

on inquiry notice and cannot meet the second prong of the pleading requirements in

Grisham. The Grisham court goes on to say that “if a plaintiff's cause of action depends

upon delayed discovery of his or her addiction to tobacco in order to be timely, he or she

must plead facts showing an inability to have discovered that addiction, such as

reasonable reliance on tobacco company misrepresentations.” Id. (Emphasis added.)

Our case is distinguishable. There are no misrepresentations in our case. Thus,

there could not be, as a matter of law, any fact or knowledge putting Mr. Quick on

inquiry notice. In our case the Respondent, Andrea Pearson, concealed the facts. In the

Grisham case, Ms. Grisham had inquiry knowledge since 1993 (Id.). In our case, Mr.

Quick never had inquiry knowledge, so, there are no facts upon which he should have

been diligent. Thus, the quoted passage by Respondent at CT 219:1-3 is not only wrong,


it is misleading.

The second reference to Grisham by Respondent refers to the “face of complaint

(sic).” (CT 219:5). This has been evaluated above: the face of the complaint (SAP) in our

case pleads that Mr. Quick never had any facts to put him on notice. A complaint on its

face which pleads misrepresentation is completely different from one which pleads

concealment. The distinction is analyzed more fully below.

Another example of the Respondent attempting to hold Mr. Quick to a “could

have” standard is found at CT 219:7-14 with CT 219:17-18. Here, again, the Respondent

is arguing that Mr. Quick did not present facts which showed “that he was prevented

from discovering his claims earlier[.]” (CT 219:7-14 ). This statement is false. The SAP

states specifically that Ms. Pearson failed to give Mr. Quick notice (CT 186:22) and

instructed the other beneficiaries not to tell about his entitlement to the benefit of the trust

(CT 186:1-4).

Respondent also claims that “Petitioner’s failure to seek out information to

discover the details of the Trust in a timely fashion is fatal to his claim.” (CT 219:17-20,

emphasis added). This is a baseless allegation and has no support in law. Respondent

keeps missing the point that Mr. Quick had no reason to suspect that he was the

beneficiary to the trust because that information was concealed from him. Regarding

demurrers, it has been held that “a Plaintiff need not plead facts with specificity where

the facts are within the knowledge and control of the defendant and are unknown to

plaintiff.” Credit Managers Association of Southern California v. Superior Court (2nd

Dis., 1975) 51 Cal.App.3d 352, 361. In our case Ms. Pearson had the knowledge and Mr.

Quick did not. Thus, how would he know to seek out anything and how would he know


what was he supposed to seek out? Further, any argument by the Respondent that the

trust information was public record and Mr. Quick should have availed himself to those

records is equally fallacious and contrary to California law. Vega v. Jones, Day, Reavis &

Pogue (2nd Dist., 2004) 121 CA4th 282, 295, ___ CR3d ___ (“The mere fact that

information exists somewhere in the public domain is by no means conclusive[,]” citing

to Seeger v. Odell (1941) 18 Cal.2d 409, 414-415 (a plaintiff is not barred by constructive

notice of a public record which would reveal the true facts).

Respondent also attempts to hold Mr. Quick to a “could have” standard at CT

219:22 regarding the fact that he discovered his biological father in 1989. Respondent

that states “Petitioner had the opportunity to obtain the necessary information about the

trust (within the statute of limitations period) but simply chose not to do so.” (Emphasis

added). The question is not whether Mr. Quick “could have” obtained the information,

but, whether he “should have” based upon some fact which would have put him on

inquiry notice. The Respondent does not provide the fact which she claims put him on

inquiry notice. She just says that Mr. Quick could have asked. The Respondent has

argued the wrong duty and the trial court agreed. Further, there is no case or statute which

states that merely having a relationship with someone triggers a duty of inquiry. Thus, the

court’s ruling was reversible error and this case should be reversed and remanded.

The analysis at CT 219:22, above, is not the law and there is no such duty on the

Appellant, Mr. Quick. His duty only ripens when he has some fact which puts him on

inquiry notice.

The same analysis applies to the next attempt to impose a “could have” standard

at CT 220:18-25. Again there are no facts, just allegations. Respondent states that Ms.


Pearson’s failure to give notice “does not obviate Petitioner’s duty to inquire … when he

became aware of facts which would put a reasonable person on notice.” (Emphasis

added.) However, Respondent does not point to one fact which supports this allegation.

That is because there are no such facts. Ms. Pearson concealed the facts from Mr. Quick.

There was no inquiry notice.

The minute order showing the ruling on the demurrer reflects the same faulty

reasoning. The analysis in the minute order pertaining to “all those previously placed on

the record” (CT 252), shows that the trial court adopted the defendant’s analysis in her

demurrer. This is reversible error.

3. The analysis in the defendant’s demurrer is not only incorrect it is deceptive

The Respondent deceived the trial court in her papers. Consider, for

example, defendant’s language at CT 219:9. Here the important observation is the

Respondent’s placement of the quotation marks and her failure to quote the cited to

section of the SAP fully (“selective quoting”). Defendant purports to be quoting

Petitioner’s SAP. The defendant admits as such as 219:7 where she opens the paragraph

with the words “In the Second Amended Petition . . ..” She then ostensibly quotes

portions of the SAP. One example of deceptive quoting is found at CT 219:9:

Petitioner was ‘an adult providing for himself’ and chose not ‘to inquire as to the financial matters of his father or his grandfather.’ (Emphasis added).

The italicized words are the entire basis of the defendant’s argument on demurrer, and,

the basis of the court’s minute order (CT 252), and those words are not in quotes. That is

because those words do not appear anywhere in the SAP. The SAP actually states:

Petitioner was an adult providing for himself and valued the personal father-son relationship . . . and had no reason to inquire


as to the financial matters . . ..

(CT 185:4-7, emphasis added). Respondent left out the italicized words. This is deceptive

quoting. The SAP language, as properly quoted, is consistent with California law.

Respondent, by replacing the correct words in the SAP with “and chose not [to inquire]”

misled the court by implying that Mr. Quick had information upon which to inquire. The

Petitioner’s language in the SAP states that he had no reason to inquire because he had no

facts upon which to base his inquiry as all the discussions between father and son were

about personal matters (CT 185:7-8). Petitioner’s statement is consistent with California

law and Respondent’s statement has no basis in California law. The trial court erred in

relying on this language to sustain the demurrer and that ruling is reversible error.

Another deceptive contention by the Respondent in her demurrer is found at CT

218:24-28. Here the Respondent contends that the SAP makes “bald assertions.”

Respondent’s statement is false and not supported by the pleadings. Respondent attempts

to make the impression that the Appellant’s SAP is contains bald assertions. The only

way such an impression can be made is through the use of deceptive quoting from the

SAP. Respondent again only quotes a part of the relevant passages. Respondent states, in

her Demurrer (CT 218:24-28) as follows:

Petitioner asserts that ‘in light of the circumstances surrounding Petitioner’s discovery’ of the relevant facts, he ‘could not have reasonable discovered’ the subject of his claim any earlier than 2007 . . ..

(Italics added). The actual language by Appellant in his SAP is:

[in] light of the circumstances surrounding Petitioner’s discovery of his natural father and Respondent’s continued efforts to conceal from Petitioner information to permit him to discover his beneficial interest in the trust, Petitioner could not have reasonably discovered the subject of this claim . . ..


(CT 188:5-10) (Italics added). This italicized portion of the quote from the Demurrer (CT

218:24-25) (“of the relevant facts”) substitutes for the italicized words in the SAP (CT

188:6-9). The italicized language from the SAP is omitted from the Respondent’s “quote”

in her Demurrer (CT 218:24-28). The omitted language is filled in (improvised) by

respondent in her Demurrer. This is a deceptive and misleading “quote.”

Stopping the quote where she did at “discovery,” and then improvising, she

misleads the reader. The substitution of the italicized language from the SAP is most

important because Respondent is deceitfully attempting to show that the paragraph in the

SAP is not consistent with California law. The italicized words from the SAP show

specifically that Mr. Quick could not have been on inquiry notice due to the concealment

of facts by the Respondent. Respondent left this out of her “quote.” Respondent’s claim

that this paragraph is nothing more than “bald assertions” is false and misleading.

Respondent’s analysis in section “B” of her demurrer at CT 218:15 is also without

merit. Here the Respondent states

where no fraud is proven, ‘section 16460 impose[s] on the plaintiff a duty of inquiry when sufficient information was received by [him] to put [him] on notice of action (emphasis added).

(CT 218:15-17). Again, Respondent does not point to one fact which would have put Mr.

Quick on inquiry notice. The obvious question is: how can fraud (concealment) be proved

if the litigation is only at the demurrer stage? No discovery has been done and

Respondent had not even answered the complaint. Thus, nothing can be “proven” at this

stage. Further, Respondent is setting forth the wrong burden. The only analysis on

demurrer is whether sufficient facts are stated to state a claim, not prove an issue.

The answer to the above question is that concealment cannot be proved at the


demurrer stage, but it can, as here, be pled. The authority cited by Respondent for her

position is also misleading. The Respondent cites to the case of Noggle v. Bank of

America (2nd Dist., 1999) 70 CA4th 853, 860 for the above proposition. However, for the

reasons relied upon by Respondent, Noggle is completely distinguishable from our case.

First, Noggle is not a case regarding a demurrer. In fact, the word “demurrer” does not

even appear in the case. The appeal in Noggle takes place after a Motion for Summary

Adjudication. Id. at 856. This means that the parties had some time to conduct discovery

in order to “prove” their allegations. No such opportunity for discovery existed in our

case. Again, Respondent misleads the court to make her point and the trial court adopted

the analysis. This is reversible error.

Respondent also misrepresents the case of Lazzarone v. Bank of America (1986)

181 CA3d 581, 226 CR 355 (CT 243:13, defendant’s Reply Brief). Defendant cites to

Lazzarone for the proposition that if Mr. Quick is alleging fraudulent concealment then

that claim must be “pled with particularity.” (CT 243:13). Respondent cites to Lazzarone

for the following quote: “Facts constituting fraud must be pled with particularity.” (CT

243:13). Respondent again deceived the trial court by quoting this line but not the line

immediately following the cited line which states that “[t]his rule is not always applied

with rigor . . ..” Id. at 598 (CT 243:13). Appellant avers that he has satisfied the pleading

requirements for concealment. But, if this court concludes that Mr. Quick did not plead

with particularity, his case comes under one of the exceptions where the rule is not

applied with rigor.

One of the exceptions which applies to our case is the inability to plead with

particularity because the facts are known only to the Respondent. The case of Committee


on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 197

Cal.Rptr. 783 makes the point:

We observe, however, certain exceptions which mitigate the rigor of the rule requiring specific pleading of fraud. Less specificity is required when "it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy," (citation); ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party ....’ (citation).

Id. at 217. See also, Credit Managers Association of Southern California v. Superior

Court, 51 Cal.App.3d 352, 361 (1975) (regarding demurrers specifically). Our case is

about the fact that Ms. Pearson, Respondent herein, had the knowledge but concealed

from Mr. Quick the facts regarding the existence of the trust, that Mr. Quick is a

beneficiary there under and the facts of the disbursements (CT 186:22-187:11).

Respondent does not inform the trial court in her Reply Brief that there are

exceptions to the “pleading with particularity” rule. She presents the quoted language as

though that is the rule, without exception. This is misleading by Respondent.

As discussed more fully below, the pleading of affirmative fraud is different from

pleading concealment. Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 95-96, 111

CR2d 711. While both are fraud, the elements of proof for concealment are different, and

not as rigorous, because of the concealed facts. Id. at 96, 97. The rationale is that

affirmative fraud requires a false statement while concealment requires the non-

expression of a statement when there was a duty to speak. In our case the Respondent had

a duty to speak because she is a fiduciary to Mr. Quick as trustee of the trust. She

breached that duty by concealing the facts from Mr. Quick. The elements of

fraud based on concealment are set forth and analyzed below.


The fact that the Respondent had to mislead the trial court in the above examples

to prevail on her demurrer is an admission that her demurrer has no merit without the

deception. Not only should the trial court have overruled the demurrer, the trial judge

should have imposed sanctions on the Respondent and reported the attorneys to the State

Bar.

Lazzarone actually supports the Appellant. It states:

A second species of extrinsic fraud has also been found where fiduciaries have concealed information they have a duty to disclose. [Citations.] This variety of extrinsic fraud recognizes that, even if a potential objector is not kept away from the courthouse, the objector cannot be expected to object to matters not known because of concealment of information by a fiduciary.

Id. at 596-97. In Lazzarone the plaintiff lost the case because he did not

present any facts or allegations showing that the bank prevented him from having his day

in court. The case states:

Here, plaintiff's complaint nowhere alleges any conduct by Bank which prevented him from having his day in court to challenge the propriety of Bank's investments

Id. at 596. Our case is distinguishable because Mr. Quick does, in his SAP, present facts

which show that Respondent did prevent him from benefiting from the trust and having

his day in court. He states specifically that:

he was not informed about the trust until 2007 (CT 185.22);

Respondent had a duty to disclose the trust and include him in the disbursements (CT 187:2);

Respondent herein concealed the existence of the trust from him (CT 186:1, 186:26, 187:2); and,

Respondent willfully failed to distribute Mr. Quick’s 1/5 share (CT 186:26, 187:12).


Further, the court itself, in Lazzarone, expressly distinguishes the Lazzarone case from

cases like ours. Id. at 597-98. In Lazzarone the plaintiff relied upon a family law case

entitled In re Marriage of Brennan (2nd Dist., 1981) 124 CA3d 598, 177 CR 520 (which

supports Appellant in our case) wherein the husband did not disclose to the wife

substantial portions of the marital estate, that is, he concealed the assets from her. The

Lazzarone court distinguishes the Lazzarone case from Brennan because in Lazzarone

the defendant bank did provide documents to the plaintiff which put her on inquiry

notice. Our case is like Brennan because in our case Ms. Pearson concealed information

from Mr. Quick as did the husband in Brennan.

The same analysis applies to all the cases which are cited in section “B” of the

Reply beginning at CT 243:8. The entire analysis by Respondent beginning at CT 243:17

makes no sense. Respondent is attempting to hold Mr. Quick to provide “specific

allegations as to how, when, where, to whom and what was allegedly said by Ms.

Pearson.” (CT 243:22-23). This is an obvious “red herring” and impossible burden

because there were no statements by Respondent. She concealed the facts. Such a burden

is not supported in a concealment case by any authority by the Respondent. Since Ms.

Pearson concealed the information there are no facts as to what was said because nothing

was said. It was concealed.

Respondent also claims that “Petitioner had the ability to discover the facts as

early as 1989 from other sources, namely, his own alleged natural father, who was also a

co-trustee of the trust.” (CT 243:25-26). Yet, Respondent points to no facts which were

divulged by his natural father which would have put Mr. Quick on inquiry notice. There

are no cases which hold that merely having a relationship with someone is sufficient to


put a person on inquiry notice. The same exception, as discussed above in the Laches

section of this brief, that when the concealment is between close family relatives the

burden on the plaintiff is even less, should also be applied here under a statute of

limitations analysis.

Respondent cites to Miller v. Bechtel Corp. (1983) 33 C.3d 868 for the above

proposition that Mr. Quick had the ability to discover the facts as early as 1989. (CT

243:28). Miller was a case on a Motion for Summary Judgment (that is, after the

opportunity for discovery) which makes it distinguishable from our case. In Miller the

subject of the suit was the value of certain stock. Plaintiff (wife) alleged that she was not

told the true value of certain stock when she agreed to allow the husband to buy her out

as part of a Marital Settlement Agreement. Again, Ms. Pearson only presents a part of the

analysis and misleads the court. In Miller the facts show that the plaintiff wife was on

inquiry notice because: 1. the plaintiff therein sought the advice of a stock broker (Id. at

872) and 2. the plaintiff therein consulted with at least 2 attorneys on the issue. Id. at 872-

73. In other words, the plaintiff in Miller was put on inquiry notice and sought advice on

the subject. While there was fraud in the Miller case because the husband allegedly lied

to the wife about the actual value of the stock, the husband did disclose the stock and the

method of valuation. In our case Ms. Pearson concealed everything from Mr. Quick.

There is not one single fact pointed to in any of Respondent’s papers which supports a

conclusion that Mr. Quick was ever on inquiry notice. Respondent makes only allegations

but points to no facts.

In Miller the court recognized that Ms. Miller was told that the stock would be

valued according to the shareholder’s agreement. Id. at 874. The court also notes that she


did make inquiries but did not inquire about the actual method for valuation. Id. In other

words, she did not inquire enough. Such is not our case. Mr. Quick had no fact upon

which to inquire because he was ignorant of all the facts: the concealment, the existence

of the trust, the distributions and the transfer of assets.

4. The concealment by Ms. Pearson results in a non-final judgment

The above analysis vitiates the Respondent’s claim that the

final distribution order is final (CT 244:13). Despite that the Respondent correctly states

the law: “a court order for a preliminary distribution, once final and in the absence of

fraud, is conclusive” (emphasis added) (CT 244:13 under the doctrine of laches), she

proceeds in the analysis as though there was no fraud. This is misleading. Respondent

undermines her own argument because the court order is not final due to the fraud as she

states expressly (CT 244:13). As has been stated and long confirmed under California

law, concealment is fraud. Lazzarone, 181 CA3d at 596-97, Lovejoy, 92 Cal.App.4th 97.

Fraud, in the form of concealment, is pled throughout the SAP (CT 186:1, 22, 187:1-11,

188:7-11).

Appellant’s analysis here also vitiates the Respondent’s argument that

“[h]ere, there are no allegations of fraud . . ..” (CT 222:9). The SAP clearly pleads fraud

in the form of concealment (CT 186:1, 22, 187:1-11, 188:7-11)). This is another

misrepresentation by the Respondent.

5. This controversy cannot be disposed of at the demurrer stage

The determination of whether the Appellant was on inquiry notice cannot

be decided on demurrer. Vega v. Jones, Day, Reavis & Pogue (2nd Dist., 2004) 121

CA4th 282, 298, ___ CR3d ___. 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. Saliter v. Pierce Brothers Mortuaries (2nd Dist., 1978) 81 CA3d 292, 300 (a

case pertaining to delayed discovery in which the court holds that if the facts can raise

more than one inference it may not be decided as a matter of law). There is no question

that Mr. Quick pleads that he was not put on inquiry notice (CT 185:6). This raises a

strong inference from the facts and the matter cannot be decided as a matter of law. The

trial court decided this case as a matter of law (CT 252) and that was reversible error.

Similarly, the question of whether Mr. Quick’s reliance on the concealment was

reasonable cannot be decided on demurrer. The California Supreme court in Grisham v.

Philip Morris USA, Inc. (2007) 40 C.4th 623, 54 CR3d 735 states: "[W]hether reliance [on

affirmative fraud or concealment] was reasonable is a question of fact for the jury, and

may be decided as a matter of law only if the facts permit reasonable minds to come to

just one conclusion." (Italics in original.) As stated, Mr. Quick pled that he was not in

inquiry notice (CT 185:6) because the facts were concealed from him by Respondent (CT

186:1, 26, 187:2). Respondent argues that he was on inquiry notice (no facts are shown).

Thus, reasonable minds cannot come to only one conclusion (though, Mr. Quick avers

that if there is only one conclusion which can be drawn it is that he was not on inquiry

notice because of the concealment and because the Respondent has not pointed to one

fact showing inquiry notice). Whether this was reasonable is not properly decided on

demurrer. Thus, the trial court’s ruling is reversible error.

This court in Vega is clear that questions regarding inquiry notice and the statute

of limitations cannot be resolved at the demurrer stage of the litigation. This court states:

Whether other circumstances exist which, inconjunction with knowledge of the existence of the financing


transaction, would have made a prudent person suspicious is a question that cannot be resolved on demurrer.

Therefore, as a matter of law, the trial court committed reversible error in sustaining the

demurrer. It committed further error by denying leave to amend. This case should be

reversed and remanded.

6. The facts show clearly that Mr. Quick exercised his rights and filed suit within the statutory period, thus, he did not sleep on his rights, the statute of limitations was tolled and the trial court erred in granting the demurrer

The facts show that Mr. Quick was first made aware of the existence of

the trust in early 2007 (CT 185:22). He then obtained a copy of the trust from the court

(CT 186:8). He obtained counsel in 8/07 (CT 186:10). He filed his Petition for Breach of

Trust on 1/16/08, only one year after he was put on inquiry notice and well within the 3

year statutes of limitation. Taking these facts as true, which this court must do, Mr. Quick

filed his Petition for Breach of Trust timely. He did not run afoul of the statute of

limitations and he did not sleep on his rights.

The facts of this case show that Mr. Quick found out that he has a biological

father in 1989 (CT 184:24). He was fortunate enough to be able to begin a relationship

with this man. Respondent, Ms. Pearson, who is also his aunt, has not pointed to one

piece of evidence which shows that Mr. Quick was ever put on inquiry notice regarding

the existence of the family trust or his right to a share therein. In fact, the Second

Amended Petition (“SAP”) states specifically that plaintiff and his father did not discuss

financial matters (CT 185:4-8). Thus, the trial court should have overruled the demurrer

as a matter of law.

The grounds upon which the court sustained the demurrer constitute reversible

error. The court placed the duty on Mr. Quick to investigate without finding that he had


knowledge that there was anything to investigate. Thus, the trial court improperly and

erroneously placed upon the plaintiff a burden to which he is not subject by statute or

case law.

The law regarding inquiry notice is well settled in California and this case falls

squarely within its protections. Only facts which put the plaintiff on notice and cause a

duty to inquire are sufficient to begin the running of the statute of limitations. Without

such inquiry notice the statute is not triggered. There is no evidence of actual knowledge

by Mr. Quick of facts to charge him with inquiry notice of the existence of the trust or his

right to a portion thereof. Nor is there any evidence of presumptive knowledge sufficient

to put him on notice prior to the disclosure by Mickey Blowitz that he is a beneficiary

under the trust.

IX. FRAUDULENT CONCEALMENT BY MS. PEARSON ENSURED THAT MR. QUICK WOULD NOT RECEIVE INQUIRY NOTICE AND THIS IS ENOUGH TO TOLL THE STATUTE OF LIMITATIONS FOR CONCEALMENT AND LACHES: THERE IS NO TIME LIMIT ON REASONABLENESS

Fraudulent concealment by the defendant (Ms. Pearson) of a cause of action tolls

the relevant statute of limitations, which does not begin to run until the aggrieved party

discovers the existence of the cause of action. Pashley v. Pacific Elec. Ry. Co. (1944) 25

C.2d 226, 229, 153 P.2d 325. See also, Snapp & Associates Insurance Services, Inc. v.

Malcom Bruce Burlingame Robertson (2002) 96 CA4th 884, 890, 117 CR2d 331.

Therefore, “commencement of the running of the statute might be deferred indefinitely.”

Brown v. Bleiberg (1982) 32 C.3d 426, 432. The rationale for this rule is that such a

defendant should be estopped from taking advantage of her own wrong by asserting the

statute of limitations. Sears v. Rule (1945) 27 C.2d 131, 147, 163 P.2d 443.

In fact, this court should be outraged by the concealment by Ms. Pearson (who, as


trustee of the trust, had a fiduciary duty to Mr. Quick) of the facts of the existence of the

trust and the denial of notice to Mr. Quick, about whom she knew from before birth (CT

184:15, 186:19). California Appellate Courts are rightfully outraged by this type of

behavior. One court stated:

Few defrauding defendants give any serious thought to the nature or quality of the harm which could befall the victims who rely on their deceptive acts. It would be unconscionable and nonsensical for such perpetrators to escape liability because of their indifference to the consequences of their opprobrious behavior.

Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 94, CR2d 711. A defendant's fraud in

concealing a cause of action against him will toll the statute of limitations, and that

tolling will last as long as a plaintiff's reliance on the misrepresentations is reasonable.

Grisham v. Philip Morris USA, Inc. (2007) 40 C.4th 623, 637 54 CR3d 735. As stated,

reliance becomes unreasonable only when the plaintiff is put on inquiry notice and fails

to take action. Unless the face of the complaint (SAP) can be interpreted only one way,

the court is not in a position to speculate as to when reliance became unreasonable: it is a

question which must be tried and cannot be determined as a matter of law. Id. The facts

of our case go even further: not only did Ms. Pearson intentionally withhold notice and

knowledge of Mr. Quick’s share, she told other beneficiaries to withhold information as

well (CT 186:1).

The pleading of concealment does not require the same adherence to the pleading

requirements of affirmative fraud (when facts known by defendant). Committee on

Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, 197

Cal.Rptr. 783, See also, Credit Managers Association of Southern California v. Superior

Court (2nd Dist., 1975) 51 Cal.App.3d 352, 361 (regarding demurrers specifically). While


Appellant avers that his SAP sufficiently states facts to make out a case for concealment,

this court must evaluate the SAP de novo to determine whether Appellant’s averment is

correct. The analysis in Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 111, CR2d

711 is on point. The court in Lovejoy states:

Not every fraud arises from an affirmative misstatementof material fact. “The principle is fundamental that‘[deceit] may be negative as well as affirmative; it mayconsist of suppression of that which it is one's duty todeclare as well as of the declaration of that which is false.’[Citations.] Thus section 1709 of the Civil Code provides:‘One who willfully deceives another with intent to induce himto alter his position to his injury or risk, is liable for anydamage which he thereby suffers.’ Section 1710 of the CivilCode in relevant part provides: ‘A deceit, within the meaningof the last section, is: . . . 3. The suppression of afact, by one who is bound to disclose it, or who givesinformation of other facts which are likely to mislead forwant of communication of that fact; . . .’” (Citation).

Id. at 95. The court continues:

According to section 550 of the Restatement, a party “whoby concealment or other action intentionally prevents theother from acquiring material information is subject to thesame liability to the other, for pecuniary loss as though hehad stated the nonexistence of the matter that the other wasthus prevented from discovering.

Id. at 96.

The case of Lovejoy cites to Stevens v. Superior Court (2nd Dist., 1986) 180 CA3d

605 to illuminate the point of concealment. Stevens involved a fraud complaint by a

patient against a hospital alleging that the hospital allowed unlicensed physicians to

practice medicine in the hospital. (Id. at 607.) The patient alleged that defendant hospital

concealed this fact from her, that one of the unlicensed physicians participated in a C-

section procedure which was performed on her, and as a result she suffered serious


bodily injury. The superior court sustained a demurrer without leave to amend on the

erroneous ground that there was an absence of any allegation that any agent of the

hospital made a direct, affirmative representation upon which she relied concerning the

doctor’s license status. (Id. at p. 608.) On appeal, the Stevens court reversed. The court in

Stevens noted that

[i]t is . . . established by statute that intentional concealment of a material fact is an alternative form of fraud and deceit equivalent to direct affirmative misrepresentation. (Civ. Code, §§ 1572, subd. 3, 1709, and 1710, subd. 3.

Stevens, 180 CA3d at 608-609. Further, the court stated:

[w]here failure to disclose a material fact is calculated to induce a false belief, the distinction between concealment and affirmative misrepresentation is tenuous. Both are fraudulent. An active concealment has the same force and effect as a representation which is positive in form.

Id. at p. 609 (italics added). The court concluded that the complaint adequately pled a

cause of action for fraudulent concealment. Stevens, 180 CA3d at 610.

The element of reliance, as in the Lovejoy case, is also shown in our case

pertaining to concealment. The Lovejoy court stated

There is no problem with reliance, since the only type of reliance required is that ‘the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact.’

Id. at 97. As has been shown, Mr. Quick was unaware of the existence of the trust, the

concealment by Ms. Pearson and the fact that he was a beneficiary under the trust. The

SAP also shows that he would not have acted as he did had he known of these facts:

when he found out about the trust and that he was a potential beneficiary under the trust

he began research into these facts and hired an attorney to complete the investigation.


(CT 186:7).

The case of Vega v. Jones, Day, Reavis & Pogue (2nd Dist., 2004) 121 CA4th 282,

___ CR3d ___ states:

Active concealment or suppression of facts by a nonfiduciary “is the equivalent of a false representation, i.e., actual fraud.” (Id., § 678, p. 136 [italics omitted].)

Id. at 291. The court continues, in fn. 7:

See Civil Code section 1710, subdivision 3 (defining deceit as including ‘[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact’), and Civil Code section 1572, subdivision 3 (defining actual fraud in a contract setting to include the ‘suppression of that which is true, by one having knowledge or belief of the fact’).

Id. at 292, fn. 7. How much more egregious is the active concealment of facts by one who

is a fiduciary to the aggrieved as in our case.

The case of Snapp & Associates Insurance Services, Inc. v. Malcom Bruce

Burlingame Robertson (2002) 96 CA4th 884, 117 CR2d 33 sets forth the public policy

regarding fraudulent concealment as it pertains to the statute of limitations (and which

also can be applied to an argument for laches). That case states:

The doctrine of fraudulent concealment, which is judicially created [citations], limits the typical statute oflimitations. '[T]he defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations . . . .' [Citations.] In articulating the doctrine, the courts have had as their purpose to disarm a defendant who, by his own deception, has caused aclaim to become stale and a plaintiff dilatory. [Citations.]

Id. at 890. The Snapp case also states:

The doctrine of fraudulent concealment of the cause of action, which applies to any type of case . . . , has an effect similar to the statutory rule of delayed accrual in fraud cases under [Code Civ.


Proc., § 338, subd. (d)].

Id. at 890. The conclusion is that concealment is a form of fraud and the pleading

requirements for concealment are not as strict as discussed herein.

The doctrine of constructive fraud also applies in our case as Ms. Pearson stands

in a fiduciary relationship to Mr. Quick. Peterson Development Co. v. Torrey Pines Bank

(1991) 233 Cal.App.3d 103, 116, 284 CR 367.

Therefore, there is another exception to the finality of judgments (CT 244:13).

The exception to that privilege is found in cases where a judgment has been obtained by

"extrinsic fraud," and "the aggrieved party [has been] deliberately kept in ignorance of

the action or proceeding, or in some other way fraudulently prevented from presenting his

claim or defense." Moore v. Conliffe (1994) 7 C.4th 634, 643 fn.5, 29 Cal.Rptr.2d 152,

157 n. 5.

X. MR. QUICK HAS SATISFIED ALL THE ELEMENTS NEEDED TO SHOW BOTH FRAUDULENT CONCEALMENT AND DELAYED DISCOVERY, THUS, THE DEMURRER SHOULD HAVE BEEN OVERRULED BY THE TRIAL COURT

In this case Mr. Quick has satisfied all the elements needed to show both

fraudulent concealment and delayed discovery of the cause of action. The rules regarding

the factors which must be pled are as follows:

When a plaintiff alleges the fraudulent concealment of a cause of action, the same pleading1 and proof is required as in fraud cases: the plaintiff must show (1) the substantive elements of fraud, and (2) an excuse for late discovery of the facts. (Citation). With respect to the fraud itself, "[w]here there is a duty to disclose, the disclosure must be full and complete, and any material concealment or misrepresentation will amount to fraud sufficient to entitle the party injured thereby to an action. [Citations.]" As for the belated discovery, the complaint must allege (1) when the fraud was discovered; (2) the circumstances under which it was

1 Taking into account that the facts were known only by defendant as discussed above at p. 30-31.


discovered; and (3) that the plaintiff was not at fault for failing to discover it or had no actual or presumptive knowledge of facts sufficient to put him on inquiry.

Community Cause v. Boatwright (1981) 124 CA3d 888, 900-01, 177 CR 657. Mr. Quick

has pled the elements of fraud and the excuse for the delayed discovery. As is shown

below all the factors listed above are satisfied in Mr. Quick’s SAP.

1. The substantive elements of concealment:

The court in Lovejoy (92 CA4th 85, 96), set forth the elements of fraud

based on concealment:

(A) the defendant must have concealed or suppressed a material fact,

(B) the defendant must have been under a duty to disclose the fact to the plaintiff,

(C) the defendant must have intentionally concealed or suppressed the fact with the intent

to defraud the plaintiff,

(D) the plaintiff must have been unaware of the fact and would not have acted as he did if

he had known of the concealed or suppressed fact, and,

(E) as a result of the concealment or suppression of the fact, the plaintiff must have

sustained damage. Id. at 96.

As applied to this case, the facts in the SAP show that the elements of

concealment have been satisfied.

A. The defendant must have concealed or suppressed a material fact.

This is pled at CT 185:22-186:6 in which the distributions of the trust funds were

disclosed to Petitioner by his half brother, Mickey, not by the trustee, who, in fact, told

the beneficiaries not to disclose to Petitioner (CT 186:1). This is also pled at CT 186:19

wherein Respondent knew that Petitioner was a member of the class of grandchildren and


her nephew. This is also pled at CT 186:13-28 wherein Respondent willfully denied

Petitioner notice of his rights.

B. The defendant must have been under a duty to disclose the fact to the plaintiff.

This is pled at CT 184:1 which shows that Ms. Pearson was the trustee of the trust

which requires that she disclose as a fiduciary;

C. The defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff.

This is pled in several places:

1. CT 185:22-186:6 which states that the distributions of the trust funds were disclosed to

Petitioner by his half brother, Mickey, not by the trustee, who, in fact, told the

beneficiaries not to disclose to Petitioner (CT 186:1);

2. CT 186:13-28: wherein Respondent intentionally failed to give Petitioner notice and

denied permission for others to do so (CT 186.1). Here, this court may make inferences

regarding Ms. Pearson’s motives in shutting out Mr. Quick. Marshall v. Gibson, Dunn &

Crutcher (2nd Dist., 1995) 37 Cal.App.4th 1397, 1403, 44 CR2d 339. Appellant avers that

this court may infer that Ms. Pearson concealed the notice to Mr. Quick as a beneficiary

of the trust and the existence of the trust for the purpose of her own financial gain or for

the financial gain of her preferred beneficiaries. Id., See also, Lovejoy v. AT&T Corp.

(2001) 92 Cal.App.4th 85, 90, 92, 111 CR2d 711.

D. The plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact.

This is pled at CT 185:17, 22. Regarding the actions of Petitioner, he clearly

would not have sat on his rights if he knew because we see that once he found out about

the trust he took action within the statutory time (CT 186:7). Such a position is, again,


consistent with California law which allows this court to make such an inference.

Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403, 44 CR2d 339.

E. Damages

As a result of the concealment or suppression of the fact, the plaintiff must have

sustained damage. This is pled at CT 185:22 regarding the large distribution of the Vons

property worth $7 million and monthly distributions and at CT 186:14-18. Mr. Quick is a

beneficiary under the trust and Ms. Pearson is in a fiduciary relationship to Mr. Quick.

Mr. Quick should have been receiving the distributions and his share of the sale or

transfer of trust assets. The fact that he was denied notice and knowledge of the trust and

those benefits constitutes his damages.

Reading the SAP liberally and as a whole, as this court must (Colvig v. RKO

General, Inc. (1965) 232 CA2d 56, 68, 42 CR 473, 480), all of these elements are

present. Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 96, 111 CR2d 711. Thus, it

was reversible error for the trial court to sustain the demurrer.

2. The reason for late discovery of the facts

As shown above, this element is divided into 3 sub-elements, all of which

are specifically addressed in the SAP:

A. When the fraud was discovered

The SAP shows that the fraud was not discovered by Petitioner

until early 2007 (CT 185:22, 187:17).

B. The circumstances under which the fraud was discovered

The SAP also addresses this element:

Appellant learned of his biological father, Michael, in 1989 (CT 184:24). Appellant


learned of Michael from Shannon Lee Blowitz (CT 184:24). Appellant then began to

develop a relationship with Michael (CT 184:26). Appellant was advised that he was a

beneficiary of the trust in early 2007 by Mickey (CT 185:22). Appellant learned that the

trust language conferred the benefits of the trust on Samuel’s “grandchildren” not on

individually named grandchildren (CT 185:22-26).

C. Appellant was not at fault for failing to discover the trust and had no actual or presumptive knowledge of facts putting on inquiry

The SAP also adequately presents facts showing this element:

CT 186:19-26: Respondent willfully denied Petitioner his rightful inheritance by

refusing to give him notice and by warning others not to do so;

CT 186:26 Respondent willfully failed to distribute any portion of the trust to the

Petitioner;

CT 187:2-7 The Respondent failed to give notice to the Petitioner;

CT 187:8: Respondent failed to make the required distributions to Petitioner as

required by law and the trust instrument; and,

CT 187:12: Petitioner did not receive any of his 1/5 share of the trust.

The law is clear and the facts pled in the SAP are also clear and come within the

protections afforded by law to Mr. Quick. His SAP properly alleges when the fraud was

discovered, the circumstances under which it was discovered and it shows that Mr. Quick

was not at fault for failing to discover the facts because he had no actual or presumptive

knowledge of facts to put him on inquiry notice. Mr. Quick, is, thereby, entitled to

continue his action in the trial court. This case must be reversed and remanded.

Part of the reason the courts consider a statute of limitations defense or a laches

defense is because with the passage of time witnesses and documents disappear and this


could be prejudicial to the defendant. Such is not the fact in our case. The witnesses are

still alive and present (Ms. Pearson, the grandchildren). The trust document (order) is still

available (CT 190) which contains the grandfather’s intent. Thus, there is no prejudice to

the Respondent in overruling the demurrer as the case is not stale. Even if this case were

stale, the Appellant is still, as a matter of law (as shown above) entitled to proceed with

his case because the Respondent must be estopped to argue that the case is stale due to

her fraudulent concealment.

The conclusion is that there are no facts pointed to by the Respondent which show

that Mr. Quick was on inquiry notice. Respondent is a fiduciary to Mr. Quick and had a

duty to disclose the existence of the trust and provide Mr. Quick with his 1/5 share. In

fact she concealed those facts from Mr. Quick for decades until after the so called final

distribution. The final judgment rule does not apply because of the concealment. Thus,

the trial court committed reversible error in sustaining the demurrer and further

committed reversible error in denying leave to amend (which Mr. Quick believes is

unnecessary due to the sufficient facts which he pled in the SAP). This case should be

reversed and remanded with instructions to go forward to trial.

XI. BASED UPON ALL THE ABOVE, RESPONDENT’S APPLICATION FOR ORDER DISMISSING PETTITIONER’S SECOND AMENDED PETITION FOR RELIEF FROM BREACH OF TRUST MUST ALSO BE REVERSED AND REMANDED

After the Appellant filed his Notice of Appeal (3/30/09) Respondent

wrongfully filed her Application for Order Dismissing Petitioner’s Second Amended

Petition for Relief from Breach of Trust (4/3/09). Augmented Clerk’s Transcript (“ACT”)

1. The trial court wrongfully granted the Application and dismissed the Petition. (ACT 3).


It is long settled that an appeal stays the proceedings in the trial court as to those

matters which are embraced by the appeal to prevent the trial court from rendering the

appeal futile. Cal. Code of Civ. Pro. § 916(a). City of Santa Monica v. Stewart (2nd Dist.,

2005) 126 Cal.App.4th 43, 79, 24 Cal.Rptr.3d 72. It is also settled that the trial court is in

excess of its jurisdiction by dismissing a complaint while an appeal is pending when that

dismissal order affects the appeal. Elsea v. Saberi (1992) 4 CA4th 625, 629, 5

Cal.Rptr.2d 742. In our case the trial court dismissed the action while the appeal was

pending. The dismissal of the matter in the trial court obviously affects the appeal

because a venue is needed for remand. Thus, this court must reverse the dismissal as the

trial court’s dismissal order is reversible error.

The Stewart court stated:

The purpose of the rule depriving the trial court of jurisdiction during the pending appeal is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided. The rule prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.

Id. In our case it is of great importance that the case not be dismissed as a dismissal

clearly affects the outcome of the appeal by depriving a venue for remand.

Therefore, the court was in excess of its jurisdiction by dismissing the SAP and

this court should reverse and remand.

XII. CONCLUSION

For the reasons set forth above, the trial court’s order sustaining the demurrer

must be reversed and remanded for trial. While the Appellant believes that the SAP


sufficiently states a cause of action and supports both concealment and delayed

discovery, if this court believes otherwise, then this court should reverse and remand

the denial in the trial court of a opportunity to amend.

Dated: September 16, 2009

THE LAW OFFICE OF ALAN GOLDBERG, APLC

By: Alan M. Goldberg


DECLARATION OF WORD COUNT

I, ALAN M. GOLDBERG, declare and say as follows:

I am the attorney for Appellant, Robert Quick. I prepared this Appellant’s

Opening Brief. I have personal knowledge of the facts contained in this declaration and if

I am called upon to testify as to these facts, I can and will competently testify.

I used the soft ware program Microsoft Word to prepare this brief. I utilized the

word count feature to count the number of words herein. That feature indicated that there

are 13,244 words in this brief excluding this declaration and including subject headings

and footnotes.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 23rd day of September, 2009 in Encino, CA.

Alan M. Goldberg


In re Marriage of Goldman, Case #: B213863

PROOF OF SERVICE - STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I, ALAN M. GOLDBERG, am over the age of 18 years, not a party to the within entitled action; my business address is 16000 Ventura Blvd. #500, Encino, CA 91436;

I served the forgoing RESPONDENT’S BRIEF

__x__ by placing a true and correct copy thereof for collection and mailing in accordance with standard business practice in the United States on the date below enclosed in a sealed envelope with postage fully pre-paid addressed as follows:

Lynette Berg Robe, Esq.12711 Ventura Blvd. #315Studio City, CA 91604___ by fax, ___ page(s), 818-980-7141

Clerk of the CourtSUPERIOR COURT900 Third Street San Fernando, CA 91340

California Supreme Court350 McAllister StreetSan Francisco, CA 941024 copies

I am readily familiar with standard office procedure for collection and processing mail. It is my practice to deposit mail with the United States Post Service on the same day it is submitted for mailing.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Dated: September ___, 2009

LAW OFFICE OF ALAN GOLDBERG, APLC

By: _______________________________ Alan M. Goldberg


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