Avila v. Caruso
| Decision Date | 13 May 2021 |
| Docket Number | B303496 |
| Court | California Court of Appeals Court of Appeals |
| Parties | ROSE AVILA, Plaintiff and Appellant, v. DAVID CARUSO et al., Defendants and Respondents. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. 19STCV06478)
APPEAL from a judgment of the Superior Court of Los Angeles County, Richard L. Fruin, Judge. Affirmed.
Willoughby & Associates, Anthony Willoughby, and Anthony Willoughby II, for Plaintiff and Appellant.
Jenner & Block, Michael P. McNamara, Kirsten H. Spira, and Effiong K. Dampha, for Defendants and Respondents Venable LLP, Daniel Hoffer, and Chana Ickowitz.
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Rose Avila appeals from a judgment following an order sustaining a demurrer to her complaint without leave to amend. Her action arose from an alleged settlement agreement in which Avila claimed her former employer, David Caruso, and his company, Greta Films, Inc. (collectively, Caruso), agreed to pay her $450,000 in exchange for her agreement to abandon any claims she might have against Caruso and to help Caruso defeat claims against Caruso by Avila's former boyfriend. Avila alleged that she performed her obligations under the agreement, but that Caruso did not.
Avila filed this action against Caruso; the law firm, Venable LLP, and two of its attorneys, Daniel Hoffer and Chana Ickowitz, who represented Caruso (collectively, Venable); and an attorney hired to represent Avila, Barry Kellman. Avila eventually settled with Caruso and Kellman, but asserted causes of action against Venable for intentional and negligent misrepresentation and breach of fiduciary duty. The trial court sustained Venable's demurrer without leave to amend to Avila's causes of action for negligent misrepresentation and breach of fiduciary, ruling they were barred by the applicable statute of limitations. The court sustained Venable's demurrer without leave to amend to Avila's cause of action for intentional misrepresentation because she twice failed to allege fraud with sufficient specificity and was unable to articulate how she could amend to cure the defects in that cause of action.
Avila does not argue the trial court erred in sustaining Venable's demurrer. Instead, she argues she can amend her complaint again to allege facts sufficient to constitute causes ofaction for legal malpractice, breach of fiduciary duty, and fraud. Because Avila has not met her burden to show she can state these causes of action, we affirm.
These are Avila's allegations, which on demurrer we assume are true:1
Avila began working as a "travel assistant" for Caruso in 2015. Avila's former boyfriend, Richard Pinotti, also worked for Caruso as an assistant. In December 2016 Pinotti made a claim against Caruso under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) (FEHA), alleging Caruso created a "toxic work environment."2 Avila told Caruso that she had "similar experiences" with Caruso and that she wanted to end her relationship with Pinotti and move out of the country. Caruso told Avila that, if she helped him defeat Pinotti's claim and waived any claims she had against Caruso, he would give her $450,000, help her and her sister move into a new apartment, continue to employ her, and provide her a car. Caruso told Avilahis proposal was "reasonable" because Pinotti's claim could cost Caruso $4 million. Caruso also acknowledged he had engaged in sexually inappropriate behavior with Avila.
Some time prior to February 2017, Caruso or Venable retained Kellman to represent Avila. Venable also gave Avila legal advice regarding her potential claims against Caruso, thereby creating an attorney-client relationship between Avila and Venable. Although Avila told Venable she had witnessed Caruso harass Pinotti, Venable drafted a declaration for her "containing material falsehoods," which Avila signed and Caruso "use[d] against [Pinotti]." Venable and Kellman also convinced Avila "to give up her own claims against Caruso," without ever advising her of the "value of the claims that she was giving up." Pinotti and Caruso eventually settled Pinotti's claims against Caruso.
As promised, Caruso provided Avila a car and gave her $14,000 to move into a new apartment. Caruso, however, did not pay Avila the $450,000, and in February 2017 he terminated her employment.
On February 25, 2019 Avila filed the original complaint in this action, which she amended on March 21, 2019. In the first amended complaint Avila alleged eight causes of action, seven of them against Caruso, one against Kellman, and three against Venable. The causes of action against Venable were fraud, negligent misrepresentation, and breach of fiduciary duty.
In connection with the fraud cause of action, Avila alleged Caruso, Venable, "and or" Kellman intentionally induced her "to give up valuable claims relating to her employment with [Caruso]in exchange for a sum of $450,000, housing, continued employment and use of a car." Avila alleged that Caruso, Venable, "and or" Kellman intentionally concealed from her "the true value of her claims" against Caruso and that Caruso, Venable, "and or" Kellman knew or should have known Caruso did not intend to honor the agreement. Avila alleged that Caruso, Venable, "and or" Kellman concealed this information from her "to induce [her] to take a position for the benefit of Caruso and to her own detriment," that the defendants (together or separately) "intended to have [Avila rely] on the representations and omissions," and that she in fact reasonably relied on them to her detriment. Avila's cause of action for negligent misrepresentation contained similar allegations, but alleged the defendants acted negligently rather than intentionally. Avila's cause of action for breach of fiduciary duty alleged Avila formed an attorney-client relationship with Venable and Kellman, either one of whom or both breached duties to her by concealing the value of her claims against Caruso, failing to document her agreement with Caruso, and inducing Avila to take a position that benefitted Caruso but that harmed her.
Venable demurred to the first amended complaint. Venable argued that the one-year statute of limitations in Code of Civil Procedure section 340.63 barred Avila's causes of action for negligent misrepresentation and breach of fiduciary duty and that she did not plead her causes of action for fraud and negligent misrepresentation with sufficient specificity. The trial court sustained Venable's demurrer. Regarding Avila's cause of action for fraud, the court ruled Avila's allegations were "vague as towho allegedly engaged in the concealment of information, and how [Venable] would have known that Caruso allegedly didn't intend to keep his bargain with [Avila]." The court gave Avila leave to amend all three causes of action.
Avila filed her second amended and operative complaint on July 1, 2019. The second amended complaint added the general allegation that, through September 2018, "Caruso continued to make representations to Avila that [Venable and Kellman] were working for Caruso on behalf of Avila."
In connection with the causes of action for fraud and negligent misrepresentation, Avila newly alleged that in or around December 2016 Caruso and Venable "jointly explained to Avila that in exchange for giving up her employment claims and helping Caruso with claims made by her former partner, Caruso with the help of [Venable and Kellman], would help Avila's sister move into a new apartment" and give Avila $450,000 for various purposes. She also modified her complaint so that, instead of alleging that one or more defendants intentionally induced her to rely on certain promises and concealed the true value of her claims against Caruso, she now alleged that all of the defendants engaged in that conduct. Avila also alleged Venable did not disclose or seek a waiver of any conflicts of interest. Venable demurred, again arguing that the statute of limitations barred Avila's negligent misrepresentation and breach of fiduciary duty causes of action and that she did not plead her fraud cause of action with sufficient specificity.
On September 6, 2019 Avila deposed Kellman. Four days later, on September 10, 2019, Avila filed her opposition to the demurrer. In her opposition, Avila did not identify any new facts discovered during Kellman's deposition, nor did she address Venable's argument that Avila's causes of action for negligent misrepresentation and breach of fiduciary duty were barred by the statute of limitations. Instead, Avila argued she had pleaded her fraud cause of action with sufficient specificity.
In advance of the September 27, 2019 hearing on the demurrer, the trial court issued a tentative ruling sustaining the demurrer in its entirety without leave to amend. The court tentatively concluded Avila's second amended complaint failed to cure the defects in her first amended complaint. The court stated that Avila's new allegation that Venable failed to present her with a conflict waiver did not support her cause of action for fraud because she knew Venable represented Caruso.
At the hearing counsel for Avila stated he "would submit" on the tentative ruling and asked only for "leave to amend the fraud action." The trial court asked counsel for Avila to identify a fact Avila had not yet alleged that would make a difference. Counsel for...
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