Stansfield v. Starkey

• Decision Date: 09 May 1990
• Docket Number: No. B037375,B037375
• Parties: Manfred STANSFIELD, et al., Plaintiffs and Appellants, v. Norman STARKEY, et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

Page 337

269 Cal.Rptr. 337

220 Cal.App.3d 59

Manfred STANSFIELD, et al., Plaintiffs and Appellants, v. Norman STARKEY, et al., Defendants and Respondents.

No. B037375.

Court of Appeal, Second District, Division 7, California.

May 9, 1990.

Lawrence Levy, Sherman Oaks, Lyle Francis Middleton, Los Angeles and Robert A. Brown, for plaintiffs and appellants.

Bowles & Moxon, Kendrick L. Moxon, Hollywood, Turner, Gerstenfeld, Wilk & Tigerman, Beverly Hills, Lawrence E. Heller, Woodland Hills, and William Drescher, Los Angeles, for defendants and respondents.

FRED WOODS, Associate Justice.

The trial court sustained without leave to amend demurrers to appellants' fifth amended complaint and dismissed actions against respondents Author Services, Inc. and Church of Spiritual Technology. We find no abuse of trial court discretion and therefore affirm the judgment.

PROCEDURAL BACKGROUND

On December 31, 1986, appellants (six individuals, one non-profit organization The complaint alleged that appellants were or had been members of the Church of Scientology, that they had been induced to join the church by defendants' misrepresentations, that defendants had breached a fiduciary duty by disclosing confidential confessional information, and that defendants had diverted church property to themselves.

and a present class of approximately 400 persons who [220 Cal.App.3d 64] could number several thousand) filed their original complaint. Named as defendants were 14 individuals, one estate, six non-profit organizations, one for profit corporation, one non-profit religious corporation, five undesignated entities, and one hundred Does. Three causes of action were alleged: (1) fraud (2) breach of a fiduciary relationship or duty and (3) injunctive relief and constructive trust.

A demurrer to the complaint was filed by defendant Sherman D. Lenske, the only defendant then served.

On March 18, 1987, the scheduled date for the demurrer hearing, appellants stated "We'll accept the tentative ruling." In pertinent part, the ruling of the court (Judge Dowds) provided: "Demurrer sustained to each cause of action per CCP § 430.10(e) and (f) ¹ on the grounds set forth in the moving papers. In particular, plaintiff must comply with [p] 103(d) of the Law Department Manual, ² fraud must be specifically pleaded (who said what to whom and when and where) and the circumstances of discovery of the fraud must be pleaded (when, by whom, where and how). If discovery was more than 3 years before the filing of the complaint, facts must be pleaded showing why it wasn't discovered earlier. 30 days to amend. 30 days to respond."

Respondents, Author Services, Inc. (ASI) and Church of Spiritual Technology (CST), the only other served defendants, were given 20 days, after the filing of the amended complaint, to respond.

On April 17, 1987, appellants filed their second pleading, the first amended complaint. It alleged five causes of action: (1) fraud (2) breach of fiduciary duty and/or relationship(s) (3) invasion of privacy (4) intentional infliction of emotional distress and (5) injunctive relief and constructive trust.

The fraud cause of action was again based upon alleged misrepresentations which induced appellants to join the Church of Scientology. The other four causes of action arose from alleged disclosures of confidential confessional communications.

Respondents (ASI and CST) and defendant Sherman D. Lenske demurred.

The court (Judge Dowds) sustained the demurrers to all five causes of action and detailed the deficiencies of the first amended complaint in a lengthy order. ³ Defendant Lenske's motion for sanctions (Code In their third pleading, the second amended complaint, ⁵ appellants realleged the previous five causes of action and added a sixth, conspiracy. Respondents and defendant Sherman D. Lenske demurred.

Civ.Proc., [220 Cal.App.3d 66] § 128.5) ⁴ against appellants was granted. Appellants were given 30 days to file an amended complaint.

The court (Judge Dowds) sustained without leave to amend respondents' ⁶ demurrers to the fraud and conspiracy causes of action and sustained with leave to amend the demurrers to the other causes of action. ⁷ Again the court detailed the pleading deficiencies in elaborate detail. ⁸

In their fourth pleading, the third amended complaint, appellants added two new causes of action, establishment of resulting trust and unfair advantage in confidential relationship, split injunctive relief and constructive trust into separate causes of action, realleged causes of action for breach of confidential relationship, invasion of privacy, and intentional infliction of emotional distress, and increased the number of Does from 100 to 5,000. As with their successive complaints appellants served only two defendants, respondents, ASI and CST.

Respondents demurred and ASI also made a motion to strike.

On December 7, 1987, the court (Judge Dowds) sustained without leave to amend the demurrers to three causes of action: establishment of resulting trust, imposition of constructive trust, and unfair advantage in confidential relationship. ⁹ The court sustained with leave to amend ¹⁰ the demurrers to the other four causes of action. In its lengthy order the court specified pleading deficiencies, made distinctions between appellants, and imposed sanctions on appellants. ¹¹

In their fifth pleading, the fourth amended complaint, appellants alleged four causes of action: (1) breach of confidential relationship (2) invasion of privacy (3) intentional infliction of emotional distress and (4) injunctive relief. Respondents both demurred and made motions to strike.

The court (Judge Cooperman), in a four-page order, ¹² partly granted the motions to On April 8, 1988, appellants filed their sixth and final pleading, the fifth amended complaint. Although given leave to do so, appellants did not reallege a cause of action for either invasion of privacy or intentional infliction of emotional distress. Appellants did, however, reallege a breach of confidential relationship cause of action and also sought injunctive and constructive trust relief. And appellants alleged a new cause of action for racketeering prohibited by the Racketeer Influenced and Corrupt Organizations Act (RICO, 18 U.S.C., § 1961 et seq.).

                strike, sustained the demurrers to the first three causes of action [220 Cal.App.3d 69] (the fourth, injunctive relief, being a remedy not a cause of action), denied sanctions, and admonished appellants "that this is the last opportunity that will be extended to amend the complaint in the manner required herein and in the prior orders rendered by Judge Dowds."   Appellants were given 30 days to amend
                

By its order of July 20, 1988, ¹³ the court (Judge Cooperman) sustained without leave

to amend the demurrers of respondents. Thereafter the court signed orders of dismissal and appellants appealed.

DISCUSSION

A. Standard of Review

"In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)

It is the correctness of the trial court's action in sustaining a demurrer, not its reasons, which is reviewable. (Maheu

                v. CBS, Inc.  (1988) 201 Cal.App.3d 662, 670, 247 Cal.Rptr. 304.)   The burden is upon appellant to demonstrate that the action of the trial court was an abuse of discretion.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, 134 Cal.Rptr. 375, 556 P.2d 737.)
                

B. Scope of review

Our review encompasses not merely appellants' last pleading and the court's order sustaining without leave to amend the demurrers to that pleading but also certain other pleadings and orders. "Although ordinarily an appellate court will not consider the allegations of a superseded complaint (see Foreman & Clark v. Fallon (1971) 3 Cal.3d 875, 884, 92 Cal.Rptr. 162, 479 P.2d 362), that rule does not apply when the trial court denied plaintiffs leave to include those allegations in an amended complaint." (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 209, 197 Cal.Rptr. 783, 673 P.2d 660.)

C. Fraud

Appellants alleged a fraud cause of action in each of their first three pleadings. Demurrers to the first and second fraud pleadings were sustained with leave to amend. But the demurrers to the third fraud pleading were sustained without leave to amend. We therefore consider whether or not this sustainment order was within the court's discretion.

The elements of fraud or deceit (see Civ.Code, §§ 1709, 1710) are: a representation, usually of fact, which is false, knowledge of its falsity, intent to defraud, justifiable reliance upon the misrepresentation, and damage resulting from that justifiable reliance. (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109, 128 Cal.Rptr. 901; 5 Witkin, Summary of Cal. Law (9th ed.1988) § 676, p. 778.)

"Every element of the cause of action for fraud must be alleged in the proper manner and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand...