Gilbert L. Loaec 2014 Trust v. Doheny

Background

Gilbert L. Loaec 2014 Trust, Yvonne Loaec-Russ, and Gilbert L. Loaec sued Romona A. Doheny. The complaint alleged that Doheny took advantage of Loaec’s advanced age, deteriorating health, and dementia. According to the complaint, between 2013 and 2018 Loaec gave Doheny approximately $1.4 million after she allegedly used fabricated stories and other conduct to gain his trust and persuade him to provide money.

The complaint asserted seven claims or requested forms of relief: financial abuse of an elder under California Welfare and Institutions Code § 15610.30; fraud under California Civil Code § 1709; undue influence under California Welfare and Institutions Code § 15610.70; conversion under California Civil Code § 1712; receiving or concealing stolen property under California Penal Code § 496; injunctive relief; and disinheritance under California Probate Code § 259. Loaec died two months after the complaint was filed, and his estate entered probate. The opinion states that Yvonne Loaec-Russ was later appointed executor of the estate.

Procedural posture and legal standard

Doheny filed a motion to dismiss after answering the complaint. Because a motion to dismiss for failure to state a claim must generally be filed before the responsive pleading, the court converted Doheny’s motion into a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). That motion uses the same legal standard as a motion to dismiss for failure to state a claim. The court therefore accepted the complaint’s material factual allegations as true and considered whether the claims were legally sufficient.

Financial abuse of an elder

The court held that the complaint adequately alleged financial abuse of an elder. It alleged that Loaec was over 65 and that Doheny obtained his property through fraud or undue influence. The court rejected Doheny’s argument that the claim could not proceed because Loaec was not a dependent adult, explaining that California law protects an “elder or dependent adult.” The court also rejected the argument that Loaec willingly gave Doheny the money, because a transfer may still support financial-abuse liability if the willingness was induced by fraud or undue influence.

The court denied Doheny’s motion to dismiss this claim.

Fraudulent deceit

The court concluded that the complaint alleged fraud with enough particularity to satisfy Federal Rule of Civil Procedure 9(b). The complaint identified alleged false statements about lupus, breast cancer, broken hands, a brain aneurysm, a severe car accident, bank fraud, and losing a home in Hurricane Irma. It also alleged that Doheny used those statements to persuade Loaec to give her money between 2013 and 2018. The court denied the motion to dismiss the fraud claims.

Undue influence

Doheny challenged the undue-influence claim under California Civil Code § 1575, but the complaint actually asserted the claim under California Welfare and Institutions Code § 15610.70. The court nevertheless determined that the claim appeared duplicative of the financial-abuse claim because California law treats undue influence as an alternative basis for financial-abuse liability. The court granted Doheny’s motion to dismiss the third claim for undue influence without leave to amend. The plaintiffs remained able to rely on an undue-influence theory in pursuing their financial-abuse claim.

Conversion

The court held that the plaintiffs adequately stated a conversion claim. The complaint alleged that Doheny took more than $1.2 million in checks and received a $200,000 loan that was never repaid. The court found that these were specific, identifiable sums of money and rejected Doheny’s argument that conversion was unavailable because the complaint did not allege that Loaec required her to keep the money separate from her own funds. The court denied the motion to dismiss the conversion claim.

Receiving or concealing stolen property

The court addressed a dispute over whether California Penal Code § 496 permits civil liability when the same conduct also supports fraud or conversion. It found the reasoning allowing such civil liability more persuasive, concluding that the statute’s prohibition on dual convictions was limited to criminal convictions and did not bar civil liability under § 496(c). The court denied the motion to dismiss the claim for receiving or concealing stolen property.

Injunctive relief

The court agreed with Doheny that injunctive relief is a remedy rather than a separate cause of action. It nevertheless declined to dismiss the request. Instead, it construed the complaint’s sixth cause of action as a request for an injunction rather than as an independent claim.

Disinheritance and probate exception

The court declined to dismiss the disinheritance request for lack of factual support because the complaint adequately alleged financial abuse and the court had to accept those allegations as true at this stage. But it held that the claim fell within the probate exception, which prevents federal courts from administering a decedent’s estate or effectively annulling a will. The court granted Doheny’s motion to dismiss the disinheritance claim under California Probate Code § 259 without leave to amend.

Disposition

The court granted Doheny’s motion to dismiss the third claim for undue influence under California Welfare and Institutions Code § 15610.70 and the seventh claim for disinheritance under California Probate Code § 259, both without leave to amend. The court otherwise denied Doheny’s motion to dismiss. The order did not resolve the remaining claims on their ultimate merits.