Opinion
B318017
02-21-2023
RANDALL BERNARD ALLEN, Plaintiff and Appellant, v. PACIFIC LIFE & ANNUITY SERVICES, INC. Defendant and Respondent.
Randall Bernard Allen, in pro. per., for Plaintiff and Appellant. Cozen O'Conner and Brett N. Taylor, for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 21STCV25562 Malcolm Mackey, Judge. Affirmed.
Randall Bernard Allen, in pro. per., for Plaintiff and Appellant.
Cozen O'Conner and Brett N. Taylor, for Defendant and Respondent. 2
EDMON, P. J.
Randall Bernard Allen appeals from a judgment entered in favor of Pacific Life &Annuity Services, Inc. (PLASI) following the trial court's order sustaining PLASI's demurrer without leave to amend. Because we conclude that Allen has not shown that the trial court erred, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
I. The settlement agreement
In June 2017, Allen and the City of Los Angeles (City) entered into a settlement agreement resolving a lawsuit for wrongful prosecution that Allen had filed against the City (settlement agreement). The settlement agreement required the City to make a lump sum payment to Allen and thereafter to make periodic payments to "The California Pooled Trust FBO Randall Allen." The settlement agreement further provided that the City could assign to PLASI the City's liability to make the periodic payments required by the settlement agreement, and that the City would make a payment to PLASI to fund those payments.
Allen, the City, and PLASI then executed a "qualified assignment and release agreement" (qualified assignment). Under the qualified assignment, PLASI assumed the City's liability to make the periodic payments required by the settlement agreement. PLASI also entered into an agreement with Pacific Life Insurance Company (PLIC) to purchase an annuity to fund the periodic payments.
After Allen created a trust account to receive the periodic payments required by the settlement agreement, he hired Vista Points, Inc. to be his trust account administrator. 3
II. Lawsuit against PLASI and others
A. Original complaint
In July 2021, Allen filed a lawsuit against the City, PLASI, and Vista Points. The lawsuit included a wide range of allegations. We summarize only those allegations that appear relevant here.
The complaint misidentified PLASI and PLIC as a single defendant described as "Pacific Life Insurance, Annuity Company."
Allen's complaint described the settlement agreement, including the provision that periodic payments required by the settlement would be paid by PLASI in monthly installments to his trust account. The complaint otherwise included few allegations regarding PLASI. It alleged PLASI was responsible for sending monthly payments to Vista Points, and that "payments have not been sent as scheduled, as the accounting numbers do not equate to the number of payments that were scheduled to be sent, minus distributions for [Allen], and the balance of funds reported by Vista Points Inc." The complaint did not include any further details regarding this allegation.
Rather, a primary focus of Allen's complaint was his dissatisfaction with Vista Points. Allen alleged that after he established Vista Points as his trust account administrator, it failed to pay his bills on time, prevented him from using trust account funds for certain purposes, including a down payment for a home, and failed to provide him with sufficient information to verify his trust account balance.
The lawsuit alleged two causes of action. Allen's first cause of action was brought under the heading "Deprivation of Civil 4 Rights - 42 U.S.C. § 1983 - Equal Protection of the Law, Due Process." Allen alleged that the defendants, acting jointly and as agents of one another, violated his rights under the Fourteenth Amendment "in that the settlement agreement that was entered, was not adhered to, as [Allen] has been deprived of the funds that were contractually agreed upon" in the settlement agreement.
Allen further alleged that the City "willfully omitted relevant, and crucial evidence to coerce [Allen] into the settlement agreement, gaining an unfair advantage" over him. It is not clear what this allegation refers to, but earlier in the complaint Allen alleged that "[i]n confidential police files, it was discovered that [Allen] was illegally experimented on while incarcerated" with certain technology that "creates detailed human simulations of the human mind."
According to the complaint, "[u]naware, [Allen] did accept the settlement agreement, and funds allotted from monthly annuity installment payments were not provided as contract agreement stated, as balances by Pacific Life Insurance Annuities, and Vista Points Inc[.], do not coincide. [Allen] filed formal complaints requesting inquiries and a formal investigation, deliberate indifference ensued. As each Defendant was notified of discrepancies of balances, fiduciary violations, and abuses occurring, and failed to thoroughly investigate, they did become co-conspirators in the violations being committed against [Allen's] rights."
The first cause of action also alleged that defendants violated his "right to be free from unreasonable seizures under the Fourth Amendment," and asserted that Allen had a "liberty interest in being free from abusive government actions, and in being accorded procedural and substantive due process of law." 5
The second cause of action was brought under the heading "Deprivation of Civil Rights - 42 U.S.C. § 1983 - Breach of Contract - Covenant of Good Faith &Fair Dealings." Allen alleged that "[t]here was an implied obligation of Good Faith and Fair Dealings, in contractual agreement, when [Allen] agreed to enter into the agreement." The allegation does not identify which "agreement" it concerns.
Allen further alleged that "[t]he controlling Defendant did engage in unconstitutionality, as information contained in confidential police files were withheld from [Allen] in an attempt to coerce a swift, but unfair settlement" in his lawsuit against the City. He also alleged that "[t]he contract was established in bad faith, because [Vista Points's executive director] did give a false pretense to coerce [Allen] into becoming a client."
In August 2021, PLASI filed a demurrer to the complaint and requested that the court take judicial notice of the settlement agreement, qualified assignment, and annuity contract with PLIC. The court did not rule on PLASI's demurrer because Allen filed an amended complaint.
B. Amended complaint
Several days after PLASI filed its demurrer to the original complaint, Allen filed a document titled "Civil Rights Complaint, Damages and Injunctive Relief." Although Allen did not clearly identify it as such, the clerk's transcript designates the document as the first amended complaint and the document is file-stamped "first amended."
PLASI's brief in this court states that "[u]nknown to PLASI until receipt of the Clerk's Transcript, the [first amended complaint] which was served upon PLASI's counsel by [Allen]" was not precisely the same as the document filed with the 6 superior court. Moreover, PLASI states that Allen did not serve it with the document designated by the superior court clerk as the first amended complaint. Despite this confusion, PLASI contends that "[t]he contents and allegations of the original Complaint and [first amended complaint] are the same and do not change the fact that the demurrer ruling was proper." It is not clear whether PLASI's contention refers to the first amended complaint it received from Allen, or the document designated as such by the clerk's transcript.
According to PLASI, Allen's first amended complaint removed PLIC as a defendant. We assume this refers to the document Allen served on PLASI, not the one designated by the clerk's transcript-which continues to refer to PLIC-as the first amended complaint.
Allen's reply brief does not address this discrepancy, and the record does not contain the first amended complaint Allen apparently served on PLASI. We thus assume for purposes of this appeal that the document designated by the clerk's transcript as the first amended complaint was the subject of the trial court's ruling.
In the first amended complaint, Allen stated that he would not dismiss PLASI or PLIC from the lawsuit. He alleged, among other things, that the qualified assignment made PLIC "a subsidiary of the City of Los Angeles, as the matter relates to [Allen]."
Allen further alleged that the "structured annuity payments due monthly paid to Vista Points Inc., as it relates to [Allen's] 'Special Needs Trust' being paid consistently, has failed to be established by [PLIC]." According to the first amended complaint, PLIC failed to respond to his requests for information 7 and documents related to the funding of his trust account. The first amended complaint states that "[PLIC] customer service representative(s) relayed that matters must be adhered to in court proceedings, as mandated in court documentation. [Allen] has yet to be provided any documentation confirming such mandate, or any other documentation related to his structured payments, agreement, accounts, or balances."
Additionally, Allen alleged that he reported "to [PLIC] that Vista Points Inc[.] provided quarterly statements reflecting a balance of funds that [Allen] had a major discrepancy with because it was significantly lower than what it should total. Monthly payments were made on a consistent basis as stated by [PLIC], so the quarterly statements provided by Vista Points Inc., should have reflected as such, in the balance(s) of those statements, and they did not."
Last, Allen also alleged that he asked PLIC "on more than one occasion" to make the periodic payments required by the settlement agreement directly to his bank account instead of to his trust account.
The remainder of the first amended complaint describes matters that appear unrelated to PLASI or the funding of his trust account.
PLASI filed a demurrer to the first amended complaint in September 2021. It contended that Allen failed to state a claim under 42 United States Code section 1983 (section 1983) because the allegations failed to show it acted under color of law. It further contended that Allen failed to state a claim for breach of contract or the implied covenant of good faith and fair dealing for several reasons: Allen failed to attach or describe the contractual provisions that were allegedly breached; quarterly statements 8 from Vista Points attached to Allen's original complaint showed that payments were timely and accurately made; and Allen failed to identify a contractual provision requiring that the periodic payments be deposited into his bank account instead of his trust account.
Allen did not file an opposition to PLASI's demurrer.
In December 2021, the court held a hearing at which Allen and counsel for PLASI appeared and the court sustained PLASI's demurrer without leave to amend. There is no transcript of the hearing. The court's minute order states that PLASI's "demurrer is sustained, without leave to amend, based upon all of its page numbers." The court also issued a separate order sustaining PLASI's demurrer without leave to amend and dismissing Allen's first amended complaint with prejudice, and entered judgment in favor of PLASI.
Allen timely appealed.
DISCUSSION
A. Standard of review
"A demurrer tests the legal sufficiency of the factual allegations in a complaint. We independently review the sustaining of a demurrer and determine de novo whether the complaint alleges facts sufficient to state a cause of action or discloses a complete defense. [Citation.] We assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken. [Citation.] We construe the pleading in a reasonable manner and read the allegations in context. [Citation.] We must affirm the judgment if the sustaining of a general demurrer was proper on any of the 9 grounds stated in the demurrer, regardless of the trial court's stated reasons. [Citation.]
"It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. [Citation.] The burden is on the plaintiff to demonstrate how the complaint can be amended to state a valid cause of action. [Citation.] The plaintiff can make that showing for the first time on appeal. [Citation.]" (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 225-226.)
Even though Allen is representing himself, he "is to be treated like any other party and is entitled to the same, but no greater consideration than other litigants and attorneys." (Barton v. New United Motor Manufacturing, Inc. (1996) 43 Cal.App.4th 1200, 1210.) Allen is thus bound by the settled rule that" '[a] judgment or order of the lower court is presumed correct,'" and "error must be affirmatively shown." (Denham v. Superior Court (1970) 2 Cal.3d 557, 564, italics omitted; People v. Sanghera (2006) 139 Cal.App.4th 1567, 1573 ["Perhaps the most fundamental rule of appellate law is that the judgment challenged on appeal is presumed correct, and it is the appellant's burden to affirmatively demonstrate error."].) For this reason, "our review is limited to contentions adequately raised in [Allen's] briefs." (Case v. State Farm Mutual Automobile Insurance Co., Inc. (2018) 30 Cal.App.5th 397, 402.)
B. Allen has failed to satisfy his burden of demonstrating the trial court erred
As noted, it is Allen's burden to demonstrate that the trial court erred by sustaining PLASI's demurrer without leave to amend. We conclude that he has failed to satisfy that burden. 10
1. Section 1983 claim
Allen's first cause of action alleged a violation of section 1983. "[T]o state a claim under . . . section 1983, the plaintiff must allege that a person acting under color of state law deprived him or her of a federally guaranteed right." (Julian v. Mission Community Hospital (2017) 11 Cal.App.5th 360, 395-396 (Julian).)" 'While generally not applicable to private parties, a § 1983 action can lie against a private party when "he is a willful participant in joint action with the State or its agents."' [Citations.]" (Id. at p. 396.) Federal law governs whether a private party is a state actor. (Ibid.)" 'We start with the presumption that conduct by private actors is not state action.' [Citations.]" (Ibid.)
Allen fails to demonstrate the trial court erred by sustaining the demurrer to his section 1983 claim. He does not present any argument clearly explaining how the allegations in the first amended complaint establish that PLASI, a private entity, acted under color of law. (See Julian, supra, 11 Cal.App.5th at pp. 396-401 11 [affirming decision sustaining demurrer without leave to amend where plaintiff failed to allege facts showing private defendants acted under color of law for purposes of § 1983]; McMahon v. Lopez (1988) 199 Cal.App.3d 829, 837 ["A prerequisite for any relief under section 1983 is that the defendant acted under color of state law"]; see also Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277 [" '[T]o demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record.' "]; City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 287 ["[W]e may disregard conclusory arguments that are not supported by pertinent legal authority or fail to disclose the reasoning by which the appellant reached the conclusions he wants us to adopt"]; In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 ["The absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived."].)
At oral argument, Allen suggested without elaboration that PLASI could be treated as having acted under color of law based on the "public function" test. (See Julian, supra, 11 Cal.App.5th at p. 397 ["Under the public function test, a private party's conduct constitutes state action when the private party exercises powers that are' "traditionally the exclusive prerogative of the State."' "].) Because Allen did not clearly raise this argument in his briefs, we do not reach it. (See County of Sonoma v. Superior Court (2010) 190 Cal.App.4th 1312, 1326, fn. 10 [declining to address contention first raised at oral argument].) And in any event, Allen failed to describe how PLASI exercises powers that are traditionally the exclusive prerogative of the City or other public entity. (See Julian, at p. 397.)
Allen's second cause of action also alleged, at least in its title, a violation of section 1983. Hence, to the extent the second cause of action was based on section 1983, for the same reasons described above, Allen has failed to demonstrate that the trial court erred by sustaining PLASI's demurrer to the second cause of action.
2. Contract-based claim
Both Allen and PLASI treat Allen's second cause of action as a claim for breach of contract and breach of the implied covenant of good faith and fair dealing. The elements of a cause of action for breach of contract "are the existence of the contract, performance by the plaintiff or excuse for nonperformance, breach by the defendant and damages." (First Commercial Mortgage Co. v. Reece 12 (2001) 89 Cal.App.4th 731, 745.) The implied covenant of good faith and fair dealing is implied by law in every contract. (See Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.) "The covenant is read into contracts and functions' "as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party's rights to the benefits of the contract."' [Citation]." (Ibid., italics omitted.)
Again, Allen fails to demonstrate the trial court erred by sustaining the demurrer to his second cause of action. For one thing, Allen's opening brief includes no citations to the record, i.e., the clerk's transcript. That deficiency alone warrants affirming the trial court. (See Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 589 ["An appellant who fails to cite accurately to the record forfeits the issue or argument on appeal that is presented without the record reference."]; Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246 [" 'The appellate court is not required to search the record on its own seeking error.' "]; Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856 ["If a party fails to support an argument with the necessary citations to the record, that portion of the brief may be stricken and the argument deemed to have been waived."]; see Cal. Rules of Court, rule 8.204(a)(1)(C) [requiring that brief "[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears"].) We acknowledge that Allen's reply brief does include a few citations to the record, but by then it was too late to permit PLASI the opportunity to respond. (See Reichardt v. Hoffman 13 (1997) 52 Cal.App.4th 754, 764 [" 'Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.' "].)
Allen's failure to cite to the record in his opening brief is no mere technicality. Because of that deficiency, Allen also fails to identify the specific allegations in his first amended complaint which he contends sufficiently alleged the elements of a cause of action for breach of contract or breach of the implied covenant of good faith and fair dealing. That too warrants affirming the trial court. (See Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1502 [appellants challenging order sustaining demurrer "bore the burden to show how the alleged facts are sufficient to establish every element" of cause of action]; Sui v. Price (2011) 196 Cal.App.4th 933, 938 ["The plaintiff 'bears the burden of demonstrating that the trial court erroneously sustained the demurrer as a matter of law' and 'must show the complaint alleges facts sufficient to establish every element of [the] cause of action.' "].) Moreover, because there is no transcript from the hearing regarding PLASI's demurrer to the first amended complaint, we cannot determine which allegations Allen relied on in the trial court to support his second cause of action.
We understand that Allen is representing himself and that he is not trained in appellate law or procedure. But even if we try to overlook the dispositive deficiencies with Allen's appeal, he still fails to convince us that reversal of the trial court's judgment in favor of PLASI is warranted. As best we can tell from his briefs, Allen's principal contentions are that PLASI failed to provide him with information regarding alleged discrepancies in 14 the periodic payments to his trust account, and that PLASI would not deposit the periodic payments to his personal bank account instead of to his trust account.
Nonetheless, Allen's opening brief fails to explain how the legal authorities he cites support the conclusion that PLASI's purported failure to provide him with information about his trust account deposits was itself a breach of contract or the implied covenant of good faith and fair dealing. (See Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1, 10 ["[A]n appellant is required to not only cite to valid legal authority, but also explain how it applies in his case."]; see also In re S.C. (2006) 138 Cal.App.4th 396, 411.) Allen's reply brief admittedly does a better job explaining how the cases he cites support his contentions. But he still fails to clearly indicate 15 which allegations in his first amended complaint were sufficient to state a cause of action, and we are not required to develop Allen's arguments for him. (See Paterno v. State of California (1999) 74 Cal.App.4th 68, 106 ["An appellate court is not required to examine undeveloped claims, nor to make arguments for parties."]; Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th 888, 890, fn. 1 [appellate court "will not develop the appellants' arguments for them"].)
We also conclude that Allen's opening brief fails to clearly discuss a cause of action for accounting, let alone describe how the trial court erred by failing to construe the first amended complaint as alleging the elements of such a cause of action. We thus need not reach PLASI's contention that Allen forfeited such a claim by failing to adequately raise it in the trial court. PLASI also contends that insofar as Allen alleges that it failed to make payments to his trust account as required by the settlement agreement, quarterly statements from Vista Point that were attached to Allen's original complaint contradict that contention. But Allen's first amended complaint does not clearly allege PLASI failed to make payments required by the settlement agreement, and Allen's briefs on appeal do not clearly raise that allegation either. Rather, Allen's contention appears to be that PLASI failed to provide him with sufficient information to evaluate what he describes as discrepancies in his trust account balance.
Likewise, Allen does not cite or discuss legal authority clearly supporting the conclusion that it was a breach of contract or the implied covenant of good faith and fair dealing for PLASI to continue depositing the periodic payments to his trust account. Indeed, the settlement agreement, qualified 16 assignment, and annuity contract all specifically identified the payee as "The California Pooled Trust FBO Randall Allen."
At oral argument, Allen contended that paragraph 5 of the qualified assignment required PLASI to deposit the periodic payments to his bank account instead of to his trust account. In relevant part, that paragraph provides that "Assignee"-PLASI- "may have Annuity Issuer send payments directly to a Claimant,"-Allen-"or, if applicable, to a Successor Payee ...." (Italics added.) We do not construe this provision as requiring PLASI to direct payments to Allen's bank account upon his request, contrary to the terms of the qualified assignment requiring that payments be made to his trust account. (See Sierra Club v. San Joaquin Local Agency Formation Com. (1999) 21 Cal.4th 489, 499 ["word 'may'" does "not mean 'must' or 'shall' "]; Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1561 ["The use of the word 'may' denotes a discretionary choice."].)
Allen's opening brief argues that he was "denied his right to establish his own self-settling first party trust account under the Special Needs Trust Fairness Act." PLASI contends that, contrary to this argument, Allen's trust is a self-settled first-party trust. We do not reach this issue, as Allen has failed to indicate how it relates to the allegations in the first amended complaint or the trial court's order sustaining PLASI's demurrer. Allen's opening and reply briefs also attached various documents, but he fails to adequately indicate if they are excerpts of the clerk's transcript, were otherwise before the trial court, or how they relate to the contentions in his brief. We therefore do not consider them.
Allen does not argue that the trial court erred by denying him leave to amend his complaint. And while Allen may request leave to amend for the first time on appeal (see Code Civ. Proc., § 472c, subd. (a); Jensen v. The Home Depot, Inc. (2018) 24 Cal.App.5th 92, 97), he has not clearly articulated the grounds for a proposed amendment that would cure the defects described above. 17
DISPOSITION
The judgment in favor of PLASI is affirmed. Each side shall bear its own costs on appeal.
We concur: EGERTON, J., NGUYEN (KIM), J. [*]
[*] Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.