Lancona vs. Bell

The causes of action are addressed below in the same order as the parties did in their briefing.

13th cause of action for breach of contractual duty to pay a covered claim

“A cause of action for breach of contract requires proof of the following elements: (1) existence of the contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach.” (Miles v. Deutsche Bank National Trust Company (2015) 236 Cal.App.4th 394, 402.)

The Court already overruled Defendant AGL’s demurrer to Plaintiffs’ breach of contract claim as it was alleged in the original Complaint on 9/15/25. (ROA 103.)

Defendant makes the same arguments again, contending that AGL did not breach the insurance contract because Tanner was not the designated policy beneficiary. Again, Defendant ignores the allegations in the Complaint of vicarious liability. Plaintiffs allege that AGL is vicariously liable for the actions of Cantu, as he was acting within the scope of his employment or agency. (See e.g., 2AC, ¶¶ 4, 50, 82, 95, 100.)

For the same reasons as before, the demurrer to the breach of contract claim is overruled.

1st cause of action for declaratory relief

Code of Civil Procedure section 1060 authorizes ‘[a]ny person interested under a written instrument, excluding a will or a trust, or under a contract, who desires a declaration of his or her rights or duties with respect to another ... in cases of actual controversy relating to the legal rights and duties of the respective parties, [to] bring an original action ... for a declaration of his or her rights and duties....’ (Code Civ. Proc., § 1060, italics added.) ‘“The fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject.” [Citation.]’ [Citation.]

In order for a party to pursue an action for declaratory relief, the ‘“actual, present controversy must be pleaded specifically. ”’ [Citation.] Thus, a claim must provide specific facts, as opposed to conclusions of law, which show a ‘controversy of concrete actuality.’” (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513-514, disapproved on other grounds by Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919.)

The Court also overruled Defendant’s demurrer previously because Defendant argued that it was duplicative/derivative of the breach of contract claim and the demurrer to the breach of contract claim was overruled. (ROA 103.)

The demurrer again is overruled because Plaintiffs allege a breach of contract claim against AGL based on its vicarious liability for Cantu’s actions. Thus, Plaintiffs also state a declaratory relief claim based on their contractual rights.

12th cause of action for breach of fiduciary duty

To establish a breach of fiduciary duty, the plaintiff must allege: “(1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.)

It is well established that as a matter of law, an insurer is not a fiduciary of an insured. (Morris v. Paul Revere Life Ins. Co. (2003) 109 Cal.App.4th 966, 973 (“An insurer is not a fiduciary, and owes no obligation to consider the interests of its insured above its own”); Vu v. Prudential Property & Casualty Ins. Co. (2001) 26 Cal.4th 1142, 1151 (“The insurerinsured relationship, however, is not a true ‘fiduciary relationship’...This characteristic has led the courts to impose “special and heightened” duties, but ‘ [w]hile these ‘special’ duties are akin to, and often resemble, duties which are also owed by fiduciaries, the fiduciary-like duties arise because of the unique nature of the insurance contract, not because the insurer is a fiduciary.’”).

Similarly, if an insurer does not owe a fiduciary duty to its own insured, it would not owe a fiduciary duty to a prospective beneficiary.

The Court previously sustained AGL’s demurrer on this ground with leave to amend. (ROA 103.)

The allegations have not substantively changed. Plaintiffs again allege that Cantu owed a fiduciary duty to Sean Lancona and his intended third-party beneficiary, Tanner Lancona. (2AC, ¶ 174.) Plaintiffs cite to no binding California cases holding that a fiduciary relationship would exist under these circumstances.

Moreover, even the federal case Plaintiffs cite to - In re Conseco Ins. Co. Annuity Marketing & Sales Practices Litigation (N.D. Cal., Feb. 12, 2007, No. C-05-04726RMW) 2007 WL 486367, at p.7 - held that “as a matter of California law, no true fiduciary duty arises from the insurer-insured relationship and an insured therefore cannot maintain a claim for breach of fiduciary duty based solely on the insurer-insured relationship.”

Therefore, the Court sustains AGL’s demurrer to this cause of action.

2nd cause of action for fraud by concealment, 3rd cause of action for fraud by intentional misrepresentation and 4th causes of action for negligent misrepresentation

The elements of fraud are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

Generally, causes of action for fraud are subject to stricter pleading standards; fraud must be plead with specificity. (Committee on Children’s Television v. General Foods Corp. (1983) 35 Cal. 3d 197, 216-227.) Facts must be plead to “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.)

Plaintiffs have added additional, more specific allegations to the Second Amended Complaint that were not present before.

For example, Plaintiffs reproduced a number of texts from Cantu, and also described conversations with Bell, as well as noting the claim forms Bell submitted contained false information. (2AC, ¶¶ 84-89, 98-103.) Plaintiffs allege these communications by Cantu were made in his capacity as AGL’s agent. (2AC, ¶¶ 95, 98.)

In addition, Plaintiffs now allege justifiable reliance. (See e.g., 2AC, ¶ 107.)

Based on this, the Court overrules Defendant’s demurrer to the 2nd- 4th causes of action.

9th cause of action for conversion

“[A] mere contractual right of payment, without more” is insufficient to state a claim for conversion. (Farmers Ins. Exch. v. Zerin (1997) 53 Cal.App.4th 445, 452 (sustaining demurrer as to conversion claim after refusing to find that an insurer had a property interest in an insurer’s third-party recoveries by virtue of the policy language).) Thus, “the simple failure to pay money owed does not constitute conversion.” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151 (holding that a conversion claim was not appropriate for unpaid contractual wages because the failure to pay money owed should be brought under contract law.).)

Plaintiffs allege that “Defendants substantially interfered with Tanner Lancona's property by knowingly and intentionally taking possession of the stolen instrument, preventing Tanner Lancona from having access to the sums certain, and refusing to return the sums certain after Tanner Lancona demanded their return.” (SAC, ¶ 141.) This does not really describe actions of AGL, but of Bell, if anyone.

Because Plaintiffs’ claims as to AGL boil down to a contractual right of payment, conversion is not properly pled and the demurrer is sustained.

10th and 11th causes of action for Civil Theft and Aiding and Abetting

California Penal Code Section 496 makes it a violation to receive or conceal stolen property

or property obtained through theft, and allows victims to bring a civil action for three times the amount of actual damages and reasonable attorney fees.

Plaintiffs allege that Cantu made false representations with an intent to defraud Plaintiffs, facilitating the diversion of funds to Bell. (2AC, ¶¶ 157-160.) While this supports a claim for fraud, this does not constitute theft on the part of Cantu/AGL.

Accordingly, Defendant’s demurrer to these causes of action is sustained.

7th cause of action for intentional infliction of emotional distress

The elements of IIED are (1) Defendant’s conduct was outrageous, (2) Defendant intended to cause Plaintiff emotional distress or acted with reckless disregard of the probability that Plaintiff would suffer emotional distress, (3) Plaintiff suffered severe emotional distress, and (4) Defendant’s conduct was a substantial factor in causing Plaintiff’s severe emotional distress. (CACI 1620.) “A defendant's conduct is outrageous when it is so extreme as to exceed all bounds of that usually tolerated in a civilized community...[and] intended to inflict injury or engaged in with the realization that injury will result.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050–51.)

Plaintiffs allege in the SAC that “Defendants Sherri Bell, Joseph Matthew Cantu, and Does 1-50 engaged in extreme and outrageous conduct. This conduct includes, but is not limited to, interfering with Tanner's right to inheritance and stealing from him in connection with the passing of his father, with whom he was very close. This exceeded all bounds of that usually tolerated in a civilized community.” (2AC, ¶ 129.)

Defendant ignores Plaintiffs’ allegations of vicarious liability, arguing just that AGL did nothing wrong as it paid the death benefit to the policy’s designated beneficiary.

Because Plaintiffs allege that AGL is vicariously liable for Cantu’s actions, the Court overrules the demurrer as Plaintiffs allege facts to support outrageous conduct on the part of Cantu. (See Lawson v. Superior Court (2010) 180 Cal.App.4th 1372, 1389 (“As long as the Complaint adequately pleads the elements of negligence, negligent infliction of emotional distress and intentional infliction of emotional distress against Koen and Sanders, it also adequately pleads the vicarious liability of the State for those causes of action.”.)

6th cause of action for intentional interference with expected inheritance

In Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1057, the court explains that to state a claim for IIEI, a plaintiff must allege, (1) he had an expectancy of an inheritance, (2) causation, (3) intent, (4) the interference was conducted by independently tortious means, and (5) that plaintiff was damaged by the defendant's interference.

In paragraphs 122-125, Plaintiffs allege facts to support this claim. Therefore, the demurrer is overruled to the 6th cause of action.

(2) MOTION TO STRIKE

Defendant American General Life Insurance Company’s (“AGL”) motion to strike portions of Plaintiffs Tanner Lancona’s and Audrina Lancona’s Second Amended Complaint (“2AC”) is granted without leave to amend as to Plaintiffs’ claims for punitive damages and attorney fees.

Defendant’s request that the Court strike the entire Second Amended Complaint and the 22 exhibits attached to it is denied, as this was not properly noticed.

Punitive damages

Civil Code § 3294 provides that punitive damages may be awarded in an action for breach of an obligation not arising from contract, if the plaintiff proves by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. “Malice” means conduct that is intended to cause injury or despicable conduct that is carried on with a willful and conscious disregard of the right and safety of others. (Civ. Code § 3294(c)(1).)

Civ. Code, § 3294(b) provides:

An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.

Plaintiffs allege no facts to support liability on the part of AGL pursuant to § 3294(b), such as ratification, knowledge, etc.

Therefore, the motion is granted without leave to amend. While Plaintiffs request leave to amend, they do not articulate how they could amend to state sufficient facts.

Attorney fees

Attorney’s fees are recoverable by a party only if specifically provided for by a statute or law, or if authorized by an express agreement between the parties. (Code Civ. Proc., §§ 1021, 1033.5, subd. (a)(10)(A)-(C); Civ. Code, § 1717; see also Nasser v. Superior Court (1984) 156 Cal.App.3d 52, 56 (“Absent an agreement or statute, a party is generally precluded from recovery of attorney fees.”); Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127.)

There is no basis (contract, statute, law) for attorney fees against AGL, in light of Plaintiffs’ failure to allege facts to support their civil theft claims against AGL.

Accordingly, the request for attorney fees as to AGL is stricken.

The status conference re: payment of sanctions by attorney Anthony J. Francisco is vacated. The case management conference is continued to December 14, 2026 at 10:00 a.m. in Department C27.

Defendant AGL is ordered to give notice of all rulings set forth above.

112 2025-01531902 1. Demurrer to Complaint 2. Motion to Strike Portions of Complaint