Annika Peacock vs James Peacock

Case Number

Case Type Civil Law & Motion Hearing Date / Time Mon, 08/31/2026 - 10:00 Nature of Proceedings 1. Demurrer to First Amended Complaint; 2. Motion: Disqualify Counsel; 3. Motion: Strike First Amended Complaint Tentative Ruling Annika Peacock v. James Peacock Case No. 25CV05454 Hearing Date: August 31, 2026 HEARING: (1) Motion by Plaintiff Annika Peacock to Disqualify Price, Postel & Parma LLP (2) Demurrer by Defendant James Peacock to First Amended Complaint (3) Motion by Defendant James Peacock to Strike Portions of First Amended Complaint ATTORNEYS: For Plaintiff Annika Peacock: Self-represented For Defendant James Peacock: Melissa J. Fassett, Cory T. Baker, Price, Postel & Parma LLP

TENTATIVE RULING: The motion by plaintiff Annika Peacock to disqualify opposing counsel Price, Postel & Parma LLP is denied. The demurrer by defendant James Peacock to the first amended complaint is sustained with leave to amend as to the first cause of action for fraud. The demurrer is overruled in all other respects. The motion by defendant James Peacock to strike portions of first amended complaint is granted with leave to amend as to Prayer for Relief, Paragraph 3 (page 21, lines 16-17) in its entirety ("For punitive damages in an amount sufficient to punish and deter Defendant's fraudulent and defamatory conduct, pursuant to Civil Code section 3294").

This text is ordered stricken from the first amended complaint. The motion is denied in all other respects. Plaintiff Annika Peacock is granted leave to file a second amended complaint as set forth herein. On or before September 15, 2026, plaintiff may file and serve a second amended complaint that is signed by plaintiff.

Background: (1) First Amended Complaint by Annika On August 11, 2025, plaintiff Annika Peacock, also known as Annica Schauer (Annica), filed her initial complaint against defendant James Peacock (James) asserting six causes of action for: (1) fraud; (2) promissory estoppel; (3) unjust enrichment; (4) defamation; (5) constructive trust; and (6) declaratory relief. [Note: due to a common surname, the court will refer to the first names of the parties for clarity.]

On May 11, 2026, the court sustained a demurrer by James to Annika's complaint, with leave to amend, as to the first (fraud), second (promissory estoppel), fourth (defamation), and fifth (constructive trust) causes of action. In addition, the words "emotional distress," in paragraph 10 of the complaint, and paragraph 2 of the prayer for relief ("For punitive damages in an amount to punish and deter Defendant's fraudulent and defamatory conduct") were ordered stricken from the complaint.

On May 15, 2026, Annika filed her operative first amended complaint (FAC) asserting four causes of action for: (1) fraud; (2) unjust enrichment; (3) defamation; and (4) declaratory relief. The court notes that the ostensibly verified FAC in the court's file is not signed or verified by Annika.

As alleged in the FAC: James resides in Santa Barbara County. (FAC, P. 2.) This action concerns real property at 524 Feather River Drive, Chester, California 96020, in the County of Plumas, Assessor's Parcel Number 100-021-018 (Property). (FAC, P. 3.) Title to the Property was recorded on December 10, 2020, as follows: "Annika Schauer, a married woman as her sole and separate property and James Peacock, a widower, as joint tenants." (Ibid.) The purchase price of the Property was $290,000, paid by James. (FAC, P. 4.)

"At the time of purchase, the Property was uninhabitable. The Property lacked road access due to pervasive environmental hazards. The roof leaked and had sections with no shingles. The stairs providing access to two upstairs residential units were deemed unsafe by the property insurer and by a home inspection report retained by a prior prospective buyer, and required immediate remediation. Wildlife had entered and was residing in the structure. Multiple large trees on the property had been assessed as dangerous to the structure and to its occupants and required removal. The Property could not be occupied, rented, or used for any purpose in its condition at purchase." (FAC, P. 5.)

James made the following misrepresentations to Annika: "(a) That the Property would serve as a generational family investment; [P.] (b) That [James] would fund necessary repairs and improvements to the Property; [P.] (c) That [Annika] could eventually acquire [James'] interest in the Property at fair market value once the Property had been improved (the 'Buyout Arrangement'); and [P.] (d) That [Annika's] contributions of labor and capital to the Property would be recognized, protected, and credited toward the eventual acquisition." (FAC, P. 6.)

"These representations were material to Annika's decision to leave her federal Employment [in North Carolina], relocate cross-country [to California], and invest her personal capital in the Property. [James] knew that [Annika] would rely on these representations in making life-altering decisions, and intended that she do so." (FAC, P. 7.) These oral representations were made in 2020, "prior to and during the purchase of the Property," by James from Santa Barbara directly to Annika in Woodfin, North Carolina. (FAC, P. 6.)

"[James] made [these] oral representations to [Annika] concerning the generational investment, repair funding, and Buyout Arrangement. These representations were false. Defendant knew that these representations were false, or made them with reckless disregard for their truth or falsity, at the time they were made. [P.] [James] made these representations with the intent to induce [Annika] to resign her federal employment, relocate cross-country, and invest her labor and capital in the Property, thereby securing for [James] the benefit of [Annika's] efforts without honoring the commitments upon which [Annika] relied." (FAC, P.P. 60-61.)

"[James] was insistent that [Annika] relocate to the Property immediately. At the time of [James'] representations, [Annika] was employed as a GS-7, Step 8 Project Manager at the Department of Veterans Affairs Revenue Operations Center in West Asheville, North Carolina. This was a permanent federal position with full benefits. [Annika] was vesting toward a federal pension of approximately $100,000 per year, with approximately four years of service remaining before full vesting." (FAC, P. 8.)

"But for [James'] representations regarding the generational investment, repair funding, and Buyout Arrangement, [Annika] would not have resigned her federal position, relocated to Chester, invested $150,000 in the Property, or sold her personal residence at a loss." (FAC, P. 10.)

"As a direct and proximate result of [James'] fraudulent inducement, [Annika] has suffered damages including, but not limited to, the loss of federal retirement benefits, the loss of her capital investment, the loss on the sale of her personal residence, lost income, and lost opportunity costs, in amounts to be proven at trial." (FAC, P. 59.)

"Between approximately February 2021 and late 2022, [Annika] managed and funded extensive renovations to the Property, transforming it from an uninhabitable structure into a functional, livable, and income-capable residential property. [Annika's] improvements included, but were not limited to: roof replacement; driveway construction to provide road access; electrical system upgrades; plumbing repairs and replacement; stairway reconstruction to bring the upper units into compliance with safety standards; removal of multiple large trees deemed dangerous to the structure and its occupants; hardscaping; landscaping; and wildlife remediation." (FAC, P. 11.)

"[Annika's] total investment in capital improvements to the Property was approximately $150,000. This figure represents [Annika's] own funds, expended over a period of approximately two years." (FAC, P. 12.)

"As a result of [Annika's] improvements, the Property's value increased from the purchase price of approximately $290,000 to an estimated current value of $500,000 to $550,000." (FAC, P. 13.)

"[James] contributed no labor, no capital, and no effort to the improvement or maintenance of the Property at any time following the initial purchase. [James'] sole financial contribution to the Property was the purchase price, which was itself partially offset by seller concessions for closing costs negotiated by [Annika]." (FAC, P. 14.)

"[Annika] paid all property taxes on the Property from the date of purchase through approximately December 2025, when [James] made a single property tax payment. Prior to that date, [James] had not contributed to property taxes on the Property at any time." (FAC, P. 15.)

"[Annika] [also] contends that she holds an equitable interest in the Property commensurate with her financial contributions of approximately $150,000 in capital improvements, her extensive labor, her payment of all property taxes for approximately five years, and the parties' mutual understanding regarding co-ownership, capital improvement, and the Buyout Arrangement." (FAC, P. 85.)

[Annika] alleges "[a] judicial determination of the parties' respective rights and interests is necessary and appropriate to resolve this controversy, including the nature and extent of each party's interest in the Property, the recognition and credit due to [Annika] for her capital contributions and labor, and the parties' respective obligations going forward." (FAC, P. 87.)

Annika also claims that she was defamed at the direction of James. "On or about September 9, 2021, at approximately 12:24 a.m., Laura Hulett ('Laura'), [James'] stepdaughter, published the following statements in a Facebook Messenger group chat that included [Annika], [Annika's] spouse, Laura [], Michelle Morales (James' other stepdaughter), and William M. Hulett (Laura['s] husband) (the 'Facebook Publication'): Laura [] stated, in substance, that she had been speaking with [James]; that [James] claimed he had 'paid for the River Feather property in Chester outright'; that [Annika] and her spouse had 'agreed to make monthly payments of around $750'; and that [James] 'claims he hasn't received a single payment since the purchase in December of last year.' " (FAC, P. 30.)

"The statements in the Facebook Publication were false. No agreement to make monthly payments of $750 existed. No written agreement of any kind existed. [Annika] is a co-owner of the Property, not a tenant. [Annika] had invested substantial personal capital and labor in the Property under the parties' co-ownership arrangement." (FAC, P. 31.)

"Laura [] made the Facebook Publication as [James'] agent or at his direction. Laura [] stated that she was relaying what [James] had told her directly." (FAC, P. 32.)

"The Facebook Publication was made to multiple third parties, including William M. Hulett and Michelle Morales, neither of whom is [James'] attorney. Publication to a single third person is sufficient to state a claim for defamation. [Citation.]" (FAC, P. 33.)

"The false characterizations published in the September 9, 2021 Facebook Publication continued as a pattern of conduct through the May 30, 2025 communication described below, and were adopted and incorporated by [James] through counsel in the Cross-Complaint filed in this action on January 7, 2026." (FAC, P. 35.)

"On May 30, 2025, William M. Hulett ('Hulett'), an attorney located at 665 Broadway Avenue, Bedford, Ohio 44146, sent a letter on his own letterhead, signed 'William M. Hulett, Esq.,' purporting to represent [James] in connection with the Property (the 'Hulett Letter'). [P.] The Hulett Letter was sent to Jill N. Robbins, Esq., Law Office of Jill N. Robbins, 800 Main Street, Susanville, California 96130, who was [Annika's] negotiating attorney at the time. [P.] The Hulett Letter was carbon-copied to Ian M. Fisher at Price, Postel & Parma LLP in Santa Barbara, California. Mr. Fisher is not [Annika's] attorney. Mr. Fisher is a third party. The transmission of the Hulett Letter to Mr. Fisher constitutes publication of its contents to a third person." (FAC, P.P. 36-38.)

Annika prays: "1. For compensatory damages in an amount to be proven at trial, including but not limited to the value of [Annika's] capital improvements, lost federal retirement benefits, loss on the sale of [Annika's] personal residence, lost income, lost business acquisition opportunity, and consequential damages; [P.]

2. For restitution of the value of benefits conferred on [James] through [Annika's] labor, capital investment, property tax payments, and property management; [P.]

3. For punitive damages in an amount sufficient to punish and deter [James'] fraudulent and defamatory conduct, pursuant to Civil Code section 3294; [P.]

4. For a full accounting of all income, expenses, and transactions related to the Property; [P.]

5. For imposition of a constructive trust over [James'] interest in the Property to the extent necessary to prevent unjust enrichment; [P.]

6. For a declaratory judgment determining the parties' respective rights and interests in the Property; [P.]

7. For pre-judgment interest as permitted by law; [P.]

8. For costs of suit incurred herein; [P.] and 9. For such other and further relief as the Court deems just and proper." (FAC, p. 21, ll. 10-26.)

(2) Cross-Complaint by James On January 7, 2026, James filed a verified cross-complaint (CC) against Annika asserting four causes of action for: (1) accounting; (2) breach of oral or implied-in-fact contract; (3) quantum meruit; and (4) partition under Code of Civil Procedure section 872.010, et seq.

As alleged in the CC: "The Property was acquired by [James] as an income-producing investment property, and not as a gift or gratuitous transfer to [Annika]. [Annika] requested that [James] fund the purchase of the Property so that [Annika] could relocate to and occupy the Property." (CC, P. 7.)

"At the time of the purchase, [James] understood and believed that [Annika] would not be able to independently finance the acquisition, but agreed to fund the purchase because he believed the Property constituted a sound real estate investment and because he expected to be repaid through occupancy payments, rental income, or other agreed compensation." (CC, P. 8.)

"Title to the Property was placed in [Annika's] name, together with [James], based on [James'] understanding that this structure was necessary to protect the Property from potential third-party claims unrelated to [James] and with the expectation that title would later be adjusted once [James] had been fully compensated for his purchase of the Property." (CC, P. 14.)

"At or around the time [James] purchased the Property and prior to [Annika's] occupancy, [James] and [Annika] discussed and reached an understanding--whether oral and/or implied by their conduct--that [Annika's] occupancy and use of the Property would not be rent-free and that [Annika] would provide compensation to [James], including through periodic payments and/or application of rental income generated by the Property." (CC, P. 10.)

"The parties discussed a payment by [Annika] to [James] of approximately $750 per month as part of their understanding, but no interest rate, loan term, or formal repayment schedule was agreed upon, and the parties did not reduce their understanding to writing." (CC, P. 11.)

"[James] has paid property taxes associated with the Property on more than one occasion, including a payment made in or around December 2025. [P.] As joint tenants, [James] and [Annika] each hold an undivided interest in the Property." (CC, P.P. 19-20.)

"A dispute has arisen between the parties regarding their respective rights and interests in the Property, and the parties have been unable to agree upon a voluntary division or disposition of the Property." (CC, P. 21.)

As to the first cause of action, James prays for an accounting. (CC, p. 8, ll. 4-13.) As to the second cause of action for breach of contract, James prays for damages. (Ibid.) As to the third cause of action for quantum meruit, James prays for restitution. (Ibid.)

As to the fourth cause of action for partition, "[a]s a joint tenant and owner of record of the Property, [James] is entitled to partition of the Property as a matter of right. [Citation.] [P.] Partition by sale is more equitable and practical than partition in kind because the Property consists of a single residential parcel, and a physical division of the Property is impracticable and would substantially diminish the value of the parties' respective interests. [P.] Partition is necessary to permit an accounting and equitable adjustment of the parties' respective interests for any expenditures, contributions, or charges related to the Property that may be determined by the Court to be proper for allocation between the parties pursuant to Code of Civil Procedure sections 872.140."

As to the fourth cause of action for partition, James prays: "1. For an interlocutory judgment determining the interests of the parties in the Property and ordering partition; [P.]

2. For an order directing partition of the Property by sale; [P.]

3. For the appointment of a referee pursuant to Code of Civil Procedure sections 872.120 and 873.010; [P.]

4. For an accounting, contribution, offsets, and equitable adjustments, including adjustments for rental income received, exclusive use and occupancy, and Property-related expenses; [P.]

5. For allocation and reimbursement of costs, including reasonable attorneys' fees incurred for the common benefit of the parties; [P.] and 6. For distribution of the proceeds of sale in accordance with the Court's determination of the parties' respective interests[]." (CC, p. 8, ll. 14-25.)

(3) Response to Operative Pleadings On January 27, 2026, Annika filed a verified answer to the CC, denied the majority of the allegations in the CC, and set forth eight affirmative defenses.

On June 15, 2026, James filed a demurrer to the first cause of action for fraud in the FAC on the grounds that this claim is barred by the statute of limitations, the FAC fails to allege justifiable reliance, and there are no allegations of false statements of fact, among other grounds. James demurs to the third cause of action for defamation on the grounds that the claim is barred by the statute of limitations, barred by the single publication rule, and barred by the litigation privilege, among other grounds. Also on June 15, James filed a motion to strike portions of the FAC pertaining to allegations of fraud, defamation, and punitive damages. The demurrer and motion to strike are opposed by Annika.

(4) Motion to Disqualify by Annika On May 14, 2026, Annika moved to disqualify counsel for James, Price, Postel & Parma LLP (PPP), on the grounds that one of the attorneys with PPP, Ian M. Fisher (Attorney Fisher), received confidential prospective-client information from Annika on August 23, 2025. As argued by Annika, PPP has actively used Annika's disclosed litigation strategy in structuring its adverse representation. (Motion, p. 2.) James filed an opposition to this motion.

Analysis: (1) Motion to Disqualify by Annika "A trial court's authority to disqualify an attorney derives from the power inherent in every court '[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.' [Citations.] Ultimately, disqualification motions involve a conflict between the clients' right to counsel of their choice and the need to maintain ethical standards of professional responsibility. [Citation.]

The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar. The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process." (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145 (SpeeDee Oil).)

When determining a motion to disqualify, a court should consider "a client's right to chosen counsel, an attorney's interest in representing a client, the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion. [Citations.] Nevertheless, determining whether a conflict of interest requires disqualification involves more than just the interests of the parties." (SpeeDee Oil, supra, 20 Cal.4th 1135 ap p. 1145.)

Rule 1.18 of the California Rules of Professional Conduct (Rule 1.18), subdivision (a) provides in part: "A person who ... consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from the lawyer in the lawyer's professional capacity, is a prospective client." (Rule 1.18(a).) "A lawyer ... shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received from the prospective client [confidential] information ... that is material to the matter ...." (Rule 1.18(c).)

"[T]here is no statutory or rule definition of the term [confidential] in the context of prospective clients ...." (Syre v. Douglas (2024) 104 Cal.App.5th 280, 297.) In the context of an attorney-client relationship, confidential information "means information transmitted ... in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present ...." (Evid. Code, Sec. 952.)

Materiality must be evaluated at the time of the requested disqualification. (Winter v. Menlo (2025) 110 Cal.App.5th 299, 312 (Winter).) "Accordingly ... courts must evaluate whether the confidential material information disclosed by a prospective client remains material to the present representation. If it does, disqualification is warranted where no exception under Rule 1.18 applies." (Ibid.) "[M]ateriality in the context of a disqualification motion under Rule 1.18 means materially harmful." (Id. at 315.)

"When a party moves to disqualify opposing counsel based on allegedly improper receipt of privileged or confidential information, the party seeking disqualification has the initial burden to show its adversary possesses confidential information materially related to the proceedings before the court. [Citations.] The moving party need not disclose the actual information asserted to be confidential but must provide the court with the nature of the information and its material relationship to the proceeding." (Sundholm v. Hollywood Foreign Press Assn. (2024) 99 Cal.App.5th 1330, 1341.) "Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting." (Evid. Code, Sec. 500.)

Here, Annika submits evidence that she sent two emails to Attorney Fisher on Saturday, August 23, 2025. The first email "attached a photograph of the Hulett letter and asked whether [Attorney] Fisher represented James[]. [Attorney] Fisher responded the same day: 'I do not. I have no idea what this is, but it doesn't look right.' " (Declaration of Annika, P. 7.) The second email to Attorney Fisher "disclosed: (a) my intent to file suit against Defendant in Santa Barbara County regarding the Chester property; (b) my claims, including declaratory relief for full ownership; (c) my damages calculation exceeding $150,000 in documented capital contributions; (d) my intent to seek punitive damages based on fraud and misrepresentation; and (e) my analysis of Defendant's collectible assets, including additional properties in San Roque and Mission Canyon and significant liquid assets. [Annika] offered to provide [her] draft complaint and supporting exhibits for Fisher's review." (Declaration of Annika, P. 7.)

The emails are attached in support of the motion and state in part: "My claims include declaratory relief for full ownership of the Chester property (where I am a co-owner of record), damages for over $150,000 in documented contributions, and punitive damages based on fraud and misrepresentation. Mr. Peacock is collectible, with additional residences in San Roque and Mission Canyon, and significant liquid assets beyond these properties." (Declaration of Annika, Ex. B.)

The court has reviewed the information submitted by Annika in support of her motion. The emails to Attorney Fisher were dated on August 23, 2025. The complaint in this action was filed by Annika on August 11, 2025. The August 11 complaint contains the damage theories discussed in the subsequent August 23 emails. (See Complaint.) The complaint is a public document. This information is also included in the FAC. (See FAC.) Moreover, these August 23 emails have now been openly filed by Annika in support of this motion and are also public documents.

The court finds that Annika failed to carry her burden to demonstrate that she disclosed confidential information to Attorney Fisher that is materially harmful to Annika in this action, as of the time of a possible disqualification. (Winter, supra, 110 Cal.App.5th at p. 312; Evid. Code, Sec. 500.) For all these reasons, the court will deny the motion for disqualification.

(2) Demurrer by James to First Cause of Action for Fraud " 'The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also 'give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.' " (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370, internal quotation marks and citations omitted.)

"Because the function of a demurrer is to test the sufficiency of a pleading as a matter of law, we ... assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law. [Citation.] It is error for the trial court to sustain a demurrer if the plaintiff has stated a cause of action under any possible legal theory, and it is an abuse of discretion for the court to sustain a demurrer without leave to amend if the plaintiff has shown there is a reasonable possibility a defect can be cured by amendment." (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.)

"[I]n ruling on a demurrer the trial court may take into account in addition to the complaint itself any matter that may be properly considered under the doctrine of judicial notice." (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1133-1134.)

Annika's first cause of action asserts a claim for fraud. (FAC, P.P. 55-67.) "The elements of fraud, which give rise to the tort action for deceit, 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.)

"In California, fraud must be pled specifically; general and conclusory allegations do not suffice." (Id. at p. 645.) "This particularity requirement necessitates pleading facts which 'show how, when, where, to whom, and by what means the representations were tendered.' [Citation.]" (Ibid., internal quotation marks omitted.)

The FAC alleges that prior to and during the purchase of the Property, James made a series of false oral representations to induce Annika to move from North Carolina to Chester, California, invest $150,000 in the Property, resign from her job in North Carolina, sell her personal residence in North Carolina at a loss, and take other actions. (FAC, P. 9.) The court finds there is an actionable cause of action for fraud as alleged to induce Annika to relocate to California.

"Actual reliance occurs when a misrepresentation is ' "an immediate cause of [a plaintiff's] conduct, which alters his legal relations," ' and when, absent such representation, ' "he would not, in all reasonable probability, have entered into the contract or other transaction." ' [Citations.] 'It is not ... necessary that [a plaintiff's] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct.... It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision.' [Citation.]" (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 976-977.)

The court does not find that the other theories of fraud in the FAC (rental obligation and Hulett Letter publication) establish the elements of fraud.

Defendant argues that the first cause of action for fraud is barred by the statute of limitations. "[I]t is difficult for demurrers based on the statute of limitations to succeed because (1) trial and appellate courts treat the demurrer as admitting all material facts properly pleaded and (2) resolution of the statute of limitations issue can involve questions of fact. Furthermore, when the relevant facts are not clear such that the cause of action might be, but is not necessarily, time-barred, the demurrer will be overruled. [Citation.] Thus, for a demurrer based on the statute of limitations to be sustained, the untimeliness of the lawsuit must clearly and affirmatively appear on the face of the complaint and matters judicially noticed." (Schmier v. City of Berkeley (2022) 76 Cal.App.5th 549, 554.)

"The limitations period, the period in which a plaintiff must bring suit or be barred, runs from the moment a claim accrues.... Traditionally at common law, a 'cause of action accrues when [it] is complete with all of its elements--those elements being wrongdoing, harm, and causation.' [Citation.] This is the 'last element' accrual rule: ordinarily, the statute of limitations runs from 'the occurrence of the last element essential to the cause of action.' " (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.)

"If a demurrer demonstrates that a pleading is untimely on its face, it becomes the plaintiff's burden 'even at the pleading stage' to establish an exception to the limitations period." (Id. at p. 1197.)

As alleged in the FAC, the first cause of action for fraud accrued in or before February 2021. By that time, as alleged in the FAC, Annika had already relocated to California based on the alleged fraud by James and suffered damages. (FAC, P.P. 6, 9, 11.) This action was filed in August 2025. However, Annika has not alleged facts demonstrating an exception to the three-year statute of limitations based on delayed discovery. (See Code Civ. Proc., Sec. 338, subd. (d).)

"In order to rely on the discovery rule for delayed accrual of a cause of action, '[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.' [Citation.] In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to 'show diligence'; 'conclusory allegations will not withstand demurrer.' " (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808 (Fox).)

But the delayed discovery doctrine "only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action." (Id. at 807.) A plaintiff has inquiry notice "when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her." (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110.)

"Simply put, in order to employ the discovery rule to delay accrual of a cause of action, a potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury. If such an investigation would have disclosed a factual basis for a cause of action, the statute of limitations begins to run on that cause of action when the investigation would have brought such information to light. In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that, despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period." (Nguyen v. Western Digital Corp. (2014) 229 Cal.App.4th 1522, 1553.)

This action was filed on August 11, 2025. "An action for relief on the ground of fraud or mistake ... is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake." (Code Civ. Proc., Sec. 338, subd. (d).) Annika must plead facts supporting the application of delayed discovery of the alleged fraudulent misconduct by James within the three-year period before the filing of the complaint. (Ibid.; Fox, supra, 35 Cal.4th at p. 808.) For all these reasons, the court will sustain the demurrer to the first cause of action for fraud based on the statute of limitations but grant Annika leave to file a second amended complaint as to these issues.

(3) Demurrer by James to Third Cause of Action for Defamation " 'Defamation requires the intentional publication of a false statement of fact that has a natural tendency to injure the plaintiff's reputation or that causes special damage.' [Citation.] The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage." (J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal.App.4th 87, 97.)

Annika alleges "[t]he [May 30, 2025,] Hulett Letter contained the following false statements of fact: [P.] (a) That [Annika] and her spouse were tenants who had breached a rental contract requiring monthly payments of $750; [P.] (b) That [Annika] and her spouse owed in excess of $40,000 in unpaid rent, fees, and interest; [P.] (c) That [Annika] and her spouse had failed to make even a single payment; [P.] (d) That [James] had paid $10,000 in closing costs associated with the purchase of the Property, when in fact the closing costs were covered by seller concessions negotiated by [Annika] through her buyer's agent; (e) That the Hulett Letter declined [Annika's] buyout offer of $390,000 on [James'] behalf; and (f) That [Annika's] spouse was jointly liable for the alleged debt, despite [Annika's] spouse having no legal connection to the Property whatsoever." (FAC, P. 39.)

"Publication, which may be written or oral, is defined as a communication to some third person who understands both the defamatory meaning of the statement and its application to the person to whom reference is made. Publication need not be to the public or a large group; communication to a single individual is sufficient." (Ringler Associates Inc. v. Maryland Cas. Co. (2000) 80 Cal.App.4th 1165, 1179.)

The FAC alleges, "[t]he Hulett Letter was carbon-copied to [Attorney] Fisher at Price, Postel & Parma LLP in Santa Barbara, California. Mr. Fisher is not [Annika's] attorney. Mr. Fisher is a third party. The transmission of the Hulett Letter to Mr. Fisher constitutes publication of its contents to a third person." (FAC, P. 38.) The FAC alleges that Attorney Fisher did not represent James. (FAC, P. 44.)

James argues that the litigation privilege applies. Under the litigation privilege of Civil Code section 47, subdivision (b)(2): "A privileged publication or broadcast is one made: [P.] ... [P.] (b) In any ... (2) judicial proceeding ...." The litigation privilege generally attaches to communications made in connection with existing or anticipated litigation. (Rubin v. Green (1993) 4 Cal.4th 1187, 1194.)

The 2026 statements pertaining to the cross-complaint in this action are clearly protected by the litigation privilege. However, as previously noted by the court in its May 11, 2026, minute order, the allegations as to the May 30, 2025, Hulett Letter are too general for the court to determine on the face of the FAC whether the letter which is alleged to communicate the misrepresentations falls within or without the litigation privilege. (See Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1251 ["A prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration."].)

Based on a reasonable reading of the FAC, the May 30, 2025, Hulett Letter is alleged as a separate publication and separate transaction directed by James and is not, on the face of the FAC, barred by the single-publication rule in relation to the earlier 2021 Facebook group chat. "Under the single-publication rule, the statute of limitations is reset when a statement is republished. See id. A statement in a printed publication is republished when it is reprinted in something that is not part of the same "single integrated publication. " (Christoff v. Nestle USA, Inc. (2009) 47 Cal.4th 468, 477-482.)

The elements of defamation have been alleged. James may have a defense under the litigation privilege or because Attorney Fisher was acting as James' attorney at the time of publication such that the Hulett Letter statements were not published to a third party, or other evidence-based arguments. However, the facts necessary to support these defenses are not alleged in the FAC.

The court will deny James' request for judicial notice of Attorney Fischer's declaration for the purpose of establishing the truth of Attorney Fisher's role at the time he received the Hulett Letter. This is not a proper use of judicial notice. (See Johnson & Johnson v Superior Court (2011) 192 Cal.App.4th 757, 768.) "The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable." (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114.) In addition, this request was first submitted on reply. For all these reasons, the court will overrule the demurrer to the third cause of action for defamation.

(4) Motion to Strike by James "Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof ...." (Code Civ. Proc., Sec. 435, subd. (b)(1).) "The court may, upon a motion made pursuant to [s]ection 435, or at any time in its discretion, and upon terms it deems proper: [P.] ... [s]trike out any irrelevant, false, or improper matter inserted in any pleading." (Code Civ. Proc., Sec. 436, subd. (a).)

"In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth." (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) The majority of this motion is moot based on the court's ruling on the demurrer. Because the demurrer was sustained as to the fraud cause of action, the court will grant the motion as to Prayer for Relief, Paragraph 3 (page 21, lines 16-17) in its entirety, as to punitive damages. These allegations in the FAC were not solely within the cause of action for fraud. The court will grant Annika leave to amend on the issue of punitive damages. (See Civ. Code Sec. 3294, subd. (a).) The motion is denied in all other respects.

Tentative Ruling: Matter of Trisha Evans Trust Tentative Ruling: Matter of Trisha Evans Trust