Jennifer McNeal v. Daryn Pastuf, et al.

Jennifer McNeal v. Daryn Pastuf, et al., 25CVP-0291

Hearing: Demurrer to First Amended Complaint and Motion to Strike

Date: September 8, 2026 ________________________________________________________________________

On August 5, 2025, Jennifer Dallas McNeal (Plaintiff) brought this action to quiet title, partition of real property, breach of oral contract, and common count against Daryn Shawn Pastuf, individually, and as Trustee of the Blue Horizon Trust, The Blue Horizon Trust, Tobias Q. Wheeler, Jessica C. Wheeler, individually and as Trustees of the Tobias Q. and Jessica C. Wheeler Living Trust of June 17, 2013. On December 3, 2025, Plaintiff filed a Request for Dismissal without prejudice, as to Tobias and Jessica Wheeler, individually and as Trustees.

Plaintiff filed a verified first amended complaint (FAC) on December 9, 2025, against Daryn Shawn Pastuf, individually, and as Trustee of the Blue Horizon Trust (Defendant), and the Blue Horizon Trust. The FAC alleges causes of action for (1) fraudulent misrepresentation, (2) breach of oral contract, (3) common count, and (4) intentional interference with economic relations.

Daryn Pastuf’s default was entered on January 20, 2026, and set aside per stipulation and order filed on March 10, 2026.

Defendant now demurs pursuant to Code of Civil Procedure section 430.10, to the first, second, and third causes of action in Plaintiff’s FAC and moves to strike certain allegations therein. Plaintiff opposes the demurrer and motion to strike. The demurrer is sustained with leave to amend as to the first cause of action and overruled as to the second and third causes of action. The motion to strike is granted in part, denied in part.

I. MEET AND CONFER

Before filing its demurrer, “the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., 430.41, subd. (a).)

On March 27, 2026, defense counsel filed declarations regarding meet and confer pertinent to the demurrer and motion to strike, indicating that at least five days before the date a responsive pleading was due to be filed, defense counsel met and conferred with the party who filed the pleading by telephone, but did not reach an agreement to resolve matters raised by the demurrer and motion to strike. (Ulwelling Decs. ¶ 2.a.)

Defendant has satisfied the meet and confer requirement.

II. DEMURRER

A.

Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack, or from matters outside the pleading that are subject to judicial notice. (Code Civ. Proc., § 430.30, subd. (a).)

A demurrer tests only the legal sufficiency of the pleading, and “[t]he facts alleged in the pleading are deemed to be true, however improbable they may be. [Citation].” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) A demurrer must be overruled if the plaintiff has stated a cause of action under any possible legal theory. (Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1379, disapproved on other grounds in Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 986, fn.15.)

When reviewing a demurrer, the court must draw all reasonable inferences in favor of the plaintiff, not the defendant. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1239.)

B. Discussion

1. First Cause of Action: Fraudulent Misrepresentation

Defendant demurs to Plaintiff’s fraudulent misrepresentation cause of action as insufficiently pleaded.

Fraud is an intentional tort. (Stone v. Foster (1980) 106 Cal.App.3d 334, 345.) “The elements of a cause of action in fraud are: (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.” (Id., at p. 344.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Plaintiff’s fraud cause of action alleges that the subject of this action is Defendant’s conduct relating to loans, investments, and real property located in San Luis Obispo County. (FAC ¶ 1.) It also alleges that Defendant intentionally and willfully made false representations pertaining to shares of the rents from the subject property and fraudulent misrepresentations associated with loans and investments given to Defendant and obtained by Plaintiff. (Id., ¶ 5.)

The fraud cause of action alleges that prior to December 1, 2023, Defendant acting willfully and wantonly, induced Plaintiff’s good faith reliance to invest in the subject property and other business ventures with the promise that Defendant would share the profits equally with Plaintiff and repay Plaintiff for the loans given to Defendant. (FAC ¶ 6.) Contrary to Defendant’s representations, Defendant never intended to share profits or repay any of the money Plaintiff had loaned to Defendant at the time of his

representations. (Ibid.) Plaintiff then detrimentally relied on Defendant’s representations by obtaining loans, loaning money to Defendant, and engaging in various investments based on Defendant’s promises. (Ibid.) Instead, Defendant never shared any of the profits that Defendant initially promised to share with Plaintiff related to the subject property and kept all profits and money loaned by Plaintiff for himself. (Ibid.) Despite Defendant’s promises to repay Plaintiff, Defendant continues to refuse to repay Plaintiff for any of the profits and rents he collected associated with the subject property. (Ibid.)

Because of the animus relationship between Defendant and Plaintiff, Plaintiff has not been able to collect any of Defendant’s promised repayments or the promised share of profits from the subject property. (FAC ¶ 7.) As a result, Plaintiff has suffered a total of at least $3,551,561.88 in damages that have resulted from Defendant’s fraudulent misrepresentations. (Ibid.)

Defendant contends the FAC fails to state facts sufficient to constitute a cause of action for fraudulent misrepresentation. Defendant argues that the FAC pleads fraud only in generalities and fails to meet California’s heightened particularity requirement. The FAC does not “allege specific facts, such as: (1) what purported false representations were made; (2) how such purported false representations induced Plaintiff’s reliance; (3) when and where such purported false representations were made; (4) and by what means such representations were made.” (Dem., p. 2, ll. 25-28.)

Plaintiff contends Defendant’s lack of specificity challenge fails because the verified FAC pleads fraud with sufficient particularity. Plaintiff argues that the FAC alleges the substance of the misrepresentations and promises, who made them, when they were made, why they were false, and Plaintiff’s reliance and resulting harm. Plaintiff further argues that California requires particularity, not exhaustive evidentiary detail, and the allegations (FAC ¶¶ 5-7) adequately satisfy the heightened fraud-pleading requirement.

The Court is not persuaded by Plaintiff’s arguments. Plaintiff’s fraud claim fails to plead the elements with the requisite particularity. The complaint alleges that Defendant promised to share profits equally with Plaintiff and to repay loans from Plaintiff, but aside from stating that the promises were made before December 1, 2023, the FAC does not specify the nature of these representations, when or where the representations were made, or whether they were oral or written.

Accordingly, the demurrer to Plaintiff’s first cause of action is sustained with leave to amend.

2. Second Cause of Action: Breach of Oral Contract

Defendant demurs to Plaintiff’s breach of oral contract cause of action because it is barred by the statute of limitations.

Defendant contends the second cause of action for breach of oral contract is barred by the two-year statute of limitations under Code of Civil Procedure section 339. The FAC

alleges that by January 1, 2023, Plaintiff knew Defendant would never repay her and does not allege any loans were made after that date. Under the alleged 2015 oral agreement requiring repayment within six months, Defendant argues that the latest possible breach occurred no later than July 1, 2023, so the limitations period expired July 1, 2025. Because Plaintiff filed suit on August 5, 2025, and the untimeliness appears on the face of the verified FAC, Defendant argues the demurrer should be sustained.

Plaintiff disagrees, arguing that the pleading alleges ongoing conduct and breach within the two-year period under Code of Civil Procedure 339. Specifically, the FAC alleges Defendant continued to promise repayment (FAC ¶ 9), and that “beginning January 1, 2023, [Defendant] has repeatedly and continuously refused to repay [Plaintiff]” (FAC ¶ 12), as well as conduct “within the last two years” (FAC ¶ 14).

Plaintiff further contends Defendant’s continuing assurances delay accrual because breach is not discovered while Defendant continues to assure repayment (FAC ¶ 9), and Defendant cannot override that factual allegation in a verified complaint. Plaintiff also points to allegations of new indebtedness/loans “within the last two years” of filing (FAC ¶ 14), which included conduct after January 1, 2023. Plaintiff additionally argues that Defendant improperly fixes accrual to January 1, 2023; the FAC alleges continued assurances, continued refusals, and indebtedness within two years, foreclosing any statute-of-limitations bar on the face of the pleading.

In his Reply, Defendant argues the opposition relies on a general allegation (FAC ¶ 9) that Plaintiff made loans since 2015 under an oral agreement requiring repayment within six months. However, where general and specific allegations conflict the specific allegations control. (Medical Marijuana, Inc. v. ProjectCBD.com (2016) 6 Cal.App.5th 602, 619.) Defendant argues that the FAC specifically alleges in paragraphs 10 and 12 that Defendant has refused to repay beginning in January 1, 2023, which controls over any inconsistent general allegations in paragraph 9 and renders the second cause of action defective. Defendant further contends the opposition’s reliance on an allegation of indebtedness “within the last two years” for over $584,000 does not save the breach of oral contract claim because it appears in the third cause of action (common count), not the second.

As a preliminary matter, Plaintiff’s “continuing assurances” argument is unsupported by authority. Plaintiff’s appears to rely on “continuing-wrong accrual principles.” (See Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197 [Two branches of continuing-wrong principles exist: the continuing violation doctrine and the theory of continuous accrual].) Plaintiff’s contention could also be read as invoking acknowledgment of debt under Code of Civil Procedure section 360, however, that statute requires a written acknowledgment signed by the debtor, and the FAC alleges no facts showing any such writing. (Banke & Segal, Cal.

Practice Guide: Civil Procedure Before Trial Statute of Limitations (The Rutter Group 2026) ¶ 1:130, citing Foristiere v. Alonge (1929) 98 Cal.App. 563, 566-567; See Carr, California Affirmative Defenses (2d. ed. 2025) Tolling by Acknowledgment or Part Payment § 25:46 [use of acknowledgment allegation to prevent cause of action from appearing time barred on its face].)

Subject to exceptions an action on “ ‘a contract, obligation or liability not founded upon an instrument of writing’ must be commenced within 2 years after accrual. [CCP § 339(1) (emphasis added).” (Banke & Segal, Cal. Practice Guide: Civil Procedure Before Trial Statute of Limitations (The Rutter Group 2026) ¶ 4:85.) Generally, an action for breach of contract accrues when the contract is breached and the plaintiff sustains damages. (See Id., ¶¶ 3:10; 4:150.) “[O]rdinarily, the statute of limitations runs from ‘the occurrence of the last element essential to the cause of action.’ [Citation.]” (Aryeh v. Canon Business Solutions, Inc., supra, 55 Cal.4th 1185, 1191.)

An exception to this rule is the continuing-wrongs rule. The first branch of the continuing-wrongs rule is the “continuing violation doctrine.” (Banke & Segal, Cal. Practice Guide: Civil Procedure Before Trial Statute of Limitations (The Rutter Group 2026) ¶ 3:70.1.) “The continuing violation doctrine has been developed largely in the context of employment discrimination claims. It applies if the employer’s actions (a) are ‘sufficiently similar in kind,’ (b) occur with ‘reasonable frequency,’ and (c) ‘have not acquired a degree of permanence.’ [Citation.]” (Id., ¶ 3:70.3.) The FAC does not appear to allege facts under the first branch of the continuing-wrongs rule. (See Aryeh v. Canon Business Solutions, Inc., supra, 55 Cal.4th 1185, 1198 [absence of factors do not warrant applicating of continuing violation doctrine].)

“The second branch of the continuing-wrong rule is the theory of continuous accrual. Where the wrong complained of is continual or recurring, the cause of action is subject to continuous accrual for statute of limitations purposes; i.e., a cause of action accrues each time a wrongful act occurs, triggering a new limitations period. [Citations.]” (Banke & Segal, Cal. Practice Guide: Civil Procedure Before Trial Statute of Limitations (The Rutter Group 2026) ¶ 3:70.5; See Aryeh v. Canon Business Solutions, Inc., supra, 55 Cal.4th 1185, 1199-1201; Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal.App.4th 1336, 1341-1342.)

On demurrer, the Court accepts as true well-pleaded facts and draws reasonable inferences for Plaintiff. (Perez v. Golden Empire Transit Dist., supra, 209 Cal.App.4th 1228, 1235, 1239.) The FAC alleges that Defendant had an obligation to pay profits and rents. (FAC ¶¶ 5-6.) A reasonable inference is that these were ongoing obligations. Drawing reasonable inferences in Plaintiff’s favor, those allegations support a recurring payment obligation and, therefore, potential application of the continuous accrual doctrine. Accordingly, the Court cannot conclude that the second cause of action is timebarred where untimeliness does not clearly and affirmatively appear on the face of the FAC.

The demurrer to the second cause of action is overruled. (See Aryeh v. Canon Business Solutions, Inc., supra, 55 Cal.4th 1185, 1201 [error to sustain a demurrer when a cause of action was stated under any possible legal theory].)

3. Third Cause of Action: Common Count

Defendant demurs to Plaintiff’s common count cause of action because it is barred by the statute of limitations.

Defendant argues that the third cause of action is barred by the two-year statute of limitations “[b]ecause the Third Cause of Action for Common Counts rests on the same underlying transactions as the Second Cause of Action for Breach of Oral Contract (i.e., that Defendant Pastuf purportedly failed to repay Plaintiff McNeal pursuant [sic] oral agreement(s), it carries the same two-year limitation period.” (Dem., p. 4, ll. 9-12.)

Plaintiff argues that “[t]he demurrer to the common count fails for the same reasons as the demurrer to the breach-of-contract claim, the verified FAC alleges indebtedness and wrongful conduct squarely within the two-year limitations period, and Defendant's contrary assertions improperly attempt to rewrite the pleading. The FAC expressly alleges that “within the last two years... Pastuf became indebted to McNeal in excess of $584,000.00” (FAC ¶14). This allegation alone defeats Defendant’s statute-of-limitations argument because a common count accrues when the defendant becomes indebted and fails to pay.” (Opp., p. 5, ll. 17-24.)

“It is not necessary to set out the times when the indebtedness, or the various items of it, accrued. [Pike v. Zadig, 171 Cal. 273, 152 P. 923 (1915); Miller v. Brown, 107 Cal. App. 2d 304, 237 P.2d 320 (2d Dist. 1951)]...Nevertheless, it is customary to include an allegation to the effect that the indebtedness arose on a specific date, or within a specified number of “years last past,” in order to establish that the action is timely within the applicable statute of limitations. [4 Witkin, California Proc. (4th ed.), Pleading § 521 1] If there is any ambiguity or uncertainty in such an allegation, however, it may be attacked by demurrer. [Miller v. Brown, 107 Cal. App. 2d 304, 237 P.2d 320 (2d Dist. 1951)]” (LaMothe, Cal. Civil Practice Business Litigation (Thomson Reuters 2026) § 34:40.)

Here, Paragraph 14 of the FAC alleges Defendant became indebted “[w]ithin the last two years.” The Court finds this timeliness allegation adequately specific for a common count and neither ambiguous nor uncertain. The demurrer to the third cause of cause is overruled.

III. MOTION TO STRIKE

Defendant moves to strike the following portions of the FAC:

1. Paragraph 3 (page 6, lines 13-15, in its entirety): “For punitive damages (according to proof) ...”;

2. Page 1, lines 12-14: “THE BLUE HORIZON TRUST”

3. Paragraph 3 (page 2, line 3): “who is a named Defendant in this action.”

1 Updated reference: 4 Witkin, California Procedure (6th ed. 2026), Pleading § 566.

A.

Legal Standard

Code of Civil Procedure section 436 permits a court to strike: (1) “any irrelevant, false, or improper matter inserted in any pleading”; and (2) “all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc., § 436.) As with demurrers, the grounds for a motion to strike must “appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

In ruling on a motion to strike, courts do not review allegations in isolation but rather 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; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2026) ¶ 7:197.5.)

B. Discussion

1. Punitive Damages

Punitive damages are governed by Civil Code section 3294, which requires “clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice ....” (Civ. Code, § 3294, subd. (a).)

Malice is defined, in part, as “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).) “ ‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (c)(2).)”

“ ‘Despicable conduct’ is conduct that is so vile, base, or contemptible that it would be looked down on and despised by reasonable people.” (CACI Nos. 3940, 3941.) “Conscious disregard of rights is conduct by a defendant who is aware of the probable dangerous consequences of such conduct to plaintiff’s interests and willfully and deliberately fails to avoid those consequences. [Citation.]” (Smith v. Brown-Forman Distillers Corp. (1987) 196 Cal.App.3d 503, 516.)

Defendant argues that punitive damages should be stricken from the FAC. Defendant explains that “Punitive damages are unavailable as a matter of law on the Second Cause of Action (Breach of Oral Contract) and Third Cause of Action (Common Counts) of the FAC, as both arise from contractual obligations, and Civil Code section 3294 expressly limits exemplary damages to action for breach of obligations not arising from contract; the First Cause of Action for Fraudulent Misrepresentation—the only fraud-based predicate—is concurrently subject to demurrer; and as to the Fourth Cause of Action (Intentional Interference with Economic Relations), the FAC fails to allege sufficient facts, as opposed to mere conclusions, to support a finding of malice, oppression, or fraud required to predicate a punitive damages award under Civil Code section 3294[.]” (Mot.,

p. 4, ll. 12-19.)

In her opposition Plaintiff concedes that she is not seeking punitive damages for contractbased claims. Plaintiff argues that “[t]he FAC’s punitive-damages request is expressly tethered to fraudulent misrepresentation and intentional interference with economic relations, both of which are torts that legally support punitive damages under Civil Code §3294.” (Opp., p. 4, ll. 6-9.)

First, as to the first cause of action for fraudulent misrepresentation, the motion to strike punitive damages is granted with leave to amend. Because the Court has sustained the demurrer to that claim, Plaintiff may amend to plead punitive damages consistent with any amended fraud allegations.

Second, the Court grants the motion as to the second and third causes of action for “breach of oral contracts, common counts.” (FAC ¶ 3, p. 6, l. 14.)

Third, as to the fourth cause of action for intentional interference with economic relations, the motion is denied. The allegations in FAC paragraphs 16 through 25 sufficiently allege, at the pleading stage, facts that, if proven, could support punitive damages under Civil Code section 3294.

2. The Blue Horizon Trust

Defendant contends that a trust is not a separate legal entity capable of being sued except thorough its trustee. Defendant argues that because Defendant is already named in the action both individually and in his capacity as trustee of The Blue Horizon Trust, naming the Trust as a standalone defendant is improper and redundant, and therefore such references should be stricken.

Plaintiff argues on the other hand that “[t]he FAC does not sue the trust as an independent juridical entity; it sues the trustee, exactly as California law requires. The caption properly identifies Daryn Shawn Pastuf, individually and as Trustee of the Blue Horizon Trust, which is the standard and necessary method of pleading when a trustee is sued in both personal and representative capacities.” (Opp., pp. 4, ll. 27-28; 5, ll. 1-3.) Plaintiff additionally argues that identifying the trust by name is proper because it clarifies the capacity in which Defendant is sued and prevents ambiguity in the management of the case, judgment drafting and later enforcement.

Defendant has the better argument. “[A] trust cannot sue or be sued or otherwise act in its own name; instead the trustee acts on behalf of the trust. [Citation.]” (Han v. Hallberg (2019) 35 Cal.App.5th 621, 632, review dismissed, (Cal. 2020) 476 P.3d 240.) “ ‘[T]he proper procedure for one who wishes to ensure that trust property will be available to satisfy a judgment ... [is to] sue the trustee in his or her representative capacity.’ [Citation.]” (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 522.)

Here, as noted by Defendant Plaintiff has already sued Defendant Pastuf individually and

in his capacity as Trustee of the Blue Horizon Trust. Specifically, the caption names as defendants, “DARYN SHAWN PASTUF, individually and as Trustee of the Blue Horizon Trust, THE BLUE HORIZON TRUST, AND DOES 1 through 10 inclusive.” (FAC, at p. 1, ll-12-14.) Because Code of Civil Procedure section 436 permits a court to strike both improper matter and a pleading not drawn in conformity with California law, and because a trust is a non-entity that cannot be named as a party, the motion is granted.

ORDER (PROPOSED)

Defendant’s demurrer is sustained with leave to amend as to the first cause of action and overruled as to the second and third causes of action.

The motion to strike is granted in part, denied in part.

Plaintiff may file a second amended complaint within twenty (20) days from service of the notice of ruling. (Code Civ. Proc., § 472b; Cal. Rules of Court, rule 3.1320(g).) Defendant will serve the notice of ruling. (Code Civ. Proc., § 1019.5, subd. (a).)

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