Court Opinion

ID: 9925405
Source: CourtListenerOpinion
Date Created: 2024-01-19 18:02:49.834561+00
Date Added: 2024-06-11T09:20:22.820874
License: Public Domain

Filed 1/19/24 Williams v. Lucas CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

WILBUR WILLIAMS, JR et al.,                                B327061

         Plaintiffs and Appellants,                        (Los Angeles County
                                                           Super. Ct.
         v.                                                No. 22STCV14857)

CAROL LUCAS et al.,

     Defendants and
Respondents.

      APPEAL from an order of the Superior Court of Los
Angeles County, Barbara M. Scheper, Judge. Affirmed in part,
reversed in part and remanded with directions.
      Nick A. Alden for Plaintiffs and Appellants.
      Loeb & Loeb and W. Allan Edmiston for Defendants and
Respondents.
                   __________________________
      Wilbur Williams, Jr., M.D.,1 and his professional
corporation, Wilbur Williams, Jr., M.D., Inc. (the Corporation;
collectively, the Williams plaintiffs), appeal from an order of
dismissal entered as to defendants Buchalter APC and Carol
Lucas (collectively, the Buchalter defendants) after the trial
court sustained without leave to amend the Buchalter
defendants’ demurrer to the complaint. The Williams plaintiffs
asserted causes of action for conspiracy to defraud, financial elder
abuse, and declaratory relief against the Buchalter defendants
based on allegations that Lucas, an attorney and shareholder at
Buchalter, conspired with Sevana Petrosian, who was Williams’s
business partner and managed several medical clinics where
Williams conducted his medical practice, to deceive Williams into
believing Buchalter represented him and to induce him to enter
contracts that allowed Petrosian to embezzle more than $11
million dollars from the Corporation. In sustaining the
demurrer, the trial court found all claims against the Buchalter
defendants were barred by the one-year statute of limitations
governing claims against an attorney “for a wrongful act or
omission, other than actual fraud, arising in the performance of
professional services” under Code of Civil Procedure
section 340.6, subdivision (a).2

1     Williams died during the pendency of this appeal. On
May 12, 2023 we granted the motion of his widow Gail Dee Lew-
Williams to be substituted in place of Williams as his successor in
interest.
2    All further undesignated statutory references are to the
Code of Civil Procedure.

                                 2
      On appeal, the Williams plaintiffs contend the one-year
statute of limitations under section 340.6, subdivision (a), does
not apply to their claims because the gravamen of their action is
actual fraud. We agree the complaint sufficiently alleged the
Buchalter defendants conspired to commit actual fraud, such that
section 340.6 does not apply and the Corporation’s conspiracy
cause of action survives demurrer. However, Williams’s
individual conspiracy claim fails because, as alleged, only the
Corporation was defrauded. Moreover, the complaint fails to
state claims for financial elder abuse and declaratory relief.
      We reverse the order of dismissal and the order sustaining
the demurrer and direct the trial court to enter a new order
overruling the demurrer to the Corporation’s cause of action for
conspiracy to defraud and sustaining without leave to amend the
demurrer to the Corporation’s remaining causes of action and
Williams’s cause of action for conspiracy to defraud.

      FACTUAL AND PROCEDURAL BACKGROUND

A.    The Complaint
      The Williams plaintiffs filed this action on May 4, 2022
against the Buchalter defendants and Petrosian, her associates
Salina Ranjbar, Vana Mehrabian, and Staforde Palmer,
Petrosian’s wholly owned company Petrosian Esthetic
Enterprises LLC (Petrosian Esthetic), and seven limited liability
companies Petrosian formed to operate individual medical spas
under the name “SEV Laser Aesthetics” (the SEV companies;

                                3
collectively, the Petrosian defendants).3 The complaint alleged
six causes of action, three of which were asserted against Lucas
or the Buchalter defendants: the first cause of action for
conspiracy to defraud, the third cause of action for financial elder
abuse, and the sixth cause of action for declaratory relief.4

3      On September 22, 2021 the Williams plaintiffs filed a
petition, including a draft complaint, seeking court approval to
file an action against the Buchalter defendants for civil
conspiracy with a client pursuant to Civil Code section 1714.10.
(Wilbur Williams, Jr., M.D., et al. v. Carol Lucas, et al. (Super.
Ct. Los Angeles County, 2021, No. 20STCP03133).) On February
3, 2022 the trial court found the alleged conspiracy to defraud the
Williams plaintiffs arose from “transactional activities” carried
out by the Buchalter defendants and did not arise “from any
attempt to contest or compromise a claim or dispute” within the
scope of Civil Code section 1714.10, subdivision (a), and therefore
the Williams plaintiffs could file their complaint without
obtaining court approval.
4      The complaint also asserted causes of action for breach of
contract, breach of the covenant of good faith and fair dealing,
and conspiracy to defraud against one or more of the Petrosian
defendants. The allegations asserted against these defendants
overlap with allegations by the Williams plaintiffs in the related
actions Wilbur Williams, Jr., M.D., et al. v. Sevana Petrosian, et
al. (Super. Ct. Los Angeles County, 2020, No. 20STCV14137) and
Wilbur Williams, Jr., M.D., et al. v. Wells Fargo Bank, N.A.
(Super. Ct. Los Angeles County, 2020, No. 20STCV15993).
      The Buchalter defendants request we take judicial notice of
the Los Angeles Superior Court online case summaries for these
related actions for the purpose of establishing the date on which
the actions were filed. The Buchalter defendants made a similar
request in the trial court that the court take judicial notice of
various pleadings in the related actions, but the court did not

                                 4
       As alleged in the complaint, in late 2013 Williams and
Petrosian entered into discussions for Petrosian to act as the non-
medical manager of medical spas where Williams would conduct
his practice. Williams was then 77 years old and in apparent
poor health. Williams and Petrosian “decided to act through
their respective corporations.” Williams’s longstanding
accountant, Leila Aquino, met with Petrosian to discuss the
preparation of a contract that would govern the parties’
arrangement and suggested a few law firms to assist them.
However, Petrosian stated she already had contacted a lawyer,
later identified as Lucas, “who agreed to represent both parties
and prepare a contract that is fair to both parties.” Petrosian set
up a meeting with Lucas.
       On April 12, 2014 Williams and Aquino met with Petrosian
and Lucas at Buchalter’s offices (April 12 meeting). Lucas did
not tell Williams that she did not represent him, nor did she ask
him if he was represented by counsel. Lucas’s statements and
conduct during the meeting led Williams and Aquino “to believe
Petrosian’s representations to them, that Lucas represented both
Parties and prepared a fair contract.” Lucas never disclosed that
she had been representing Petrosian for over a year.

rule on their request. We deny the request to take judicial notice
of any trial court records in the related actions because the
records are not relevant to our resolution of this appeal. Because
we find the Williams plaintiffs’ claims were filed within the
applicable statute of limitations, we do not reach the Buchalter
defendants’ arguments that the pleadings in the related actions
contain admissions bearing on accrual of the Williams plaintiffs’
claims.

                                5
      During the meeting, Lucas had in front of her a
“Management Services Agreement” that she referred to a few
times. She briefly explained to Williams that the laws governing
the corporate practice of medicine prohibit non-physicians from
owning a medical practice, and then she “immediately moved to
convince and advise Dr. Williams to grant [Petrosian Esthetic] a
power of attorney and Petrosian the right to sign checks and to
pay bills,” explaining this would be necessary for Petrosian
Esthetic to operate a clinic, collect patient payments, and make
bank deposits on behalf of Williams’s medical practice. “In
reliance on Petrosian’s representation that Lucas represented
both Parties and prepared a fair contract, reinforced by Lucas’s
conduct and statements during the meeting,” on April 12, 2014
Williams signed the management services agreement without
reading it.
      A copy of the executed management services agreement
between the Corporation and Petrosian Esthetic was attached to
the complaint. The recitals state the Corporation “desires to
engage the services of [Petrosian Esthetic] to perform certain
non-professional functions for [the Corporation], in order to
permit [the Corporation] to concentrate its efforts on the
Practice.”’ The “Practice” was defined as the provision of medical
cosmetic services at medical spa locations in Glendale and West
Hollywood. Under the agreement, the Corporation appointed
Petrosian Esthetic as its attorney-in-fact for a wide range of non-
medical functions, including collecting payments, making
deposits, and other banking functions on the account of the
Corporation (including making payments to Petrosian Esthetic
for management services and expenses). Petrosian Esthetic was
responsible for providing numerous services on behalf of the

                                 6
Corporation with respect to the practice, including accounting,
financial, and legal services, the employment of non-physician
personnel, providing and maintaining furniture, fixtures and
equipment, and marketing. The agreement also provided
Petrosian Esthetic would sublease space to the Corporation.
Under the agreement, a copy of any notices served pursuant to
the agreement would be sent to the attention of Lucas at
Buchalter’s Los Angeles office.
      The complaint alleged on information and belief that “from
the onset Lucas knew of Petrosian’s intent to own the Practice,
take all the profits and pay Dr. Williams some kind of salary and,
upon termination of the agreement, Petrosian intended to take
over the Practice,” and Lucas drafted the management services
agreement “in a way to allow Petrosian to achieve her intended
scheme.”
      Beginning in 2016 the medical practice expanded to seven
new clinic locations, and Lucas, on behalf of Petrosian, formed
and registered the SEV companies, one for each new location.
Each of the SEV companies then entered into a management
services agreement with the Corporation regarding Williams’s
medical practice at the individual locations. Relying on
Petrosian’s representation that the seven management services
agreement were identical to the April 12, 2014 management
services agreement and that they were prepared by Lucas,
Williams signed each agreement on behalf of the Corporation,
again without reading the agreements. Each of the management
services agreements provided that the respective SEV company
would be entitled to actual out-of-pocket costs in providing

                                7
management services plus a management fee of 15 percent of
those costs.5
       In January 2020 the Corporation received a tax form from
its credit card processing company indicating the practice had
collected credit card payments exceeding $7.5 million in 2019,
although in 2019 the Williams plaintiffs had only received
$155,000 from the Petrosian defendants. Petrosian had claimed
the $155,000 was the net profit from operations. Williams was
surprised by the disparity and consulted an attorney in February
2020. With the help of an accountant, Williams reviewed the
Corporation’s bank records and determined gross income to the
Corporation during 2019 exceeded $10.2 million, with estimated
profits of about $6 million.
       On February 17, 2020 the parties mutually agreed to
terminate their relationship effective April 30, 2020. Following
the termination, Petrosian allegedly “took over” the entire
practice, including the equipment, patients and employees,
without compensating Williams, and she denied Williams access
to the clinics. The Petrosian defendants relied on a provision of
the management services agreements to claim ownership of the
practice.6

5     A copy of the October 29, 2018 management services
agreement between the Corporation and SEV Laser Aesthetics-
San Jose, LLC was attached to the complaint as an example of
the post-2018 management services agreements the Corporation
entered into with the SEV companies.
6     Paragraph 4.8 of the management services agreement
provides, “[Petrosian Esthetic] has the legal right to occupy the
space occupied by the Practice . . . and grants to [Corporation] the

                                 8
        The Williams plaintiffs calculated that between January 1,
2017 and March 31, 2020, the practice generated gross revenues
of about $20 million, with estimated overhead of $8 million, but
they only received about $400,000 in purported net profits during
this period. The complaint alleges on this basis the Petrosian
defendants embezzled about $11.4 million from the Corporation.
       Moreover, in early 2020 the Petrosian defendants withdrew
about $2.2 million from the Corporation’s bank accounts,
including more than $700,000 in cash withdrawals. In response
to an inquiry from the Williams plaintiffs’ attorney about the
withdrawals, Lucas stated the funds were charged by Petrosian
as a “license fee,” and Lucas produced a set of agreements
executed in 2019 between the SEV companies and Petrosian
Esthetic under which each SEV company licensed the intellectual
property relating to the “SEV Laser” brand from Petrosian
Esthetic. Williams was previously unaware of these agreements,
under which the Petrosian defendants collected $2.1 million a
year in intellectual property license fees.
       Lucas denied ever representing Williams or the
Corporation, and she denied preparing the management services
agreements. Lucas also claimed Buchalter had never billed the
Corporation for legal services. However, in 2017 Petrosian
Esthetic paid nearly $8,000 to Buchalter, and in 2018 two of the
SEV companies paid nearly $30,000 in “legal fees” to the firm.
Thus, “Lucas has been paid dozens of thousands of dollars every
year by the [p]ractice of Dr Williams, at the same time Lucas was

right to use the Premises for the Practice for as long as this
Agreement remains in effect (the ‘Sublease’).”

                                 9
conspiring with Petrosian against Dr. Williams and his
[p]ractice.”
      The first cause of action for conspiracy to defraud sought to
void the management services agreements based on Lucas’s and
Petrosian’s false inducements to cause Williams to enter the
agreements; damages exceeding $11 million for the
embezzlement of Corporation funds pursuant to the agreements
and the overbroad powers of attorney granted to the Petrosian
defendants therein; damages for the severe emotional distress
Williams suffered as a result of the defendants’ scheme; punitive
and exemplary damages based on the defendants’ malice; and
enhanced damages pursuant to Welfare and Institutions Code
section 15657.5.
      The third cause of action for financial elder abuse pursuant
to Welfare and Institutions Code section 15610 is based on the
same factual allegations regarding the Buchalter defendants’
conduct. The sixth cause of action for declaratory relief, although
asserted against both the Buchalter defendants and the
Petrosian defendants, alleges “[a]n actual controversy exists
between Plaintiffs and the [Petrosian defendants]. Plaintiffs
contend that the [Petrosian defendants] should be held liable for
Plaintiffs losses of about $11.5 million. Plaintiffs also contend
that they own the Practice, the leases to the clinics, the
equipment and the electronic communication, as well as the
website. Plaintiffs also contend that they are entitled to all the
income generated from the Practice since May 1, 2020.
Defendants contend otherwise.”

                                10
B.     The Buchalter Defendants’ Demurrer and the Trial Court’s
       Order
       On July 15, 2022 the Buchalter defendants demurred to all
causes of action in the complaint. They argued the claims
against them were barred under the one-year statute of
limitations in section 340.6, subdivision (a), which governs claims
“for a wrongful act or omission, other than actual fraud, arising
in the performance of professional services” by an attorney. They
asserted that, as alleged in the complaint, the Williams plaintiffs’
claims accrued no later than February 17, 2020, when the parties
agreed to terminate their relationship based on disputes over
payments to the Corporation, but the claims against the
Buchalter defendants were not filed until May 2022.
       The Buchalter defendants also argued with respect to the
conspiracy cause of action that the Williams plaintiffs failed to
sufficiently allege the Buchalter defendants were aware of, or
knowingly agreed to a “‘common and unlawful plan’” to embezzle
money from the Williams plaintiffs. Rather, “[t]hey simply allege
that Buchalter performed legal services—such as forming LLCs,
participating in an exchange of information regarding a proposed
business arrangement during an April 12, 2014 meeting, and
drafting agreements—for its client, Sevana Petrosian.”
Moreover, the “agent’s immunity rule” shielded the Buchalter
defendants from liability for acts of misconduct performed as an
agent of Petrosian, because the Buchalter defendants did not owe
an independent legal duty to Williams, and further, their acts did
not “‘go beyond the performance of a professional duty to serve
the client and [did not] involve a conspiracy to violate a legal duty
in furtherance of the attorney’s financial gain.’” In addition,
Williams’s individual claim for conspiracy failed because the

                                 11
complaint did not allege harm he suffered given that all of the
funds were allegedly embezzled from the Corporation.
       Similarly, the complaint failed to state a cause of action for
financial elder abuse because the complaint alleged
embezzlement of money only from the Corporation, not from
Williams personally. Finally, the declaratory relief cause of
action did not seek a declaration of rights to prevent a future
breach; rather, it sought redress for alleged past wrongs.
       In their opposition, the Williams plaintiffs argued the
complaint adequately alleged a conspiracy to embezzle funds, and
the Buchalter defendants were not insulated by the agent’s
immunity rule because the complaint alleged tortious and
fraudulent acts by Lucas that “went far beyond the performance
of a professional duty to serve the client.” (Capitalization
omitted.) Financial elder abuse was actionable because Williams
was the sole shareholder of the Corporation, and “all the funds
deposited in the [the Corporation] were generated by his medical
practice.” The interests of Williams and the Corporation “fully
coincide,” and the two “should not be regarded as legally
distinct.” Declaratory relief was proper because the complaint
had the prospective effect “to stop any further misappropriation
of the income” from the medical practice. Finally, the one-year
statute of limitations in section 340.6 did not apply to the claims
in the complaint because the complaint did not allege a cause of
action for legal malpractice.
       In their reply, the Buchalter defendants argued, in part,
that section 340.6 is not limited to claims for legal malpractice
but instead governs any claim, however styled, that depends on
proof that an attorney violated a professional obligation in the

                                 12
course of providing professional services, as explained by the
Supreme Court in Lee v. Hanley (2015) 61 Cal.4th 1225 (Lee).
       At the September 12, 2022 hearing on the demurrer, the
trial court announced its tentative ruling was to sustain the
demurrer without leave to amend.7 The court stated, “I do think
the one-year statute of limitations applies based on the Lee
versus Hanley case. And . . . according to your allegations you
discovered the facts at the latest on February 17th of 2020, but
didn’t file the suit until May 4th of 2022, which was over a year
later.” After hearing argument of counsel, the court adopted its
tentative ruling and sustained the demurrer to the causes of
action for conspiracy, financial elder abuse, and declaratory relief
without leave to amend.
       On September 12, 2022 the trial court entered an order of
dismissal in favor of the Buchalter defendants. The Williams
plaintiffs timely appealed.8

7     We previously deemed the Williams plaintiffs’ September 1,
2023 motion to augment the record to include the reporter’s
transcript of the September 12, 2022 hearing as a motion to
designate the record on appeal but deferred a ruling on the
motion. We now grant the motion.
8      The Williams plaintiffs’ notice of appeal states they are
appealing from a judgment of dismissal after an order sustaining
a demurrer. Although no judgment was entered, “[t]he order of
dismissal, signed by the trial court and entered by the court
clerk, constitutes a judgment under Code of Civil Procedure
section 581d.” (Moorer v. Noble L.A. Events, Inc. (2019)
32 Cal.App.5th 736, 741, fn 3; see § 581d [“All dismissals ordered
by the court shall be in the form of a written order signed by the
court and filed in the action and those orders when so filed shall
constitute judgments and be effective for all purposes . . . .”].)

                                13
                          DISCUSSION

A.     Standard of Review
       “‘In reviewing an order sustaining a demurrer, we examine
the operative complaint de novo to determine whether it alleges
facts sufficient to state a cause of action under any legal theory.’”
(Mathews v. Becerra (2019) 8 Cal.5th 756, 768; accord, T.H. v.
Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.)
When evaluating the complaint, “we assume the truth of the
allegations.” (Brown v. USA Taekwondo (2021) 11 Cal.5th 204,
209; accord, Lee , supra, 61 Cal.4th at p. 1230; see Marina Pacific
Hotel and Suites, LLC v. Fireman’s Fund Ins. Co. (2022)
81 Cal.App.5th 96, 104-105 [“‘[W]e accept as true even
improbable alleged facts, and we do not concern ourselves with
the plaintiff’s ability to prove [the] factual allegations.’”].)
       “‘“‘[A] demurrer based on an affirmative defense will be
sustained only where the face of the complaint discloses that the
action is necessarily barred by the defense.’”’” (Silva v. Langford
(2022) 79 Cal.App.5th 710, 716; see Lee, supra, 61 Cal.4th at
p. 1232 [“‘“‘A demurrer based on a statute of limitations will not
lie where the action may be, but is not necessarily, barred.
[Citation.] In order for the bar . . . to be raised by demurrer, the
defect must clearly and affirmatively appear on the face of the
complaint.’”’”].) If “‘the complaint’s allegations or judicially
noticeable facts reveal the existence of an affirmative defense, the
“plaintiff must ‘plead around’ the defense, by alleging specific
facts that would avoid the apparent defense.”’” (Esparza v.
County of Los Angeles (2014) 224 Cal.App.4th 452, 459.) The
application of an affirmative defense on demurrer based on facts
alleged in the complaint, such as the statute of limitations, is

                                 14
subject to de novo review. (See Aryeh v. Canon Business
Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.)
      A dismissal entered after a demurrer has been sustained
without leave to amend “will be affirmed if proper on any grounds
stated in the demurrer, whether or not the court acted on that
ground.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324; accord, Ko
v. Maxim Healthcare Services, Inc. (2020) 58 Cal.App.5th 1144,
1150.)

B.     The Trial Court Erred in Sustaining the Demurrer Based
       on the One-year Statute of Limitations Governing Attorney
       Misconduct
       Section 340.6, subdivision (a), provides in relevant part,
“An action against an attorney for a wrongful act or omission,
other than for actual fraud, arising in the performance of
professional services shall be commenced within one year after
the plaintiff discovers, or through the use of reasonable diligence
should have discovered, the facts constituting the wrongful act or
omission . . . .” The Williams plaintiffs contend that contrary to
the trial court’s ruling, section 340.6, subdivision (a), does not
apply to their claims because the complaint alleges the Buchalter
defendants engaged in fraud and embezzlement. The Buchalter
defendants argue the claims against them arise solely from their
performance of legal services for their client, Petrosian, and the
“actual fraud” exception in section 340, subdivision (a), does not
apply. The Williams plaintiffs have the better argument.9

9     Because we find section 340.6, subdivision (a), does not
apply, we do not reach the Williams plaintiffs’ argument their
claims accrued later than February 2020 and were timely even

                                15
       In Lee, supra, 61 Cal.4th at pages 1233 to 1236, the
Supreme Court examined the scope of section 340.6,
subdivision (a), in considering whether the trial court properly
sustained without leave to amend on statute of limitations
grounds the demurrer filed by an attorney (William Hanley) to
the complaint filed by his client (Nancy Lee) in an action to
recover unspent attorneys’ fees where Lee alleged Hanley
converted the funds by refusing to return them after Lee
terminated him. The Supreme Court held after examining the
legislative history that “section 340.6(a)’s time bar applies to
claims whose merits necessarily depend on proof that an attorney
violated a professional obligation in the course of providing
professional services. In this context, a ‘professional obligation’ is
an obligation that an attorney has by virtue of being an attorney,
such as fiduciary obligations, the obligation to perform
competently, the obligation to perform the services contemplated
in a legal services contract into which an attorney has entered,

under a one-year limitations period. The statutes of limitations
applicable here are all three years or longer: three years for
conspiracy to commit fraud or embezzlement (§ 338, subds. (c)(1),
(d); see Filmservice Laboratories, Inc. v. Harvey Bernhard
Enterprises, Inc. (1989) 208 Cal.App.3d 1297, 1309 [timeliness of
a civil conspiracy claim “must be determined by reference to the
statute of limitations applicable to the underlying cause of
action”]); four years for financial elder abuse (Welf. & Inst. Code,
§ 15657.7; Dennison v. Rosland Capital LLC (2020)
47 Cal.App.5th 204, 212); and three or four years for declaratory
relief (Bank of New York Mellon v. Citibank, N.A. (2017)
8 Cal.App.5th 935, 943 [“A claim for declaratory relief is subject
to the same statute of limitations as the legal or equitable claim
on which it is based.”]). It is undisputed the complaint was filed
within three years of accrual of the claims.

                                 16
and the obligations embodied in the Rules of Professional
Conduct.” (Lee, at pp. 1236-1237.)
      By contrast, the Lee court reasoned, “[S]ection 340.6(a) does
not bar a claim for wrongdoing—for example, garden-variety
theft—that does not require proof that the attorney has violated a
professional obligation, even if the theft occurs while the attorney
and the victim are discussing the victim’s legal affairs.” (Lee,
supra, 61 Cal.4th at p. 1237.) Moreover, section 340.6 does not
apply merely because an attorney’s misconduct “occurs during
the period of legal representation or because the representation
brought the parties together and thus provided the attorney the
opportunity to engage in the misconduct. . . . Nor does
section 340.6(a) necessarily apply whenever a plaintiff’s
allegations, if true, would entail a violation of an attorney’s
professional obligations. The obligations that an attorney has by
virtue of being an attorney are varied and often overlap with
obligations that all persons subject to California’s laws have. . . .
For purposes of section 340.6(a), . . . the question is whether the
claim, in order to succeed, necessarily depends on proof that an
attorney violated a professional obligation as opposed to some
generally applicable nonprofessional obligation.” (Lee, at
p. 1238.)10

10    The Supreme Court in Lee, supra, 61 Cal.4th at page 1236
emphasized that section 340.6, subdivision (a), was designed “so
that the applicable limitations period for such claims would turn
on the conduct alleged and ultimately proven, not on the way the
complaint was styled,” citing appellate decisions applying
section 340.6. subdivision (a), to malpractice-based claims against
attorneys styled as claims for breach of fiduciary duty (e.g.,
Prakashpalan v. Engstrom, Lipscomb & Lack (2014)

                                 17
      Based on these principles, the Lee court held the trial court
erred in sustaining the demurrer to Lee’s complaint without
leave to amend because although “Lee’s allegations, if true, would
show that Hanley has violated certain professional obligations in
the course of providing professional services” (and any claim
based on this violation would be time-barred), the complaint
could “also be construed to allege a claim for conversion whose
ultimate proof at trial may not depend on the assertion that
Hanley violated a professional obligation. Thus, on at least one
reasonable construction of the complaint, at least one of Lee’s
claims is not time-barred.” (Lee, supra, 61 Cal.4th at pp. 1229-
1230; see id. at p. 1240 [“Of course, Lee’s allegations, if true, may
also establish that Hanley has violated certain professional
obligations, such as the duty to refund unearned fees at the
termination of the representation (Cal. Rules of Prof. Conduct,
rule 3-700(D)(2)), just as an allegation of garden-variety theft, if
true, may also establish a violation of an attorney’s duty to act
with loyalty and good faith toward a client.”].)
      The trial court here erred in finding the Supreme Court’s
decision in Lee required application of section 340.6,
subdivision (a). The complaint, like the complaint in Lee, can be
reasonably construed to allege Lucas violated obligations she
owed to the Williams plaintiffs under California law not to
defraud them, and not simply her professional obligations as an
attorney. The central allegations against the Buchalter
defendants are that Lucas “knew of Petrosian’s intent to own the

223 Cal.App.4th 1105, 1121-1122), malicious prosecution (e.g.,
Yee v. Cheung (2013) 220 Cal.App.4th 184, 195-196), and breach
of contract (e.g., Southland Mechanical Constructors Corp. v.
Nixen (1981) 119 Cal.App.3d 417, 427).

                                 18
Practice, take all the profits and pay Dr. Williams some kind of
salary and, upon termination of the agreement, Petrosian
intended to take over the Practice,” and Lucas drafted the
management services agreement “in a way to allow Petrosian to
achieve her intended scheme.”11 Specifically, Lucas knew
Williams had been misinformed by Petrosian that Lucas was
representing both parties, Lucas perpetuated the
mispresentation during the April 12 meeting through her words
and conduct, and she took advantage of the misrepresentation to
induce Williams to sign the management services agreements
and to execute powers of attorney. Contrary to the argument by
the Buchalter defendants, the allegations that Lucas conspired
with Petrosian to deceive and defraud Williams go beyond the
performance of ordinary legal services.12

11   Buchalter does not dispute its liability for Lucas’s conduct
under principles of respondeat superior.
12    The Buchalter defendants also argue that Williams’s claims
must fail because the Buchalter defendants did not “derive any
personal financial benefit from [their] legal work ‘over and above’
and ‘monetary compensation’ that Buchalter received as payment
for professional services.” But “‘“[i]t is not essential to liability
that the person charged with fraud should have received any
benefit therefrom.”’” (Fort v. Board of Medical Quality Assurance
(1982) 136 Cal.App.3d 12, 19-20; accord, Lone Star Security &
Video, Inc. v. Bureau of Security & Investigative Services (2012)
209 Cal.App.4th 445, 457.)

                                 19
       Certainly, Lucas’s alleged misconduct could constitute
violations of her professional obligations, “such as fiduciary
obligations, the obligation to perform competently, the obligation
to perform the services contemplated in a legal services
contract . . . and the obligations embodied in the Rules of
Professional Conduct” (Lee, supra, 61 Cal.4th at p. 1237), and
further, the misconduct occurred in the course of Lucas’s legal
representation, which provided the opportunity to deceive
Williams (id. at p. 1238). But the Williams plaintiffs do not need
to prove any professional violation to prevail. Rather, they have
alleged a garden-variety fraudulent scheme. Indeed, the
complaint would be essentially unchanged if Lucas were simply
an actor who came to the April 12 meeting pretending to be a
lawyer who would protect Williams’s interests, while tricking
Williams into signing the agreement. This would be consistent
with the allegation in the complaint that Lucas’s statements and
conduct during the meeting led the Williams plaintiffs to believe
she drafted the management services agreement.
       Moreover, as we discuss below, the first cause of action for
conspiracy to defraud adequately states a claim for intentional
fraud; thus, even if the claim arose from the provision of legal
services, the claim falls within the “actual fraud” exception in
section 340.6. (See Quintilliani v. Mannerino (1998)
62 Cal.App.4th 54, 69-70 [“the exception for actual fraud in
section 340.6 was intended to apply to intentional fraud, not
constructive fraud resulting from negligent misrepresentation”];
accord, Nguyen v. Ford (2020) 49 Cal.App.5th 1, 17 [same].) The
Buchalter defendants do not cite, and we are not aware of any,
case holding that an otherwise sufficient cause of action for
intentional fraud by an attorney is subject to section 340.6’s one-

                                20
year statute of limitations. (Cf. Lee, supra, 61 Cal.4th at p. 1239
[“Section 340.6(a) applies to claims that necessarily depend on
proof that an attorney violated a professional obligation in the
course of providing professional services unless the claim is for
actual fraud.”].)

C.     The Complaint Adequately Pleaded the First Cause of
       Action for Conspiracy To Defraud
        “Civil conspiracy is not an independent tort. [Citation.]
‘Standing alone, a conspiracy does no harm and engenders no tort
liability. It must be activated by the commission of an actual
tort.’” (Favila v. Katten Muchin Rosenman LLP (2010)
188 Cal.App.4th 189, 206 (Favila); accord, Applied Equipment
Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.)
“‘[T]he basis of a civil conspiracy is the formation of a group of
two or more persons who have agreed to a common plan or design
to commit a tortious act.’ [Citations.] The conspiring defendants
must also have actual knowledge that a tort is planned and
concur in the tortious scheme with knowledge of its unlawful
purpose.” (Kidron v. Movie Acquisition Corp. (1995)
40 Cal.App.4th 1571, 1582; accord, Favila, at p. 206.)
“Knowledge and intent ‘“may be inferred from the nature of the
acts done, the relation of the parties, the interest of the alleged
conspirators, and other circumstances.”’” (Favila, at p. 206.)
       The elements of fraud are (1) a misrepresentation;
(2) knowledge of its falsity; (3) intent to induce another’s reliance
on the misrepresentation; (4) justifiable reliance; and
(5) resulting damage. (Conroy v. Regents of University of
California (2009) 45 Cal.4th 1244, 1255; Cohen v. Kabbalah
Centre Internat., Inc. (2019) 35 Cal.App.5th 13, 20.) To survive a

                                 21
demurrer, a plaintiff must allege facts constituting each element
of fraud with particularity. (Kalnoki v. First American Trustee
Servicing Solutions, LLC (2017) 8 Cal.App.5th 23, 35; Robinson
Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993
[“fraud must be pled specifically; general and conclusory
allegations do not suffice”].) “‘“This particularity requirement
necessitates pleading facts which ‘show how, when, where, to
whom, and by what means the representations were tendered.’”’”
(People ex rel. Allstate Insurance Company v. Discovery Radiology
Physicians, P.C. (2023) 94 Cal.App.5th 521, 548; see Robinson, at
p. 993 [“This particularity requirement necessitates pleading
facts which ‘show how, when, where, to whom, and by what
means the representations were tendered.”’”].)
       Here, the complaint alleges each element of fraud with
adequate particularity: (1) in advance of the April 12 meeting at
Buchalter, the Petrosian defendants misrepresented to Williams
that Lucas represented both parties and drafted a fair agreement
to allow Petrosian to be the business manager of Williams’s
practice; (2) Petrosian and Lucas knew this to be false, and Lucas
knew that Petrosian intended “to own the [p]ractice, take all the
profits and pay Williams some kind of salary and, upon
termination of the agreement, Petrosian intended to take over
the practice”; (3) Lucas intended to induce Williams’s reliance by
failing at the April 12 meeting to disclose that Buchalter
previously represented Petrosian, making statements and acting
in a manner that led Williams to believe she was representing
him,13 representing that the management service agreement and

13   Although the allegation that Lucas made statements at the
meeting and acted in a manner that led Williams to believe she

                               22
powers of attorney were necessary for Petrosian to manage the
practice while misrepresenting the laws regulating the corporate
practice of medicine; (4) Williams, who was elderly and in
apparent poor health, “reinforced by [Lucas’s] conduct in the
meeting, . . . was convinced by Lucas’s arguments and executed
the MSA without reading it”; and (5) the Corporation was
damaged through the diversion of the practice’s income and theft
of its assets. Moreover, the complaint specifically alleged Lucas
had actual knowledge of the fraudulent scheme and coordinated
with Petrosian to achieve its purposes, supporting conspiracy
liability. (Favila, supra, 188 Cal.App.4th at p. 206.)
       The Buchalter defendants contend the cause of action for
conspiracy to commit fraud is barred by the agent’s immunity
rule. Under the agent’s immunity rule, “[a] cause of action for
civil conspiracy may not arise . . . if the alleged conspirator,
though a participant in the agreement underlying the injury, was
not personally bound by the duty violated by the wrongdoing and
was acting only as the agent or employee of the party who did
have that duty.” (Doctors’ Co. v. Superior Court (1989) 49 Cal.3d
39, 44 (Doctors’ Co.); accord, Favila, supra, 188 Cal.App.4th at
p. 208.) In Doctors’ Co., the Supreme Court held that the
claimant, whose malpractice claims against his doctor were
successfully tried to a jury, could not state a claim against the
attorney for the doctor’s insurer and the insurer’s expert for
conspiring with the insurer to violate an Insurance Code

was representing him lacks sufficient particularity, standing
alone, to allege the inducement element, it is sufficient in
combination with the allegation that Lucas falsely advised
Williams that he had to sign the management services agreement
and powers of attorney for Petrosian to manage the practice.

                               23
provision requiring good faith efforts to settle a valid claim
“[b]ecause the noninsurer defendants [(the attorney and expert)]
are not subject to that duty [under the Insurance Code] and were
acting merely as agents of the insurer ‘and not as individuals for
their individual advantage.’” (Doctors’ Co., at p. 45.) But the
court clarified, “It remains true, of course, that under other sets of
circumstances ‘[attorneys] may be liable for participation in
tortious acts with their clients, and such liability may rest on a
conspiracy’ [citations]. For example, an attorney who conspires
to cause a client to violate a statutory duty peculiar to the client
may be acting not only in the performance of a professional duty
to serve the client but also in furtherance of the attorney’s own
financial gain.” (Id. at p. 46.) Also, a claim may lie “against an
attorney for conspiring with his or her client to cause injury by
violating the attorney’s own duty to the plaintiff.” (Id. at p. 47.)
       Shortly after the Supreme Court decided Doctors’ Co., the
Legislature amended Civil Code section 1714.10 (setting forth
prefiling requirements for certain claims against an attorney
alleging a civil conspiracy with his or her client) to add
subdivision (c), which sets forth the two exceptions to the agent’s
immunity rule articulated in Doctors’ Co. and provides that they
are likewise exceptions to the prefiling requirements for civil
conspiracy claims. Under subdivision (c), the prefiling
requirements do not apply to a cause of action “against an
attorney for a civil conspiracy with his or her client arising from
any attempt to contest or compromise a claim or dispute” where:
“(1) the attorney has an independent legal duty to the plaintiff, or
(2) the attorney’s acts go beyond the performance of a

                                 24
professional duty to serve the client and involve a conspiracy to
violate a legal duty in furtherance of the attorney’s financial
gain.” (Civ. Code, § 1714.10, subd. (c); see Favila, supra,
188 Cal.App.4th at p. 209.)14
       The allegations of the complaint are sufficient to establish
the conspiracy claim is not barred by the agent’s immunity rule
because Lucas (and Buchalter) had an independent legal duty not
to defraud Williams. As discussed, the complaint alleges Lucas
schemed to defraud the Williams plaintiffs by her statements and
conduct at the April 12 meeting, which led Williams to believe
she represented him and Petrosian, and she induced Williams to
believe the management services agreement and broad powers of
attorney were necessary for Petrosian Esthetic to operate the
medical clinic. “It is well established that an attorney has an
independent legal duty to refrain from defrauding nonclients.”
(Rickley v. Goodfriend (2013) 212 Cal.App.4th 1136, 1151 [Civil
Code section 1714.10 did not apply because attorneys had an
independent legal duty to third parties when holding client funds
in a trust account with respect to dispersal of the funds to the
clients and third parties]; see id. at p. 1153 [“A license to practice
law does not shield an attorney from liability when he or she
engages in conduct that would be actionable if committed by a
layperson. An attorney who commits such conduct may be liable

14    Although the Buchalter defendants in their demurrer
argued the Williams plaintiffs’ civil conspiracy claim was barred
by the agent’s immunity rule under Civil Code section 1714.10, as
we observed in Favila, supra, 188 Cal.App.4th at page 209, Civil
Code section 1714.10 only applies to the prefiling requirement,
providing “at best, . . . only an additional procedural safeguard
against meritless claims.”

                                 25
under a conspiracy theory when the attorney agrees with his or
her client to commit wrongful acts.”]; accord, Burtscher v.
Burtscher (1994) 26 Cal.App.4th 720, 727 [Civil Code
section 1714.10 did not apply because “attorney Hobbs resorted to
self-help . . . in going onto the property and unilaterally retaking
possession in circumstances where a lawyer would be serving a
notice to quit, filing an unlawful detainer action and getting a
court order. Hobbs actively participated in conduct that went
way beyond the role of legal representative: self-help is not the
practice of law.”].)

D.    Williams Fails To State an Individual Cause of Action for
      Conspiracy To Defraud the Corporation
      In their demurrer the Buchalter defendants argued, as they
do on appeal, that Williams cannot state an individual cause of
action for conspiracy because the complaint does not allege any
harm to him personally from the conspiracy: instead, the parties
are alleged to have “acted through their respective corporations,”
and all of the revenues and assets of the practice were taken from
Corporation.15 The Williams plaintiffs did not address this
argument in their opposition to the demurrer, and they do not
address it in their opening or reply briefs on appeal. They have

15    The complaint includes a conclusory allegation that
Williams suffered “severe emotional distress” as a result of the
Buchalter defendants’ misconduct, seeking damages on that
basis. But there are no particularized allegations as to how the
Buchalter defendants caused emotional distress and how the
distress manifested. In any event, the Williams plaintiffs do not
argue the emotional distress allegation is sufficient to support an
individual claim.

                                26
therefore forfeited this contention. (See Tiernan v. Trustees of
Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4
[issue not raised on appeal “deemed waived”]; Swain v.
LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59, 72
[“‘“‘Issues not raised in an appellant’s brief are [forfeited] or
abandoned.’”’”].) Although the trial court did not reach the issue,
the demurrer to Williams’s individual cause of action for
conspiracy to defraud was properly sustained. (Carman v.
Alvord, supra, 31 Cal.3d at p. 324.)

E.     The Complaint Fails To State a Cause of Action for
       Financial Elder Abuse
       Financial elder abuse occurs when a person “[t]akes,
secretes, appropriates, obtains or retains real or personal
property of an elder,” or assists in these activities, either “for a
wrongful use or with intent to defraud, or both,” or “by undue
influence.” (Welf. & Inst. Code, § 15610.30, subds. (a)(1), (3).) An
“‘[e]lder’” is “any person residing in this state, 65 years of age or
older.” (Id., § 15610.27.)
       The complaint fails to state a claim for financial elder
abuse because it does not allege funds were taken from a person
over 65—as alleged, the unauthorized withdrawals, embezzled
profits, and misappropriated assets were all taken from the
Corporation.16 “It is fundamental that a corporation is a legal

16     There are circumstances in which the taking of property
not held directly by an elder may be actionable. (See Welf. &
Inst. Code, § 15610.30, subd. (c) [financial elder abuse occurs
“when an elder or dependent adult is deprived of any property
right . . . , regardless of whether the property is held directly or
by a representative of an elder or dependent adult.”].) However,

                                 27
entity that is distinct from its shareholders.” (Grosset v. Wenaas
(2008) 42 Cal.4th 1100, 1108; accord, Presta v. Tepper (2009)
179 Cal.App.4th 909, 914 [a corporation is a “‘“distinct legal
entity separate from its stockholder and from its officers”’”]; see
Hilliard v. Harbour (2017) 12 Cal.App.5th 1006, 1015 [plaintiff
did not have standing to sue for financial elder abuse because his
claim did not “originate in circumstances independent of his
status as a shareholder in the [c]ompanies, and his claim
therefore cannot be deemed personal”].)
       The Williams plaintiffs argued in their opposition to the
demurrer to the elder abuse claim that the trial court should
treat the alleged embezzlement from the Corporation as if the
funds were taken from Williams because Williams was the sole
owner of the Corporation, their interests “fully coincide,” and the
two “should not be regarded as legally distinct.” On appeal, they
cite general authorities defining alter ego liability. The Williams
plaintiffs misapprehend the alter ego doctrine.
       “‘“Under the alter ego doctrine, . . . where a corporation is
used by an individual or individuals, or by another corporation, to
perpetrate fraud, circumvent a statute, or accomplish some other
wrongful or inequitable purpose, a court may disregard the
corporate entity and treat the corporation’s acts as if they were
done by the persons actually controlling the corporation.”’”

a “‘representative’” is narrowly defined as “a person or entity that
is either . . . : [¶] (1) [a] conservator, trustee, or other
representative of the estate of an elder or dependent adult [or]
[¶] (2) [a]n attorney-in-fact of an elder or dependent adult who
acts within the authority of the power of attorney.” (Id.,
§ 15610.30, subd. (d).) The Corporation does not fall within this
definition of a representative.

                                28
(Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. (2013)
217 Cal.App.4th 1096, 1106; accord, Postal Instant Press, Inc. v.
Kaswa Corp. (2008) 162 Cal.App.4th 1510, 1517-1518.) “Thus,
alter ego is used to prevent a corporation from using its statutory
separate corporate form as a shield from liability only where to
recognize its corporate status would defeat the rights and
equities of third parties; it is not a doctrine that allows the
persons who actually control the corporation to disregard the
corporate form.” (Communist Party v. 522 Valencia, Inc. (1995)
35 Cal.App.4th 980, 994; accord, Butler America, LLC v. Aviation
Assurance Co. LLC (2020) 55 Cal.App.5th 136, 147.)
       As alleged, Williams and Petrosian “decided to act through
their respective corporations,” and the Buchalter defendants
fraudulently induced Williams to enter into the management
services agreements and execute powers of attorney on behalf of
the Corporation. The Petrosian defendants withdrew money
from the Corporation’s bank accounts, overbilled the Corporation
for management services and reimbursements, and claimed
ownership of the Corporation’s assets. The complaint does not
allege the Corporation is Williams’s alter ego, and the fact
Williams was the sole owner of the Corporation does not make
the Corporation his alter ego, let alone bring a corporation within
the scope of the elder abuse law.

F.     The Complaint Fails To State a Cause of Action for
       Declaratory Relief Against the Buchalter Defendants
       “‘A complaint for declaratory relief is legally sufficient if it
sets forth facts showing the existence of an actual controversy
relating to the legal rights and duties of the parties under a
written instrument or with respect to property and requests that

                                  29
the rights and duties of the parties be adjudged by the court.’”
(Market Lofts Community Assn. v. 9th Street Market Lofts, LLC
(2014) 222 Cal.App.4th 924, 931.) “‘Declaratory relief operates
prospectively, serving to set controversies at rest. If there is a
controversy which calls for a declaration of rights, it is no
objection that past wrongs are also to be redressed; but there is
no basis for declaratory relief where only past wrongs are
involved.’” (Baldwin v. Marina City Properties, Inc. (1978)
79 Cal.App.3d 393, 407; accord, Gafcon, Inc. v. Ponsor &
Associates (2002) 98 Cal.App.4th 1388, 1403.) The remedy of
declaratory relief is unavailable where a “plaintiff has a fully
matured cause of action for money, if any cause exists at all.”
(Jackson v. Teachers Ins. Co. (1973) 30 Cal.App.3d 341, 344;
accord, Canova v. Trustees of Imperial Irrigation Dist. Employee
Pension Plan (2007) 150 Cal.App.4th 1487, 1497 [“Where, as
here, a party has a fully matured cause of action for money, the
party must seek the remedy of damages, and not pursue a
declaratory relief claim.”].)
       The complaint alleges the Petrosian defendants, aided by
the Buchalter defendants, embezzled money from the
Corporation and, after the April 30, 2020 termination of the
relationship, used the management services agreements to
exclude Williams and take over the practice. The declaratory
relief cause of action alleges a controversy exists “between the
Plaintiffs and the Petrosian Defendants” (a defined term in the
complaint that does not include the Buchalter defendants)
because the Williams plaintiffs contend they sustained losses of
$11.5 million, they own the practice, including the leases,
equipment, and intangible property, and they “are entitled to all

                                30
the income generated from the [p]ractice since May 1, 2020,”
whereas the defendants dispute those contentions.
      The complaint therefore fails to allege an actual
controversy respecting prospective rights between the Williams
plaintiffs and the Buchalter defendants. The Buchalter
defendants’ alleged role in defrauding the Corporation may be
redressed with damages. To the extent there is a prospective
dispute about ownership of the practice and future revenues it
may generate, this dispute lies with the Petrosian defendants,
not the Buchalter defendants. There is no allegation the
Buchalter defendants have asserted any interest in the practice
and its assets.17

                         DISPOSITION

       The order of dismissal is reversed. The matter is
remanded to the trial court with directions to vacate the order
sustaining the demurrer to the complaint without leave to
amend and to enter a new order overruling the demurrer as to
the first cause of action for conspiracy to commit fraud asserted
by the Corporation but sustaining the demurrer without leave
to amend as to the first cause of action for conspiracy to
commit fraud asserted by Williams individually, the third
cause of action for financial elder abuse, and the sixth cause of

17    The Williams plaintiffs do not request leave to amend their
individual cause of action for conspiracy to defraud or their
causes of action for financial elder abuse and declaratory relief,
nor do they articulate how they could amend their complaint.

                                31
action for declaratory relief. The parties are to bear their own
costs on appeal.

                                     FEUER, J.
We concur:

             SEGAL, Acting P. J.

             MARTINEZ, J.

                                32