Court Opinion

ID: 6351694
Source: CourtListenerOpinion
Date Created: 2022-06-21 17:02:26.675708+00
Date Added: 2024-06-11T12:49:11.286100
License: Public Domain

Filed 6/21/22 Williams v. Wells Fargo Bank CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

WILBUR WILLIAMS, JR. et al.,                              B314887

         Plaintiffs and Appellants,                       (Los Angeles County
                                                          Super. Ct.
         v.                                               No. 20STCV15993)

WELLS FARGO BANK, N.A. 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.
      Severson & Werson, Jan T. Chilton and Elizabeth C.
Farrell for Defendants and Respondents.
                   __________________________
       Wilbur Williams, Jr., M.D., and his professional
corporation, Wilbur Williams, M.D., Inc. (the Corporation;
collectively, the Williams plaintiffs), appeal from an order of
dismissal entered as to defendants Wells Fargo Bank, N.A.,
and its Glendale bank branch manager Hovanes Tonoyan
(collectively, the Wells Fargo defendants) after the trial court
sustained without leave to amend the Wells Fargo defendants’
demurrer to the second amended complaint. The Williams
plaintiffs asserted seven causes of action based on allegations the
Wells Fargo defendants abetted Williams’s former business
partner Sevana Petrosian and her associates Salina Ranjbar,
Vana Mehrabian, and Staforde Palmer (collectively, the
Petrosian defendants) in embezzling approximately $11.5 million
from the Corporation’s bank accounts by allowing the Petrosian
defendants to make large cash withdrawals, write checks to
themselves, and transfer funds to their own accounts.
       In sustaining the demurrers, the trial court found the Wells
Fargo defendants did not have a duty to monitor withdrawals
made by the Petrosian defendants because, as alleged, the
Petrosian defendants were authorized signatories on the
Corporation’s accounts. On appeal, the Williams plaintiffs
contend, among other arguments, the trial court erred because
the second amended complaint alleges the Petrosian defendants’
authority was limited to writing checks to pay the Corporation’s
bills, and Williams did not authorize other types of checks, wire
transfers, and cash withdrawals from the Corporation’s account.
       We agree the Petrosian defendants’ alleged cash
withdrawals (about $700,000 within three months) were not
made in an authorized manner, and the trial court erred in
sustaining the demurrer as to the causes of action for conspiracy

                                2
to embezzle funds and violation of the Unfair Competition Law
(Bus. & Prof. Code § 17200 et seq.; UCL). Further, the Williams
plaintiffs should be allowed to file a motion for leave to amend
their causes of action for breach of contract and breach of the
implied covenant of good faith and fair dealing. However, we
affirm the order sustaining the demurrer as to the remaining
causes of action in the second amended complaint and the order
sustaining the demurrer to the cause of action for breach of
fiduciary duty in the first amended complaint. We reverse the
order of dismissal and remand for further proceedings.

         FACTUAL AND PROCEDURAL BACKGROUND

A.    The Second Amended Complaint
      The Williams plaintiffs filed this action on April 27, 2020.
After the trial court sustained the Wells Fargo defendants’
demurrer to the first amended complaint with leave to amend,
the Williams plaintiffs filed the operative second amended
complaint,1 alleging causes of action for (1) breach of contract,

1     The Williams plaintiffs request we take judicial notice of
12 documents filed in two 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. Carol Lucas, Esq., et al. (Super. Ct. Los Angeles
County, 2020, No. 21STCP03133). The exhibits include five
witness declarations (exhibits A, B, C, J, K); the articles of
incorporation of Petrosian’s company Sev Laser Aesthetics, LLC
(exhibit F); three management services agreements between
Williams, Sev Laser Aesthetics, LLC, and Petrosian Esthetic
Enterprises (exhibits D, G, H); a bank statement (exhibit I); the

                                 3
(2) declaratory relief, (3) conspiracy to convert and embezzle
funds,2 (4) negligence, (5) breach of the covenant of good faith and
fair dealing, (6) financial elder abuse, and (7) violation of the
UCL.3 The second amended complaint omitted several material

Corporation’s 1099-K forms (exhibit L); and a publication of the
California Medical Board regarding the licensure of medical
businesses (exhibit E). The Williams plaintiffs contend these
documents are properly noticed as official court and government
records under Evidence Code section 452, subdivisions (c) and (d).
However, the exhibits are offered for the truth of the matters
asserted therein, pertain to facts subject to reasonable dispute,
and are not appropriate for consideration on demurrer. We
therefore deny the request for judicial notice. (New Livable
California v. Association of Bay Area Governments (2020) 59
Cal.App.5th 709, 716 [A “‘court cannot by means of judicial notice
convert a demurrer into an incomplete evidentiary hearing in
which the demurring party can present documentary evidence
and the opposing party is bound by what that evidence appears to
show.’”]; Kilroy v. State of California (2004) 119 Cal.App.4th 140,
145 [“‘Courts may not take judicial notice of allegations in
affidavits [and] declarations . . . in court records because such
matters are reasonably subject to dispute and therefore require
formal proof.’”].)
2     For simplicity we refer to the third cause of action as a
cause of action for conspiracy to embezzle funds.
3     The first amended complaint also included a cause of action
for breach of fiduciary duty. On appeal, the Williams plaintiffs
challenge the trial court’s ruling sustaining with leave to amend
the demurrer to that cause of action.

                                 4
factual allegations from the first amended complaint; we consider
these allegations under the sham pleading doctrine.4
       The second amended complaint relies on the same
allegations for all counts. Williams was an 84-year-old physician
who operated a medical practice in California through the
Corporation, which he wholly owned. As of April 12, 2014 the
Corporation operated two medical clinics in Los Angeles County.
Petrosian and Ranjbar acted as the managers of the clinics; they
managed the clinics’ finances; and they “were granted the right to
sign checks to pay bills of the clinics.” In 2017 and 2018 the
Corporation added seven more clinics, and Mehrabian and
Palmer acted as managers of some of those clinics. Mehrabian
and Palmer likewise “were granted the right to sign checks to pay
bills of the clinics.”
       In 2018 Williams opened nine commercial bank accounts
(one for each clinic) in the Corporation’s name at Wells Fargo’s

4     See Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408,
425 (“Under the sham pleading doctrine, plaintiffs are precluded
from amending complaints to omit harmful allegations, without
explanation, from previous complaints to avoid attacks raised in
demurrers or motions for summary judgment. [Citation.] ‘If a
party files an amended complaint and attempts to avoid the
defects of the original complaint by either omitting facts which
made the previous complaint defective or by adding facts
inconsistent with those of previous pleadings, the court may take
judicial notice of prior pleadings and may disregard any
inconsistent allegations.’”). In their opening brief, the Williams
plaintiffs argue there were no material inconsistencies between
the complaints, but they do not contend the trial court’s
consideration of the allegations in the first amended complaint
under the sham pleading doctrine was error.

                                5
Glendale branch. Branch manager Tonoyan required Williams to
execute documents that Tonoyan represented were necessary to
open the accounts, but Tonoyan did not explain what the
documents were. At a meeting in 2018, Williams told Tonoyan
that Petrosian, Ranjbar, Mehrabian, and Palmer “will be working
for him,” and Williams requested they “be given the right to sign
checks to pay the bills of [the Corporation].” However, Williams
specified each of the Petrosian defendants “should be allowed to
sign checks to pay bills of [the Corporation] and nothing else.”
Williams “did not authorize [Wells Fargo] to allow [the Petrosian
defendants] to withdraw cash or transfer funds from [the
Corporation] to their corporate account at [Wells Fargo].”
      The Williams plaintiffs alleged on information and belief
that Tonoyan entered into a conspiracy with the Petrosian
defendants to embezzle all of the Corporation’s profits, and
during the period from January 2018 through March 2020, the
Petrosian defendants embezzled approximately $11.5 million
from the Corporation’s accounts. In furtherance of the
conspiracy, the Wells Fargo defendants issued the Petrosian
defendants blank checks and a rubber stamp with a facsimile of
Williams’s signature. Williams did not authorize and was
unaware of the stamp, and “to cover up these facts,” Wells Fargo
never sent a hard copy of the Corporation’s bank statements to
Williams.
      Using Williams’s facsimile signature, the Petrosian
defendants withdrew approximately $614,000 from the
Corporation’s accounts in the first three months of 2020 by

                               6
issuing checks to their own accounts at Wells Fargo.5 Tonoyan,
in his capacity as an officer of Wells Fargo, was responsible for
authorizing these checks, some of which exceeded $100,000, and
none of which was personally signed or used to pay bills. During
the same time period, the Petrosian defendants also withdrew
about $700,000 in cash from the Corporation’s accounts. Copies
of online bank statements attached to the complaint reflect 25 in-
branch withdrawals by Mehrabian or Palmer made within a 71-
day period in increments ranging from $5,000 to $115,000. In
many instances, Wells Fargo’s computer “rejected the transaction
and raised red flags,” but Tonoyan, pursuant to his conspiracy
with the Petrosian defendants, used his authority to override the
computer to allow the withdrawals. The Petrosian defendants
also made approximately $853,000 in wire transfers to their
accounts. Altogether, the Petrosian defendants withdrew more
than $2.2 million from the Corporation’s accounts in early 2020
without Williams’s knowledge or authorization.

B.     The Wells Fargo Defendants’ Demurrer and the Trial
       Court’s Order
       On April 27, 2020 the Wells Fargo defendants demurred to
all causes of action in the second amended complaint. They
argued the causes of action for breach of contract and breach of
the implied covenant of good faith and fair dealing failed because
the Williams plaintiffs did not allege the terms of a contract;
instead, the second amended complaint contained as an

5      The images of processed checks attached to the complaint
reflect as payees three Sev Laser entities and Petrosian Esthetic
Enterprises.

                                7
attachment a document described as a “signature card that
serves as a contract between a bank and its depositor.” The
document is titled “Certification Regarding Beneficial Owners of
Legal Entity Customers,” and the Wells Fargo defendants
asserted the document was not a signature card or contract, and
the complaint did not otherwise allege a specific contractual
relationship between the Corporation and Wells Fargo.
       The Wells Fargo defendants also argued the causes of
action based on allegations they processed checks bearing
Williams’s signature presented by the Petrosian defendants, as
authorized signatories on the Corporation’s accounts, were barred
under Financial Code section 1451 (section 1451), which provides
a bank may assume a withdrawal made by an authorized party in
an authorized manner is itself authorized, even if the withdrawal
facially benefits the authorized party. Thus, the cause of action
for conspiracy to embezzle funds failed because the second
amended complaint did not allege any wrongful conduct by the
Wells Fargo defendants given that the Petrosian defendants were
authorized signatories on the Corporation’s accounts. And as to
the cause of action for negligence, “It is not negligent for a bank
to honor checks drawn by those who are authorized to sign those
checks.” Further, the economic loss doctrine barred the
negligence claim because the second amended complaint alleged
only economic harm.
       The Williams plaintiffs’ remaining causes of action for
declaratory relief, financial elder abuse, and violations of the
UCL also failed because there was no underlying tort or breach of
contract. In addition, the second amended complaint failed to
allege elder abuse because all the allegedly embezzled funds were
taken from the Corporation’s account, not from Williams.

                                8
       After a hearing, on June 30, 2021 the trial court sustained
the Wells Fargo defendants’ demurrer without leave to amend.6
In its tentative ruling, which the court adopted as its order, the
court found the Williams plaintiffs omitted key facts from the
second amended complaint that they had alleged in the first
amended complaint, essentially admitting under the sham
pleading doctrine “the Petrosian Defendants were managers of
the clinics and that Williams specifically told Tonoyan this when
authorizing them as signatories.” The court found the earlier
allegations were “fatal to Plaintiffs[’] claims because Defendants
could not have breached a duty to Plaintiffs by doing the very
thing Plaintiffs authorized them to do.”
       The trial court concluded the Williams plaintiffs failed to
state a cause of action as to any of their claims because “Plaintiffs
have alleged that the Petrosian Defendants were authorized to
sign checks on behalf of Plaintiffs[,] they were allowed to sign the
name of Williams[,] and Plaintiffs are bound by the use of that
signature under Commercial Code section 3402. In addition, . . .
Defendants were allowed to assume that the checks were being
drawn for the purpose authorized and Defendants were obligated
to honor those checks.”

6      The trial court did not rule on the Wells Fargo defendants’
concurrent motion to strike portions of the second amended
complaint, finding it was mooted by the sustaining of the
demurrer. The motion to strike is not included in the record on
appeal, and the parties have not addressed it. To the extent the
motion to strike pertains to the surviving causes of action, the
trial court should address the motion on remand.

                                 9
      On June 30, 2021 the trial court entered an order of
dismissal in favor of the Wells Fargo defendants.7 The Williams
plaintiffs timely appealed.

                              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 v. Hanley (2015) 61 Cal.4th 1225, 1230.) A
dismissal entered after a demurrer has been sustained without
leave to amend “will be affirmed if proper on any grounds stated

7     The order of dismissal stated the dismissal of the Wells
Fargo defendants was without prejudice. To constitute an
appealable judgment under Code of Civil Procedure section 904.1,
subdivision (a)(1), a dismissal must be “in the form of a written
order signed by the court and filed in the action” (id., § 581d) and
constitute a “final determination of the rights of the parties in an
action or proceeding” (id., § 577; see Cook v. Stewart McKee & Co.
(1945) 68 Cal.App.2d 758, 763 [appellate court has no jurisdiction
to review rulings on demurrers prior to a voluntary dismissal]).
Here, the trial court signed the order of dismissal, and although
the order stated the dismissal was without prejudice, the order
was entered following the court’s order sustaining the demurrer
without leave to amend, thus finally determining the rights of the
parties.

                                 10
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 to the
      Causes of Action for Conspiracy To Embezzle and Violation
      of the UCL
      1.     As alleged, the Wells Fargo defendants owed a duty to
             monitor cash withdrawals from the Corporation’s
             accounts
      As the Wells Fargo defendants observe in their
respondents’ brief, “[a]t bottom, each of plaintiffs’ claims rests on
the notion that Wells Fargo should have policed [the
Corporation’s] accounts to assure that the Petrosian defendants
did not abuse their power, as authorized co-signers on those
accounts, to write checks or make withdrawals for unauthorized
purposes.” We agree the existence and scope of the Wells Fargo
defendants’ duty to monitor withdrawals from the Corporation’s
account is the central issue raised by the demurrer as to all
causes of action. The Wells Fargo defendants contend that under
section 1451, a bank’s duty to act with reasonable care toward its
depositors does not extend to the monitoring of withdrawals from
bank accounts by authorized signatories in an authorized form or
manner. As alleged, however, the Petrosian defendants’ cash
withdrawals were not in an authorized form or manner because
Williams only authorized the Petrosian defendants to “sign

                                 11
checks to pay bills,” and “nothing else.”8 Thus, the trial court
erred in sustaining the demurrer based on the absence of a duty
on the part of the Wells Fargo defendants.
       “‘The relationship between a bank and its depositor is
founded on contract,’ [citation] which is ordinarily memorialized
by a signature card that the depositor signs upon opening the
account.” (Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532,
537 (Chazen).) “‘It has long been regarded as “axiomatic that the
relationship between a bank and its depositor arising out of a
general deposit is that of a debtor and creditor.” [Citation.] “A
debt is not a trust and there is not a fiduciary relation between
debtor and creditor as such.”’” (Ibid.) “Accordingly, banks ‘are
not fiduciaries for their depositors.’” (Ibid.; accord, Kurtz-Ahlers,
LLC v. Bank of America, NA. (2020) 48 Cal.App.5th 952, 956
(Kurtz-Ahlers).)
       “Nevertheless, ‘[i]t is well established that a bank has “a
duty to act with reasonable care in its transactions with its
depositors.”’” (Kurtz-Ahlers, supra, 48 Cal.App.5th at p. 956,
quoting Bullis v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801,
808.) “The duty is an implied term in the contract between the
bank and its depositor.” (Kurtz-Ahlers, at p. 956; accord, Chazen,
supra, 61 Cal.App.4th at p. 543.) The scope of a bank’s duties
under a deposit agreement is narrow. (Kurtz-Ahlers, at p. 956.)

8      Because we conclude the Williams plaintiffs adequately
pleaded causes of action for conspiracy to embezzle and violation
of the UCL based on the Wells Fargo defendants’ processing of
unauthorized cash withdrawals, we do not reach whether the
alleged wire transfers and checks written to the Petrosian
defendants’ corporate accounts were in an authorized form or
manner.

                                 12
“Such duties include the duty to honor checks properly payable
from the depositor’s account.” (Ibid.; accord, Chazen, at p. 539
[“Banks are strictly liable for the wrongful dishonor of checks.”].).
Conversely, banks have “the duty to dishonor checks lacking
required signatures.” (Kurtz-Ahlers, at p. 956.)
       However, the contractual relationship between a bank and
its depositor “does not involve any implied duty ‘to supervise
account activity’ [citation] or ‘to inquire into the purpose for
which the funds are being used . . . .’” (Chazen, supra,
61 Cal.App.4th at p. 537; see Kurtz-Ahlers, supra, 48 Cal.App.5th
at pp. 956-959 [bank owed depositor no duty to investigate
suspicious checks cashed by bookkeeper who deceived the
depositor into issuing tax payment checks that the bookkeeper
deposited into her own account instead of mailing to tax
authorities]; Software Design & Application v. Hoefer & Arnett
(1996) 49 Cal.App.4th 472, 481 [there is no authority for the
proposition “that, in the absence of suspicious instruments, a
bank has a duty to supervise account activity or otherwise track
frequent and/or large dollar transactions in deposit accounts”].)
       Section 1451 addresses the longstanding principle first
codified in the 1925 Bank Act (Stats. 1925, c. 312 (Assem. Bill
No. 725 (46th Sess.) § 16a) that banks are not obligated to
monitor withdrawals made by authorized parties in an
authorized manner—even where the funds are paid to the
withdrawing party. Section 1451 provides, “When the depositor
of a commercial or savings account has authorized any person to
make withdrawals from the account, the bank, in the absence of
written notice otherwise, may assume that any check, receipt, or
order of withdrawal drawn by such person in the authorized form
or manner, including checks drawn to his personal order and

                                 13
withdrawal orders payable to him personally, was drawn for a
purpose authorized by the depositor and within the scope of the
authority conferred upon such person.”9 (Italics added.)
Section 1451’s limitation on the bank’s duty to supervise
withdrawals is designed to further the strong public policies to
protect depositor privacy (see Chicago Title Ins. Co. v. Superior
Court (1985) 174 Cal.App.3d 1142, 1159 [if “banks had a duty to
reveal suspicions about their customers, they would violate their
customers’ right to privacy, not to mention be forced to act as the
guarantor of checks written by the depositors”]); the need for an
efficient processing of banking transactions (see Kurtz-Ahlers,
48 Cal.App.5th at p. 960-961 [limitation on bank’s duty furthers
rules requiring “‘banking transactions to be processed quickly
and automatically and impos[ing] strict deadlines for the
payment or timely dishonor of checks ’”]); and the recognition

9     Commercial Code section 3307, subdivision (b)(3), also
relied on by the Wells Fargo defendants, similarly provides as to
checks written by a fiduciary on a depositor’s account, “If an
instrument is issued by the represented person or the fiduciary
as such, and made payable to the fiduciary personally, the taker
does not have notice of the breach of fiduciary duty unless the
taker knows of the breach of fiduciary duty.” The Wells Fargo
defendants rely on this provision to argue Wells Fargo, as the
“taker” of the checks to the Petrosian defendants, did not have
notice of any breach of fiduciary duty by the Petrosian
defendants. However, the second amended complaint does not
allege that the Petrosian defendants were fiduciaries of the
Corporation, and thus this section would not apply. The second
amended complaint only alleges the Petrosian defendants
“managed” the Corporation’s clinics and finances, and Williams
told Tonoyan the Petrosian defendants “will be working for him.”

                                14
that depositors are better equipped than depository banks to
identify fraudulent activity (id. at p. 961; see Desert Bermuda
Properties v. Union Bank (1968) 265 Cal. App.2d 146, 151-152
[“when the Legislature adopted what is now Financial Code,
section [1451], it relieved banks from any general duty to police
fiduciary accounts (a duty which a bank could not reasonably be
expected to carry out effectively)”].).
       Contrary to the trial court’s conclusion the Petrosian
defendants were authorized “to withdraw funds and sign checks,”
the second amended complaint only alleged that Williams told
Tonoyan when Williams opened the Corporation’s accounts that
the Petrosian defendants “should be allowed to sign checks to pay
bills of [the Corporation] and nothing else,” specifying Williams
“did not authorize [Wells Fargo] to allow [the Petrosian
defendants] to withdraw cash or transfer funds.” Thus, under
section 1451, the “authorized form or manner” of withdrawals
from the Corporation’s accounts only included the writing of
checks, not cash withdrawals by the Petrosian defendants.
Section 1451 may have relieved the bank of responsibility for the
Petrosian’s defendants check-writing practices (potentially
subject to a limitation on checks to pay bills), but the statute did
not absolve the Wells Fargo defendants of their duty to exercise
reasonable care when Mehrabian and Palmer withdrew more
than $700,000 in cash from the Corporation’s accounts. (See
Kurtz-Ahlers, supra, 48 Cal.App.5th at p. 956.)
       Although we are unaware of any case authority
distinguishing between types of withdrawals with respect to
section 1451’s limitation on a bank’s duty of reasonable care, our
reading of section 1451 is consistent with the statute’s specific
reference to a “check, receipt, or order of withdrawal” in limiting

                                15
authority to the “authorized form or manner.” Had the
Legislature intended to broadly immunize a bank from liability
for any form of withdrawal regardless of the specified authority
granted by the depositor to the signatory, as argued by the Wells
Fargo defendants, the Legislature could have simply referred to
withdrawals from an account, without specifying three types of
withdrawals (a check, receipt, or order of withdrawal). (See
California Building Industry Assn. v. State Water Resources
Control Board (2018) 4 Cal.5th 1032, 1041 [in construing a
statute, “‘[w]e consider first the words of a statute, as the most
reliable indicator of legislative intent’”]; Imperial Merchant
Services, Inc. v. Hunt (2009) 47 Cal.4th 381, 387 [“We must look
to the statute’s words and give them ‘their usual and ordinary
meaning.’”].)
      The courts have imposed a duty of reasonable care on
banks in similar contexts where there are limits on a signatory’s
authority with respect to a bank account. For example, in
Torrance Nat. Bank v. Enesco Federal Credit Union (1955)
134 Cal.App.2d 316, 320-321 the Court of Appeal concluded
former Financial Code section 953 (the predecessor to
section 1451) did not assist a bank in its action against a
corporate depositor to recover an overdraft on the corporation’s
bank account where the corporate officer who signed a check on
the account was authorized to sign “‘check[s] and drafts,’” but he
was not authorized to sign a check that was greater than the
account balance. The court concluded a check that caused the
depositor’s account to be overdrawn was not “‘in the authorized
form and manner’” under section 953 because it was in excess of
the balance of the depositor’s account with the bank, explaining,
“The fact that any check for an amount less than or up to the

                                16
amount of the deposit would have been authorized does not alter
the fact that the check involved in the instant action was
unauthorized.” (Id. at pp. 319, 328; see Bullis v. Security Pac.
Nat. Bank, supra, 21 Cal.3d at pp. 811-812 [Financial Code
section 953 did not immunize a bank from liability for failing to
require the signatures of two coexecutors for withdrawal from an
estate’s checking account where the coexecutors both signed
signature cards for the checking account, but the cards clarified
that the accounts were governed by applicable banking laws and
customs, and the bank’s operations manual required both
coexecutors to authorize a withdrawal].)10

10    We recognize it would be unusual for a large bank like
Wells Fargo to agree based on a branch manager’s oral
communications with a depositor that a signatory has narrowly
prescribed authority to make withdrawals on an account (here, to
sign checks to pay bills, and not to make cash withdrawals or
wire transfers), but in reviewing a ruling on a demurrer, we
accept the allegations as true. (Brown v. USA Taekwondo, supra,
11 Cal.5th at p. 209.) Further, we are unaware of any legal
authority that would prevent a bank from allowing such a
restriction. The attorney for the Wells Fargo defendants
acknowledged at oral argument that a bank could in theory
authorize an employee to agree to the restriction alleged here,
although he observed that Wells Fargo, with hundreds of
thousands of employees, would never allow an oral agreement for
signatory authority, and written depository agreements would
foreclose this possibility.

                               17
      2.      The third cause of action adequately pleaded a cause
              of action for conspiracy to embezzle funds
        “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; 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.)
       “‘Embezzlement is the fraudulent appropriation of property
by a person to whom it has been [e]ntrusted.’ ([Pen. Code,]
§ 503.) The elements of embezzlement are ‘1. An owner entrusted
his/her property to the defendant; 2. The owner did so because
he/she trusted the defendant; 3. The defendant fraudulently
converted that property for his/her own benefit; [and] 4. When
the defendant converted the property, he/she intended to deprive
the owner of its use.’” (People v. Fenderson (2010)
188 Cal.App.4th 625, 636; accord, People v. Selivanov (2016)
5 Cal.App.5th 726, 764.)
       The second amended complaint alleged Tonoyan entered
into a conspiracy with the Petrosian defendants to embezzle

                               18
$11.5 million from the Corporation’s accounts by providing the
Petrosian defendants with blank checks and a facsimile signature
stamp, approving large cash withdrawals that he knew to be
unauthorized, and “us[ing] his authority to override the computer
as to allow the transactions to go thru [sic].”11
       The trial court agreed with the Wells Fargo defendants
that the Williams plaintiffs failed to plead an underlying claim
for embezzlement because the alleged withdrawals were
authorized by Williams, and thus there was no fraudulent
conversion. However, as discussed, at least as to the cash
withdrawals, the transactions were not authorized.
       The Wells Fargo defendants also contend the conspiracy
claim fails because the Williams plaintiffs failed to allege
Tonoyan was aware of and intended to assist in the Petrosian
defendants’ embezzlement from the Corporation’s accounts. But
the second amended complaint alleged Tonoyan knew Williams
had authorized the Petrosian defendants only to write checks on
the account, and he did not authorize cash withdrawals or
transfers. Further, as alleged, Tonoyan assisted the Petrosian
defendants by providing them blank checks and the signature
stamp, failing to send paper statements to Williams “to cover up
these facts,” and overriding computerized red flags despite
knowing enormous cash withdrawals were being taken from the
Corporation accounts. From these factual allegations, it is
reasonable to infer Tonoyan had actual knowledge of an
embezzlement scheme and intended to and acted in concurrence

11     The second amended complaint alleged Wells Fargo is
liable for the conspiracy under principles of respondeat superior.

                                19
with the tortious scheme. (Favila v. Katten Muchin Rosenman
LLP, supra, 188 Cal.App.4th at p. 206.)

      3.       The seventh cause of action adequately pleaded a
               cause of action for violation of the UCL based on the
               Wells Fargo defendants’ alleged participation in the
               conspiracy to embezzle
        The UCL “prohibits unfair competition, including unlawful,
unfair, and fraudulent business acts. [The UCL] covers a wide
range of conduct. It embraces ‘“‘“anything that can properly be
called a business practice and that at the same time is forbidden
by law.”’” [Citations.]’ [Citation.] . . . [¶] [The UCL] ‘borrows’
violations from other laws by making them independently
actionable as unfair competitive practices.” (Korea Supply Co. v.
Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143; accord,
Medical Marijuana, Inc. v. ProjectCBD.com (2020)
46 Cal.App.5th 869, 896.) “[A] practice may violate the UCL even
if it is not prohibited by another statute. Unfair and fraudulent
practices are alternate grounds for relief.” (Zhang v. Superior
Court (2013) 57 Cal.4th 364, 370; accord, Medical Marijuana,
Inc., at p. 896.)
         The second amended complaint alleged the Wells Fargo
defendants’ conspiracy, conversion of the Corporation’s funds,
financial elder abuse, and breach of the covenant of good faith
and fair dealing constituted the unfair business practices. Where
a UCL claim is entirely derivative of other claims, “the cause of
action stands or falls” with those underlying claims. (Medical
Marijuana, Inc. v. ProjectCBD.com, supra, 46 Cal.App.5th at p.
896 [“Given that there is no further indication in the second
amended complaint as to what conduct or statements on the part

                                20
of the [defendants], other than the statements identified in the
pleaded cause of action for libel, plaintiffs rely on for their UCL
cause of action, we agree that plaintiffs’ UCL cause of action
‘must . . . stand or fall with the underlying claims’ for libel and
false light.”]; accord, Hawran v. Hixson (2012) 209 Cal.App.4th
256, 277 [where plaintiff’s “UCL claim is derivative of [his]
defamation cause of action, . . . that cause of action stands or falls
with that underlying claim”].)
       Because the trial court erred in sustaining the demurrer to
the cause of action for conspiracy to embezzle, it likewise erred in
sustaining the demurrer to the derivative UCL claim.

C.    The Trial Court Properly Sustained Wells Fargo’s
      Demurrers to the Causes of Action for Breach of Fiduciary
      Duty, Breach of Contract, Negligence, Breach of the
      Covenant of Good Faith and Fair Dealing, Financial Elder
      Abuse, and Declaratory Relief
      1.     Breach of fiduciary duty (first amended complaint)
      On appeal, the Williams plaintiffs contend the trial court
erred in sustaining without leave to amend the Wells Fargo
defendants’ demurrer to the breach of fiduciary cause of action
included in the first amended complaint. The trial court did not
err.
      “‘“The elements of a cause of action for breach of fiduciary
duty are the existence of a fiduciary relationship, its breach, and
damage proximately caused by that breach. [Citation.] Whether
a fiduciary duty exists is generally a question of law.”’”
(Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 546;
accord, Green Valley Landowners Assn. v. City of Vallejo (2015)
241 Cal.App.4th 425, 441.) “A fiduciary relationship is ‘“any

                                 21
relation existing between parties to a transaction wherein one of
the parties is in duty bound to act with the utmost good faith for
the benefit of the other party.”’” (Wolf v. Superior Court (2003)
107 Cal.App.4th 25, 29.) A fiduciary duty can exist in the
absence of a fiduciary relationship defined by law if the fiduciary
has voluntarily agreed to accept fiduciary responsibilities. (Ibid.)
The Williams plaintiffs contend they sufficiently alleged a cause
of action for breach of fiduciary duty because the first amended
complaint alleged the parties agreed to enter a fiduciary
relationship. It did not.
       As discussed, “banks ‘are not fiduciaries for their
depositors.’” (Chazen, supra, 61 Cal.App.4th at p. 537; accord,
Copesky v. Superior Court (1991) 229 Cal.App.3d 678, 693-694
[bank-depositor relationship is not a fiduciary relationship,
“quasi-fiduciary relationship,” or even a “special relationship”].)
Although the first amended complaint cursorily alleged the
parties’ relationship was “at a minimum, quasi-fiduciary,” it did
not allege an agreement by the Wells Fargo defendants to assume
any fiduciary responsibilities. The first amended complaint
alleged Williams met with Tonoyan for the purpose of opening
nine checking accounts; the Williams plaintiffs “totally depended
on [Wells Fargo] . . . and depended on its honesty and expertise to
protect them”; and the Wells Fargo defendants breached the trust
and confidence Williams placed in them. Absent is any allegation
Tonoyan or Wells Fargo agreed to assume a duty toward the
Williams plaintiffs beyond the bank-depositor relationship.

      2.     First cause of action for breach of contract
      “[T]he elements of a cause of action for breach of contract
are (1) the existence of the contract, (2) plaintiff’s performance or

                                 22
excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821; accord, C.W. Howe Partners
Inc. v. Mooradian (2019) 43 Cal.App.5th 688, 699.) “A written
contract may be pleaded either by its terms—set out verbatim in
the complaint or a copy of the contract attached to the complaint
and incorporated therein by reference—or by its legal effect.
[Citation.] In order to plead a contract by its legal effect, plaintiff
must ‘allege the substance of its relevant terms. This is more
difficult, for it requires a careful analysis of the instrument,
comprehensiveness in statement, and avoidance of legal
conclusions.’” (McKell v. Washington Mutual, Inc. (2006)
142 Cal.App.4th 1457, 1489; accord, Heritage Pacific Financial,
LLC v. Monroy (2013) 215 Cal.App.4th 972, 993.)
       The second amended complaint alleged Williams executed a
“signature card that serves as a contract between a bank and its
depositor,” which purported contract is attached as an exhibit to
the second amended complaint. Although the attached document
bears Williams’s signature, it is patently not a contract. The
attached certification regarding beneficial owners of legal entity
customers is instead a disclosure required under federal law, as
described on its first page: “To help the government fight
financial crimes, federal regulation requires certain financial
institutions to obtain, verify, and record information about the
beneficial owners of legal entity customers.” (See 31 C.F.R.
§ 1010.230(b)(1) & Appx. A [financial institutions are required to
maintain procedures to identity the beneficial owner of any legal
entity customer at the time an account is opened, which may be
accomplished by obtaining a “certification regarding beneficial
owners of legal entity customers” on a prescribed form].) The

                                  23
second amended complaint does not plead the terms of any other
contract to support the breach of contract cause of action.12
Accordingly, the trial court properly sustained the demurrer to
the breach of contract cause of action. (Heritage Pacific
Financial, LLC v. Monroy, supra, (2013) 215 Cal.App.4th 972,
993 [court did not err in sustaining demurrer to cause of action
for fraud on assignment where plaintiff failed to plead or attach a
written agreement evincing an intent to assign claims].)

       3.    Fourth cause of action for negligence
       “‘The elements of a cause of action for negligence are: the
“defendant had a duty to use due care, that he [or she] breached
that duty, and that the breach was the proximate or legal cause
of the resulting injury.”’” (Day v. Lupo Vine Street, L.P. (2018)
22 Cal.App.5th 62, 69; accord, Merrill v. Navegar, Inc. (2001)
26 Cal.4th 465, 477.) As discussed, the Wells Fargo defendants
argued in their demurrer that under section 1451 they had no
duty of reasonable care toward the Williams plaintiffs to monitor
withdrawals by the Petrosian defendants on the Corporation’s
bank accounts. Because section 1451 did not shield the Wells
Fargo defendants from liability (at least as to cash withdrawals),
and they owed a duty to the Williams plaintiffs as the depositor,
the second amended complaint sufficiently alleged the elements

12    Although we read the second amended complaint to allege
that Wells Fargo and the Williams plaintiffs had a depositor
agreement under which the accounts were opened, the second
amended complaint does not allege breach of a depositor
agreement. As we discuss below, the Williams plaintiffs’ attorney
stated at oral argument that the contract claim is based instead
on an oral agreement between Williams and Tonoyan.

                                24
of a cause of action for negligence. Specifically, the second
amended complaint alleged the Wells Fargo defendants processed
in-person cash withdrawals of about $700,000 from the
Corporation’s accounts in early 2020 despite Tonoyan’s
knowledge Williams did not authorize the Petrosian defendants
to make cash withdrawals.
       However, as the trial court correctly found, the negligence
cause of action was independently barred by the economic loss
rule. Under the economic loss rule, “there is no recovery in tort
for negligently inflicted ‘purely economic losses,’ meaning
financial harm unaccompanied by physical or property damage.”
(Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922
(Sheen); see Seely v. White Motor Co. (1965) 63 Cal.2d 9,
18 [“Even in actions for negligence, a manufacturer’s liability is
limited to damages for physical injuries and there is no recovery
for economic loss alone.”].) Where the parties are in contractual
privity, “the rule functions to bar claims in negligence for pure
economic losses in deference to a contract between litigating
parties.” (Sheen, at p. 922; see Robinson Helicopter Co., Inc. v.
Dana Corp. (2004) 34 Cal.4th 979, 988 (Robinson Helicopter)
[“The economic loss rule requires a purchaser to recover in
contract for purely economic loss due to disappointed
expectations, unless he can demonstrate harm above and beyond
a broken contractual promise. [Citation.] Quite simply, the
economic loss rule ‘prevent[s] the law of contract and the law of
tort from dissolving one into the other.’”].)
       Despite the rule’s simple framing, “[n]ot all tort claims for
monetary losses between contractual parties are barred by the
economic loss rule. But such claims are barred when they arise
from—or are not independent of—the parties’ underlying

                                25
contracts.” (Sheen, supra, 12 Cal.5th at p. 923; see Robinson
Helicopter, supra, 34 Cal.4th at p. 991 [where manufacturer
alleged a parts supplier provided false certificates of conformance
with manufacturing specifications, “the economic loss rule does
not bar [the plaintiff’s] fraud and intentional misrepresentation
claims because they were independent of [the defendant’s] breach
of contract”].)
       In Sheen, the plaintiff used his home as collateral for two
loans from the bank. After he missed payments on the loan, he
submitted applications to modify the loans, but the bank failed to
respond. The plaintiff sued the bank for negligence, alleging the
bank owed a duty of care to review and respond to plaintiff’s loan
application. (Sheen, supra, 12 Cal.5th at pp. 914-915.) The trial
court sustained the bank’s demurrer to the negligence claim
finding no duty of the bank in tort to respond to plaintiff’s
request for a loan modification. (Id. at p. 919.) The Supreme
Court affirmed, observing the plaintiff had an agreement with
the bank that specified the parties’ rights and obligations with
respect to the loan, including that the bank could seize and sell
the property if plaintiff stopped making payments on the loan.
(Id. at p. 924.) The court held plaintiff’s negligence claim was
barred by the economic loss rule because it was not independent
of the original contract, explaining, “To impose a tort duty in such
circumstances would go further than creating obligations
unnegotiated or agreed to by the parties; it would dictate terms
that are contrary to the parties’ allocation of rights and
responsibilities. The proposed duty would impede [the bank’s]
right to foreclose by permitting foreclosure only after [the bank]
discharges a tort duty to ‘process, review and respond carefully

                                26
and completely to [a borrower's] loan modification
application[s].’” (Id. at p. 925.)
      As in Sheen, the Williams plaintiffs substantially allege—
notwithstanding the pleading defects in the first cause of action
for breach of contract—that Williams had an agreement with the
Wells Fargo defendants that specified the parties’ rights and
obligations with respect to processing withdrawals from the
Corporation’s accounts. Wells Fargo allegedly breached that
agreement by processing cash and other unauthorized
withdrawals. The measure of contract damages alleged in the
second amended complaint ($11.5 million) is the amount the
Petrosian defendants allegedly embezzled from the Corporation
between January 2018 and March 2020. The negligence cause of
action is premised on the same factual allegations, the same
alleged duty of Wells Fargo as to withdrawals, and the same
measure of damages (the embezzled $11.5 million).13 Under

13     The negligence cause of action included a conclusory
allegation that Williams “suffered and continues to suffer severe
emotional distress, all to his damage in an amount in excess of
the minimum jurisdictional limit of the above-referenced court.”
However, emotional distress damages are generally not
recoverable for negligence where the plaintiff suffers only
economic injury, other than in a cause of action for negligent
infliction of emotional distress. (See Erlich v. Menezes (1999) 21
Cal.4th 543, 554-555 [“a preexisting contractual relationship,
without more, will not support a recovery for mental suffering
where the defendant’s tortious conduct has resulted only in
economic injury to the plaintiff”]; see also Butler-Rupp v.
Lourdeaux (2005) 134 Cal.App.4th 1220, 1228 [“The Erlich
holding is consistent with the economic loss rule reviewed in
[Robinson Helicopter].”].) There are no material allegations

                                27
these circumstances, the economic loss rule properly functions “to
bar claims in negligence for pure economic losses in deference to
a contract between litigating parties.” (Sheen, supra, 12 Cal.5th
at p. 922.)

      4.     Fifth cause of action for breach of the covenant of good
             faith and fair dealing
      “The covenant of good faith and fair dealing is implied by
law in every contract and exists to prevent one contracting party
from unfairly frustrating the other party’s right to receive the
benefits of the agreement. [Citation.] The scope of the covenant
depends upon the underlying contract: The covenant ‘cannot “‘be
endowed with an existence independent of its contractual
underpinnings.’”’ (Association for Los Angeles Deputy Sheriffs v.
County of Los Angeles (2019) 42 Cal.App.5th 918, 940-941;
accord, Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 349-
350 [The covenant “cannot impose substantive duties or limits on
the contracting parties beyond those incorporated in the specific
terms of their agreement”]; see Foley v. Interactive Data Corp.
(1988) 47 Cal.3d 654, 690 [ “The covenant of good faith is read
into contracts in order to protect the express covenants or
promises of the contract, not to protect some general public policy
interest not directly tied to the contract’s purpose.”].)
Accordingly, “‘[t]he prerequisite for any action for breach of the
implied covenant of good faith and fair dealing is the existence of

Williams suffered any harm other than the alleged $11.5 million
in economic harm, and the Williams plaintiffs did not argue
below nor do they contend on appeal that Williams “can
demonstrate harm above and beyond a broken contractual
promise.” (Robinson Helicopter, supra, 34 Cal.4th at p. 988.)

                                 28
a contractual relationship between the parties.’” (Molecular
Analytical Systems v. Ciphergen Biosystems, Inc. (2010)
186 Cal.App.4th 696, 711.) Further, the implied covenant must
rest upon the existence of a specific contractual obligation. (See
Racine & Laramie, Ltd. v. Department of Parks & Recreation
(1992) 11 Cal.App.4th 1026, 1031 [although parties had a
contractual relationship, there was no express obligation to
negotiate a modification that could give rise to a claim for bad
faith with respect to the negotiations].)
       The Williams plaintiffs alleged the conspiracy by the Wells
Fargo defendants to embezzle funds from the Corporation’s
accounts breached their duty of good faith and fair dealing
arising out of their contractual relationship. But, as discussed,
the only alleged contractual relationship was based on the
signature card, and the Williams plaintiffs failed to attach any
other contract or allege the terms of a contract. Accordingly, the
trial court properly sustained the demurrer to this cause of
action.

      5.     Sixth cause of action for financial elder abuse
      Financial elder abuse occurs when a person “takes,
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, subd. (a)(1).) An
“elder” is “any person residing in this state, 65 years of age or
older.” (Id., § 15610.27.)
      The trial court correctly found the second amended
complaint failed to allege a cause of action for financial elder
abuse because it does not allege funds were taken from a person

                                 29
over 65—all of the alleged withdrawals were taken from the
Corporation’s business checking accounts, not from Williams.14
“It is fundamental that a corporation is a legal 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 argue we should treat the alleged
embezzlement from the Corporation as if the funds were taken
from Williams personally because he operated the Corporation as
his “alter ego,” pointing to the allegations that Williams was the

14     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,
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.

                                 30
100 percent owner of the Corporation and “any loss or profit
generated by [the Corporation] is directly attributed to Williams.”
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.”’”
(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, 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,
the Corporation maintained accounts for each of its nine medical
clinics, and Williams authorized the Petrosian defendants to pay
the clinic’s expenses from the accounts. That Williams was the
sole owner of the Corporation does not make the company his
alter ego, let alone bring a corporation under the aegis of the
elder abuse law.

       6.    Second cause of action for declaratory relief
       “‘A complaint for declaratory relief is legally sufficient if it
sets forth facts showing the existence of an actual controversy

                                   31
relating to the legal rights and duties of the parties under a
written instrument or with respect to property and requests that
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 second amended complaint alleged the Petrosian
defendants, aided by the Wells Fargo defendants, embezzled
money from the Corporation’s accounts from 2018, when the
accounts were opened, through March 31, 2020, when the parties
terminated their relationship. The Williams plaintiffs seek as
damages from Wells Fargo the value of the stolen funds, but they
also allege in their cause of action for declaratory relief that the
“actual controversy” is that the Wells Fargo defendants “should
be liable for the Plaintiffs[’] losses of about $11.5 million.”
Because the second amended complaint does not seek a

                                 32
declaration of rights to prevent a future breach, the trial court
properly sustained the demurrer to the declaratory relief cause of
action.

D.     The Trial Court Shall Allow the Williams Plaintiffs Leave
       To Amend the Causes of Action for Breach of Contract and
       Breach of the Implied Covenant of Good Faith and Fair
       Dealing if the Williams Plaintiffs Can Make a Good Faith
       Showing They Can Plead a Viable Claim for Breach of an
       Oral Contract
       An order sustaining a demurrer without leave to amend
constitutes an abuse of discretion if “‘there is a reasonable
possibility that the defect can be cured by amendment.’”
(Loeffler v. Target Corp. (2014) 58 Cal.4th 1081, 1100; accord,
City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865;
Ko v. Maxim Healthcare Services, Inc., supra, 58 Cal.App.5th at
p. 1150.) “The question whether the trial court ‘abused its
discretion’ in denying leave to amend ‘is open on appeal even
though no request to amend such pleading was made.’” (Sierra
Palms Homeowners Assn. v. Metro Gold Line Foothill Extension
Construction Authority (2018) 19 Cal.App.5th 1127, 1132, quoting
Code Civ. Proc., § 472c, subd. (a).) “‘The plaintiff has the burden
of proving that [an] amendment would cure the legal defect, and
may [even] meet this burden [for the first time] on appeal.’”
(Sierra Palms, at p. 1132; accord, Ko, at p. 1150; see Aubry v.
Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 971.)
       As discussed, the trial court properly sustained the
demurrer to the breach of contract cause of action because the
“signature card” attached to the complaint and alleged to be the
parties’ contract on its face was not a contract. Although the

                                33
second amended complaint further alleged that “[Tonoyan] made
[Williams] execute some documents, which [Tonoyan] stated were
necessary to open the accounts,” the Williams plaintiffs did not
allege the substantive terms or legal effect of the parties’
agreement, as required to state a claim for breach of contract.
(McKell v. Washington Mutual, Inc., supra, 142 Cal.App.4th at p.
1489.)
       At oral argument, the Williams plaintiffs’ attorney posited
for the first time that the breach of contract cause of action is
based instead on an oral agreement between Williams and
Tonoyan governing the parties’ depository relationship. Because
such an agreement is not necessarily inconsistent with the
allegations in the second amended complaint that Williams
signed unspecified documents and instructed Tonoyan that the
Petrosian defendants should have only limited check-writing
authority, the Williams plaintiffs should have an opportunity on
remand to allege breach of an oral contract if they have a good
faith basis on which to do so.15 To the extent they can allege a
cause of action for breach of contract, they may also assert a
derivative cause of action for breach of the implied covenant of
good faith and fair dealing.

15     As noted, it seems improbable the Wells Fargo defendants
entered into an oral agreement with Williams that created a
limited scope of check authorization for the Petrosian defendants.
To the extent the parties entered into a written agreement
expressly authorizing the Petrosian defendants to make
withdrawals from the Corporation’s accounts, any oral limitation
of that written authorization cannot overcome Wells Fargo’s
entitlement under section 1451 to assume all withdrawals are
authorized “in the absence of written notice otherwise.”

                               34
                            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 second amended complaint
without leave to amend and to enter a new order sustaining
the demurrer without leave to amend as to the second cause of
action for declaratory relief, the fourth cause of action for
negligence, and the sixth cause of action for financial elder
abuse, and overruling the demurrer as to the third cause of
action for conspiracy to embezzle funds and the seventh cause
of action for violation of the UCL. The order is affirmed to the
extent it sustains the demurrer to the first cause of action for
breach of contract and the fifth cause of action for breach of the
implied covenant of good faith and fair dealing, but on remand
the trial court is to allow the Williams plaintiffs to file a
motion for leave to amend these causes of action. The order
sustaining without leave to amend the Wells Fargo defendants’
demurrer to the first amended complaint as to the cause of
action for breach of fiduciary duty is also affirmed. The parties
are to bear their own costs on appeal.

                                    FEUER, J.
We concur:

      PERLUSS, P. J.                SEGAL, J.

                               35