Procedural Posture

Plaintiff lien holders appealed from the judgment of the Superior Court of Los Angeles County (California), which sustained a demurrer without leave to amend as to the fiduciary duty and emotional distress claims against defendant bonding company and summary judgment on the negligence and contract claims.

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Overview

Plaintiff lien holders retained defendant collection agency to enforce a judgment. Plaintiff brought an action against defendant alleging that defendant had engaged in wrongful conduct in attempting to collect on the judgment, negligence, breach of contract, breach of fiduciary duty, and intentional infliction of emotional distress. The trial court sustained a demurrer on the fiduciary duty and emotional distress claims and granted summary judgment on the negligence and contract claims. On appeal, the court concluded that the trial court erred in concluding that the common law did not create a fiduciary relationship between the parties. The court saw no reason to commence the running of the statute of limitations when plaintiffs made reasonable efforts to determine whether defendant had committed any wrongdoing. The court concluded that reasonable minds could differ as to whether defendant’s conduct was sufficiently extreme and outrageous. The court held that the trial court should have overruled the demurrer.

Outcome

The court reversed the demurrer on the causes of action for breach of fiduciary duty and intentional infliction of emotional distress because the common law created a fiduciary relationship between the parties. The court reversed the summary judgment as to the remaining causes of action because the statute of limitations did not begin to run until plaintiff lien holder discovered the injury.