In the Matter of Logan – Trust

In December 2013, Garfield resigned as trustee and nominated Colin, one of the grandchildren and Garfield’s son (also Aidan’s brother), as successor trustee. Garfield remained as counsel, however, and upon his advice, Colin sued Garfield in connection with the loans. Garfield engineered a settlement agreement dated July 27, 2014 (“Settlement Agreement”) to resolve the suit. As part of the Settlement Agreement, Garfield agreed to pay more than $1,500,000 to the LL Trust. He also assigned certain assets of Logan Diversified to the LL Trust.

Garfield convinced Ethan, another of his sons, that a new trust should be created to protect the Settlement Agreement from an attack by Garfield’s creditors. Upon his advice, the Logan Family Irrevocable Trust (“LFI Trust”) was created in December 2017. Garfield was the only beneficiary of the LFI Trust. Colin and Ethan were named as the trustees. Under the terms of the LFI Trust, the entirety of the trust income and principal could be distributed to Garfield for his health, education, maintenance, or support.

Upon advice from Garfield, Ethan also purchased interests in multiple LLCs from the LL Trust and assumed debt owed by Logan Diversified, LP. In exchange, Ethan executed a promissory note to the LL Trust for more than $1,500,000. Ethan also assigned everything he had purchased from the LL Trust to the LFI Trust. In March 2024, after Ethan refused to use LFI Trust assets to settle Garfield’s personal debts, Garfield removed Ethan as trustee of the LFI Trust. Garfield then named his wife, Kerry Regan Logan (“Kerry”) as trustee. Kerry operates the LFI Trust for Garfield’s benefit.

Aidan, when he learned Ethan had been removed as trustee of the LFI Trust and replaced with Kerry, demanded he be appointed as Successor Trustee of the LL Trust and on November 26, 2024, Colin resigned, and Aidan became successor trustee of the LL Trust. Aidan then filed the petition that initiated this proceeding.

The FAP petition names as Respondents Kerry, as trustee of the LFI Trust, and Garfield. The FAP alleges five causes of action:

1. First Cause of Action for Return of Trust Assets (Probate Code §§ 850 & 859) is against both Respondents, Garfield and Kerry.

2. Second Cause of Action for Nullification of Settlement Agreement due to Undue Influence is against Respondent Garfield only.

3. Third Cause of Action for Imposition of Constructive Trust (Civil Code sections 2223 & 2224) is against both Respondents, Garfield and Kerry.

4. Fourth Cause of Action for a Civil Claim Under Penal Code § 496(c) is against both Respondents, Garfield and Kerry.

5. Fifth Cause of Action against Breach of Fiduciary Duty under California Rules of Professional Conduct 1.8.1 and Probate Code § 16400 is against Respondent Garfield only.

II. GARFIELD’S DEMURRER

Garfield demurs to all five causes of action on the ground they are barred by applicable statutes of limitations. He additionally demurs to the second and fifth causes of action on the ground they fail to state sufficient facts.

A. Are the Claims Time-Barred?

The FAP alleges Garfield misappropriated nearly $2 million from Descendants’ Trust between 2005 and 2013. The FAP alleges Garfield engaged in further improper self-dealing between 2014 and 2017. Under the applicable statutes of limitations, claims based on the alleged wrongdoing would normally be time-barred. Aidan argues, however, the claims are not time-barred under the delayed discovery rule.

A claim traditionally accrues “‘when “[it] is complete with all of its elements”—those elements being wrongdoing, harm, and causation.’” (Aryeh v. Cannon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.) The delayed discovery rule, however, “postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “Under the [delayed] discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her.” (Jolly v.

Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110.) To sufficiently allege delayed discovery, a plaintiff must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to show diligence, and conclusory allegations will not withstand a demurrer.

The FAP alleges Aidan was unaware of any of the alleged wrongdoing until November 2024. (FAP, ¶ 38.) The FAP was filed on April 2, 2025, well within the statutory limitation if delayed discovery was adequately pled.

Garfield alleges delayed discovery was not adequately pled for three reasons: (1) the allegations are conclusory; (2) as the predecessor trustee, Colin had full knowledge of the allegedly fraudulent transactions in 2014 and 2017 and his knowledge is imputed to Aidan as successor trustee; and (3) Aidan could have inquired about what was going on with the relevant trust between 2005 and his alleged discovery in 2024.

1. The delayed discovery allegations are not conclusory.

A petitioner alleging delayed discovery must plead facts showing the time and manner of discovery and the inability to have made earlier discovery. The FAP pleads Garfield, as trustee, stole nearly $2,000,000 from the LL Trust between December 2005 through 2013. (FAP, ¶ 12.) Specifically, the FAP alleges Garfield, as General Partner and President of Logan Diversified, LP issued 11 promissory notes totaling $1,713,924 to the LL Trust over the 8-year period. (FAP, ¶¶ 12-13.)

Although Garfield resigned as trustee, he allegedly remained as counsel for the LL Trust and, in that capacity, advised Colin, the successor trustee, that Colin

had a fiduciary duty to sue Garfield to put the LL Trust in front of Garfield’s other creditors. (FAP, ¶ 15.) Upon that advice, Colin filed Case No. 30-2014- 06696435 against Garfield and Logan Diversified LP. (FAP, ¶ 16.) Shortly thereafter, and again on advice of Garfield, the lawsuit was settled by the Settlement Agreement written by Garfield. (FAP. ¶¶ 16-18.) Pursuant to the terms of the Settlement Agreement, Garfield was to pay the LL Trust more than $1,500,000 and assign certain Logan Diversified assets to the LL Trust. (FAP, ¶ 19.)

The FAP alleges Garfield then convinced Colin and, later, Ethan, to create the LFI Trust and transfer LL Trust assets to the LFI Trust. (FAP, ¶¶ 21-22.) Garfield controlled the LFI Trust and was its only beneficiary. (FAP, ¶¶ 24- 29.) Ethan also purchased LL Trust’s interests in multiple LLCs and assumed the debt owed by Logan Diversified to LL Trust. The purchase was funded by another promissory note in the amount of $1,582,843. (FAP, ¶ 30.) Everything purchased from LL Trust was later transferred to LFI Trust. (FAP, ¶ 30.)

The FAP alleges the transaction “was not disclosed by anyone to beneficiary and Petitioner Aidan Logan, and Aidan could not have reasonably discovered the transaction until his brothers, Colin and Ethan, finally disclosed it to him in 2024.” (FAP, ¶ 30.) The FAP further alleges Aidan “had absolutely no knowledge of these events as they occurred, nor could he reasonably have discovered them. Neither Ethan nor Colin understood the real effect of these transactions, nor made any disclosure to Aidan to give Aidan reason to suspect any wrongdoing by Garfield.” (FAP, ¶ 37.)

The FAP alleges Aidan discovered the wrongdoing in November 2024. (FAP, ¶ 38.) Based on the record presented, the court finds that this is sufficient to plead time and manner of discovery.

2. The FAP does not establish Colin had reason to discover the causes of action.

Garfield argues Colin knew or had reason to know of the alleged wrongdoing and his knowledge is imputed to Aidan. The FAP does not allege Colin had actual knowledge of wrongdoing. Accordingly, the applicable statutes of limitations would only be triggered if Colin had reason to know of the wrongdoing. As trustee, Colin had a duty to investigate what was going on with the Trust’s assets. However, when a trustee relies on a fiduciary, that burden is reduced. (WA Southwest 2, LLC v. First American Title Ins.

Co. (2015) 240 Cal.App.4th 148, 157 [“‘“when a potential plaintiff is in a fiduciary relationship with another individual, that plaintiff’s burden of discovery is reduced and he is entitled to rely on the statements and advice provided by the fiduciary”’”].) The FAP alleges Garfield was acting as LL Trust’s attorney when he engaged in the allegedly wrongful conduct during Colin’s tenure as trustee. Accordingly, the court finds that Colin was therefore entitled to rely on Garfield’s statements and advice as LL Trust’s counsel, and Colin’s burden of discovery was reduced.

The court further concludes that even if the allegations of the FAP established Colin knew or had reason to know of the relevant wrongdoing, that knowledge would be imputed to Aidan as trustee only and not to Aidan as beneficiary.

3. The FAP does not establish Aidan had reason to discover the cause of action.

Garfield argues that Aidan cannot claim delayed discovery because as a beneficiary, he could and should have inquired as to what was going on before 2024. First, the court finds that the FAP does not allege Aidan had any

knowledge of what was going on at any point before November 2024. Accordingly, the court finds that Aidan did not have reason to know. Second, the court finds that even if the FAP alleged Aidan had knowledge of the various transactions, Garfield was in a fiduciary role; first as trustee and later as counsel for LL Trust. When a fiduciary duty exists, “awareness of facts that would ordinarily call for investigation does not excite suspicion.” (Metabyte, Inc. v. Technicolor S.A. (2023) 94 Cal.App.5th 265, 282; see Ferguson v.

Yaspan (2014) 233 Cal.App.4th 676, 683 [“when the putative defendant is in a fiduciary relationship with the putative plaintiff, in that situation, the statute of limitations clock does not begin to tick until ‘the [putative plaintiff] has knowledge or notice of the act constituting a breach of fidelity.’ [Citations.] The existence of the fiduciary relationship limits the plaintiff’s duty of inquiry by eliminating the plaintiff’s usual duty to conduct due diligence”].) Accordingly, the court concludes that although Aiden could have made inquiries, as beneficiary, he had no duty to do so.

It is well-settled that “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 of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 342.) For the reasons set forth above, the court finds that the delayed-discovery allegations are sufficient to overcome any statute of limitations bar at the pleading stage.

Garfield’s demurrers to the five causes of action are OVERRULED on statute of limitations grounds.

B. Do the Second and Fifth Causes of Action Allege Sufficient Facts?

1. Second Cause of Action for Nullification of Settlement Agreement

The second cause of action seeks to nullify the Settlement Agreement on three separate grounds: (1) the Settlement Agreement was entered into in violation of Rules of Professional Conduct, rule 1.8.1 (Rule 1.8.1); (2) the Settlement Agreement was the result of fraud; and (3) the Settlement Agreement was the result of undue influence. So long as any one of these three theories is adequately pled, the demurrer to these causes of action on the ground of failure to state sufficient facts must be overruled. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167 [“Ordinarily, a general demurrer may not be sustained, nor a motion for judgment on the pleadings granted, as to a portion of a cause of action”].)

Rule 1.8.1. Garfield argues Aidan cannot seek to nullify the Settlement Agreement based on an alleged violation of Rule 1.8.1 because violations of the rules of professional conduct cannot be the basis for civil liability. In support of this argument, Garfield cites DeMeo v. Cooley (2025) 115 Cal.App.5th 17 (DeMeo). The court is not persuaded. DeMeo does not stand for the cited proposition. The court in DeMeo held that an individual who was not a client and had no attorney-client relationship cannot sue an attorney for violation of the Rules of Professional Conduct. The case acknowledges, however, “[t]o be sure, the Rules of Professional Conduct help to define the duty component of the fiduciary duty which the attorney owes to his or her client.” (Id. at p.

40. Internal quotation marks omitted.) The FAP seeks to

nullify the Settlement Agreement based on Garfield’s alleged wrongdoing. Garfield was allegedly counsel for the LL Trust. Accordingly, the court finds that Garfield’s alleged violation of Rule 1.8.1 is sufficient to plead a claim for nullification of the Settlement Agreement.

Fraud allegations. Even if the Rule 1.8.1 allegations were insufficient, the court finds that the fraud allegations are pled with sufficient specificity. Fraud allegations must show how, when, where, to whom, and by what means the representations were tendered. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43.) The FAP alleges Garfield, as counsel, represented “the Settlement Agreement was necessary to protect the Descendents’ Trust assets from Garfield’s creditors.” (FAP, ¶ 60.) The court finds that this allegation is sufficient to plead fraud and the demurrer to the Second Cause of Action on the ground that it fails to state sufficient facts is OVERRULED.

2. Fifth Cause of Action for Breach of Fiduciary Duty

Garfield argues the Fifth Cause of Action for Breach of Fiduciary Duty fails to state sufficient facts because the cited probate sections address a trustee’s breach of trust and by the time the Settlement Agreement was entered into, Garfield was no longer trustee. The court is not persuaded. The fifth cause of action also cites to Rule 1.8.1 as a basis for its claim of breach of fiduciary duty. As set forth above, “the Rules of Professional Conduct help to define the duty component of the fiduciary duty which the attorney owes to his or her client.” (DeMeo, supra, 115 Cal.App.5th at p.

40. Internal quotation marks omitted.) Because Garfield is alleged to have acted as LL Trust’s attorney, the alleged Rule 1.8.1 violation is sufficient to plead a claim for breach of fiduciary duty. Accordingly, the demurrer to the Fifth Cause of Action on the ground that it fails to state sufficient facts is OVERRULED.

III. KERRY’S DEMURRER

Kerry demurs to the first, third, and fourth causes of action on the ground they are barred by the applicable statutes of limitations period. As set forth above, the claims are not time-barred and Kerry’s demurrer to the First Amended Petition is OVERRULED.

Petitioner (Aidan) is directed to give notice.