The Section includes periodically sends email with New Case Alerts to its members. Recent New Case Alerts are listed below. Most cases can be found on the California Courts website. Please note: Opinions more than 120 days old can be found through the process described HERE.
Cite as A148678Filed November 8, 2017, First District, Div. Five
By Matthew R. OwensWithers Bergman LLPwww.withersworldwide.com
William and Daniel were beneficiaries of their father’s estate. Four years after William was appointed personal representative of the estate, Daniel filed a petition seeking his removal. After trial, the court entered an April 2015 order removing William, appointing a successor personal representative, and announcing it would file a statement of decision. William did not appeal the April 2015 order. The court filed its final statement of decision in April 2016. When William appealed the statement of decision, both Daniel and the successor personal representative argued the statement of decision was not an appealable order and that William forfeited his appellate rights by failing to timely appeal the April 2015 order.
The appellate court held the statement of decision was appealable. Although a court’s final ruling is typically embodied in an order or judgment, this statement of decision contained an order removing a fiduciary, which is an order made expressly appealable under the Probate Code. The April 2015 order, on the other hand, was not a final appealable order because it referenced a forthcoming statement of decision, so William’s failure to appeal did not render his later appeal untimely.
Cite as B281420
Filed October 23, 2017, Second District, Div. Six
By Daniel C. Kim
Weintraub Tobin Chediak Coleman Grodin Law Corporation
Margaret Chappell created a trust in 2010 and amended it three times before succumbing to cancer in 2016. In the original trust she left everything to her boyfriend, Jose Aviles, on her death. The subsequent amendments changed the distribution provisions with the third amendment naming Tracy Swearingen the sole remainder beneficiary and successor trustee. The third amendment also incorporated by reference the unchanged provisions of the second amendment, including a no contest clause. After Chappell died, Aviles filed a petition to invalidate the third amendment on the grounds that it was the product of undue influence and financial abuse. Swearingen opposed the petition and filed her own petition to disinherit Aviles based on his violation of the no contest provision. She argued the no contest provision in the second amendment was incorporated by reference into the third amendment. The trial court denied the petition to disinherit Aviles, ruling that the third amendment was not a “protected instrument” under the applicable statutes because it did not contain a no contest clause or expressly reference the no contest clause in the second amendment.
The appellate court affirmed. Under California law, a no contest clause and its application to future trust amendments is strictly construed. The applicable statutes require that a “protected instrument” either contain the no contest clause or that the instrument be in existence on the date that the instrument containing the no contest is executed and is expressly identified in the no contest clause. The appellate court also rejected Swearingen’s argument that the applicable statutes did not apply because there was a contrary provision in the trust. Lastly, the court could not find that Chappell unequivocally intended the no contest provision to apply to trust amendments that are the product of fraud or undue influence.
By Daniel C. Kim
Weintraub Tobin Chediak Coleman Grodin Law Corporation
Robert and Eva Lindskog established a revocable trust in 1995, which they later amended to make an irrevocable gift to create a charitable foundation. William Shine became the sole trustee in 2004 and later appointed two of his friends as co-trustees. The Attorney General audited the trust and, based on her findings, petitioned for removal of the trustees, appointment of a receiver, and an accounting. The Attorney General alleged, inter alia, that Shine engaged in prohibited self-dealing, falsely reported a $7 million charitable donation, failed to accurately account for income and expenses, and improperly loaned trust funds to personal acquaintances. The trustees agreed to relinquish control and the court appointed David Bradlow as temporary trustee during the litigation. Shine petitioned the court to instruct Bradlow to reimburse Shine’s past defense costs, and his future attorneys’ fees and costs of the anticipated trial, from the trust. The court granted the petition, finding that although the Attorney General appeared to have a strong case, the trust contained an indemnity provision allowing for payment of fees absent willful misconduct or gross negligence.
The appellate court reversed. The court focused on Shine’s entitlement to pendente lite fees. Although the issue is not well-developed in case law, courts have discretion to award interim fees in certain circumstances. Courts are to first assess the probability that the trustee be entitled to reimbursement of attorneys’ fees and then balance the relative harm to the interests of the other parties, including those of the trust beneficiaries. When evaluating potential harms, the court should investigate the ability of the trustee or former trustee to repay fees if ultimately determined not to be entitled to the costs of defense. The appellate court found the trial court had failed to review the issue under the appropriate standards and remanded for reconsideration.
Cite as E067316
Filed October 12, 2017, Fourth District, Div. Two
Anthony Carter, 78, named Maxine Stewart as his agent for health care. After being admitted to the St. Mary Medical Center, Carter was advised, inter alia, that he should be placed in hospice care, receive a gastronomy tube, and have a pacemaker placed to correct irregularities in his heartbeat. Stewart canceled the heart surgery, suspecting that the irregularities were due to sleep apnea, and sought second opinions. While those opinions were pending, the hospital’s ethics committee convened, Stewart’s power of attorney was voided, and the hospital proceeded with the surgery. Sometime shortly thereafter, Carter went into cardiac arrest, allegedly due to complications from the pacemaker, and ultimately died. Stewart brought suit and alleged numerous causes of action as the personal representative of Carter’s estate. Respondents moved for summary adjudication and the court granted the motion as to the causes of action for elder abuse, fraud by concealment, and medical battery, while allowing other claims to proceed to trial. Stewart appealed and sought a writ of mandate.
The appellate court issued the peremptory writ of mandate and vacated the trial court’s grant of summary adjudication. The court found that there were triable issues of material fact as to the claims for elder abuse, fraud by concealment, and medical battery. The court held that elders have the right to autonomy in the medical decision-making process and that deprivation of this right can constitute actionable “neglect” under California’s elder abuse laws. Further, the court found that a reasonable jury could find that the hospital failed to provide medical care for physical and mental health needs, and failed to protect the elder from health and safety hazards. Additionally, the court found that there were multiple triable issues of fact which would not warrant summary adjudication of the fraud by concealment claim, including the possibility that the hospital could have intentionally concealed the ethics committee meeting and the surgery from Stewart. Lastly, although the hospital argued it was not liable for medical battery caused by the surgery because the surgeons were independent contractors, the court found that there were triable issues of fact regarding the hospital’s involvement in proceeding with the surgery. Accordingly, the trial court’s order granting summary adjudication was vacated.
Cite as B272085
Filed October 13, 2017, Second District, Div. One
Betty established the Betty Lou O’Connor Trust naming as equal beneficiaries her two living children, Tom and Kelli, and her deceased son’s two children. In the last several years of her mother’s life, Kelli visited her five to six times a week and helped manage her affairs. She assisted Betty in opening two joint accounts at Wells Fargo. After Betty’s death, the parties disputed ownership of the accounts. Tom claimed the accounts were trust assets in which he had an interest; Kelli claimed they were solely hers based on the right of survivorship. The trial court found that Betty had indicated to Kelli that the money in the Wells Fargo accounts was for Kelli’s use and that both Betty and Kelli had “withdrawal rights” in the accounts. Wells Fargo confirmed that the accounts had been set up with Betty as the primary joint owner and Kelly as the secondary joint owner. The trial court concluded there was a presumption that the accounts were joint tenancy accounts with a right of survivorship and that Tom had failed to rebut the presumption. The sole issue on appeal was whether Betty intended to create joint accounts with the right of survivorship in favor of Kelli when she opened the accounts, thus excluding them from the trust.
The Court of Appeal affirmed. Survivorship interests in multiple-party accounts are governed by Probate Code section 5302, which states in relevant part: “[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving party... as against the estate of the decedent unless there is clear and convincing evidence of a different intent.” Although Tom argued that no sufficient writing supported the joint tenancy nature of the accounts, a writing is not required to create the right of survivorship under California’s multiple-party account law. Moreover, Tom was unsuccessful in overcoming the presumption by clear and convincing evidence. Although Tom cited various contradictory statements made by Kelli regarding ownership of the accounts, the appellate court agreed with the lower court’s finding that there was insufficient evidence that Betty herself did not intend the accounts to be held in joint tenancy.
Filed October 5, 2017, Second District, Div. Five
Allyne Urick created a trust and named her two children, Willis and Dana, and Dana’s son, Trentyn, as the primary beneficiaries. After Allyne died, Dana filed a petition to reform the trust on the grounds that the drafting attorney misrepresented its terms and that the trust did not reflect Allyne’s wishes. Although she was named as the trustee, Dana filed her petition as a trust beneficiary, and sought a reformation that benefited her and her son, Trentyn, and disinherited Willis. In response, Willis filed a petition for instructions as to whether his sister’s reformation petition violated the “no contest” clause of their mother’s trust. In her capacity as trustee, Dana then filed an anti-SLAPP motion to strike Willis’s petition, arguing that the filing of the reformation petition was a “protected activity.” The trial court granted the anti-SLAPP motion, finding that Willis’s petition for instructions arose out of the type of protected litigation activity contemplated by the anti-SLAPP statutes and that Willis had failed to show a probability of prevailing in his petition.
The Court of Appeal reversed. Although Dana had successfully established that Willis’s petition arose from her protected litigation activity (the filing of her reformation petition) and fit squarely within the plain language of the anti-SLAPP statutes, the appellate court took a different view of whether Willis had demonstrated a probability of prevailing on the merits. Unlike the lower court, the appellate court determined that Dana had very little evidence that her mother intended to name Dana and her son, Trentyn, as sole beneficiaries and to disinherit Willis. Additionally, the court found that Willis was likely to prevail in his argument that Dana’s actions violated the “no contest” clause of the trust since the reformation petition was a direct contest sought by a beneficiary without probable cause. In finding that Willis had successfully shown a reasonable probability that he would prevail on the merits, the appellate court reversed the trial court’s order granting the anti-SLAPP motion.
Filed June 1, 2017, First District, Div. Two
Cite as A146330
By Ciarán O'Sullivan
The Law Office of Ciarán O'Sullivan
78-year-old James Hilliard owned a controlling interest in the James Crystal Companies. In 2003 the Companies entered a security agreement with Wells Fargo Bank, and over time the Bank ultimately loaned the Companies approximately $18.9 million. The loan was in continuous default beginning in mid-2004, but the parties repeatedly amended the Agreement to allow Hilliard additional time to repay the loans. Although Hilliard made significant repayments on the Companies’ behalf, he failed to make the final payment because he could not liquidate certain assets by the deadline. The Bank then sold the debt to a third party, which obtained a $17 million judgment against the Companies. Hilliard sued the Bank for financial elder abuse, alleging that the Bank had always ignored prior deadlines, and he had no reason to believe that Bank would actually sell the loan. The trial court sustained the Bank’s demurrer on the grounds that Hilliard lacked standing to sue for the harm suffered by the Companies.
The Court of Appeal affirmed. Any alleged misrepresentations by the Bank were intended to induce action on the part of the Companies, not Hilliard personally. Hilliard would have an individual cause of action if the damages resulted from a special duty the Bank owed to him as a shareholder of the Companies. That was not the case here. Hilliard’s argument that the Bank breached a duty owed to him personally simply because he is an elder, and elder abuse is by definition a personal claim, is circular. Regardless of the fact that he is an elder, Hilliard’s claim originates from his status as a shareholder, and the claim for breach of duty belongs to the
Companies. EADACPA does not confer a claim for elder abuse in such circumstances.
Filed August 3, 2017, First District, Div. 5
Cite as A148614
By Julie R. Woods
Hartog, Baer & Hand, APC
K.W. was conserved under the Lanterman-Petris-Short Act as gravely disabled as the result of a mental disorder, unable to provide for his basic needs for food, clothing, or shelter, and incapable of accepting treatment voluntarily. When his conservator petitioned for reappointment, K.W. demanded a jury trial. The psychiatrist who diagnosed K.W.’s bipolar schizoaffective disorder testified as an expert that K.W. was gravely disabled. His testimony included his personal observations of K.W., medical records from the county health department and its locked facility where K.W. was receiving treatment, and conversations with K.W.’s former outpatient psychiatrist and social worker. The jury found K.W. was gravely disabled due to a mental disorder, and the court reestablished the conservatorship. K.W. appealed, contending the trial court erred in permitting the jury to consider hearsay testimony from an expert witness, and arguing the court should retroactively apply the new rule from People v. Sanchez (2016) 63 Cal.4th 665.
The court of appeal affirmed. Before Sanchez, when an expert’s opinion was based on hearsay, a jury received a limiting instruction to consider hearsay statements only to evaluate the expert’s opinion, but not as proof the information in the statements was true. Sanchez held that out-of-court statements used as the basis of expert opinion testimony are hearsay. When an expert offers case-specific out-of-court statements to explain the bases for his or her opinion, those statements are necessarily considered by the jury for their truth, and are hearsay. Here, although the case-specific hearsay was problematic, other expert testimony was based on the witness’ own experiences, and the medical opinion of K.W.’s incapacity was unimpeached. The court found it was not reasonably probable that the jury would have reached a different result absent the improperly admitted hearsay testimony, and the error was harmless.
Filed April 19, 2017, Second District, Div. 7
Cite as B269900
By Julie R. Woods
Hartog, Baer & Hand, APC
Belinda Wilkins Tepper sued her three siblings, Geoffrey Wilkins, Martha Wilkins, and Derek Wilkins, on behalf of her 88-year-old mother, Eileen Wilkins, claiming her siblings’ actions individually and as trustees of Eileen’s revocable living trust constituted financial elder abuse. Tepper was not a trustee of Eileen’s revocable trust. Tepper did not allege that she had been personally aggrieved by the actions of her siblings or that she possessed the ability to file suit as Eileen’s conservator or attorney-in-fact. Tepper’s siblings demurred to her first amended complaint, asserting Tepper lacked standing to pursue an action on Eileen’s behalf. Eileen retained her own counsel and intervened in the action, joining the demurrer to Tepper’s amended complaint. The trial court sustained the demurrer without leave to amend and dismissed Tepper’s elder abuse action on standing grounds.
The court of appeal affirmed. The trial court did not err in ruling Tepper lacked standing to bring the elder abuse action. Simply being an elder’s child is not sufficient to confer standing. Probate Code Section 48 defines an “interested person” as a child with an interest in a trust estate or estate of the decedent that may be affected by the proceeding. Tepper did not claim to have any interest in her mother’s revocable living trust, and even if she were named as a beneficiary, her interest would be merely potential and subject to change. Wilkins, not Tepper, was the real party in interest in the elder abuse action; Tepper was not aggrieved by the alleged conduct or otherwise beneficially interested in the controversy. Tepper did not proceed as her mother’s conservator or guardian ad litem, and therefore, she lacked standing to complain for financial elder abuse on her mother’s behalf.
Filed June 2, 2017, First District, Div. Four
Cite as A147236
By Ciarán O'Sullivan
The Law Office of Ciarán O'Sullivan
Fred and Martha Mahan created a revocable Children’s Trust and funded it with two second-to-die insurance policies on their lives, valued at a total of $1 million, and sufficient funds to pay the annual premiums well into the future. Two decades later, Fred, a lawyer at the end of his career, was in cognitive decline and Martha was diagnosed with Alzheimer’s disease. Taking advantage of the couple’s vulnerability, defendant insurance agents and brokers surrendered one policy and replaced the other with a single life policy requiring premium payments of $800,000, on which defendants earned $100,000 in commissions. To pay the increased premiums, the Mahans were forced to sell property and transfer additional money to the trust. The trial court sustained defendants’ demurrer to the Mahans’ financial elder abuse action on the grounds that the trust was not an elder who was protected by the Elder Abuse and Dependent Adult Civil Protection Act, and the Mahans voluntarily paid the premiums; defendants’ actions did not deprive the Mahans of property within the meaning of the Act.
The Court of Appeal reversed. Liability under the Act may flow from transfers made voluntarily. The fact that the Children’s Trust owned the policies did not negate the claim, because defendants’ actions deprived the Mahans of property rights in a number of ways. They made the Mahans’ estate plan more expensive and less valuable, caused them to lose value in their insurance policies, and forced them to spend more money to pay new premiums and defendants’ commissions. Furthermore, defendants’ actions were perpetrated by means of undue influence. Therefore, the Mahans’ complaint properly stated a cause of action for financial elder abuse.
Filed May 9, 2017, Second District, Div. 5
Cite as B265865
After reporting complaints about her short-term memory to her doctor, Maria Higgins added her stepson, W. Clive Higgins, as joint account holder to her checking and savings accounts. Clive later transferred additional accounts of Maria’s into accounts owned by him and his wife, Lupe Higgins, in trust for Maria. When Clive died, Lupe changed the ownership of the accounts to her name alone. When Maria later died, Lupe paid Maria’s funeral expenses and the pecuniary bequests set forth in Maria’s estate plan from the accounts. Lupe also transferred some of the funds to her own family and used the remaining funds for her own purposes. Arthur Higgins, Maria’s executor and successor trustee of her trust, brought an action for constructive trust. The trial court found no constructive trust could be imposed for a wrongful act by Clive because once he was added to Maria’s account as a joint holder, he had a legal right to do as he pleased with the funds and could make Lupe a joint owner. The trial court could find no legal obligation for Lupe to restore the funds and entered judgment in her favor.
The appellate court reversed, holding that Arthur had established all conditions necessary to impose a constructive trust. So long as all parties are living, an account belongs to the parties who have a present right to payment, in proportion to their contributions, unless there is clear and convincing evidence of a different intent. Clear and convincing evidence showed that Clive and Lupe intended to create irrevocable trust accounts in which Maria had a present beneficial interest in the funds on deposit, and that Lupe continued to hold the funds in trust for Maria after Clive’s death. One who wrongfully detains something, or who gains it by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is an involuntary trustee of the thing for the benefit of the owner. Because Lupe repudiated the trust by removing Maria’s name from the accounts and using the funds for her own purposes, the court found that Arthur was entitled to a constructive trust as a matter of law.
Filed April 20, 2017, U.S. Court of Appeals, 9th Cir.
Cite as 16-10152
By Catherine M. Swafford
Withers Bergman, LLP
After being convicted of theft from an employee benefit plan, Michael Harris was sentenced to jail and ordered to pay $646,000 in restitution. Harris was the beneficiary of two irrevocable trusts. One of the trusts provided that the trustee shall pay income in the trustee’s absolute discretion for Harris’ support, and the other trust provided the trustee may distribute income and principal in the trustee’s absolute discretion for his support. The district court granted the government’s application for a writ of continuing garnishment for any property distributed from the trusts to Harris.
The Ninth Circuit affirmed. Present and future interests in trust distributions fall within the definition of property under federal law, and are subject to garnishment. Despite the trustee’s discretion with respect to both trusts, California law allows Harris to compel distributions from the trusts. Accordingly, a federal government lien may attach to Harris’ right to receive trust distributions. Further, disclaimers and spendthrift clauses do not prevent attachment of federal liens.
Filed April 4, 2017, U.S. Court of Appeals, 9th Cir.
Cite as 14-17404
Michael Bensal and Bensal & Coburn Investments LLC (“BCI”) obtained two loans from Millennium Bank. The Small Business Administration (“SBA”) guaranteed one of the loans. BCI defaulted. Millennium assigned the loans to First Bank & Trust (“FBT”), which sued BCI and Bensal and obtained a judgment. FBT assigned its right to collect the judgment to SBA. Thereafter, Bensal’s father died. Bensal was class="anchor" named as a beneficiary of his father’s trust. Bensal disclaimed his interest in the trust. SBA filed a lawsuit in federal court seeking to void Bensal’s disclaimer under the Federal Debt Collection Procedures Act (“FDCPA”), arguing he fraudulently transferred his interest in the trust to prevent SBA from collecting the debt. The district court granted SBA’s motion for summary judgment, and ordered that Bensal’s interest in the trust be transferred to SBA to satisfy the judgment.
The Ninth Circuit affirmed. Bensal contended the disclaimer was effective under California Probate Code section 283, which provides that a disclaimer is not a voidable transfer. However, section 283 directly conflicts with, and is preempted by, the FDCPA. The disclaimer constituted a voidable transfer under the FDCPA because Bensal had an unqualified right to receive and dispose of his interest in the trust. In addition, the judgment assigned to SBA was a debt within the meaning of the FDCPA because SBA was a party to the underlying loan contracts.
Filed March 28, 2017 , Third District
Cite as C077594
By Catherine M. Swafford
Withers Bergman, LLP
Melissa Reynoso served as trustee of her grandfather’s trust. The trust authorized Reynoso to sell real property to her mother, Karen Bartholomew, for $100,000 below the property’s appraised value. Reynoso agreed to help Bartholomew purchase the property. Reynoso obtained a personal loan, conveyed the property to Bartholomew, and the trust received the loan proceeds. Bartholomew’s son, Anthony Pizarro, and brother, Keith Jensen, filed petitions alleging that Reynoso breached her fiduciary duties, and that the sale must be set aside as a sham. During the litigation, Bartholomew turned against Reynoso and knowingly testified falsely. The trial court denied the petitions, finding the sale was valid and Reynoso did not breach her fiduciary duties. Additionally, exercising its equitable power over trusts, the trial court charged Bartholomew’s and Jensen’s shares of the trust with Reynoso’s attorney fees and costs. To the extent their trust shares were insufficient, the trial court held Bartholomew, Jenson, and Pizarro personally liable for the fees and costs.
The appellate court affirmed in part and reversed in part. Pizarro forfeited any arguments on appeal concerning the sale because his brief lacked clarity and failed to follow appellate procedure. The court properly exercised its equitable power to charge Reynoso’s attorney fees and costs against Bartholomew’s and Jensen’s trust shares. The court has the equitable power to charge a beneficiary’s share with the trustee’s attorney fees and costs if the beneficiary, in bad faith, brings an unfounded proceeding. While Bartholomew did not bring the petition, the court had the equitable power to charge her trust share because she took an unfounded position and acted in bad faith. However, the court could not order the litigants to personally pay the attorney fees and costs because such an order is beyond the court’s equitable power over trusts.
Filed March 23, 2017, Supreme Court of California
Cite as S224985
Under his parents’ spendthrift trust, Reynolds is entitled to receive an initial distribution of $250,000 and periodic distributions from trust principal amounting to over one million dollars. Reynolds filed for Chapter 7 bankruptcy before receiving the trust’s first payment. The trustees sought a declaratory judgment on the extent of the bankruptcy trustee’s interest in the trust. The bankruptcy court held that the bankruptcy trustee could reach only up to 25 percent of Reynolds’s interest in the trust under Probate Code section 15306.5, and the bankruptcy appellate panel affirmed. The bankruptcy trustee appealed to the Ninth Circuit, which asked the California Supreme Court if Probate Code section 15306.5 limits a bankruptcy estate’s access to a spendthrift trust to 25 percent of the beneficiary’s interest, where the trust pays the beneficiary entirely out of principal.
The California Supreme Court held the Probate Code does not impose an absolute limit on a general creditor’s access to trust principal. A bankruptcy trustee, standing as a hypothetical judgment creditor, can reach a beneficiary’s interest in a trust that pays entirely out of principal in two ways under the section 15306.5 exception to spendthrift provisions. First, it may reach up to the full amount of any distributions of principal that are currently due and payable to the beneficiary, even though they are still in the trustee’s hands, unless the trust instrument specifies that those distributions are for the beneficiary’s support or education and the beneficiary needs those distributions for either purpose. Separately, the bankruptcy trustee can reach up to 25 percent of any anticipated payments made to, or for the benefit of, the beneficiary, reduced to the extent necessary by the support needs of the beneficiary and any dependents.
Filed March 21, 2017, First Appellate District, Div. Three
Cite as A144558
After their removal, former trustees Klein, Reynolds, and Pair sought to withhold documents relating to their two prior trust accountings on the basis of attorney-client privilege from successor trustee Fiduciary Trust International of California (FTI) and sole non-contingent trust beneficiary Hughes. FTI demanded the former trustees produce documents that included communications between the former trustees and their legal counsel. The probate court permitted the former trustees to withhold only 45 of the 234 documents identified in their supplemental privilege log, because FTI as successor trustee now held the attorney-client privilege. Both parties appealed. Both took issue with how the court distinguished confidential attorney-trustee communications concerning advice and guidance on matters of trust administration and those concerning matters on which the trustee seeks guidance out of concern for possible charges of breach of fiduciary duty.
The appellate court affirmed in part and reversed in part. The character of the relationship between the trustee and counsel determines whether the communication is privileged. To assert the attorney-client privilege as the basis for withholding documents from the successor trustee, the predecessor trustee must have hired a separate lawyer, paid for the advice out of its personal funds, and taken steps to preserve the confidentiality of the communication. The party claiming the privilege has the burden to establish the preliminary facts necessary to support its claims of privilege by distinguishing his own interests from those of the beneficiaries. Here, the former trustees did not make a prima facie showing the 45 withheld documents were privileged when they merely stated the documents concerned their defense of a petition for removal or surcharge. On remand, the trial court must reconsider the privilege status of the 45 documents.
Filed February 9, 2017; mod. 3/10/17, Second District, Div. Two
Cite as B260762
Valerie Yale sued estate planning attorney Robert R. Bowne, II for malpractice. During her marriage to Bryan Knight, Yale removed her house from her trust and vested title in her class="anchor" name as separate property to obtain a line of credit. The lender required Yale and Knight to co-sign on the loan. This required that title to the house be conveyed from Yale as trustee of her separate trust to her as her separate property, then to her and Knight as community property. After the loan was recorded, Yale encountered problems in deeding the house back to herself, and Bowne completed the transfers as she wanted. When Yale subsequently had Bowne update her estate plan, she expressly instructed him to maintain her assets as her separate property. When she transferred property to her new trust, she read the words “community property” in two deeds, but did not ask Bowne about the effect of that term. Later, during divorce proceedings, Yale discovered her property might not have been restored as her separate property in her estate plan. In Yale’s legal malpractice action against Bowne, the trial court instructed the jury that it could find comparative fault on Yale’s part. The jury found Bowne was 90 percent negligent and Yale was 10 percent negligent. Yale appealed, contending the jury instruction on comparative fault was erroneous.
The appellate court affirmed. The facts and circumstances supported the trial court’s giving of the jury instruction. Comparative fault principles may apply in malpractice actions if the lawyer’s breach of duty causes damage to the client and if the client’s own deficient conduct results in sharing responsibility for the harm caused. Bowne breached the standard of care when he failed to follow Yale’s express instruction to maintain her assets as separate property. But Yale had sufficient knowledge to ask Bowne about the clauses in the deeds before she signed them and chose not to question Bowne. Because Yale contributed to the harm for which she sought damages, the trial court correctly instructed the jury on the principles of comparative fault.
Filed March 9, 2017, U.S. Court of Appeals, Ninth Circuit
Cite as 15-56034, 15-56047
Richard Zanowick sued defendants, alleging that their products exposed him to asbestos which led to his terminal mesothelioma. Richard’s wife, Joan Clark-Zanowick, also sued defendants for loss of consortium. Richard died, and Joan failed to file a timely motion to substitute a new party for Richard within 90 days as required by Rule 25(a)(1), Federal Rules of Civil Procedure. Joan moved to dismiss the action voluntarily without prejudice, or alternatively, to substitute a new party or extend the deadline. Defendants contended that Rule 25(a)(1) required dismissal with prejudice. The district court granted Joan’s motion to voluntarily dismiss the action without prejudice pursuant to Rule 41(a)(2). Defendants appealed.
The Court of Appeals affirmed. The panel held that Rule 25(a)(1) permitted the district court to allow a late substitution if requested, and did not require the district court to dismiss the federal action with prejudice. The district court did not abuse its discretion in granting the Rule 41(a)(2) motion for dismissal without prejudice.
Filed January 31, 2017, Second District, Div. Six
Cite as B265745
By Catherine M. Swafford
Withers Bergman, LLP
In 2008, William Morgan established an irrevocable subtrust for Beverly Morgan. William told Beverly about the subtrust at least twice in 2009. Thereafter, Beverly was unable to pay her mortgage. She decided to quitclaim her house to her sister, Connie Morgan. At the time, the house was worth less than the mortgage. In 2012, Connie sold the house for $48,000 less than the mortgage. The same year, Beverly contacted co-trustee Thomas Brooks for the first time to discuss the subtrust. Thomas and co-trustee Barton Clemens subsequently resigned. Successor trustee Joanne Williamson sued Thomas, Barton, Connie, and William for damages. Williamson alleged Thomas and Barton failed to keep Beverly informed about the subtrust, and had she been made aware of it, she would have used subtrust assets to prevent the loss of her home. The trial court denied the petition.
The appellate court affirmed. Williamson failed to prove breach of fiduciary duty because she did not establish damages. Trustees may be held liable for losses incurred by a trust. They are not liable for personal damages suffered by beneficiaries, or opportunities lost for not distributing trust assets. Williamson failed to prove the subtrust was harmed and suffered damages. Moreover, Beverly was informed about the subtrust and had ample opportunity to obtain more information about it before she quitclaimed the house to Connie.
Filed December 29, 2016, California Supreme Court
Cite as S226645
By Ciarán O'Sullivan
The Law Office of Ciarán O'Sullivan
The ACLU of Southern California submitted a Public Records Act (“PRA”) request for invoices sent to the County Counsel from outside law firms who defended excessive force actions by L.A. County Jail inmates, claiming that the invoices might prove that the law firms had engaged in “scorched-earth litigation tactics” that were against the public interest. When the County objected, the Superior Court required production of invoices from closed cases, but allowed the redaction of an attorney’s legal opinion, advice, mental impressions, or theories of the case, and ruled that all parts of an invoice in a pending case are privileged from disclosure. The Court of Appeal reversed, concluding that the entirety of a legal invoice, even from a closed case, is entirely privileged if it was confidentially transmitted within the course of the attorney-client relationship, regardless of the content.
The Supreme Court reversed, holding that the attorney-client privilege does not categorically shield everything in a billing invoice from PRA disclosure because the privilege does not apply to every single communication between an attorney and a client. The attorney-client privilege protects only communications made “for the purpose of legal consultation,” such as those containing legal opinion, advice, mental impressions, work product, or theories of the case. The amount of a legal invoice is not sent for the purpose of legal consultation but to ensure payment. In a pending case the mere amount of an invoice may reveal legally sensitive information such as an uptick in legal work, or preparation for trial, and thus the entire invoice in a pending matter is privileged. In a closed case, however, the mere amount of an invoice cannot reveal any legally sensitive information, and the amount billed for closed cases is therefore not privileged.
Filed October 24, 2016, First District, Div. One
Cite as A145981
Dick Magney appointed his wife, Judith Magney, as his agent in a valid advance health care directive in 2011. The directive contained Dick’s health care instructions, expressed his personal values, and gave his agent the power to exercise her discretion to refuse medical treatment on his behalf. In 2015 he was hospitalized with a serious heart infection. After reviewing Dick’s medical history and recent tests, and consulting with Dick and Judith, his primary physician concluded that further treatment would be futile and would greatly diminish Dick’s quality of life. Upon investigation into possible caretaker abuse or neglect, Humboldt County Adult Protective Services filed an ex parte petition without notice to remove Judith as agent and to compel immediate medical treatment. The court granted the petition the same day. After she was served with the order, Judith filed a petition contesting the merits, seeking dismissal, and for statutory attorney fees. When Humboldt withdrew its petition, the court vacated the treatment order and denied Judith’s request for attorney fees.
The court of appeal reversed and remanded to determine and award Judith’s attorney fees. Probate Code section 4771 allows for a discretionary award of attorney’s fees to the agent under a power of attorney for health care if the court determines that the proceeding was commenced without reasonable cause. Reasonable cause is determined under an objective, reasonable person standard, and the petition must be supported by competent evidence. Humboldt’s petition deliberately misled the trial court of the law and facts. Humboldt lacked reasonable cause to commence the proceeding: its allegations of neglect were unsubstantiated and its view of Dick’s best interests was inconsistent with his instructions and personal values expressed in his advance directive. The Health Care Decisions Law (Prob. Code sec. 4600, et seq.) protects the fundamental right of competent adults to control decisions concerning their own health care.
Filed April 15, 2016, Fourth District, Div. Three
Cite as G050964
By Catherine M. Swafford
Withers Bergman, LLP
Robert Obarr contracted to sell a mobile home park to S.C.D. Enterprises, who assigned the purchase agreement to Westminster. After escrow opened, Obarr contracted to sell the mobile home park to Pham. Westminster and Pham filed actions against Obarr, who died during the litigation. After Obarr's death, Pham filed the declaration of Obarr's bookkeeper describing Obarr’s retention of attorney Kimes, and attaching an e-mail and letter to Obarr from Kimes. The special administrator sought orders to exclude this evidence on the ground it was protected by the attorney-client privilege, and to disqualify Pham’s counsel for improperly obtaining and using the privileged documents. The trial court conducted an in camera review of the evidence and determined the attorney-client privilege did not apply because statements by Obarr's attorney in the communications indicated he did not represent Obarr, and the statutory exceptions provided in Evidence Code sections 957, 960, and 961 applied. The special administrator appealed.
The appellate court reversed. The court cannot review the contents of communications to determine whether the attorney-client privilege applies. The privilege attaches to all confidential communications between an attorney and client. When the proponent makes a prima facie showing of a confidential attorney-client communication, the court must presume the communication is privileged, and the burden shifts to the opponent to establish waiver, an exception, or some other reason the privilege does not apply. The special administrator made a prima facie showing of a confidential attorney-client communication, which was not rebutted. Section 957 is based on the assumption a decedent would want the privileged communication disclosed to ensure his intent is carried out. Section 957 did not apply here because the parties made claims against, not through, Obarr. The purpose of sections 960 and 961 is to permit an attorney to testify about a client’s intent regarding an instrument affecting an interest in property. There was no showing the disputed evidence consisted of the type of communications about which an attesting witness would testify. The appellate court remanded the case to determine if Pham’s counsel should be disqualified.
Filed December 16, 2016, Second District, Div. Six
Cite as B270310
Appellant B.C. suffered cardiac arrest and brain damage from the combined effects of methamphetamine and alcohol usage, resulting in physical and mental deficits. B.C. later married Jessie M., with whom she had previously abused drugs and had a daughter. A neuropsychologist determined that B.C.’s cognitive deficits made her vulnerable to fraud. When B.C.’s aunt C.S. petitioned for appointment as probate conservator of B.C.’s person, B.C. and Jessie hired a private attorney to oppose the petition, and that attorney demanded a jury trial. Because of B.C.’s lack of capacity to hire a lawyer, the Court appointed instead a public defender who did not renew the demand for a jury trial. After a bench trial, the court appointed C.S. as conservator of B.C.’s person.
The court of appeal affirmed. Prior cases held that the trial court must obtain the personal waiver of a jury trial from the conservatee in conservatorship proceedings under the Lanterman-Petris-Short Act. Similarly, a personal waiver is required in cases involving the involuntary commitment of a mentally disordered offender. But, those situations are distinguishable because a probate conservator has no power to place a conservatee in a locked facility against her will. While the Probate Code allows a jury trial in conservatorship cases, it does not mandate one in every case where it is not affirmatively waived, which is the rule in involuntary commitment situations. The trial court here erred when it failed to advise B.C. of her right to a jury trial, but the error was harmless because she was represented by counsel who had authority to forego a jury trial. Similarly, B.C’s argument that the court did not consult her about the conservatorship failed because her sentiments were represented to the Court by her attorney.
Filed November 3, 2016, Second District, Div. Five
Cite as B268416
Testator Margor Dayan transferred interests in real property to her children and to her trust in 1986. After numerous quitclaim deeds were signed and after Dayan made her last will in 2009, title to the property was held two-thirds in the trust and one-third by her son, Anthony. In the will, Dayan revoked the trust and transferred her entire interest in the property to another trust for the benefit of her other son, Ermond. The will contained a no-contest clause. After Dayan’s death, Ermond filed a petition under Probate Code section 850 for an order directing Anthony to transfer his interest in the property to the estate. Ermond claimed that although Anthony had legal title to one-third of the property, Dayan retained equitable title to the entire property. Anthony objected to the 850 petition, arguing he was entitled to the one-third interest previously conveyed to him. In response, Ermond filed a petition to enforce the will’s no-contest clause against Anthony under the theory that his objection to the 850 petition sought to invalidate the portion of the will disposing of all of Dayan’s right, title, and interest in the property. The trial court denied the 850 petition and Ermond’s request to enforce the no-contest clause.
The appellate court affirmed. Ermond failed to present sufficient evidence to overcome the presumption of record title showing Anthony was the owner of a one-third interest in the property. Dayan never sought to quiet title to the property after transferring the interest to Anthony, despite having had more than twenty years to do so. The no-contest clause was not triggered because Anthony’s assertion of ownership was not a direct challenge to the will, a challenge to the operative transfer of ownership to him, or a creditor’s claim.
Filed September 6, 2016, Fourth District, Div. Three
Cite as G052385
By Ciarán O'Sullivan
The Law Office of Ciarán O'Sullivan
Cynthia Vedder was entitled to all income and mandatory and discretionary distributions from her grandparents' trust. The trust contained a spendthrift clause, as well as a “shutdown” clause prohibiting certain periodic mandatory principal distributions when those payments become subject to enforceable claims of creditors. Cynthia’s ex-husband obtained judgments against her for wrongfully-taken community property funds and unpaid child support. He petitioned for an order requiring the trustee to pay the child support judgment from trust income and principal, and to impose a lien on the trust to satisfy the community property judgment. The trial court denied the petition based on the shutdown clause.
The court of appeal reversed. A spendthrift clause does not defeat the claims of a support creditor. The shutdown clause does not apply to discretionary payments of income or principal, but only to mandatory principal distributions. Regardless of the nature of the distributions, the shutdown clause cannot defeat the claim of a support creditor. A trustee cannot refuse to satisfy an enforceable child support judgment for an improper purpose, and the court has discretion under Probate Code section 15305 to order a trustee to make distributions to satisfy a support judgment to the extent that it is equitable and reasonable to do so under the circumstances. On remand, the trial court must determine the amount of the income and principal distributions to satisfy the support judgment and future support obligations. The court also reversed as to the community property judgment, which can be satisfied by payment of up to 25 percent of discretionary distributions to a beneficiary.
Filed August 25, 2016, First District, Div. Four
Cite as A140941
By Julie R. Woods
Hartog | Baer | Hand
Robert and Maryon created the Miller Family Trust in 1991. When Maryon died in1994, the entire trust became irrevocable by its terms. The trust granted Robert a limited power of appointment for Maryon’s son Peter and his issue, and designated Peter as sole successor trustee after Robert's death. Robert died in 2013. In his will, Robert exercised the power of appointment to create a new trust and designated Peter and his sister Meade as cotrustees. In 2013, Peter filed a “safe harbor” application under repealed Probate Code section 21320 for a determination that he would not violate the trust’s no-contest clause by filing a petition to determine that he is the sole trustee and challenging Robert’s actions as trustee. The trial court assumed that the safe harbor procedure was available because the trust became irrevocable prior to 2001, but denied Peter’s application and held that his petition would be a direct contest and violate the trust's no-contest clause. Peter appealed.
The appellate court held the trial court should not have entertained the safe harbor petition. The safe harbor procedure in former Probate Code section 21320 was repealed by statute in January 2010. Even if an instrument became irrevocable before 2001, and prior law is applicable to determine the impact of a no-contest clause, the safe harbor procedure is unavailable. A safe harbor petition for judicial determination that a proposed pleading is not a violation of a no-contest clause is a pleading and not an instrument for the purposes of the no-contest statutes.
Filed August 23, 2016, Third District
Cite as C078369
By Julie R. Woods
Hartog | Baer | Hand
Clyde Greco, Jr. was the trustee of his parents’ trust and administrator of their estates. He used money from the trust and estates to litigate three actions against his sisters, all of which were dismissed without prejudice or settled. To recover the money, his sister Cara Lyn Greco brought a civil complaint for elder abuse and a probate petition for recovery of property, breach of fiduciary duty, conversion, and constructive fraud, and claimed the prior litigation was a personal vendetta by Clyde. Clyde filed special motions to strike Cara’s lawsuits under Code of Civil Procedure section 425.16 as strategic lawsuits against public participation (the "anti-SLAPP" law), contending that Cara's claims arose from protected activity. The probate court denied the motions, finding the gravamen of Cara's complaint was the taking of money from the settlor or the trust, and the protected activity (Clyde's litigation) was merely incidental to Clyde's conduct.
The appellate court affirmed the orders, but reversed and remanded as to the cause of action for constructive fraud. Determining whether to grant a special motion to strike is a two-step process. First, the court must determine whether the aggrieved party has made a threshold showing that the challenged cause of action arises from protected activity. Second, if so, the court must consider whether the plaintiff has demonstrated a probability of prevailing on the claim. A cause of action arises from protected conduct if the wrongful, injurious acts alleged by the plaintiff constitute protected conduct. The gravamen of Cara’s claims for elder abuse, breach of fiduciary duty, recovery of property, and conversion was the act of taking trust and estate funds. The taking was not a statement or writing protected by the anti-SLAPP statute, nor did it involve a public issue or an issue of public interest. However, because the gravamen of Cara’s claim for constructive fraud was not the taking, but the alleged misrepresentations about the underlying litigation, the court reversed and remanded with directions to determine whether Cara demonstrated a reasonable probability of prevailing on the merits.
Filed August 18, 2016, First District, Div. One
Cite as A141625
Armand Borel left real property in his trust to the East Bay Regional Park District to establish an agricultural park. Borel and Sidney Corrie entered into an option agreement for a portion of the same property. After Borel died, Corrie filed a motion for an order instructing the trustee to convey the optioned property to him, which the settlor’s heirs joined but the District opposed. After the court appointed a new trustee the District petitioned the court under Probate Code section 17200 to order the trustee to receive a loan from the District. The District alleged the loan was necessary because the trust was nearly insolvent due to a prior trustee’s malfeasance, and needed funds for debts, taxes, and operational costs. The District also sought an order to distribute the property without conditions. The probate court granted the 17200 petition and ordered the trustee to accept the loan and distribute the property. Corrie and settlor’s heirs appealed both orders. On petition by the District under Probate Code section 1310(b), the probate court found that the trust was insolvent, the trust beneficiaries would suffer harm without additional revenue, the only source of revenue was from the District, and the loan would not harm Corrie’s option agreement rights if enforceable. The court therefore issued the order under section 1310(b) instructing the trustee to accept the loan and deed the property, notwithstanding the appeal. Corrie also appealed that order.
The appellate court dismissed the appeals on the Section 1310(b) and 17200 petitions, and affirmed the decision that the option agreement was unenforceable. Section 1310(b) allows a probate court to direct the exercise of the powers of the fiduciary for the limited purpose of preventing injury or loss to a person or property while an appeal is pending. Actions taken by the trustee pursuant to section 1310(b) are valid, irrespective of the outcome of an appeal. The appellate court could not reverse the orders on the 17200 petitions without invalidating the trustee's actions on those orders. Because there was no relief that could be granted to the appellants, the court of appeal dismissed their appeals.
Filed July 13, 2016, Sixth District
Cite as H040663
By Catherine M. Swafford
Withers Bergman LLP
William Hugill executed a trust amendment reducing Edward Bennett Gregge’s beneficial interest in the trust. After William died, Gregge filed a petition to determine the validity of the amendment under Probate Code section 17200, alleging it was invalid based on William’s lack of capacity and susceptibility to undue influence. Respondent-trustee Michael Hugill obtained a disclaimer from another beneficiary to disclaim his interest in the trust, conditioned upon dismissal of the petition. Respondent-trustee argued that Gregge lacked standing because the disclaimer restored Gregge’s pecuniary interest to the pre-amendment amount. The court viewed the disclaimer as a settlement resolving Gregge’s damages, and dismissed the petition under Probate Code section 17202 on the ground that the proceeding was not reasonably necessary to protect the interests of the trust or a beneficiary.
The Court of Appeal reversed. The conditional disclaimer and the trial court’s dismissal under Section 17202 were contrary to public policy, which promotes effectuating the settlor’s intent and deterring elder abuse. The trial court’s interpretation of the disclaimer as a settlement was incorrect because Gregge did not agree to settle the case. Gregge was deprived of his right to challenge the trust amendment and was entitled to a trial on his petition.
Filed April 21, 2016, U.S. Tax Court
Cite as T.C. Memo. 2016-74
By Catherine M. Swafford
Withers Bergman LLP
Arthur Marsh was elderly and suffered from various medical problems, including dementia. In early 2007, he hired Angelina Alhadi to work as his caregiver. He paid her well beyond the scope of her services. By the fall of 2008, Marsh had written Alhadi checks totaling nearly $800,000. In October 2008, he wrote her five checks totaling $500,000. Vanguard Group raised concerns about the five checks and declined to honor them. Vanguard sent an elder abuse report to the California Department of Health and Human Services. After the Department investigated, the Santa Clara Public Guardian petitioned to establish a temporary conservatorship, which the Probate Court granted in January 2009. On behalf of Marsh’s trust, Santa Clara County filed Forms 1099 for Alhadi for the years 2007 and 2008. Alhadi failed to report the income she received from Marsh. The IRS asserted deficiencies and penalties on a total unreported income of more than $1 million.
The Tax Court determined the money Alhadi received from Marsh was taxable income. Applying California law, the Tax Court determined the money was not a gift because Alhadi exerted undue influence over Marsh. There was no evidence Marsh loaned the money to Alhadi. Additionally, the Tax Court determined Alhadi owed self-employment tax, and her 2007 and 2008 tax returns were fraudulent.
Filed July 5, 2016, Second District, Div. Four
Cite as B263377
By Catherine M. Swafford
Withers Bergman LLP
On January 31, 2012, John Torjesen obtained a judgment against Harry Mansdorf. Mansdorf
died on August 27, 2012, and Torjesen subsequently sought to enforce his judgment under Code
of Civil Procedure section 680.010 et seq., the Enforcement of Judgments Law (EJL). On
September 17, 2012, Torjesen obtained a writ of execution. On October 11, 2012, the sheriff’s
department levied on Mansdorf’s property. In March 2013, Jaime Gonzalez filed a third party
claim for ownership and possession of the property Torjesen levied. Torjesen filed a petition to
invalidate Gonzalez’s third party claim, which the trial court granted. Gonzalez did not appeal
this order. Two years later, Gonzalez moved to vacate the trial court’s order on the ground it was
void ab initio because Torjesen was required to enforce his judgment under the Probate Code.
The trial court denied Gonzalez’s application, and he appealed.
The Court of Appeal affirmed. The EJL provides that after a judgment debtor dies, the Probate
Code governs the enforcement of judgments against a decedent’s property. Under the Probate
Code, money judgments are payable in the course of administration and are not enforceable
under the EJL, unless the property is levied upon before the decedent’s death. The manner in
which Torjesen enforced his judgment after Mansdorf’s death, i.e., through the EJL, was
improper because he was required to proceed under the Probate Code. The issue was whether
the statutory scheme deprived the superior court of fundamental jurisdiction, or whether the court
simply acted in excess of its jurisdiction. Because the superior court has jurisdiction over the
enforcement of judgments and claims relating thereto, the trial court’s error was an act in excess
of its jurisdiction, and the order was voidable, not void ab initio. The trial court’s order became
final when Gonzalez did not timely appeal from the order.
Filed June 23, 2016, First District, Div.
Cite as A145749
By Ciarán O'Sullivan
The Law Office of Ciarán O'Sullivan
Jesse G. had a history of multiple mental health hospitalizations and diagnoses, including schizoaffective disorder, bipolar type, and antisocial personality disorder. He was hospitalized temporarily under Welfare and Institutions Code section 5150 following an incident of bizarre behavior. The public guardian's expert testified that Jesse was schizophrenic, suffered from auditory hallucinations, and suffered from various substance abuse disorders. Jesse denied that he was suicidal, acknowledged his mental health problems, and felt that he could control them with medication. His friend Michael Elmer testified that Jesse had lived with him in the past, could live with him in the future, and that he would control Jesse’s medications and prevent any substance abuse in the home. The court nevertheless found that Jesse was gravely disabled because his underlying mental condition interfered with his ability to provide for his food, shelter and clothing, and because Elmer's work commitments would make him unavailable if Jesse needed help.
The Court of Appeal reversed. “Gravely disabled” is a condition in which a person, as a result of a mental health disorder, is unable to provide for his basic personal needs for food, clothing or shelter. But a person is not gravely disabled if he can survive without involuntary detention with the help of responsible family, friends, or others who are willing or able to help meet his needs. Though Jesse did suffer from a mental health disorder, Elmer's testimony demonstrated that Jesse could survive safely in the community without involuntary detention. If the fact that Elmer was at work during some of each day automatically negated the third party assistance factor, then offers of third party assistance would rarely, if ever, be sufficient to avoid a finding of grave disability. That would defeat the purpose of the LPS Act, which is to use the involuntary commitment power only in those cases where gravely disabled persons are unable to provide for their basic needs either alone or with the help of others.
Filed June 20, 2016, Second District, Div. Six
Cite as B259534
LeBouef was an estate planning attorney who was the principal beneficiary and the nominated trustee under a testamentary trust executed by Patton, a vulnerable elder. The trial court invalidated the gift to LeBouef under Probate Code section 21380, which provides that a gift to the drafter of a donative instrument is presumptively the product of fraud or undue influence. Despite LeBouef’s denial, the trial court determined he was the drafter, and that he faked a burglary in which the original estate plan was stolen to prevent forensic examination of the original documents. In reaching its conclusion, the court admitted evidence of estate plans LeBouef prepared for other vulnerable elders, Irene Grant and Audrey Cook, under which he or his life partner were the primary beneficiaries.
The Court of Appeal affirmed. Evidence Code section 1101(b) allows admission of evidence of prior acts if they are relevant to prove some fact, such as motive, intent, opportunity, knowledge, or plan. The circumstances surrounding preparation of the Grant and Cook wills were similar in many ways to the circumstances here, including the fact that those wills were prepared on the same forms as the Patton will, and contained the same misspellings and grammatical errors. Evidence of the preparation of the Grant and Cook wills supported the existence of knowledge, opportunity and plan. Thus, substantial evidence supported the court’s conclusion that the same person, LeBouef, prepared all of the wills. LeBouef was not entitled to trustees’ fees, or attorneys’ fees to defend the heirs’ action, because the trust was void. He was also ordered to pay the heirs’ attorneys’ fees because, under section 21380, a beneficiary who is unsuccessful in rebutting the presumption of fraud or undue influence must pay the prevailing party’s attorneys’ fees.
Certified for Publication May 16, 2016, Fourth District, Div. Three
Cite as G050468
By Julie R. Woods
HARTOG | BAER | HAND
Lynn Bower paid for the support and maintenance of her conservatee husband, David. The probate court ordered her to pay professional and legal fees directly to David’s conservators and creditors, reasoning that attorneys’ fees and conservator’s fees are part of the conservatee’s support and maintenance. Lynn paid the professional fees indirectly, by satisfying liens placed on community assets after they were sold, thus failing to comply with the literal terms of the order. As a result of Lynn’s noncompliance with the order, the probate court ordered the Bowers’ community estate divided under Probate Code section 3089, with David’s conservator receiving David’s share.
The appellate court reversed. In a conservatorship proceeding where the conservatee has community property interests, the probate court may divide the community property if the competent spouse refuses to comply with an order for the support and maintenance of a conservatee spouse. However, orders for fees for attorneys and conservators in conservatorships are distinct from orders for the support and maintenance of a conservatee spouse. Professionals cannot collect their fees under Probate Code section 3089.
Filed May 10, 2016, First District, Div. Five
Cite as A114391
By Julie R. Woods
HARTOG | BAER | HAND
Carlos McClatchy is the beneficiary of an irrevocable trust administered by William Coblentz, a now-deceased partner of respondent law firm. Carlos filed a petition for breach of trust seeking damages for William’s mismanagement of trust assets. Carlos class="anchor" named William individually as a defendant, as well as Doe defendants 1 through 20. Carlos later amended his petition to add the law firm as a Doe defendant because William was a partner at the firm while acting as trustee. The trial court granted the firm’s motion to quash, holding that Carlos could not amend the petition to add the firm as a defendant because he knew the firm’s identity and facts giving rise to its liability when he filed the original petition.
The court of appeal affirmed, holding that Carlos was not ignorant of the facts establishing a cause of action against the law firm when he filed the original petition. Carlos knew or reasonably should have known to identify the law firm as a defendant in the original petition because William used the firm’s business address, offices, letterhead, and resources in carrying out his duties as trustee. Code of Civil Procedure section 474 allows a plaintiff who is ignorant of a defendant’s identity at the time of filing a complaint to designate the defendant by a fictitious class="anchor" name. When the plaintiff subsequently discovers the defendant’s identity, the plaintiff may file an amended complaint relating back to the date of the complaint. Because Carlos was not ignorant of the law firm’s identity and the facts giving rise to his cause of action against the firm when he filed the petition, his amended petition substituting the firm for a Doe defendant did not relate back to the original filing. The trial court properly granted the motion to quash because the statute of limitations had expired when he added the firm as a defendant.
Filed April 25, 2016, Second District, Div. Seven
Cite as B263917
Mary Lynne and Leland Babbitt established a revocable trust. Upon Leland’s death, the trust was divided into two subtrusts: the revocable survivor’s trust and the irrevocable decedent’s trust. Leland’s daughter, Carol McCormack, petitioned to compel Mary Lynne to account for both subtrusts. Mary Lynne opposed the petition as to the revocable survivor’s trust, but the probate court granted Carol’s petition to compel both accountings. Mary Lynne filed a petition for a writ of mandamus and a request for a stay of the proceedings.
The appellate court issued a peremptory writ of mandate to vacate the probate court’s order. While a trust is revocable, a trustee owes duties solely to the settlor, and a contingent beneficiary may not compel a trustee to account for a revocable trust as long as the settlor is not incapacitated, incompetent, or subject to undue influence. Even though a beneficiary has standing to compel an accounting or information from a trustee when a trust or a portion of a trust becomes irrevocable, the probate court does not have the authority to order a trustee to account or provide information regarding a revocable trust while it is still revocable and the settlor is competent and not subject to undue influence.
Filed April 13, 2016, Fourth District, Div. One
Cite as D067756
By Catherine M. Swafford, Withers Bergman LLP
Decedent executed a revocable trust in 1985 (the “1985 Trust”), and real property located on Via Regla was transferred to the 1985 Trust. Decedent executed an irrevocable trust in 2009 (the “2009 Trust”) which stated, “I transfer to my Trustee the property listed in Schedule A, attached to this agreement.” The sole asset listed on Schedule A was the Via Regla property. Decedent’s daughter filed a petition to confirm the validity of the 2009 Trust and that the Via Regla property was an asset of the 2009 Trust. The trial court found the transfer of Via Regla to the 2009 Trust was not valid because decedent was required to transfer title to the Via Regla property by a deed, and because decedent did not personally own the property at the time of the transfer.
The appellate court reversed. The language quoted above in the 2009 Trust was sufficient to convey the property to the 2009 Trust, and decedent was not required to execute a deed. While decedent did not own the property individually at the time of the transfer, his signature on the 2009 Trust was sufficient to convey title from the 1985 Trust to the 2009 Trust because the 1985 Trust was a revocable inter vivos trust, he owned the property as sole trustee of the 1985 Trust, and he had the power to transfer real property owned by the 1985 Trust.
Filed March 23, 2016, Fourth District, Div. Three
Cite as G049880
By Julie R. Woods, Weintraub Tobin Chediak Coleman Grodin Law Corporation
Beneficiary Cathe Callender appealed orders concerning the interpretation and administration of a trust which included licensing agreements for use of the Marie Callender class="anchor" name. The beneficiaries disputed the division of the trust residue by the so-called changing fraction method, whereby the beneficiaries’ interests are revalued with each non-pro rata distribution payment, such as estate tax payments. Cathe also disputed her responsibility to pay estate taxes on property specifically gifted to her, free of estate taxes. The trial court ruled the trust residue should be divided based on the changing fraction method, based on its interpretation of the trust and the settlor’s intent, and on extrinsic evidence. The court also ruled that Cathe was responsible for a portion of the estate taxes on the specific gift of real property.
The appellate court reversed and remanded, holding that the trial court erred in applying the changing fraction method to the trust residue, and charging estate tax to Cathe’s gift. There was no language in the trust, no evidence of the settlor’s intent, and no basis in California law or equity to support the use of the changing fraction method. Instead, the appellate court utilized the fixed fraction method, whereby non-pro rata charges to principal have no effect upon the fractional interests of the beneficiaries. Further, based on the language of the trust, Cathe was not responsible to pay any estate taxes on her specific gift.
Filed March 2, 2016, Second District, Div. Six
Cite as 2B260975
Heather W. appeals an order reappointing the County Public Guardian as her conservator under the Lanterman-Petris-Short Act. The trial court did not advise Heather W. of her right to a jury trial. The trial court also did not obtain on-the-record Heather W.’s personal waiver of the right to a jury trial. Based on the evidence presented at the bench trial, the trial court found Heather W. was gravely disabled.
The appellate court reversed because, in conservatorship proceedings pursuant to the LPS Act, the trial court must obtain a personal waiver of a jury trial from the proposed conservatee, or from the proposed conservatee’s attorney when the proposed conservatee lacks capacity to make a jury waiver. Even though there was evidence that Heather W. was gravely disabled, it is not harmless error to deny due process for a jury trial in an LPS conservatorship.
Filed February 18, 2016, First District, Div. Two
Cite as A145893
Petitioners, co-executors, sought double damages under Probate Code section 859 for allegations that their stepfather wrongfully withheld property belonging to their mother’s estate. During the proceeding, the stepfather died and his son substituted in as the successor in interest. Summary adjudication was granted on the claim for double damages: the trial court held there can be no punitive damages in an action against a decedent’s personal representative or successor in interest.
The appellate court reversed and held that the rule barring claims for punitive damages against a decedent’s estate did not preclude an award of double damages against the estate. Double damages under section 859 are not punitive damages, which require findings of oppression, fraud or malice. Rather, the damages under section 859 are statutory and only require a finding of bad faith, and may be awarded in addition to punitive damages.
Filed January 29, 2016, First District, Div. One
Cite as A144289
Plaintiff signed a residency agreement containing an arbitration clause as her mother’s agent under a power of attorney. After her mother died, plaintiff sued the care facility for wrongful death and elder abuse in her capacity as personal representative. The trial court denied defendant’s petition to compel arbitration because plaintiff was not a party to the residency agreement.
The appellate court affirmed. As personal representative, plaintiff sued on behalf of decedent's heirs, not the decedent. Although the arbitration clause in the agreement purported to bind "all parties" and "heirs, representatives, administrators, successors and assigns", only a party to an arbitration agreement may be bound by it. Plaintiff signed the residency agreement under decedent’s power of attorney, not in plaintiff's personal capacity: the only parties to the residency agreement were the decedent and the defendant.
Filed January 11, 2016, Fourth District, Div. One
Cite as D067735
Within one year of the prior trustee’s resignation plaintiff successor trustee filed a professional negligence action against the prior trustee’s attorneys. The trial court sustained the attorneydefendants’ demurrer, holding the professional negligence action was time barred because plaintiff knew about the representation and the alleged professional negligence more than one year before he filed the action.
The appellate court reversed. The statute of limitations for professional negligence is tolled until the predecessor trustee’s attorney-client relationship is terminated. When a successor trustee replaces a predecessor, he steps into the predecessor’s shoes and succeeds to the predecessor’s tolling rights. Because the attorney-defendants represented the prior trustee until she resigned, and the successor trustee’s malpractice action was filed within the one-year statute of limitations, it was timely.
Filed January 6, 2016, Fourth District, Div. Two
Cite as E059761
The Jewish Federation of Palm Springs and Desert Area, as remainder beneficiary, objected to
accountings provided by the trustee, who was also the income beneficiary. Federation argued the
trustee breached her fiduciary duties by improperly allocating trust expenses to principal rather
than income. The trial court agreed with Federation, finding that the expenses were chargeable as
income and could be apportioned over the term of the lease.
On appeal, the trustee argued that expenses for leasehold improvements, preparing spaces for
rent, broker commissions, and capital improvements are chargeable to principal. However, the
appellate court affirmed the probate court’s ruling, finding that the items are allocable to income.
If an expense is to be paid from income, but there is insufficient income to pay the expense and
maintain the income beneficiary’s distribution, the trustee can pay for the expense from
principal; however, the trustee must pay back the principal over time if there is no reserve.
Filed November 19, 2015, Fourth District, Div. Two
Cite as E061480
FirstMerit Bank sought to enforce a money judgment against Reese by applying for an order under Code Civ. Proc., § 708.510 assigning Reese’s interest in two trusts to FirstMerit, and an order restraining her from otherwise disposing of her right to payment under the trusts. The trial court denied the motion because a debtor’s interest in a trust is specifically not subject to such an assignment order.
The court of appeal affirmed. The only means by which a judgment creditor may enforce a money judgment against a beneficiary’s interest in a trust is by a lien under Code Civ. Proc., § 709.010. However, such an order must be sought from the court with jurisdiction over the trust. In this case the trusts were administered in Ohio. Therefore, even if FirstMerit had utilized the correct procedure, the California court had no jurisdiction to impose such a lien.
Filed November 16, 2015, Second District, Div. Eight
Cite as B258151
Donald Sterling appealed probate court orders concerning the sale of the Los Angeles Clippers, an NBA team and a major asset of the Sterling Family Trust. First, the appellate court found that Donald Sterling was properly removed as trustee pursuant to the terms of the trust, which was supported by evidence presented by physicians as to his lack of capacity and his inability to manage his finances and withstand undue influence. Second, the appellate court found that Probate Code section 1310(b) authorized the probate court to instruct the trustee, Rochelle Sterling, to sell the Clippers notwithstanding the stay on appeal of the probate court’s order, because the risk of loss to the trust estate if the sale fell through was extraordinary or imminent given the $2 billion purchase price as compared with other offers and valuations. Third, the appellate court held that it was not improper for the trustee to wind up the affairs of the trust, even after Donald revoked the trust. The trustee’s winding up of the trust included seeking the best possible result for the beneficiaries in selling the Clippers, in accordance with her duty of loyalty as trustee.
Filed October 20, 2015, First District, Div. Three
Cite as A143422
Susan Doolittle filed petitions to invalidate her mother’s restated trust on grounds of lack of capacity, undue influence, and financial elder abuse. The trust’s no contest clause directed the trustee to defend a contest at the expense of the trust estate. Susan and the trustee, Exchange Bank, filed competing petitions for instructions to address the trustee’s authority to use trust funds to pay for litigation expenses. The trial court found that the defense directive is not a no contest clause, and authorized the trustee to use trust funds to defend against Susan’s petitions.
The appellate court affirmed. The Doolittle trust specifically directed the trustee to defend against claims challenging the validity of the trust at the expense of the trust. The appellate court determined that since the clause on defense of claims was not a no contest clause itself, it was not necessary to first make a determination that Susan’s claims were asserted without merit or probable cause before it granted authorization for fees to defend the trust. Assuming Susan has probable cause for her claims, the residue will be reduced by defense costs. If the rule were otherwise, there would be no means to implement the trustor’s intentions until after the litigation is adjudicated, which would render the defense directive meaningless.
Filed October 1, 2015, Fifth District
Cite as F070914
Kevin A. appealed from an order granting the petition of the public conservator to reestablish LPS conservatorship for a one-year period, finding him gravely disabled. Although Kevin A. had previously remained in conservatorship for a number of years, a jury in 2013 found him not gravely disabled, terminating the conservatorship. Following a hearing in which Kevin A.'s apparent request to replace his attorney was denied, Kevin A.'s attorney waived a jury trial over Kevin A's objection.
The court of appeal reversed. A proposed conservatee must waive the right to a jury, and in accepting the attorney's waiver over Kevin A.'s express objection, the court made no specific finding that Kevin A. lacked capacity to decide for himself whether to proceed before a jury. The case is distinguishable from precedent where counsel's waiver of a jury was upheld, because the proposed conservatee there, unlike Kevin A., expressed on the record a desire for a court trial.
Filed September 30, 2015, Second District, Division Six
Cite as B253538
After doctors diagnosed 82-year-old Lester Moore with dementia and alerted his daughter that he could no longer manage his own affairs, his attorney William Salzwedel prepared documents in which Moore modified his trust to disinherit family members, and appointed Salzwedel as temporary trustee and agent under a durable power of attorney, replacing Moore's daughter. Salzwedel also vigorously opposed the daughter's petition for a conservatorship and an adjudication of her father's capacity to execute the documents. Before Salzwedel's ultimate removal as trustee and attorney he paid himself $148,000 in trustee fees, representing 32% of the estate, and incurred $32,000 in litigation expenses. The court surcharged Salzwedel $70,000 in attorney's fees and $25,000 in expert medical fees incurred in unsuccessfully opposing the daughter's petition, all of which were found to be excessive and of no benefit to Moore's estate.
The Court of Appeal affirmed. An attorney cannot put on blinders and follow the orders of a client he knew suffered from mental impairment. To the extent that the trust did not stand to benefit from the litigation there was no basis for recovery of legal expenses from trust assets. Salzwedel put his own financial interests before those of his client and failed to safeguard his client's person and financial interests. It was irrelevant that Moore did not object to the fees, or that they were incurred before adjudication of his capacity. The client's wishes or objectives did not trump the attorney-trustee's duty to prudently spend trust money and avoid conflicts of interest. Also, since Salzwedel served as both attorney and trustee, he was required to obtain advance approval of his fees from the court. The court referred Salzwedel to the State Bar for possible discipline
Filed September 28, 2015, Court of Appeal, Third Appellate District
Cite as C077467
Christopher B. was charged with making criminal threats and other serious felonies. After concluding he was incompetent to stand trial, the court committed him to a state hospital for the maximum confinement of three years and suspended the criminal proceedings. At the end of the three years, the state hospital concluded he could not be restored to competency, and recommended a Murphy Conservatorship, a renewable one-year civil commitment for criminal defendants who are otherwise incompetent to stand trial for a serious felony involving physical violence, and who do not have the prospect of restoration to competency. Because the criminal complaint proceedings were stayed, the district attorney could not file an information, so instead he obtained a grand jury indictment on the same charges, and the probate court then established the Murphy Conservatorship. At a review hearing in the criminal matter, the court dismissed the "case." When it realized that it should have dismissed only the complaint and not the indictment, the court endeavored to correct its mistake by clarifying that it had not dismissed the indictment. Defendant/conservatee appealed the order establishing the conservatorship, arguing that because the court dismissed the entire criminal case, a prerequisite to his conservatorship no longer existed.
The Court of Appeal reversed. After the trial court dismissed the entire case, including the indictment, it lost jurisdiction to reverse itself. Trial courts may correct clerical errors and interim orders, but not final judgments that do not result from clerical errors. Even though the judgment of dismissal was the result of a mistake, the act of dismissal is one the court intended to perform. The trial court had no jurisdiction to correct a judicial error. Since the trial court dismissed the indictment as well as the complaint, there was no basis to establish the Murphy Conservatorship.
Filed September 28, 2015, U.S. Court of Appeals, Ninth Circuit
Cite as 13-56045
After the sole beneficiary of the Mark Hughes Family Trust obtained a Probate Court order removing the trustees of the trust, he objected to a Bankruptcy Court settlement agreement previously entered between those removed trustees and a bankrupt entity that owed a sizeable debt to the trust. The Bankruptcy Court overruled the beneficiary's objections on their merits. On appeal, the District Court found that the beneficiary lacked standing to object.
The Ninth Circuit affirmed, holding that the beneficiary was not a "party of interest" under the Bankruptcy Code who has standing to object to the Bankruptcy Court settlement. As a trust beneficiary he had no "legally protectable interest" in the bankruptcy proceeding. Under California law only the successor trustee of the trust, the person positioned to take legal recourse to protect the trust assets, possessed such interest.
Filed July 27, 2015, California Supreme Court
Cite as S199435
Testator's holographic will provided that his wife would receive his estate, but if he and his wife died simultaneously, charities would receive his estate. The will did not provide for disposition of the estate if wife predeceased testator – which is exactly what occurred. The charities claimed they should receive the estate because testator provided for them if his wife was deceased at the time of his death. Testator's nephews claimed that the will failed, and they were entitled to receive the estate as testator’s intestate heirs. The probate court granted the nephews’ motion for summary judgment, finding that the will was unambiguous, and declined to consider extrinsic evidence of testator’s intent. The appellate court affirmed, based on Estate of Barnes (1965) 63 Cal.2d 580. The California Supreme Court reversed, and abrogated the Barnes rule that extrinsic evidence may never be introduced to reform an unambiguous will. Extrinsic evidence may be introduced to reform an unambiguous will if clear and convincing evidence establishes an error in the expression of the testator’s intent, and also establishes the testator's true intent, at the time the will was drafted.
Filed June 15, 2015, Fourth District, Division One
Cite as D066340
The trustee petitioned for an order confirming that the proceeds of two life insurance policies belonged to the trust. Chabad of Poway, a charity, filed an “Objection and Counterclaim” to the trustee’s petition in which it alleged that the settlor had irrevocably pledged the proceeds to the charity, and also sought affirmative relief against the trustee for unjust enrichment and breach of contract. The trial court, in an unsigned minute order, struck the Objection and Counterclaim on the basis that a party may not seek affirmative relief in an answer or objection, and the charity appealed.
The court of appeal dismissed the appeal for lack of jurisdiction because the order appealed from was not signed. The court noted that under the Code of Civil Procedure an order striking an answer and counterclaim is not an appealable order, and the same is true in equivalent proceedings under the Probate Code. Probate Code section 1300(d) did not make the order appealable because the order did not deny the payment of a claim. Code of Civil Procedure section 581d’s requirement that a dismissal “be in the form of a written order signed by the court” applied in proceedings under the Probate Code, and mandated dismissal of the appeal because there was no signed order of dismissal to appeal from.
Filed May 8, 2015, Second District, Div. Five
Cite as B250925
The order for distribution of testator's estate gave his widow a life estate in real property. It also provided that if she remarried, the property would be sold and proceeds distributed one-third to widow and one-third to each of decedent's two sons; at her option the property could be sold, and proceeds distributed in the same proportions; and upon widow's death prior to sale, the property would pass in equal shares to decedent's sons. Widow deeded the property to herself and encumbered it. After widow's death, payments were not made on the loan, and the lender initiated foreclosure proceedings. In response, the sons brought an action for cancellation of the widow's deed to herself. The lower court entered summary judgment on the cancellation claim, and the Second District affirmed, reasoning that widow's interest in the property was a life estate, subject to certain limitations, and not a fee subject to conditions subsequent.
Filed April 28, 2015, Second District, Division Five
Cite as B256889
An attorney representing a client on a contingency basis brought a petition to determine the client was a pretermitted spouse. A settlement was reached and approved by the probate court under which a trust established by the deceased spouse was to make various payments. The client then died. The attorney filed a petition to enforce his claim for fees against the trust. The trial court denied the attorney's petition, finding that the proper procedure to recover attorney's fees was by a creditor's claim against the client's estate and that such a claim and the attorney's petition were both time barred. The appellate court reversed and remanded with instructions, noting that the attorney's beneficial interest and the lien attached to it came into being at the time of the settlement and its approval by the probate court. Under Probate Code § 9391, the holder of a lien against property in the decedent's estate may commence an action to enforce the lien without first filing a claim if in the complaint the holder expressly waives recourse against all other property in the estate.
Filed April 24, 2015, Fourth District, Division One
Cite as D065898
Plaintiff's grandfather died in 1966, leaving a Will executed in 1955. The grandfather's Will created a testamentary trust for the benefit of Plaintiff's father, for his lifetime. The Will empowered the father to appoint three-quarters of the Trust to the father's then living issue by his own Will, and in default of such an appointment, the property would be distributed to the father's then living issue on the principle of representation. The father died in 2006, leaving a Will that did not appoint any of the Trust to Plaintiff. In a prior appellate decision, Sefton I, the court determined that powers of appointment at the time of the execution of the grandfather's Will and at the time of the grandfather's death were governed by California common law rather than the subsequent statutory scheme and that the power of appointment conferred by the grandfather was nonexclusive because it did not expressly give the donee of the power any right of exclusion. Sefton I thus remanded the case to the trial court to determine the plaintiff's share. In response, the trial court determined that plaintiff was entitled to a "substantial share" equivalent to seven percent of a one-seventh share. The appellate court reversed and remanded. Held, under applicable common law, the father's attempted appointment, which excluded plaintiff, was invalid and void and the appointive property therefore passed according to the grandfather's testamentary scheme, which provided that in the event of default of appointment, such property should pass to the father's then-living issue on the principle of representation.
Filed April 23, 2015, Fourth District, Division Three
Cite as G049161
Decedent died intestate. Parent of minor child born out of wedlock brought petitions to administer the estate of Decedent and to determine heirship. Evidence was admitted that the Decedent was 99.9996 percent likely to have been the parent of the minor child. Nonetheless, both petitions were denied by the trial court on the basis that the Petitioner had not met her burden under Probate Code § 6453(b) to establish by clear and convincing evidence that the Decedent had openly held out the minor as being his own. The judgment was affirmed on appeal. Held, the statutory requirement of "openly held out" requires an unconcealed affirmative representation of paternity in open view.
Filed April 9, 2015, Sixth District
Cite as H040646
Decedent retained attorney to draft an amendment to a revocable trust. The decedent executed the amendment, which as drafted class="anchor" named decedent's children and spouse as beneficiaries. After decedent's death, decedent's children petitioned to modify the amendment, alleging it failed to implement the decedent's instructions by incorrectly including decedent's spouse as a beneficiary entitled to receive an interest in decedent's brokerage accounts and real and personal property. In connection with the probate proceeding, the drafting attorney admitted the amendment did not reflect the decedent's stated intentions. After the probate proceeding was settled, the decedent's children sued the attorney for legal malpractice. The decedent's attorney successfully demurred to the complaint on the ground, inter alia, he owed no duty to decedent's children. The appellate court reversed on the basis that decedent's children should have been granted leave to amend to allege such a duty. Held, applying the six so-called Biakanja/Lucas factors to these facts, it cannot be said as a matter of law that the attorney did not owe decedent's children a duty.
Filed March 27, 2015, Sixth District
Cite as H040220
Following the death of beneficiary of Special Needs Trust, Trustee sought to avoid reimbursement to the Department of Health Care Services for medical expenses paid on behalf of the beneficiary, citing 42 U.S.C. § 1396p(b)(1)(B) and Welfare & Institutions Code § 14009.5(b)(1), on the ground Trust assets were allegedly exempt from such reimbursement rights because the beneficiary was under 55 years of age when the services were provided. Noting that the Special Needs Trust provided for reimbursement to the state upon the beneficiary’s death and that such a provision is required for a disabled beneficiary of a Special Needs Trust under the age of 65 to be eligible for public assistance under Medicaid, the appellate court affirmed the trial court’s ruling granting the Department’s claim. Held, statutes and regulations governing recovery from a Special Needs Trust do not exempt beneficiaries under age 55, either directly or by making them subject to estate recovery provisions.
Filed March 16, 2015, Fourth District, Div. One
Cite as C065630
Settlor established a Trust which recited that all of his “right, title and interest” to “all of his real … property” is included in the Trust’s assets. After the Settlor’s death, the Co-Trustee brought a petition under Prob. C. § 850 for an order that two parcels held in the class="anchor" name of the Settlor were part of the Trust. In reversing the trial court’s denial of the petition, the appellate court noted that a Heggstad petition will lie if the owner of the real property is the settlor creating the trust with him or her as trustee and if the transfer of the real property complies with the statute of frauds. Held, the recital in the Trust satisfied the statute of frauds because it could be established by extrinsic evidence that the Settlor held title to the parcels.
Filed February 26, 2015, Second District, Div. Five
Cite as B253746
Settlor’s trust gives the trustee broad discretion to pay principal for the settlor’s care, maintenance, support, or desires. After the settlor became conserved, the trustee began to sell assets to generate liquidity. Remainder beneficiary objected to the sale of settlor’s residence on the basis that it was to pass to her upon the settlor’s death and that the abatement statutes would preclude the sale. The probate court approved the sale. The Second District affirmed, reasoning that the trustee has the “sole and absolute” discretion to invade principal for the settlor’s care, that the rights of the remainder beneficiary were of secondary importance, and that nothing in the abatement statutes would preclude the sale.
Filed October 17, 2014, First District, Div. One
Cite as A137679
Successor conservator sued predecessor conservator’s counsel for malpractice in connection with original conservator’s alleged misappropriation of assets from the estate. Counsel successfully demurred on the basis she had represented only the original conservator, not the conservatee, and, further, that the claim would be barred by the same defense of unclean hands counsel could assert against the original conservator. Held, the successor fiduciary exception to the rule of privity permits such a malpractice claim, and unclean hands is also not applicable as a defense in those circumstances.
Filed October 23, 2014, Fourth District, Div. Two
Cite as E059692
Trial court decision rejecting claim to invalidate donative transfer (here a quitclaim deed) under former Probate Code § 21350 reversed on grounds that although the statute was repealed and replaced by Probate Code § 21380, the former statute continues to govern an instrument executed before January 1, 2011. Further, the court rejects the argument that a transfer for good consideration is not a “donative transfer” within the meaning of both statutory schemes. Instead, a transfer is a “donative transfer” if it is for inadequate consideration.
Filed October 30, 2014, Fourth District, Div. Three
Cite as G048906
Sole trustee of a revocable living trust who is also the sole settlor and beneficiary may appear in court proceedings in propria persona. General rule requiring trustee to appear via counsel is based on the notion that the trustee represents the interests of others and is thus engaging in the unauthorized practice of law unless represented by counsel. Where, as here, the sole trustee owes duties only to himself or herself, the rationale of the general rule is inapplicable.
Filed April 17, 2013, Fourth District, Div. One Cite as D060906
Where a trustee filed a malicious prosecution claim against an heir and his attorneys following the heir’s unsuccessful petition for breach of trust and removal, the attorneys’ motion to strike the claim under California’s anti-SLAPP statute, Code of Civil Procedure section 425.16, was properly denied. Under the anti-SLAPP statute, the trustee had shown a probability of success on the merits of his claim by demonstrating that the heir’s prior petition was filed with malice and without probable cause. The Court of Appeal also upheld an award of attorney fees to the trustee, and went on to impose sanctions for the attorneys’ frivolous appeal of the anti-SLAPP ruling.
(2013) 214 Cal.App.4th 62.
Filed March 5, 2013, Court of Appeals of California, Second District, Division Three.
Conservatee’s mother lacked standing to appeal order on conservators’ petition setting his visitation schedule, directing change in his living services vendor and ordering disclosure of his personal, medical and financial records. Mother, who alleged only violations of nonappealing adult conservatee’s rights, was not an aggrieved party for purposes of appeal under Code of Civil Procedure section 902. Nor did Probate Code section 1829, permitting relative of proposed conservatee to appear at conservatorship hearing below, support mother’s right to appeal.
Filed January 9, 2013, Fourth District, Div. Three
Cite as G046460
Plaintiff’s suit on the decedent’s promise to make distribution from an estate was timely when filed within one year from date of death as required by Code of Civil Procedure section 366.3, even though the plaintiff failed to initiate his suit within 90 days of the personal representative’s rejection of claim as ostensibly required by Probate Code section 9353. The court held that Code of Civil Procedure section 366.3 was the more specific statute and hence controlled the outcome.
Filed December 26, 2012, publication ordered January 22, 2013, Second District, Div. Six
Cite as B231361
In a disqualified transferee case, Probate Code section 21351(a) – which states that a donative transfer is not presumptively invalid if the transferor is related by blood or marriage to the transferee -- merely requires that the transferor and transferee be related when the transferor executed the instruments in question. This section does not require that they be related at the transferor’s death, and hence a subsequent divorce did not result in stepchildren being disqualified under this statutory scheme.
Filed December 20, 2012
Cite as S197694
When the settlor of a revocable trust appoints a third party to act as trustee and then passes away, the beneficiaries have standing to sue that trustee for breaches of trust that occurred during the period when the trust was revocable. While the trustee may have owed no duty to the beneficiaries at that time, the beneficiaries can sue for the breach of a duty that was owed to the settlor.
Filed December 13, 2012, First District, Div. Two
Cite as A133952
A domestic partnership agreement is not automatically invalidated by a subsequent marriage license when the domestic partnership agreement is enforceable under Family Code sections 1600-1617 and is made after the enactment of statutes providing that domestic partners have essentially the same property rights as spouses. Accordingly, the surviving spouse of a same-sex marriage was barred by his waiver in the domestic partnership agreement and thus could not claim any interest as a pretermitted spouse in the deceased spouse’s estate.
Filed December 13, 2012, Sixth District
Cite as H037330
When the trust instrument prohibits compensation to a successor trustee, the successor trustee is not entitled to compensation. Probate Code sections 15642 and 17206 do not provide authority for disregarding the language of the trust instrument.
Filed June 27, 2012, First District, Div. Two
Cite as A132295
Attorney for the personal representative was entitled to ordinary compensation under Probate Code section 10810 despite having failed to enter into a written fee agreement with the client. Business and Professions Code section 6148, which typically requires that the attorney have a written fee agreement, was inapplicable because the payment for the attorney was to come from the estate and from not the client herself.
Filed May 21, 2012, Fifth District
Cite as F062443
Arbitration clause in contract with assisted living facility was unenforceable to the extent it would prevent an elder-abuse plaintiff from recovering attorneys’ fees and costs under Welfare and Institutions Code Section 15657.
Filed May 10, 2012, Third District
Cite as 2012 S.O.S. 2251
Under the doctrine of unclean hands, an administrator was barred from bringing an action to quiet title to real property where he had previously tried to obtain that property by using an improper mechanic’s lien. The court declined to accept the administrator’s argument that his personal misconduct should not bar him in his fiduciary capacity, noting that the administrator had failed to show the existence of innocent heirs who would be harmed by the application of the unclean hands doctrine.
Filed April 24, 2012, Fourth District, Div. Two
Cite as E051772
When plaintiff sued her father’s former conservator for elder abuse, the plaintiff was barred to the extent that the former conservator’s accountings had been approved by the probate court. The plaintiff had received actual notice and had failed to object. The court ruled that the elder-abuse statutes did not supersede Probate Code section 2103 and the law of res judicata and that the plaintiff had failed to establish extrinsic fraud, which, if proved, could have allowed her to avoid the effect of the prior orders.
Filed April 10, 2012, Fifth District
Cite as F062232
Trust amendments were properly invalidated when they did not comply with the amendment provision in the trust. The court held that given the effect of Probate Code section 15402, when the trust specifies a method for amendment, the settlor cannot amend the trust by using the method of revocation provided in Probate Code section 15401(a)(2).
Filed March 23, 2012, Second District, Div. One
Cite as B228704
This case held that the probate court had discretion under Probate Code section 3 to determine that the old law governing the enforceability of no-contest clauses (Probate Code sections 21300 through 21322) applied to the possible contest of a trust and amendment thereto, even though the trust became irrevocable after January 1, 2001 and the amendment in question was executed after January 1, 2001. This case held that the probate court did not abuse its discretion by applying the old law and that the beneficiaries’ proposed challenges to the settlor’s capacity to amend, her failure to make distributions, and her failure to create subtrusts would have violated the no-contest clause.
Filed March 20, 2012, Fourth District, Div. One
Cite as D058547
Personal service on a party’s attorney of record constituted personal service on that party when the attorney was served with a petition for revocation of a will under Probate Code section 8270. The court reasoned that because pre-probate contests had already occurred and involved that same party, the petition for revocation was part of the same case and hence could be served on the attorney of record. The court also held that the bar against successive will contests did not apply to a post-probate contest when that party's earlier contest was never adjudicated.
Filed March 14, 2012, Fourth District, Div. Three
Cite as 2012 S.O.S. 1246
Before the court can authorize an LPS conservator to consent to nonroutine, nonemergency medical treatment under Welf. & Inst. Code section 5358.2, the court must find that conservatee lacks capacity to give informed consent and that the treatment is medically necessary, which must be shown by admissible evidence. Hence, when the conservatee objected to a physician's declaration on the grounds of hearsay, that objection should have been sustained.
Filed March 12, 2012, Second District, Div. Four
Cite as 2012 S.O.S. 1190
In an elder abuse action, a defendant can recover costs, including expert witness fees, if the plaintiff fails to recover in excess of an offer that the defendant made under Code of Civil Procedure section 998, even though a prevailing defendant could not recover attorneys' fees under the elder-abuse statutes. The trial court had discretion to award costs under section 998 for services of an expert who did not testify, when that expert aided in the preparation of the case and was qualified. Furthermore, the costs recoverable under section 998 could be incurred before the time of the settlement offer.
Filed March 8, 2012, First District, Div. Five
Cite as 2012 S.O.S. 1178
To deprive an LPS conservatee or proposed LPS conservatee of the right to refuse or consent to treatment related to his or her own grave disability under Welf & Inst Code section 5357(d), the court must find that the conservatee or proposed conservatee lacks the ability to make rational decisions about his or her treatment. The conservatee or proposed conservatee has the right to proper notice and an opportunity to be heard on this issue, which in this instance was not satisfied by the obtaining of a temporary conservatorship in accordance with Probate Code section 2250.2.
Filed January 26, 2012, Second District, Div. Six
Cite as 2012 S.O.S. 392
The probate court’s order directing a trustee to account was not appealable where it did not expressly or impliedly decide any other issues. The probate court had the power to order an accounting on its own initiative under the court’s general power to supervise trust administration and under Probate Code section 17206, where the parties were already disputing the status of trust assets. Estate of KampenThe probate court’s order directing a trustee to account was not appealable where it did not expressly or impliedly decide any other issues. The probate court had the power to order an accounting on its own initiative under the court’s general power to supervise trust administration and under Probate Code section 17206, where the parties were already disputing the status of trust assets.
Filed November 14, 2011, publication ordered December 9, 2011, First District, Div. Two
Cite as 2011 S.O.S. 6662
Personal representative who failed to distribute estate for approximately 9 years after the order of final distribution was not surcharged for interest. The court reasoned that (1) the order of final distribution was not a money judgment under Code of Civil Procedure Section 680.270 and thus prejudgment interest did not accrue under that statute; (2) the personal representative had no duty to invest funds of the estate before distribution; (3) prejudgment interest under Civil Code Section 3287 was inapplicable because there was no money judgment or contract; and (4) the beneficiary’s claim for interest was barred by the doctrine of laches. Will which set forth testator's intent in the event he predeceased his wife or they died at the same moment, but made no disposition in the event he outlived his wife, as he did, did not render the will ambiguous; existence of a disinheritance clause in the will did not prevent testators' legal heirs from taking under the statutory rules of inheritance where testator had to be considered as having died intestate. Testator's purported oral declaration of intent cannot be used to fill in omitted terms of the will. - filed December 5, 2011, Second District, Div. FourCite as 2011 S.O.S. 6501
Oregon estate lacked capacity to sue California attorneys in California because that personal representative’s authority did not extend beyond Oregon. (Code of Civil Procedure §1913(b)). The Oregon personal representative was trying to bring a malpractice claim against California attorneys who were retained by the predecessor representative. To bring the action in California, the Oregon personal representative would have to open an ancillary probate in California and then, if he was appointed as the ancillary representative, he would have the capacity to sue. The court held that the Oregon personal representative had to be given the opportunity to open an ancillary probate and that under both California and Oregon law, the personal representative has standing to sue attorneys who were retained by a predecessor personal representative if those attorneys were hired to benefit the estate.
Filed September 26, 2011, Fourth District, Div. Three
After the settlor died, the trustee was surcharged for acts committed when the trust was revocable, but the court of appeal reversed and held that the trustee only owed duties to the settlor during that period and that therefore the beneficiaries could not maintain their claim. The court held that the trustee of a revocable trust has no duty to question the settlor's capacity and that the beneficiaries have no say in how the trust is managed during that time. The court also held that when she accepted benefits under the trust, the settlor's wife did not forfeit her claim that she had a community property interest in certain assets held in the trust. Assuming that the doctrine of spousal election applied, it was no impediment to the wife, because the settlor was not purporting to dispose of his wife's community property and because his will did not require that she choose between sharing in his estate or retaining her share of the community property.
Filed August 23, 2011, First District
Trusts and Estates
An earlier decision establishing surviving spouse's status with respect to an estate did not result in res judicata relative to an action alleging surviving spouse's financial elder abuse of decedent.
Fled August 11, 2011, Fourth District
After non-managing spouse made prima facie showing that assets had disappeared, spouse who had control of community assets had burden of accounting for missing assets
(2011) 188 Cal. App. 4th 559, filed August 11, 2011
The Department of Health Care Services is subject to a statute of limitations of three years after the death of the recipient of benefits to seek recovery against a trust holding the recipient’s assets.
Court of Appeals, 9th Circuit 2011 No. 10-71854, August 4, 2011.
Full recognition of charitable deduction that was increased based on audit was not precluded as a condition precedent.
(2011) 196 Cal. App. 4th 1031, filed May 31, 2011
Deposit from purchasers of real property was properly retained by conservator after the purchasers failed to comply with the terms of the escrow.
(2011) 196 Cal. App. 4th 962, filed June 21, 2011
A cause of action for breach of contract by an estate administrator was not barred by the statute of limitations applicable to claims against the decedent.
(2011) 196 Cal. App. 4th 722, filed June 14, 2011
The standard for a trustor’s capacity to execute a simple trust amendment is less stringent than for a more complex document.
(2011) 196 Cal. App. 4th 505, filed June 9, 2011
The need for further accounting was not precluded by accord and satisfaction between trust beneficiaries.
(2011) 195 Cal. App. 4th 776, filed May 18, 2011
When taken out by both spouses, a life insurance policy listing one spouse as the policy owner was that spouse's separate property under form of title presumption.
(2011) 195 Cal. App. 4th 581, filed May 13, 2011
When finding that father of minor subject of guardianship petition was unfit parent, the Probate court should have referred the case to child protective services.
(2011) 195 Cal. App. 4th 315, filed May 10, 2011
A trust beneficiary could not be compelled to arbitrate disputes under the trust when the beneficiary had not agreed to do so.
(2011) 194 Cal. App. 4th 557
Cause of action for legal malpractice based on allegedly faulty drafting of partnership agreement did not begin to run until circumstances threatening dissolution of partnership arose.
Filed April 8, 2011, Second District, Div. One
A claim based on a decedent's promise to leave her cohabitant a life estate in real property is governed by the one-year statute of limitations of Code of Civil Procedure Sec. 366.3; equitable estoppel doctrine may be applied to preclude a party from asserting a timeliness defense where that party's wrongdoing has induced another to forbear filing suit.
Filed April 5, 2011, Second District, Div. Three
Cite as 2011 S.O.S. 1765
Where probate court approved settlement of a will contest and dismissed with prejudice petitions by certain beneficiaries claiming that certain moneys were part of the decedent's estate, those beneficiaries are barred by the doctrine of res judicata from relitigating whether those funds were part of the estate.
Filed March 23, 2011, Second District, Div. Four
A release for consideration of one joint tortfeasor operates as a release of the joint and several liability of the other joint tortfeasors whose independent acts concurrently produced a single injury.
Filed March 22, 2011, Fourth District, Div. Three
Open-ended retainer agreement providing a structure for establishing future attorney-client relationships on an "as-requested" basis did not create a contractual ongoing attorney-client relationship.
Filed March 22, 2011, First District, Div. One
Son claiming a right to inherit his father's estate as an omitted heir had standing to challenge probate court's interim award of attorneys' fees and costs to executor because such an award would place son at a financial disadvantage by diminishing the estate should son prevail in the will contest. Personal representatives or executors who are also beneficiaries are not incapable of participating "as a party to assist the court" under Probate Code Sec. 11704(b).
Filed March 3, 2011, Second District, Div. Six
Where petition to probate will had the practical effect of challenging an earlier trust, filing of such petition was an "action to contest the trust" within the meaning of Probate Code Sec. 16061, which requires that such an action be brought within 120 days following service of notice by the trustee. Will was dictated and signed by decedent and handwritten by another person--but was defective in form because it contained no witnesses' signatures. Trial court did not err in admitting it to probate under Sec. 6110(c)(2) based on clear and convincing evidence of decedent's intent in the form of testimony by two witnesses who saw him sign it. Public policy in favor of validating wills that reflect decedents' intent supports retroactive application of Sec. 6110(c)(2) to wills executed before its effective date. Lack of testamentary language, use of the word will, or reference to death did not preclude finding that document was intended by decedent to be his will.
Filed February 23, 2011, First District, Div. Four
A special power of attorney coupled with an interest in property is terminated upon extinguishment of the interest; erroneous jury instruction as to this principle was prejudicial. Plaintiffs were not required to offer evidence of mental suffering to support their claim of financial elder abuse.
Filed February 16, 2011, United States Court of Appeals, Ninth Circuit
Taxpayer could not rely on substantial compliance doctrine to excuse his failure to properly request an extension of time to pay estate tax where he failed to state the period of extension required because such information was essential for IRS to assess reasonableness of request; failure of IRS to notify taxpayer that his extension request was incomplete was insufficient to support claim of equitable estoppel. Taxpayer's reliance on an accountant to obtain an extension did not constitute "reasonable cause" for his failure to pay estate taxes in a timely manner.
Filed February 1, 2011, United States Court of Appeals, Ninth Circuit
Public administrator's failure to give notice and an opportunity to respond to family of decedent before taking items from decedent's house, absent extraordinary circumstances, violated due process. Official was not entitled to qualified immunity because the law was clearly settled in this area.
Filed January 26, 2011, Second District, Div. Six
Civil Code Sec. 1624(a)(7), cannot be construed as applying to the transfer of shares of stock to a trust; plain meaning of the words of the statute manifests a legislative intent to limit the statute's application to agreements to loan money or extend credit made by persons in the business of loaning money or extending credit. No California authority invalidates a transfer of shares of stock to a trust because a general assignment of personal property did not identify the shares.
Filed January 28, 2011, Second District, Div. One
Form-of-title presumption simply does not apply in cases in which it conflicts with the presumption that one spouse has exerted undue influence over the other. Undue-influence presumption applied where wife testified that she freely and voluntarily executed a quitclaim deed in favor of husband to obtain a more favorable interest rate on a loan to refinance based on his promise to restore her class="anchor" name to the title once the refinance was complete. Trial court lacks discretion to deny attorney fees if aggrieved spouse shows a breach of fiduciary duty as to the management and control of community property that does not rise to the level of fraud, malice, or oppression.
Filed January 14, 2011, First District, Div. Four
In suit for financial abuse of an elderly person, trial court correctly applied collateral source rule by instructing jury that government benefits received by victim based on her long-standing disabilities and financial need could not be considered in awarding damages.
Filed December 14, 2010, Fourth District, Div. Three
Lack of explicit statement that trust's no-contest clause also applied to subtrusts did not entitle petitioner to a "safe harbor" determination that the clause did not apply, where intent to apply the clause to the subtrusts was implicit in the terms and it was unreasonable--considering the "whole of the trust"--to interpret the clause as inapplicable to the subtrusts. Petition for determination that designated successor trustee for trust was not entitled to appointment as successor trustee for subtrusts was a "contest" because it directly contravened trustor's express directive.
Filed December 8, 2010, Second District, Div. Four
Prospective beneficiary of a will could not maintain a cause of action for legal malpractice against the attorney who drafted the will where it was not executed before the testator's death.
Filed Cal.Sup.Ct.; November 8, 2010
The fact that a plaintiff's interests in litigation were personal and nonpecuniary did not bar an award of fees under the private attorney general doctrine.
Filed November 5, 2010, Second Dist., Div. Eight
The term “issue” included issue born out of wedlock when the terms of the trust did not provide a contrary definition.
Filed November 4, 2010, First District, Div. Three
Where husband executed a modified marital settlement agreement with his ex-wife that provided for continuing support payments to the ex-wife after his death, and husband subsequently remarried, the trial court did not err in holding that real property the husband's widow held with him in joint tenancy could be considered under Probate Code Sec. 13551 in determining the extent of the widow's personal liability to the ex-wife. The scope of a surviving spouse's personal liability encompasses all property which, at the time of a decedent's death, is characterized as community property or the decedent's separate property, regardless of the manner in which title to the property is held.
Filed October 27, 2010, Third District
Beneficiaries of decedent's trust who had already been paid the amounts they were owed under the trust were not "interested persons" for purposes of pursing an elder abuse action after decedent's death pursuant to Welfare and Institutions Code Sec. 15657.3(d); beneficiaries' status as beneficiaries of decedent's trust never gave them standing to pursue the elder abuse action because the beneficial interest they had in the trust estate was not one that could have been "affected by" the elder abuse action. The only way beneficiaries would have standing would be as decedent's successors in interest under subdivision (d)(1)(B) if the requirements of Probate Code Sec. 259 were met as to the residuary beneficiaries. Since defendants' summary judgment motions were based on the premise that plaintiffs lacked standing to pursue any cause of action that belonged to decedent because they could not show defendants were disinherited under Sec. 259, defendants did not have to separately address plaintiffs' claims or make a prima facie showing as to those causes of action. Even though liability for abuse under Sec. 259 could be premised on aiding and abetting abuse by another or on a conspiracy to commit the act of abuse, it still must be shown that the person who is liable for the abuse acted in bad faith and was reckless, oppressive, fraudulent, or malicious. Plaintiffs did not demonstrate prejudicial error in the denial of their motion to compel one defendant to respond to discovery since they did not show that defendant's answers would have led to admissible evidence sufficient to raise a triable issue of fact as to whether defendant acted in bad faith and engaged in reckless, malicious, oppressive, or fraudulent conduct.
Filed October 18, 2010, Second District, Div, Eight
Evidence supported finding that house was community property based on violation of marital fiduciary duty when husband failed to keep promise to put wife on title after purchase (Rubin, Acting P. J.)
Filed July 26, 2010
District court did not err in granting summary judgment to trustees of Hawaii state agency that administered a portion of a public trust created, along with four other purposes, to benefit native Hawaiians in suit by native Hawaiians because federal law did not oblige the trustees to use proceeds only for native Hawaiians. Where trust gave trustees broad discretion to serve its purposes, the district court properly found that challenged expenditures were sufficiently directed to one or more trust purposes to fall within the range of permissible spending. State's spending of far more money each year on public education--one of the enumerated trust purposes--than it received from the trust did not deprive any beneficiary of standing to bring a claim for breach of trust for lack of injury.
Filed July 22, 2010, First District, Div. Two
When donative transfer was allegedly made in violation of Probate Code Sec. 21350--which imposes restrictions on the making of such transfers to certain categories of beneficiaries, including one who has a fiduciary relationship with the donor--and the transfer became irrevocable while the donor was still alive, administrator of donor's estate had three years from the date he became apprised of the relevant facts in which to bring an action to set aside the transfer.
Filed July 1, 2010, Second District, Div. Three
A trustee who successfully hid the existence of the trust from a beneficiary was precluded from asserting laches or relying upon the statute of limitations to defeat claims later brought by the beneficiary.
Filed June 14, 2010, Fourth District, Div. Three
Trusts and Estates
Civil action alleging defendants breached their duties as trustees and seeking an injunction to compel defendants to produce an account--in an action in which the existence of a trust was in dispute--was not a contest of a trustee's account within the meaning of Probate Code Sec. 17211(b), which authorizes recovery of attorney fees by a beneficiary who brings such a contest if the trustee unreasonably opposes the contest.
Filed June 10, 2010, Fourth District, Div. One
Brother who alleged his sister and brother-in-law interfered with his expected inheritance by unduly influencing their mother to sign a codicil to her will that gave $1,000,000 each to sister's children could not bring a cause of action in tort because he had an adequate remedy in probate.
Filed May 6, 2010, Fourth District, Div. Three
The guardian of the decedent's minor children was entitled to priority over the public administrator for appointment as personal representative.
Filed May 3, 2010, Ninth Circuit Court of Appeals
Decedent was convicted of operating a Ponzi scheme. While the decedent's death during a pending appeal provided grounds to abate the criminal conviction and its associated restitution order, decedent's stipulation to the appointment of a receiver prior to his death was not dependent upon his later conviction. As a result, the receivership remained in force following the decedent's death.
Filed April 27, 2010, Second District, Div. Five
Trust beneficiaries have standing to seek restitution for misappropriated funds, even when their rights in the decedent's estate have not been conclusively determined.
Filed March 26, 2010, First District, Div. One
Filed March 23, 2010, Fourth District, Div. One
A probate court has discretion under Probate Code § 17211(b) to award attorney fees to a trust beneficiary who contests a trustee's account by challenging the trustee's refusal to make a final distribution based on a collateral dispute among the parties that did not pertain to the trust.
Filed March 19, 2010, Ninth Circuit Court of Appeals
A state probate court's findings were entitled to preclusive effect, and a tortious interference with inheritance counterclaim was a “non-core proceeding” for which the bankruptcy court could issue only proposed findings of fact and conclusions of law,
Filed February 25, 2010 California Supreme Court
Court hearing Lanterman-Petris-Short Act conservatorship proceeding did not violate the act or the conservatee's constitutional right of due process by accepting representation of conservatee's attorney--that conservatee was waiving his right to be present for hearing and was not contesting petition--where attorney personally discussed the proceedings with conservatee, and there was no allegation that attorney misrepresented the contents of that discussion.
Filed February 24, 2010, Fourth District, Div. Three
Probate court abused its discretion in awarding fees to trustee without any explanation for what it concluded trustee had reasonably incurred those fees and without specifying the amount of that award. An assessment of reasonableness for a fee award depends not only on what fees were reasonably incurred but also on whether such fees are reasonably and prudently incurred for the trust.
Filed February 11, 2010 , Second District, Div. Eight
A provision in a will that excluded unclass="anchor" named was heirs not sufficient to defeat the operation of the anti-lapse statute.
Filed January 22, 2010 - 9th U.S. Circuit Court of Appeals
Widow was not automatically entitled to surviving spouse rights under ERISA or Internal Revenue Code where husband established an IRA, in part using funds from a 401(k) plan from prior employer.
Filed January 8, 2010 - Fourth District, Div. Three
A person with no connection to the family of minors lacked standing to petition for appointment of guardian of estates for newborn children.
Filed December 11, 2009 - Second District, Div. Five
The filing of a petition to modify a special needs trust was not a violation of a trust's no contest provision where the modification was necessary to effectuate the settlor's intent.
Filed December 3, 2009 , Fifth District
Cite as F056587
When a trust beneficiary instigates an unfounded proceeding against the trust in bad faith, a probate court has the equitable power to charge the reasonable and necessary fees incurred by the trustee in opposing the proceeding against that beneficiary's share of the trust estate.
Filed November 30, 2009 , Second District, Div. Four
Cite as B213392
The beneficiary of a spendthrift trust who also acted as trustee and committed a breach causing financial harm to the trust could have her interest in the trust estate impounded to satisfy a claim arising from her misfeasance because the damage resulting from her breach would otherwise be sustained by the beneficiaries.
Filed November 17, 2009 , Second District, Div. Five
Cite as B207613
Code of Civil Procedure Sec. 366.2's one-year period of limitations for actions against a deceased person is applicable to fraud claims based on statements of a decedent on behalf of a trust of which decedent was trustor and trustee, even though fraud action is against successor trustee.
Filed November 9, 2009 , Fourth District, Div. One
Cite as D054136
Trust beneficiary had standing to sue fellow beneficiary for aiding trustee in transferring property out of trust in breach of trustee's duties. Trial court erred in failing to consider and make necessary findings as to whether plaintiff could recover from defendant under a theory that after trustee's death, defendant--by holding herself out as trustee and purporting to perform trustee's duties--became a trustee de son tort and could thus be held liable for breach of those duties.
Filed October 29, 2009
Cite as S166747
A challenge to a surviving spouse's mental capacity to transfer trust assets and appoint a successor trustee did not violate no-contest clause in a family trust. Proceeding contesting a settlor's mental competence to exercise rights under a trust does not amount to an attack on the trust itself, unless it seeks to thwart the estate plan established by the trust.
Filed October 28, 2009, publication ordered November 24, 2009, Fourth District, Div. Three
Cite as G040427
Where two individuals entered into a real estate partnership acting in their capacity as trustee of a family trust, the partners were the individuals, not the trusts. A trust is a relationship by which one person or entity holds property for the benefit of another and is not a separate entity from its trustees; trustees act as individuals when carrying out trust business.
filed September 30, 2009 , Sixth District
Cite as H032581
No authority supported objector's proposition that Code of Civil Procedure Sec. 631.8 does not apply to probate proceedings. Guardianship accountings require the same procedure for filings and objections as conservatorship proceedings. Where trust was specifically created to provide for minor's "health, maintenance, education, travel, and welfare, and general welfare," minor's father did not need to exhaust his own resources to provide for minor before dipping into trust assets. Trial court did not abuse its discretion in overruling objection to handling of wrongful death proceeds that funded trust or excluding certain evidence absent any demonstration of error by objector. Totality of facts supported trial court's finding that objector filed objection in bad faith and without reasonable cause. Probate Code Sec. 2622.5 specifically provides compensation for fees incurred to defend an account from unreasonable objections and does not preclude compensation for costs associated with collecting those fees.
Filed September 29, 2009 , Second District, Div. Six
Cite as B205793
Where testators instructed that beneficiary's debt to them be offset against that beneficiary's distribution, beneficiary's assertion that his debt was not enforceable violated trust's no-contest provision since beneficiary's pleading attacked testators' plans to distribute their property.
Filed September 29, 2009 , Second District, Div. Four
Cite as B207402
Neither plain language nor legislative history of Probate Code Sec. 21351 supports judicial creation of a fraud or undue-influence exception to rule that a spouse may receive a donative transfer from a dependent or elder adult.
Filed September 29, 2009 , Second District, Div. Four
Cite as B207398
Standard of review on a question of annulment is substantial evidence; limitations period and standing provisions are dependent on the ground for annulment invoked. Since a third party is never accorded standing to seek annulment based on fraud, a cause of action does not survive defrauded spouse's death.
Filed September 1, 2009, Third District Cite as C058154
Where bank account contract incorporated California law relating to such agreements except to the extent that the contract explicitly varies from California law, trial court erred in finding such contract was not governed by California's Multiple-Party Accounts Law absent varying contractual provisions. CAMPAL governs whether a person is a proper party to the account unless the terms of the account vary from CAMPAL's provisions, and CAMPAL does not deprive account holders of recourse against financial institutions that permit a party to withdraw funds from a multiple-party account when the person is not a proper party to the account pursuant to CAMPAL and the account contract.
Filed August 21, 2009, publication ordered September 4, 2009, First District, Div. Four
Cite as A120657
Where plaintiff filed suit against her ex-husband's attorneys, asserting that their actions--revising estate plan for ex-husband's mother in a manner that appeared to disinherit ex-husband, participating in probate court proceedings to effectuate this revised plan, and defending ex-husband and his siblings in litigation by plaintiff--unlawfully aided a child support obligor to avoid paying child support by transferring or concealing assets, plaintiff's action was predicated on protected activity since counsel's conduct was neither inherently criminal nor otherwise outside the scope of normal, routine legal services even if those actions had the effect of defeating or forestalling plaintiff's ability to execute her judgment for child support. Because ex-husband's expectancy as a probable heir of mother's estate was not an "asset," plaintiff had no reasonable probability of success as to her child support evasion claim as to those actions taken by attorneys to effectuate and defend mother's estate plan. As those actions took place prior to effective date of child support evasion statute and subsequent actions taken by attorneys in probate proceedings, and the litigation defense were absolutely protected by the litigation privilege, plaintiff had no probability of prevailing as to her remaining claims. Trial court did not abuse its discretion in determining the appropriate amount of attorney fees to award.
Filed August 31, 2009, publication ordered September 9, 2009, First District, Div. Two
Cite as A123296
Where testator bequeathed estate to her son and daughter and son disinherited his children, trial court erred in denying petition for an evidentiary hearing on issue of whether son predeceased testator, in which case his children would take his share from testator's estate under anti-lapse statute.
Filed July 28, 2009, publication ordered August 19, 2009, First District, Div. Three
Cite as A121525
Petition by contingent remainder beneficiaries, seeking information with regard to how trustee who was also income beneficiary was spending trust funds, would not violate trust's no-contest clause.
Filed August 5, 2009, Sixth District
Cite as H031659
Termination based upon violation of the compulsory cross-complaint rule is a "technical" disposition rather than one "on the merits." Because malice concerns a party's actual mental state, it necessarily presents a question of fact; a reasonable trier of fact could readily find that defendant acted without probable cause when he sued his former clients in tort, threatening them with punitive damages, merely for objecting to his fees and that defendant had acted with spite. Events after defendant's complaint against plaintiffs was filed and dismissed had no logical bearing on question of probable cause because essence of that element was tenability of defendant's claims based upon his knowledge and belief at the time of filing. Fact finder would be entitled to disbelieve defendant's asserted reasons for dismissing action against plaintiff and so that declaration could not establish as a matter of law that plaintiffs would be unable to prove favorable termination. When a malicious prosecution action is stayed on the ground that an appeal from the underlying judgment is pending, and the appeal is thereafter resolved adversely to the malicious prosecution plaintiff, a voluntary dismissal by him in response to that event is a technical determination and not a termination on the merits in favor of his opponent.
Filed July 28, 2009, Fourth District, Div. One
Cite as D053519
Standards of professional responsibility prepared by the State Bar are not regarded as court orders or local rules for purposes of awarding sanctions, and trial courts do not have responsibility to directly enforce these rules, even when violations of court orders are alleged, since disciplinary authority is lodged in the Supreme Court, which has delegated it to the State Bar Court. Where probate courts issued an order appointing attorney, and court-appointed attorney requested that other attorneys in case make contact with client only though her, violations of that request would amount to violations of the Rules of Professional Conduct, not of a court order. Probate court's determination that counsel's disregard of such a request by court-appointed attorney justified setting a sanctions hearing and finding that counsel had violated a court order was incorrect and exceeded probate court's discretion.
Filed July 22, 2009, Fifth District
Cite as F056973
Trial court order removing counsel, based on erroneous legal conclusion that counsel had a conflict of interest, was not entitled to deference. While an attorney may have liability to an intended beneficiary of a will who, because of the attorney's error, does not receive a bequest that testator had intended to grant as a result of negligent performance of a contract, such potential negligence liability does not bring third-party beneficiaries of a contract to draft a will into an attorney-client relationship. An attorney who has drafted a will is not bound to a beneficiary by the duties of an attorney to a client because beneficiary is not a client and does not become a successor client just because the will becomes irrevocable upon testator's death. Attorney for executor does not have a conflict of interest merely because he represents one beneficiary of a will in a dispute with another beneficiary unless such representation presents a conflict between the executor and the represented beneficiary.
Filed June 23, 2009, Fourth District, Div. Three
Cite as G040975
Protective order under Elder Abuse and Dependent Adult Civil Protection Act may be issued on the basis of evidence of past abuse without any particularized showing that the wrongful acts will be continued or repeated. Issuance of protective order was an abuse of discretion where judge acknowledged that decision was "tipp[ed]" by defendant's counsel's aggressive and confrontational cross-examination of plaintiff, which judge assumed was consistent with defendant's desires; counsel's tone of voice or style of examination is not evidence, and cannot be the basis for the issuance of a protective order under the Elder Abuse Act.
Filed June 8, 2009, Fifth District
Cite as F055231
Where petitioner sought determination that handwritten notations on trust document that reduced petitioner's share of a trust asset were not part of the terms of the trust, such notations were an attempt to amend the trust; since the "amendment" was not part of the original trust agreement, the challenge to its validity was not a contest under Probate Code Sec. 21305(a)(3).
Filed May 27, 2009, publication ordered June 29, 2009, Fourth District, Div. Three
Cite as G040428
Income beneficiaries of a trust that owned a shopping center complex had a present interest in improvements on the property constructed and owned by lessee and sublessees because such improvements were part of the property that had to be surrendered to the lessor in good condition at the close of the lease. By receiving rent income from trust property, beneficiaries had beneficial use of that property even though they did not have legal title. A lifetime beneficiary receiving the rental value of a parcel of real property is considered under the law to be receiving value substantially equal to the value of the fee interest.
Filed May 20, 2009, Fifth District
Cite as F055384
Where statutory rules governing the law of intestate succession required decedent's estate be passed onto decedent's first cousins, estate was to be divided into as many shares as there were first cousins who survived decedent and first cousins who predeceased the decedent but left surviving issue of any generation. Surviving issue of a predeceased heir entitled to inherit was not limited to the first generation.
Filed May 15, 2009, Fourth District, Div. One
Cite as D053732
After a conservatorship has been established, a conservatee may file an initial petition for rehearing to challenge her status as a conservatee at any time and is only required to wait six months before filing a another petition for rehearing.
Filed May 13, 2009
Cite as 06-75332
If a third party who has no direct interest in tax litigation pays fees on behalf of a taxpayer, that taxpayer "incurs" fees so long as he assumes either an absolute obligation to repay the fees--regardless of whether he successfully moves for a fee award--or a contingent obligation to pay the fees in the event that he is able to obtain a fee award.
Filed May 1, 2009 , Fifth District
Cite as F055054
Statutory provision allowing state to seek reimbursement from estate of a pretrial detainee committed to a state hospital does not violate equal protection because pretrial detainees are not similarly situated to inmates transferred to state hospital for treatment while incarcerated. Legislature also had a rationale basis for treating two categories of patients differently.
Filed April 21, 2009, publication ordered May 11, 2009, Second District, Div. Four
Cite as B207305
Decedent's authorization of law firm to act as his "authorized representative" regarding his application for Medi-Cal eligibility and benefits created an agency relationship that was revoked by decedent's death.
Filed April 20, 2009 , Third District
Cite as C055832
Trusts and Estates:
Homeowners insurer had standing in probate court to challenge validity of judgment claim against decedent's estate (Nicholson, J.)
Filed April 10, 2009 , First District, Div. One
Cite as A123445
Where an out-of-state resident who was born in California petitioned for issuance of a new California birth certificate reflecting her gender reassignment, Health and Safety Code requirement that such a petition be filed in the county of petitioner's residence--which did not permit a change of gender on a birth certificate--violated the Equal Protection clause and Privileges and Immunities clause.
Filed April 1, 2009 , Third District
Cite as C058941
Trusts and Estates
Time limit for admitting new or competing wills to probate under Probate Code Sec. 8226(c) does not apply to proponent of a will who did not receive notice of the petition for letters of administration.
Filed April 1, 2009 , Second District, Div. Seven
Cite as B201357
Trusts and Estates
Proposed petition by successor trustee to marshal assets in two trusts fell within safe harbor of no-contest provision.
Filed March 25, 2009 , First District, Div. Two
Cite as A120644
The pre-retirement death of a pension plan participant ordinarily irrevocably vests the right to survivor benefits in the existing spouse, but a domestic relations order possessed by a former spouse before the plan participant's death may be qualified postmortem as a "qualified domestic relations order" under the Employee Retirement Income Security Act of 1974 where it substantially complies with ERISA's specificity requirements. When a pension plan participant dies or retires before a former spouse secures an order awarding that spouse any interest in the plan, a domestic relations order entered before the death that does not award the former spouse an interest in the participant's pension plan, but simply "reserves jurisdiction" over the plan, provides an inadequate basis for entry nunc pro tunc of either a QDRO under ERISA or of an order determining the former spouse's interest that later may be qualified as a QDRO.
Filed March 19, 2009
Cite as S142028
Probate Code Sec. 1516.5--which authorizes termination of parental rights when a probate guardianship has continued for at least two years, and trial court finds that adoption by guardian would be in child's best interest--is not facially unconstitutional by adopting the best interests of a child as standard for terminating parental rights. Court of appeal erred in barring termination of father's parental rights without a finding of unfitness if father could demonstrate a commitment to parental responsibility where father was qualified to assert his rights as a presumed father but expressly waived those rights when child was placed in guardianship.
Filed March 19, 2009
Cite as S143723
Probate Code Sec. 1516.5--which authorizes termination of parental rights when a probate guardianship has continued for at least two years, and trial court finds that adoption by guardian would be in child's best interest--is not facially unconstitutional because a showing of current unfitness is not always necessary when a court terminates parental rights after parent-child family unit has ceased to exist and parent's entitlement to custody is not at issue; when child develops an interest in a stable, continuing placement, and guardian acquires a recognized interest in the care and custody of child; and when statute requires trial court to balance all familial interests in deciding what is best for child. Trial courts have discretion to determine on a case-by-case basis whether to apply Sec. 1516.5 to a guardianship in existence on its effective date. Where mother had not sought visitation during more than three and a half years of probate guardianship and did not see child for an even longer period, reunification was a remote possibility, and retroactive application of Sec.1516.5 was consistent with due process.
Filed March 16, 2009 , Second District, Div. Seven
Cite as B199813
Testator's lawyer owes no duty of care to a nonclient who alleges he or she was a potential beneficiary of the testator's estate in the absence of an executed will or trust instrument expressly reflecting the testator's intent. Testator's lawyer owes no duty of care to a nonclient who was previously class="anchor" named in a will or trust instrument executed by testator and who alleges testator intended to revise his or her estate plan to increase the gift to the beneficiary.
Filed March 12, 2009 , Second District, Div. One
Cite as B199998
Beneficiary's contention that ambiguous language in trust documents was result of scrivener's error and should therefore be reformed in accordance with grantors' intent did not violate trusts' no-contest clauses. Trial court could excuse compliance with trust provision--providing for a conclusive presumption that survivor did not exercise her limited power of appointment over specified property if survivor's will or codicil was not filed within 60 days of her death--if survivor exercised her limited power of appointment in a way that approximated the manner prescribed by trust documents and that did not defeat a significant purpose of trustors.
Filed March 11, 2009 , publication ordered April 8, 2009 , Second District, Div. Two
Cite as B206952
Trial court did not abuse its discretion in denying defendant's motion to compel arbitration where codefendants were third parties unaffected by arbitration agreement and plaintiffs asserted causes of action as successors in interest of decedent as well as in their individual capacities as third parties not bound by the arbitration agreement.
Filed February 27, 2009, publication ordered March
24, 2009 , First District, Div. Three
Cite as A120402
California Department of Health Care Services' claim for Medi-Cal expenses paid on behalf of decedent were not governed by general Probate Code provisions for creditor's claims but by specific provisions for creditor's claims by public entities.
Filed December 29, 2008 , Second District, Div. Six
Cite as 2008 SOS 6957
Cite as 2008 SOS 6890
A probate court may not, on principles of equity, disinherit a natural parent from distribution in child's estate when child died intestate. Failure to pay child support or lack of a meaningful parent-child relationship does not affect parent's rights as an intestate heir.
Filed December 22, 2008 , First District, Div. One
Trusts and Estates
Where testator attempted to devise residue of her estate to her sisters who predeceased her, California's antilapse statute--which requires "issue of deceased transferee take in the transferee's place" as provided by Probate Code Sec. 240, which requires residue to be "divided into as many equal shares as there are living members of the nearest generation of issue"--directed that intended devisees' surviving adult children took by right of representation.
Filed December 16, 2008 , Fourth District, Div. Two
Cite as 2008 SOS 6705
Where property was acquired by wife in wife's class="anchor" name only, property was presumptively wife's separate property as a matter of law, but husband could rebut presumption by clear and convincing evidence of an agreement or understanding between spouses that property was to be held as community property or husband's separate property. Fact that parties were married when wife acquired property had no bearing on whether spouses had an agreement or understanding regarding property. Presumption could not be overcome by tracing source of funds used to purchase property nor husband's unilateral belief he owned property. Having a reason for allowing title to be taken solely in wife's class="anchor" name did not diminish inference that parties intended property to be wife's separate property.
Filed November 12, 2008 , First District, Div. Four
Cite as 2008 SOS 6124
Trial court erred in making a wholly independent evaluation of trial evidence and rejecting jury's findings of fact when fashioning equitable relief founded on same evidence and same operative facts as jury's verdict. In a mixed trial of legal and equitable issues where legal issues are first tried to a jury, court must follow jury's factual determinations on common issues of fact. Where legal causes of action and equitable defense were founded on distinct facts, jury's factual determinations on legal claims were not binding. Trial court did not abuse its discretion in ruling upon equitable issues after submitting matter for jury determination.
Filed November 6, 2008 , Fourth District, Div. Three
Cite as 2008 SOS 6103
Trusts and Estates
Where husband and wife entered into an inter vivos trust that became irrevocable upon death of either spouse, wife could not withdraw her share of community property from trust after husband's death. Joint trust was irrevocable following husband's death and precluded wife from withdrawing any property. Irrevocable trusts are binding, even on their trustors.
Filed October 9, 2008, Second District, Div. Five
Cite as 2008 SOS 5706
Trusts and Estates
Where purchaser defaulted on agreement to buy property from estate and property was resold at a lower price, Probate Code Sec. 10350(e)(1) authorized probate court to award estate damages in an amount equal to difference between defaulting and successful purchase prices. Because estate was entitled to retain defaulted buyer's deposit as statutory award for damages, it made no legal difference that deposit amount covered both estate's interest in property and that of co-owner because Sec.10350(e)(1) did not authorize a pro rata share of damages based on sellers' respective interests in the property.