Justia California Court of Appeals Opinion Summaries

This case stems from a dispute relating to the Leland C. Babbitt and Mary Lynne Babbitt Family Trust. In In re Estate of Giraldin, the California Supreme Court held that when the settlor of a revocable trust appoints, during his lifetime, “‘someone other than himself to act as trustee, once the settlor dies and the trust becomes irrevocable,’” the remainder beneficiaries “‘have standing to sue the trustee for breaches of fiduciary duty committed during the period of revocability.’” At issue in this case is what happens if the settlor of a revocable trust does not appoint “someone other than himself to act as trustee,” but instead appoints himself to be the trustee. The court concluded that in this situation the rule is different. Although the beneficiaries of the irrevocable trust have standing to petition the probate court for an accounting and information after the settlor dies and the trust or a portion of the trust becomes irrevocable, the probate court does not have authority to order the trustee to provide an accounting or information regarding trust assets and transactions while the trust was still revocable, where, as here, there is no claim that the deceased settlor was incapacitated or subject to undue influence during the period of revocability. View "Babbitt v. Super. Ct." on Justia Law

The issue at the heart of this dispute concerned the ownership of property formerly owned by decedent Kenneth Liebler. Liebler's daughter, appellant Melanie Carne (as putative successor trustee to the Kenneth Liebler Irrevocable Trust dated December 21, 2009 (the "2009 Trust")), filed a second amended petition to confirm the validity of the 2009 Trust, Carne's status as successor trustee of the 2009 Trust, and the assets of the 2009 Trust. In her petition, Carne sought to confirm that certain real property previously owned by Liebler ("the Via Regla property"), had been properly transferred to the 2009 Trust. Liebler's grandson, defendant-respondent Dillon Hasting, filed an opposition to the petition. Hasting was a beneficiary of the Liebler Revocable Declaration of Trust dated February 27, 1985 (the "1985 Trust"). In his opposition, Hasting contended that the 2009 Trust was not a valid trust because Liebler had not properly transferred title to the only asset allegedly in the 2009 Trust, the Via Regla Property. In support of this contention, Hasting noted that Liebler held legal title to the Via Regla Property as trustee of the 1985 Trust, and the 2009 Trust contained no language indicating that Liebler was acting as the trustee of the 1985 Trust at the time of the purported transfer to the 2009 Trust. The trial court entered an order denying Carne's petition for the two reasons set out in Hasting's opposition. On appeal, Carne argued the trial court erred in denying her petition. After review, the Court of Appeal concluded that the language in the 2009 Trust was sufficient to convey the Via Regla Property to the 2009 Trust and that Liebler was not required to execute a separate deed in order to effectuate such conveyance. Furthermore, the Court concluded that, because at the time the 2009 Trust was created, the 1985 Trust was a revocable inter vivos trust, and Liebler was the sole trustee who owned no interest in the Via Regla Property as an individual, Liebler's signature on the 2009 Trust was sufficient to "to convey good title" to the Via Regla Property from the 1985 Trust to the 2009 Trust. View "Carne v. Worthington" on Justia Law

At issue in this appeal was the interpretation and administration of the Donald W. Callender Family Trust (Trust), executed by Donald Callender (Donald) as the settlor and original trustee in 2003. The trust held assets of money and property, including royalties for use of the "Marie Callendar" name. Defendant-appellants Cathleen Callender (Cathe) and Catherine Callender (Katy), and defendant Donald Lucky Callender (Lucky), the primary beneficiaries of the Callender Trust, were at odds primarily about how the residuary of the Trust was to be divided. The Trust provided that upon Donald's death, the residuary was to be divided into thirds and vested in each of the Beneficiaries. Plaintiffs-respondents Douglas Ammerman and Janet Feldmar (collectively, Trustees) succeeded Donald as the trustees upon his death in January 2009. When disputes arose among the Beneficiaries as to division of the residuary, they filed a petition for instructions. After trial, the court ruled the Trust residuary should be divided based on what the parties referred to as the "changing fraction method." The central issue on appeal was whether the court erred in ruling the changing fraction method applied to the residuary. The Court of Appeal concluded that the trial court erred in ruling the changing fraction method applied to the Trust residuary, and that Cathe should have been charged taxes on the gift of her property. Therefore the Court reversed the judgment. View "Ammerman v. Callender" on Justia Law

Plaintiffs filed a petition against their stepfather, to recover property belonging to their mother’s estate and sought damages of double the value of the property, based on Probate Code 859: “If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to ... an elder, ... or the estate of a decedent, or has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder or dependent adult financial abuse … the person shall be liable for twice the value of the property recovered [and] in the court’s discretion ... for reasonable attorney’s fees and costs.” Staggers died. His son was substituted in as the respondent in the probate proceeding. The court held that double damages and attorney fees under section 859 were punitive in nature and not available against the son, based on Code of Civil Procedure 377.42, which excepts from recovery against a successor “damages recoverable under Section 3294 of the Civil Code or other punitive or exemplary damages.” The court of appeal vacated, reasoning that section 859 damages may be punitive in nature, but are not punitive damages. View "Hill v. Superior Court" on Justia Law

Monschke, acting as personal representative for the estate of her mother, the decedent, filed suit for wrongful death and elder abuse against Timber Ridge Assisted Living, which petitioned to compel arbitration on the ground plaintiff, on behalf of decedent, had signed an agreement with an arbitration clause before enrolling decedent in the facility. The trial court denied the petition, finding the wrongful death claim had been brought on behalf of decedent’s surviving children, and the children were not parties to the arbitration agreement. The trial court also declined to submit the elder abuse claim to arbitration because of the possibility of conflicting rulings. The court of appeal affirmed. While a personal representative’s interests may not directly align with the interests of any particular heir, the personal representative’s duty is to stand in the position of the heirs, not the decedent. View "Monschke v. Timber Ridge Assisted Living, LLC" on Justia Law

James Kelly, as trustee of the Beverly Snodgrass Clark Inter Vivos 1999 Separate Property Trust, sued Barbara J. Orr, Joseph Holland, Gretchen Shaffer, and DLA Piper LLP (US) (Defendants) for professional negligence in relation to legal advice they provided to his predecessor trustee of the Trust. Defendants demurred on statute of limitations grounds, arguing his action was barred by the one-year statute of limitations under Code of Civil Procedure section 340.6. The trial court sustained Defendants' demurrer without leave to amend, and Kelly filed a timely notice of appeal. On review of the matter, the Court of Appeal concluded the statute of limitations was tolled under section 340.6, subdivision (a)(2), until March 22, 2013, the date Kelly alleged Defendants ceased representation of Kelly's predecessor trustee. Because Kelly filed suit on February 27, 2014, less than one year after Defendants ceased representation of the predecessor trustee, the Court of Appeal concluded Kelly's action was not time-barred. The Court reversed the judgment and remanded for further proceedings. View "Kelly v. Orr" on Justia Law

Plaintiff-appellant Laura Gray was the sole net income beneficiary of the Edward B. Cantor Trust. Defendant-appellant Jewish Federation of Palm Springs and the Desert Area was one of three remainder beneficiaries of the Cantor Trust. Cantor died in August 1991. The main asset of the Cantor Trust was an interest in commercial rental property Las Vegas, Nevada. In 2001, respondent Martha Jimenez was appointed the trustee of the Cantor Trust. In 2005, Gray was appointed co-trustee along with Jimenez. In 2007, Gray and Jimenez made an attempt to provide an appropriate accounting to the remainder beneficiaries of the Cantor Trust when Jimenez wanted to resign as trustee. Jewish Federation objected to the accounting. Gray filed several other amended accountings to which Jewish Federation objected. Gray was advised to prepare an accounting that addressed the income and principal that was distributed by the Las Vegas property management company. Gray filed a Petition for Instructions to Ascertain Beneficiaries to the Cantor Trust seeking a determination that Jewish Federation was a proper remainder beneficiary as the name of the beneficiary in the trust documents was Project Exodus. The Petition was denied as “bogus.” Gray was ordered removed as the co-trustee of the Cantor Trust in 2009. Gray and Jimenez filed one more accounting. Jewish Federation’s objections were set for trial. Gray appealed her removal as trustee and also the trial court’s order that she must provide a complete accounting of distributions to income and principal from the management company for the Las Vegas property. In a prior unpublished opinion, the Court of Appeal denied Gray's arguments finding that an accounting from the management company was necessary, and that the trial court properly removed her as trustee. The case was remanded, and more accountings were filed. Jewish Federation objected and a trial was set. The trial court found that Gray had to reimburse the Cantor Trust for items improperly distributed to income rather than principal; Gray had to pay Jewish Federation's attorney's fees; and to repay the Trust for trustee fees she was paid. Gray appealed, and finding no reversible error, the Court of Appeal affirmed. View "Gray v. Jewish Federation of Palm Springs" on Justia Law

Plaintiff-appellant FirstMerit Bank, N.A. sought to enforce a money judgment against defendant-respondent Diana Reese by applying for an order 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. FirstMerit appealed, arguing: (1) Cod Civ. Proc. section 708.510 gave the trial court authority and jurisdiction to order Reese to assign FirstMerit funds she receives from the trusts; (2) section 708.520 gave the court authority to issue an order restraining Reese from transferring her interest in the trusts; and (3) section 709.010 did not affect the court’s authority or jurisdiction to enter such orders. Finding no reversible error, the Court of Appeal affirmed. View "FirstMerit Bank v. Reese" on Justia Law

Donald T. Sterling seeks to regain ownership of the Los Angeles Clippers (Clippers), a professional basketball team Steven Ballmer purchased on August 12, 2014. A charge before the NBA’s board of governors indicated that on April 26, 2014, a tape recording of Donald’s “deeply offensive, demeaning, and discriminatory views toward African Americans, Latinos, and ‘minorities’ in general” was made public. Donald was subsequently banned from participating in the league and the NBA sought to terminate the Sterlings' ownership of the Clippers. Due to Donald's refusal to sign the sale agreement, his wife removed him as trustee of the Sterling Family Trust and filed an ex parte petition seeking confirmation of Donald's removal as trustee and instructions relevant to the sale. At issue on appeal is the probate court's order following the ex parte petition. The court concluded that the evidence credited by the probate court overwhelmingly showed that Donald was properly removed as trustee; the credited evidence overwhelmingly supported the probate court’s conclusion that exigent circumstances warranted the sale of the Clippers to prevent extraordinary loss to the trust; the probate court’s sanctioning the sale was correct even though Donald, who initially agreed to the sale, purportedly revoked the trust in an effort to block the sale; and Donald fails to demonstrate any legal error and fails to consider the facts in accordance with the proper standards on appeal. Accordingly, the court affirmed the probate court's order. View "Sterling v. Sterling" on Justia Law

Susan filed two actions challenging the disposition of the trust estate under an amendment to her mother’s trust that gave substantial gifts to her mother’s gardener, her friends, and caregivers. The probate court authorized the trustee to use trust assets to defend against those actions. The trust contained a no-contest clause and a provision giving the trustee the power to “litigate” and “employ” and “reasonably compensate . . . attorneys” regardless of the outcome of a challenge. Susan argued that the provision was, in effect, a no-contest clause that may not be enforced under current provisions of the Probate Code, absent a determination that her challenges lack merit and were brought without probable cause and, in all events, may not be enforced until the validity of the amendment containing the authorization has been adjudicated. The court of appeal affirmed; the defense directive is not an element of the no-contest clause. View "Doolittle v. Exchange Bank" on Justia Law