Justia California Court of Appeals Opinion Summaries

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 In a prior unpublished opinion, the Court of Appeal denied Gray's arguments finding that an accounting from the management company was necessary, and that the trial court properly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

Attorney William Salzwedel appealed a $96,077.14 judgment surcharging him for excessive attorney's/trustee's fees, medical expert fees, and costs incurred while acting as the temporary trustee of the Moore Family Trust. The court concluded that substantial evidence supports the finding that the fees were unreasonable, and Salzwedel's trust accounting demonstrates that the fees and expenses were excessive. The court found that Salzwedel was repeatedly warned that he had a conflict of interest acting as trustee and as the attorney for a mentally impaired client in a conservatorship proceeding. He had never served as a trustee or been involved in a conservatorship before but perceived it as a license to zealously fight for Moore no matter what the cost. The court denied Salzwedel's remaining claims and affirmed the judgment. View "Friend v. Salzwedel" on Justia Law

Mary is the child of the marriage of Marion and Herbert Sanders. Marion executed a will in California, placing her separate property assets in the Trust and providing that Mary would receive the Trust income during her lifetime. Upon Mary’s death, the remainder of the Trust was to be distributed “for the benefit of the then living issue” of Mary. The will defined ‘’issue" as lawful lineal descendants of all degrees, including legally adopted children. If Mary had “no living issue” surviving, Jody was to become the income beneficiary of the Trust. In 2013, Mary adopted Andrew, the adult son of a close friend, and sought a declaration of Andrew's rights. The probate court concluded that Andrew did not fall within this definition of “issue” because he had been adopted as an adult under Texas adoption statutes. The probate court believed that a Texas parent-child relationship did not encompass the same rights and duties as a California parent-child relationship. The court of appeal reversed. California cannot devalue a parent-child relationship simply because it was created, whether by biology or adoption, in a sister state that imposes different rights and duties. Those policy choices do not alter the status of the relationship. View "Sanders v. Yanez" on Justia Law

Respondent-trustee Bonnie Katzenstein, representing the Feinberg Family Trust (dated October 30, 1984), filed a petition after Rober Feinberg had passed away. Mr. Feinberg was the cosettlor and former cotrustee of the Trust and the named insured in two life insurance policies. In the Petition, the Trustee sought: (1) a determination that the Trust is the beneficiary of, and therefore entitled to the proceeds from, one of the insurance policies; and (2) damages against Chabad of Poway (Chabad) for interfering with the payment of that policy's benefits to the Trust. Chabad responded by filing a document entitled "Claimant's Objection and Counter Claim [sic] to Petition filed by Trustee to Determine Ownership of Life Insurance Policy Proceeds" (Objection and Counterclaim). In an unsigned minute order following summary judgment proceedings initiated by Trustee, the court sua sponte struck Chabad's Objection and Counterclaim on the basis that the Code of Civil Procedure precluded a party from seeking affirmative relief in an answer. Chabad appealed. The Court of Appeal found that the unsigned minute order was not an appealable order under either the Code of Civil Procedure or the Probate Code. As such, the Court lacked jurisdiction to hear Chabad's appeal, and dismissed it. View "Katzenstein v. Chabad of Poway" on Justia Law

Plaintiffs are trustees under “Coogan Trust Accounts,” which are statutorily required accounts to preserve 15 percent of a minor’s gross earnings for artistic or creative services for the benefit of the minor until the minor turns 18 or is emancipated (Fam. Code, 6750.) They filed a class action lawsuit on behalf of themselves and others against Bank of America, alleging breach of written contract, breach of the implied covenant of good faith and fair dealing, conversion, and unlawful and unfair business practices. The complaint claimed that the bank made withdrawals from Cogan Trust Accounts, including for monthly service fees, without court approval. The trial court dismissed. The court of appeal reversed. A bank may not debit a Coogan Trust Account for service fees without court approval (section 6753 (b)). The state law prohibition on a debit by a national bank is not preempted by federal law. View "Phillips v. Bank of America" on Justia Law

Plaintiff Thomas W. Sefton, Jr. (Thomas Jr.) appealed a judgment awarding him $565,350, plus interest, from the estate of his grandfather, Joseph W. Sefton, Jr. (Grandfather). Grandfather died in 1966. In Grandfather's will, Grandfather created a testamentary trust for the benefit of his son, Thomas W. Sefton (Father), during Father's life. Upon Father's death, the Trust terminated and its assets were to be distributed. The probate court, interpreting the Court of Appeal's prior opinion in this matter, determined this sum to be the " 'substantial' share" of Grandfather's estate to which Thomas Jr. was entitled. Thomas Jr. argued the probate court misinterpreted "Sefton I" and therefore improperly limited his award from Grandfather's estate. After review, the Court of Appeal concluded the probate court's interpretation of Sefton I, while reasonable, was in error. The " 'substantial' share" determined by the probate court was not the correct measure of Thomas Jr.'s award from Grandfather's estate under the facts of this case. In this opinion, the Court resolved the ambiguity from its earlier opinion and clarified the award to which Thomas Jr. is entitled. View "Sefton v. Sefton" on Justia Law

Amine Britel died intestate in 2011. Appellant Jackie Stennett, the mother of A.S., a child born out of wedlock, petitioned to administer Amine’s estate and for A.S. to be declared Amine’s heir. The court denied Jackie’s petitions. It granted the petition of respondent Mouna Britel (Amine’s adult sister) to administer Amine’s estate, which petition listed respondent Rhita Bhitel (Amine’s mother) as Amine’s surviving parent. The Court of Appeal affirmed the court's order, concluding that Probate Code section 6453(b)(2)’s phrase, “openly held out,” required the alleged father to have made an unconcealed affirmative representation of his paternity in open view. The Court also concluded substantial evidence supported the court’s finding Amine did not openly hold out A.S as his child. Further, the Court concluded section 6453(b)(2) did not violate the state or federal equal protection rights of nonmarital children or of nonmarital children who can prove paternity using DNA tests. View "Estate of Britel" on Justia Law