Justia California Court of Appeals Opinion Summaries

Articles Posted in Trusts & Estates
by
This case centered on a dispute over the administration of a family trust and the interpretation of trust documents. After a bench trial, the court decided in favor of plaintiff Adam Blumberg, the step-grandson of defendant Gloria Minthorne. Gloria was ordered by the court to file an accounting and quitclaim certain property to Adam. Gloria appealed. She quitclaimed that property to her daughter and failed to file the accounting. Adam moved to dismiss the appeal, citing the disentitlement doctrine. The Court of Appeal agreed with Adam that this was one of the rare cases where applying this doctrine was appropriate due to Gloria’s flagrant violation of the court’s orders. The appeal was therefore dismissed. View "Blumberg v. Minthorne" on Justia Law

by
Anthony Aulisio, Jr., appealed a jury verdict that found defendants, consisting of his homeowner association's management company (Optimum Professional Property Management and Debra Kovach), the patrol service it employed (BLB Enterprises, Inc., dba Patrol One, and Bill Bancroft), and a towing company (PD Transport, dba Southside Towing, and John Vach), did not wrongfully tow and convert his Jeep vehicle, nor convert the personal property it contained. CAAJ Leasing Trust (CAAJ), which Aulisio created as sole grantor, trustee, and trust beneficiary, owned legal title to the Jeep and also appeals. CAAJ appeals the trial court's ruling at the outset of trial that CAAJ "can't participate in the proceedings" with Aulisio appearing in propria persona as the trust's sole trustee and sole beneficiary. The trial court relied on precedent that an executor or personal representative may not appear in propria persona in court proceedings outside the probate context on behalf of a decedent's estate because representing another person or entity's interest in a lawsuit constitutes the unauthorized practice of law. But if a sole trustee is also the trust's sole settlor and beneficiary, the rationale of these cases ceases to apply: no interests are at stake except those of one person. Upon review, the Court of Appeal concluded that a sole trustee of a revocable living trust who is also the sole settlor and beneficiary of the trust assets he or she is charged to protect does not appear in court proceedings concerning the trust in a representative capacity. Instead, he or she properly acts in propria persona and does not violate the bar against practicing law without a license. The judgment as to CAAJ was reversed, and the case remanded so Aulisio may appear in propria persona to assert his interest as the sole beneficial owner of the Jeep as a trust asset. The Court affirmed the judgment against Aulisio in his individual capacity concerning his personal property in the Jeep.View "Aulisio v. Bancroft" on Justia Law

by
The Bank filed a judicial foreclosure action to collect a loan secured by two parcels of real estate which had been made to a husband and wife. After the husband died, the loan went into default. The Bank and wife agreed to a private sale of one of the parcels that was her separate property and Bank filed the foreclosure action on the remaining parcel to obtain a deficiency judgment. The trial court granted the Bank's motion for summary adjudication of its judicial foreclosure cause of action and determined that the Bank was entitled to obtain a deficiency judgment against the representatives of the husband's estate (appellants). The court concluded that, because the Bank failed to show the requirements of Code of Civil Procedure 726 for creditors seeking deficiency judgments by disposing of the property at issue outside of judicial foreclosure and without appellants' consent or waiver, the Bank has waived any right to a deficiency against them. Accordingly, the court reversed the judgment of the trial court.View "First CA Bank v. McDonald" on Justia Law

by
In 2007, Robert (Bob) Perry quitclaimed a house to defendant Charlotte (Jeanne) Teegarden, who was his friend and one of his caregivers. Teegarden prepared the quitclaim deed. In her deposition, Teegarden admitted that the only consideration that she gave for the quitclaim consisted of one dollar and her friendship. At trial, however, she testified that, pursuant to an oral agreement with Perry, she also gave $100,000 (for improvements to the house), her $45,000 equity in a different house, and her services. Plaintiff Merilou Jenkins is Perry’s stepdaughter and, since Perry’s death, the trustee and beneficiary of his trust. Jenkins contended that the quitclaim was invalid under Probate Code former section 21350, which, at the time, provided that a "donative transfer" was invalid under specified circumstances, including when the recipient drafted the instrument that effected the transfer. Jenkins also contended that the quitclaim deed was ineffective because it was executed by Perry in his individual capacity instead of as trustee and because it had an erroneous legal description. The trial court found that the quitclaim was not a donative transfer because Teegarden gave good consideration for it. It then reformed the quitclaim deed so as to fix the mistakes in it regarding the grantor’s capacity and the legal description. Jenkins appealed. The Court of APpeal held that, though Probate Code former section 21350 et seq. has been repealed and replaced by Probate Code section 21380 et seq., the former section 21350 et seq. still governed an instrument executed before January 1, 2011. The issue concerning a "donative transfer" for purposes of Probate Code former section 21350 was a question of first impression. The Court held that a transfer is a donative transfer if it is for inadequate consideration; the mere fact that the recipient gave good consideration, sufficient to support a contract, does not prevent the transfer from being donative. Finally, the Court concluded that the evidence demonstrated that the quitclaim was a donative transfer under this definition as a matter of law. Hence, the quitclaim was invalid.View "Jenkins v. Teegarden" on Justia Law

by
In 2002, David hired the Attorneys to represent him in petitioning for his appointment as probate conservator of the person and estate of his mother, Donna. In his petition, David represented there were no conservatorship assets and that all of Donna’s assets were held in her Trust, so that no bond was required. Donna actually owned significant assets, including real property and several individual retirement accounts (IRAs), individually and not as assets of her Trust. The probate court appointed David as conservator of both Donna’s person and estate and waived bond. The Attorneys continued to represent David and allegedly “knew that Donna . . . had assets in her name that under California law were assets of the conservatorship,” but never informed the probate court of their existence nor petitioned the court to require or increase a bond. David subsequently misappropriated over one million dollars. Stine, a subsequently-appointed licensed professional fiduciary sued David for financial elder abuse and conversion and the Attorneys for legal malpractice. The trial court dismissed the Attorneys. The court of appeal reversed holding that the successor trustee is not subject to any defense that can be interposed against David and David’s malfeasance.View "Stine v. Dell'Osso" on Justia Law

by
Don Bizek obtained a judgment against Sally Gordon, a trustee and beneficiary of the WPB Trust, and sought to execute his judgment against Gordon's beneficial interest in the WPB Trust. If the disclaimer is valid, it caused Gordon's beneficial interest to descend to Cyndi Vance, Gordon's daughter and successor beneficiary. If the disclaimer is void, Bizek may attach Gordon's beneficial interest in the WPB Trust. The trial court ruled that Gordon's disclaimer was void. However, the court concluded that the presumption created by section 16004 of the Probate Code that a trustee who commingles trust funds with her own funds violates her fiduciary duty to the trust applies only to the relationship between a trustee and trust beneficiaries. In this case, the trial court applied the presumption for the benefit of a creditor of the trustee, not a beneficiary of the trust. Therefore, the trial court committed error and the court reversed and remanded. Bizek was not entitled to the section 16004 presumption and thus had the burden to prove that Gordon's use of WPB Trust funds demonstrated acceptance of her beneficial interest in the Trust. View "Vance v. Bizek" on Justia Law

by
Creditor sought to collect an exemplary damages award from a tortfeasor who was placed under a conservatorship after he was sued for his wrongdoing. The court held that a conservator's debts incurred before creation of the conservatorship must be paid from his estate. In this case, the court concluded that the debt was incurred when the conservatee committed the tort, not when the jury rendered its verdict awarding damages for the wrongful conduct. Therefore, the conservator must pay the punitive damages awarded to the creditor from the conservatee's estate. View "Conservatorship of the Person and Estate of Parker" on Justia Law

by
In 1998, the superior court established a conservatorship over G.H.’s person pursuant to the Lanterman-Petris-Short Act (Welf. & Inst. Code, 5000. G.H. has been under continuous conservatorship since that time. In 2012, the Santa Clara County Public Guardian sought to be reappointed G.H.’s conservator, alleging that G.H remained gravely disabled as a result of mental disorder. G.H.’s counsel requested t an evidentiary hearing. On the date of the hearing G.H. was not present in court. The Public Guardian explained that G.H. had refused to submit to a mental examination with the Public Guardian’s doctor, and that it did not intend to transport G.H to court unless G.H. submitted to the mental examination. At a second hearing, the Public Guardian explained that G.H. had again refused to submit to a mental examination with the Public Guardian’s doctor. G.H. was not present at a third hearing. The court granted the reappointment petition, reasoning that G.H.’s failure to submit to a mental examination with the Public Guardian’s doctor authorized the court to impose an evidence sanction or a terminating sanction pursuant to Code of Civil Procedure section 2032.410. The court of appeal reversed, holding that the court erred in imposing a terminating, as opposed to an evidence sanction. View "Conservatorship of G.H." on Justia Law

by
In August 2007, the initial trustee of two family trusts invested millions in the Rockwater American Municipal Fund, LLC (RAM Fund), a hedge fund engaged in municipal arbitrage. The RAM Fund was managed by Rockwater Municipal Advisors, LLC (RMA), its managing member. In November 2007, Charles Fish Investments, Inc. (CFI) transferred its assets to Rockwater CFI, LLC, a wholly owned subsidiary of RMA, in exchange for a 15 percent interest in RMA. CFI had an option to unwind the transaction, if its interest in RMA did not meet certain benchmark values. The RAM Fund was devastated by the stock market crash and the trust investments were largely wiped out by 2008. CFI exercised its option to unwind the transaction with RMA and Rockwater CFI, LLC, and obtained a return of the assets originally belonging to it. The successor trustee of the trusts sued the RAM Fund, RMA, Bryan Williams (founder of the RAM Fund and the chief executive officer of RMA), John Hapke (the chief financial officer of the RAM Fund), CFI, and Charles Fish (the chairman and chief executive officer of CFI). After it had seen clips from the movie Wall Street 2 (Twentieth Century Fox 2010) and a power point presentation with eight screens captioned "Greed," a jury awarded the successor trustee a $4.6 million judgment against the RAM Fund, RMA, Williams, and Hapke. The successor trustee was unsuccessful in obtaining a judgment against CFI and Fish. The RAM Fund, RMA, Williams, and Hapke, on the other hand, have each filed an appeal claiming the RAM Fund was simply the victim of the market crash. The successor trustee appealed too, seeking to hold liable CFI and Fish, the defendants who "got away." After review, the Supreme Court: reversed the judgment in favor of RAM, RMA and Willians, and affirmed the judgment against CFI and Fish on actual and constructive fraudulent transfer; to the extent the judgment held the Rockwater Defendants and Hapke liable on the causes of action for fraud by intentional misrepresentation, fraud by concealment, and/or negligent misrepresentation, it was reversed. The judgment in favor of CFI and Fish on those causes of action was affirmed. The judgment against the RAM Fund and Hapke for breach of fiduciary duty and professional negligence was reversed. However, the judgment against RMA and Williams on those causes of action was affirmed. The judgment in favor of CFI and Fish on the breach of fiduciary duty cause of action was affirmed. The ruling that CFI was not liable for the debts of RMA was affirmed. The ruling that Fish was not liable for the debts of CFI was moot, and the judgment in favor of CFI on all causes of action is affirmed. View "Hasso v. Hapke" on Justia Law