Articles Posted in California Courts of Appeal

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The Court of Appeal affirmed the trial court's award of attorney fees and costs in this dispute over the management and the distribution of monetary assets of a family trust. The court held that the trial court properly applied the substantial benefit theory, an offshoot of the common fund doctrine, in making its award of fees from trust assets. In this case, substantial evidence supported the finding that the litigation substantially benefited all beneficiaries and that litigation preserved trust assets when the accounts were frozen. The court explained that the litigation preserved a common fund for the benefit of the non-participating beneficiaries. View "Smith v. Szeyller" on Justia Law

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Stockird's handwritten will transferred “all my property and everything I may be entitled to inherit” to her life partner, Aguirre, and an aunt-by-marriage, Ambrose. The will did not include alternative provisions for disposition if either gift lapsed. Ambrose died before Stockird. After Stockird died, Aguirre sought a declaration that he is entitled to Stockird’s entire estate as the sole surviving residuary beneficiary under Probate Code 21111(b). Stockird’s halfbrother, Ramsden, argued the lapsed gift to Ambrose must pass to Stockird’s estate under section 21111(a)(3) and that as Stockird’s only surviving heir, he is entitled to Ambrose’s share under the laws of intestacy. The probate court agreed with Ramsden. The court of appeal reversed, finding that the trial court misinterpreted section 21111(b). The definition of “transferee” as kindred in section 21110(c) applies to section 21110, but the more general definition of “transferee,” as a “beneficiary, donee, or other recipient of an interest transferred by an instrument,” applies in section 21111(b). Given the clear intent of the Legislature to abolish the “no residue of a residue” rule and avoid intestacy, the 35 percent lapsed gift does not go to Stockird’s estate under section 21111(a)(3), but, subject to determination of Ambrose's descendants' reformation petition, must pass to Aguirre under section 21111(b). View "Estate of Stockird" on Justia Law

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Amanda Meleski was injured when Albert Hotlen ran a red light and collided with her vehicle. Unfortunately, Hotlen was deceased at the time of the lawsuit, and he had no estate from which she could recover. However, Hotlen had purchased a $100,000 insurance policy from Allstate Insurance Company (Allstate) covering the accident. Meleski brought her action pursuant to Probate Code sections 550 through 555, which allowed her to serve her complaint on Allstate and recover damages from the Allstate policy, but limited her recovery of damages to the policy limits. Meleski attempted to settle the matter before going to trial by making an offer pursuant to section 998 for $99,999. The offer was not accepted, and at trial a jury awarded her $180,613.86. Because the offer was rejected and Meleski was awarded judgment in excess of her offer to compromise, she expected to recover her costs of suit, the postoffer costs of the services of expert witnesses, and other litigation costs. Meleski argued on appeal that she should have been able to recover costs in excess of the policy limits from Allstate, since it was Allstate that had refused to accept a reasonable settlement offer prior to trial. The trial court disagreed, and Meleski filed this appeal, arguing Allstate was a party within the meaning of section 998 for purposes of recovering costs, and that such costs were recoverable from the insurer despite the limitation on the recovery of “damages” found in Probate Code sections 550 through 555. The Court of Appeal agreed and reversed judgment: "Even though the decedent’s estate is the named defendant in actions under Probate Code sections 550 through 555, this is a legal fiction. The insurance company accepts service of process, hires and pays for counsel to defend the action, makes all decisions regarding settlement of the litigation, is responsible for paying the judgment in favor of the plaintiff if such judgment is rendered, and makes the decision whether or not to appeal an adverse judgment. There is no actual person or entity other than the insurance company to do any of this. This is a reality we will not ignore. Moreover, we find it manifestly unfair that section 998 could be employed by Allstate to recover costs from the plaintiff (which costs it would have no obligation to pay to the estate), but Allstate would have no corresponding responsibility to pay costs merely because it is not a named party." View "Meleski v. Estate of Hotlen" on Justia Law

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Walter owned and operated Control Master Products, a wire and cable business. After Walter’s death, Plaintiffs filed a petition to determine their status as beneficiaries under Walter's trust and to challenge Youngman’s right to inherit. Youngman, Walter’s long-time friend and tax attorney, had drafted Walter’s trust. The petition sought to have a condition, which made certain gifts contingent on being employed by Control at the time of the death of Walter and his spouse (Verla), stricken on various grounds, including impossibility. Walter had sold the company’s assets and its employees had been terminated. The probate court concluded the dispute was not ripe because Verla’s death had not occurred. On remand, the probate court found that Youngman and his family were “disqualified from any gift under the trust,” that Ostrosky’s gift lapsed because she had retired before the sale, and Schwan’s and Johnson’s gifts “remain valid and enforceable, but only after Verla[’s] death.” The court of appeal reversed and remanded for findings as to whether Ostrosky’s work for Custom satisfied the trust’s employment condition and modified the trial court decision so that the gifts to Schwan and Johnson remain valid and enforceable, only after Verla’s death, and only if they survive Verla. The court otherwise affirmed. View "Schwan v. Permann" on Justia Law

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Acting under Probate Code section 16440(b), the trial court denied a petition brought by Orange Catholic Foundation and Kevin Vann, the Roman Catholic Bishop of Orange (collectively, the Church) to remove Rosie Mary Arvizu from her position as trustee of the Josephine Kennedy Trust (Trust) and for damages. The Trust gave a life estate in Kennedy’s house (the Residence) to Paul Senez, her very dear family friend of over 60 years, provided that he pay for certain expenses related to the Residence. The Trust further provided that upon Senez’s death, the Residence was to be sold and the proceeds were to be given to the Church for the benefit of the needy elderly and abused children. The Church alleged that Arvizu (Kennedy’s niece and the successor trustee) breached her duties as trustee by: (1) improperly using Trust funds to pay expenses that should have been borne by Senez (who was elderly, destitute, suffering from dementia, and unable to cover the expenses himself); (2) failing to evict Senez when he could not pay those expenses; and (3) not promptly renting out or selling the Residence after Senez’s death (a delay which occurred in part due to Arvizu’s cancer treatment and other health issues, and which fortuitously benefited the Church because the Residence appreciated by $136,000 during the period of Arvizu’s inaction). Finding no abuse of discretion, the Court of Appeal affirmed the judgment. View "Orange Catholic Foundation v. Arvizu" on Justia Law

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Defendant was convicted of theft from an elder or dependent adult in 2010 (the criminal action). After the victim died before the end of the criminal action, plaintiff, the conservator and the co-administrator, filed two actions against defendant under Probate Code section 850, seeking civil damages (the probate action) and another action that resulted in a restitution award (restitution judgment). The Court of Appeal held that, pursuant to the terms of a stipulation concerning the amount of restitution in the criminal action, defendant's prejudgment restitution payments should have been credited against principal rather than interest. The court held, however, that even after adjusting the remaining principal on the restitution judgment to account for prejudgment payments, defendant still owed a substantial sum. Therefore, the court remanded for recalculation of the amount remaining due on the restitution judgment. The court rejected defendant's remaining arguments. The court affirmed the judgment in the probate action. View "Kerley v. Weber" on Justia Law

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The Obata sisters, died intestate in 2013, having never married and with no descendants. Letters of administration of the estates were issued in the Alameda County Superior Court. A dispute arose regarding the line of succession that centered on the decedents’ father, Tomejiro and the impact of his “yōshi-engumi” by Minejiro and Kiku Obata in 1911. Appellants are the descendants of Tomejiro’s biological parents, the Nakanos. The court found in favor of the Obata family members. The court concluded that California recognizes Tomejiro’s yōshi-engumi as a legal adoption and that under the Probate Code, “The adoption of Tomejiro Obata by Minejiro Obata and Kiku Obata severed the relationship of parent and child between Tomejiro Obata and his natural parents.” The court of appeal affirmed, citing Probate Code sections 6450-6451. While the primary purpose of Tomejiro’s adoption may have been to create an heir, the role of an heir in Japanese society at that time was considerably more expansive than under California law, involving not just inheritance rights, but financial and moral obligations to care for relatives and honor the family’s ancestors. Whether Tomejiro’s adoption would have terminated his relationship with his biological parents under Japanese law now or in 1911 is immaterial. View "Estate of Obata" on Justia Law

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The Court of Appeal affirmed the trial court's dismissal of a petition under Probate Code section 17200 to set aside certain amendments and declare effective the 16th amendment to the Maynord 1986 Family Trust. The court held that appellant was a former beneficiary that lacked standing to petition for relief under section 17200, where the plain language of section 17200 demonstrates that only beneficiaries and trustees of the current trust version have standing to petition for review of the internal affairs of that trust. The court also held that the conclusion in Drake v. Pinkham (2013) 217 Cal.App.4th 400, that a living but incompetent settlor was not a bar to a beneficiary's lawsuit did not demonstrate that a former beneficiary challenging the latest version of a trust was entitled to proceed because of their status in the last allegedly valid former trust document. View "Barefoot v. Jennings" on Justia Law

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Appellants Brian O'Connor and Astrid O'Connor Bassett appealed from orders: (1) declaring decedent John O'Connor's power of appointment exercised in his will complied with the requirements of Probate Code1 section 632; and (2) for probate of his will. The Court of Appeal concluded the language of decedent's will contained enough detail to discern his conscious exercise of the particular power of appointment granted to him, and thus complied with the requirements of both the granting instrument and section 632 that he make a specific reference to the power of appointment. Accordingly, the Court affirmed the orders. View "Estate of O'Connor" on Justia Law

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Appellants, adult children of Decedent, who died in 2010 of mesothelioma allegedly caused by exposure to asbestos in brakes he purchased from Pep Boys, an automotive parts retailer, brought claims for wrongful death, strict liability, and negligence. The trial court rejected appellants’ wrongful death claims as untimely and a claim for punitive damages. The court awarded $213,052 as economic damages but found that amount was entirely offset by settlements with other parties. The court of appeal reversed in part, agreeing that the trial court erred in failing to award damages for the costs of providing home health services to Decedent and his wife and erred in awarding Pep Boys expert fees under section 998. The court rejected claims that the trial court abused its discretion in allowing Pep Boys to amend its answer to correct a previously-asserted statute of limitations defense; erred in granting Pep Boys’ motion for judgment under section 631.8; and erred in applying offsets to the award of economic damages based on prior settlements without allocating between estate claims and wrongful death claims. Damages recoverable in a survival action brought by a decedent’s personal representative or successor in interest are limited to damages that the decedent incurred before death and do not include “ ‘lost years’ damages” that would have been incurred had the decedent survived. View "Williams v. The Pep Boys Manny Moe & Jack of California" on Justia Law