Opinion
A127129
09-21-2011
PHILIP DIGIROLAMO, Plaintiff and Respondent, v. ANGELO C. DIGIROLAMO, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. RG08407865)
I. INTRODUCTION
This case arose out of events relating to the administration of a family trust by appellant Angelo DiGirolamo (Angelo), with the assistance of his mother and co-defendant, Rosalie Pierce (Rosalie). Philip DiGirolamo (Philip) filed this action against his brother Angelo, their mother Rosalie, and Rosalie's husband Paul, alleging breach of fiduciary duty, financial abuse of a dependent adult, fraud and other torts. After a court trial, the court entered judgment against Angelo and Rosalie, holding them jointly and severally liable for damages totaling $654,048.78. Philip was also awarded attorney fees in the amount of $509,436.
Rosalie did not appeal the judgment, but Angelo did. His primary contentions are that the evidence does not support the judgment against him, Philip's claims against him are time-barred, and the trial court erred by applying provisions of the Elder Abuse and Dependent Adult Civil Protection Act (the EADACPA). (Welf. & Inst. Code, §§ 15600, et seq.) We reject all of Angelo's contentions and, therefore, affirm the judgment.
II. STATEMENT OF FACTS
The events relevant to this litigation occurred between 2003 and 2008. As our summary reflects, the trial court heard very different versions of many of these events from the witnesses who testified at the September 2009 court trial. A. The Joseph Salmeri Trust
On July 24, 2002, Joseph Salmeri (Joseph) executed a revocable living trust (the Trust). Joseph was the trustee and lifetime beneficiary and, upon his death, the Trust assets were to be distributed in equal shares to four residual beneficiaries, Joseph's daughter Rosalie and Rosalie's three adult children, Angelo, Philip and Amy. Angelo was named the successor trustee.
The assets that comprised the Trust estate were not described in the copy of the trust instrument that appears in the Appellant's Appendix. However, the attorney who prepared that instrument for Joseph, Lorie Leigh Robertson, testified at trial that this was a "simple" trust, which consisted of several accounts and Joseph's home in Monterey (the Monterey property) which was, "by far," the largest asset. According to Robertson, the Trust was funded with assets that had a total value "approaching" but less than $1 million so as to avoid adverse tax consequences.
Joseph died in June 2003. Angelo was appointed successor trustee and retained attorney Robertson to advise him regarding his duties, including his fiduciary obligations to the other beneficiaries. Robertson advised Angelo that his primary duties were to account for and distribute the assets of the Trust. B. Philip's Mental Health and Social Security Benefits
Philip, who was approximately 30 years old at the time of trial, suffers from a mental disability that was variously described at trial as bipolar disorder, manic-depression, and schizophrenia. He began taking medication for his condition at the age of 11. Philip has been institutionalized at least twice, once when he was a teenager and again within a year or two prior to Joseph's death.
When asked to describe his mental condition, Philip testified: "I'm 51/50, bipolar/schizophrenia, is what they say, or schizophrenia, is what I've been told." Angelo and Rosalie testified that Philip is bipolar and suffers from manic depression. When Philip's trial attorney asked Angelo if he had heard that Philip is schizophrenic, Angelo testified "[n]ot previous to these proceedings." Rosalie testified that she is "not really sure" if Philip is schizophrenic.
Rosalie expressly acknowledged at trial that Philip is disabled as a result of his mental illness. According to Angelo, when Philip is not taking medication, he is irritable, upset, irrational and often angry and paranoid. When Philip is taking his medication, "[h]e's got a million ideas and he's going and researching them and calling people, and he's active, and he's pursuing everything from his music to real estate to something else that caught his eye."
Philip's living situation has been unstable since he was a teenager. Rosalie "kicked [him] out" of her house when he was 14. He lived on the streets or with friends until his grandfather Joseph took him in. He bounced around after that, experienced periods of homelessness, but also lived with Rosalie at various times. Angelo testified that he does not believe that Philip struggles with "daily living activities." For example, at the time of Joseph's death, Philip had a driver's license and a car. However, Angelo also acknowledged at trial that Philip has never been able to maintain his own home, that he moved around between Joseph's home and his parents' homes and that he also lived in his car.
Philip, who felt he always had a home with Joseph, was living at the Monterey property when Joseph died and stayed there for several weeks thereafter. Then Philip moved to Fernley, Nevada, where he lived with Rosalie during many of the events that gave rise to this litigation. Philip returned to California in 2008, where he has not been able to secure a stable home.
Philip has also experienced difficulty holding a job. During the five-year period prior to trial, Philip secured three jobs, but lost each one in less than two weeks. During that period, Philip also formed a corporation, although his company never made any money. Philip testified that the purpose of his corporation was to "conduct legal business," and that he sometimes used it to record music. Philip paid for recording time either by using his credit card or getting cash from Rosalie.
Philip has received Social Security, on and off, since the age of 16 or 17. At the time of trial, he received a monthly disability check of just under $1,300, which was his only source of income.
C. The Impact of An Inheritance on Philip's Social Security Benefits
Philip testified that when Joseph died, Rosalie told him that he would lose his Social Security benefits if he accepted his inheritance and, therefore, Rosalie was going to accept Philip's inheritance for him. Philip testified that Angelo told him the same thing, but "only after Rosalie first told him."
Rosalie testified that she never told Philip that he would lose his Social Security benefits if he accepted an inheritance, but that she probably believed that was true at the time. According to Rosalie, Philip had always told her not to tell the Social Security Administration (SSA) that he owned anything of value. For example, Philip told Rosalie not to tell the SSA about the music equipment he owned. Also, whenever Rosalie offered to deposit money into Philip's account, he told her not to because he was only allowed to have a certain amount of money in his account.
Angelo testified that he never told Philip that he would lose his Social Security if he accepted his inheritance, but rather Philip advised him that was the case. Angelo admitted that he did not conduct an independent investigation regarding the effect of an inheritance on Philip's benefits. He believed that Philip was familiar with how Social Security works and Philip said he would lose his benefits if he accepted the inheritance. At the time of trial, Angelo did not recall discussing this matter with his attorney, Ms. Robertson. Robertson testified, however, that Angelo told her that Philip received Social Security benefits and that she told Angelo that an inheritance could jeopardize Philip's benefits. Robertson advised Angelo to tell Philip to discuss the impact of the inheritance with his benefits manager and/or with an attorney. D. Angelo's Administration of the Trust
1. The Total Value of the Trust
Angelo testified that the total value of the Trust at the time of Joseph's death was approximately $811,449. If there was documentary evidence to support this valuation, it has not been included in the Appellant's Appendix. Indeed, we cannot determine from this record how Angelo identified the assets that were part of the Trust.
Philip testified that he believed Joseph had considerably more assets than Angelo claimed and that he demanded an accounting of the Trust but never received one.
2. Personal Property
According to Angelo's testimony, the Trust held various items of Joseph's personal property, including jewelry, furniture and a car, which were distributed among the beneficiaries pursuant to mutual agreement at a family meeting that was held at Joseph's house. There was also a bag of coins that Joseph had collected. Angelo did not believe the coins had value as a collection, although Philip apparently did. The coins were left at Joseph's house for some period of time until they were moved to a closet in Angelo's home. Angelo acknowledged at trial that each beneficiary was entitled to a one-quarter share of the coins, which had not been distributed at the time of trial.
3. The Monterey Property
a. The Appraisal
In September 2003, Angelo obtained an appraisal of the Monterey property, which consisted of two homes, one located on Terry Street, where Joseph had lived (the Terry house), and the other on Withers Avenue (the Withers house). The September 2003 appraisal, which was prepared by a friend of a friend, valued the property at $540,000. Angelo thought this appraisal was accurate because neither home was in good condition and the property needed a lot of work. Angelo considered dividing the property into two lots but concluded that the process would take too long.
Philip testified that he believed the Monterey property was more valuable than the 2003 appraisal showed and that Angelo arranged it that way because he did not want the value of Joseph's estate to exceed $1 million. Through an expert, Philip presented evidence at trial that, at the time of Joseph's death, the Monterey property was worth approximately $615,000.
b. The Buy-Out
Angelo testified that after the 2003 appraisal was completed, all four beneficiaries discussed what to do with the Monterey property. Angelo and Amy wanted to sell it, but Rosalie and Philip did not. Therefore, all the parties agreed to transfer their interests in the property to Rosalie, who would then refinance the property, buy out Angelo and Amy and then hold Philip's interest on his behalf. Angelo testified that both Philip and Rosalie told him that Rosalie would assume responsibility for making sure that Philip received his interest in the Monterey property. Therefore, in March 2004, Angelo transferred a 25 percent interest in the Monterey property to each of the beneficiaries, and the three siblings then transferred their interests to Rosalie, who became the sole title holder of the Monterey property. Rosalie then refinanced the Monterey property and used some of the proceeds to pay Angelo and Amy $135,000 each.
Philip testified that he never told Angelo that he and Rosalie made an arrangement about the Monterey property. Furthermore, Angelo never explained to Philip that he deeded a one-quarter interest in the Monterey property to Philip as an individual. Philip admitted, however, that he did sign the grant deed which enabled Rosalie to take title to the Monterey property in her name, but he claimed that he did not really know what he was doing at the time. Philip testified that he was "highly medicated" and sound asleep when Rosalie woke him and rushed him off to sign papers in Reno, telling him that he would get his inheritance if he cooperated with her. Philip felt as though he was being tricked but eventually signed the paperwork. As Philip explained at trial, "I signed it because Rosalie told me I had to sign it or I would never get my inheritance. That I had to sign it if I wanted my money once Terry Street sells or when she decides to sell it. So I just did what I was told."
4. Bank Accounts and Stock
Angelo testified that he spent between four and six weeks after Joseph's death tracking down bank accounts that were part of the Trust and cashing out Joseph's stock account. Angelo and Rosalie were already signatories on a checking account that Joseph had maintained at Washington Mutual Bank (the Washington Mutual account). Therefore, for convenience sake, Angelo transferred all of Joseph's liquid assets into the Washington Mutual account.
Angelo determined that each of the four beneficiaries was entitled to receive $40,124.86 from Joseph's bank accounts and an additional $20,037.64 from the sale of stock. Angelo testified that, during the period he administered the Trust, he gave each beneficiary access to their share of these funds by making payments at their request. Angelo created a spreadsheet on which he documented payments that he made from the Washington Mutual account and deductions he made from each beneficiary's share of the liquid assets of the estate.
According to Angelo's spreadsheet and trial testimony, between June 2003 and March 2004, Angelo used Trust funds to make payments on Philip's behalf which totaled approximately $17,000. Angelo maintained that he made these payments from the Trust at Philip's express request; Philip either submitted the bills to Angelo or called him and told him what to pay. Angelo also testified that he paid Philip $20,000 cash in March 2004. Angelo did not obtain a receipt for this payment, although a Washington Mutual bank statement reflects that a $20,000 cash withdrawal was made on March 23, 2004.
Philip testified that he never asked Angelo to use the Trust to pay any of his expenses. Nevertheless, he acknowledged that some of the payments documented on Angelo's spreadsheet were for his expenses. However, Philip did not recognize some of the payments and was sure that others should not have been attributed to him. Philip also denied that Angelo paid him $20,000 in cash in March 2004. Rather, around that time, Rosalie informed him that Angelo gave her $20,000 of Philip's share of the funds. Philip maintained that he had "no say" in that matter and that the money should have been paid directly to him.
5. Angelo's "Final" Distribution Payments
Angelo testified that, after title to the Monterey property was transferred to Rosalie in late March 2004, Angelo advised the beneficiaries that he was going to make final distribution payments and close the Trust. At that time, according to Angelo's spreadsheet, Philip's remaining interest in the liquid funds held in the Trust was approximately $22,318.
At trial, Angelo specifically recalled that he told Philip that he was going to write checks to the other beneficiaries and asked if Philip wanted the balance of his interest to be paid to him by check as well. Philip told Angelo to leave his share in the Washington Mutual account along with Rosalie's share because he and their mother had made an "arrangement." Therefore, after Angelo made final distribution payments to himself and his sister Amy, he gave Rosalie the bank statements, checkbook and register for the Washington Mutual account, along with a copy of his spreadsheet.
Angelo testified that he turned the Washington Mutual account over to Rosalie at Philip's request, that he told Rosalie that she was now the custodian of Philip's share of the money in the account and that Rosalie acknowledged that she was receiving Philip's share on his behalf. At that point, Angelo believed he had completed his obligations as successor trustee; he had paid the taxes, dealt with the Monterey property and made final distributions.
Philip testified that Angelo never told him he was making a final distribution of the Trust and that he never told Angelo to give his share of the cash to Rosalie. Nor did Philip ever agree that Rosalie could hold his share of the inheritance. According to Philip, shortly after Joseph died, Angelo told him that he had to decide whether he wanted his inheritance or his Social Security. Philip requested an accounting so he could decide which was more valuable but Angelo refused to provide an accounting. Instead, Angelo said that Rosalie would hold Philip's money for him so Philip could weigh his options. Angelo told Philip that his share of the inheritance was all going to Rosalie and " promised" that Rosalie would give him his share of the Trust. Philip testified: "And [Angelo] said, you know, when Terry Street sells, she's going to give you your inheritance. At that time, that's what I believed. I believed my brother. And I believed he would make sure that it happened. But I was wrong."
Philip testified that he asked Angelo to pay him his inheritance "hundreds of times," and that Angelo gave different responses on different days. Sometimes, he said that Philip would get his inheritance when Rosalie sold the Monterey property, sometimes he said that it was not his problem and sometimes he made the "excuse" that Rosalie would not listen to him. E. The Disclaimers
Before Angelo turned over the Washington Mutual account to Rosalie, he was provided a document which contained the following typed text: "To whom it may concern: [¶] I Philip Joseph DiGirolamo, choose to disclaim the 25% of the cash left to me through the living trust of Joseph S. Salmeri. I understand my portion will be distributed evenly to the three remaining beneficiaries and that in doing so I cannot attempt to collect on said funds at any point in the future." Philip's handwritten name appears on this "disclaimer" document, below the typed text.
Angelo testified that Rosalie and Philip sent a copy of this disclaimer to him. Angelo did not think that the disclaimer was legally effective but also testified that he relied on it when he distributed the funds from the Trust. Angelo testified that Philip had told him that he would lose his Social Security benefits if he received an inheritance from the Trust, and the purpose of this disclaimer was so that Philip could show the SSA that he had disclaimed his inheritance and there would be no paper trail since there was no direct payments from the Trust to Philip.
Rosalie testified that Philip was living with her at her house on Jenny's Lane in Fernley, Nevada, when the two of them discussed the idea of a disclaimer. Philip wrote out the language, Rosalie typed the document, and Philip signed it in her presence. Rosalie did not intend for the disclaimer to be effective in preventing Philip from acquiring his share of Joseph's estate.
Philip testified that he did not sign any document disclaiming his interest in the cash assets of the Trust. He acknowledged that the signature on the disclaimer form was similar to his own but testified that it was also different and that, if he did sign that paper, he did so before the typed paragraph was added. F. Rosalie's Arrangement with Philip Regarding the Inheritance
Philip admitted that he did attempt to disclaim his beneficial interest in a life insurance annuity that Joseph had purchased. Apparently, Angelo did not discover this Trust asset until August 2004. Philip testified that he tried to disclaim his interest in the annuity because it was not a lot of money and Angelo told him he would lose his Social Security if he accepted it. Philip testified that Angelo said "to sign off on it and let mom, Amy and him receive it and that he would make sure they give me the money anyway."
1. The Washington Mutual Account
Rosalie testified that Philip requested that his inheritance be left in the Washington Mutual account, that he asked her to hold those funds for him, and that she agreed with Philip that $22,318 of the funds in the account would be available to Philip.
When Angelo gave Rosalie the Washington Mutual checkbook and his spreadsheet, Rosalie believed that the Trust was dissolved and she treated the account as her personal property. However, Rosalie also understood that approximately $22,318 of the money in that account belonged to Philip and that she was responsible for making sure that Philip received his share of the cash.
Rosalie also testified that, after she took possession of the Washington Mutual account, she paid Philip's bills as he requested. However, she did not keep a formal accounting or provide Philip with a written summary of the payments she made on his behalf. Furthermore, Rosalie admitted at trial that she made the decision whether or not to pay certain bills for Philip. Rosalie also reluctantly admitted that Philip asked her to pay him his inheritance instead of paying his bills.
Philip testified that he never agreed that Rosalie could hold his share of the cash inheritance. Rather, after Joseph died, Rosalie came to him and told him that she was going to make sure that he did not lose his Social Security benefits by taking his inheritance for him. Philip testified that every time he demanded his inheritance, Rosalie "would try to give me money. A lot of times she'd say no. And I have to ask or beg or demand maybe 10 to 50 times before she actually pay a bill or give me some." Philip also recalled going to a bank and opening a joint account with Rosalie. Rosalie told him that it was his account, but when he returned to the bank the next day "to get all the money," he was told that he was "not legally allowed to take out or make any withdrawals."
2. The Monterey Property
Rosalie testified that she and Philip made an agreement to keep the Monterey property and to buy out Angelo and Amy's interests. According to Rosalie, Philip made the refinancing arrangements which enabled her to obtain a $380,000 loan so they could buy out Angelo and Amy. At the time, Rosalie was concerned about the loan terms because her monthly payment obligations were high and not fixed, and she knew she would have to pay back the loan within a year. So, the understanding she had with Philip was that they would keep the Terry house for Philip to live in and they would sell the Withers house in order to pay off the loan. Philip helped implement this plan by hiring an architect to divide the two houses on the Monterey property.
Rosalie testified that she and Philip also agreed that Philip's name would not be on the title to the Monterey property but that the property would belong to them both. Rosalie acknowledged at trial that she knew and understood that when she obtained title to the Monterey property, she was holding that property on behalf of Philip as well.
At trial, Philip maintained that he did not voluntarily participate in the plan to buy-out Angelo and Amy's interests in the Monterey property. Philip was living with Rosalie at the time, and recalled that his mother was furious when Angelo told her he wanted to be bought out, that she became more angry when Amy made the same request a month later, and that she did not know where she was going to get the money to buy them out. According to Philip, it just so happened, that he had found a flyer on the door from a real estate mortgage company. So he gave the flyer to Rosalie who then said she would borrow the money so she could do the buy-out. At that point, Philip thought he might be able to get his inheritance too, but when he asked Rosalie, "she went crazy."
According to Philip, from the time of Joseph's death, Rosalie repeatedly told him she would give him his inheritance after she sold the Monterey property and Angelo told him the same thing on numerous occasions.
3. Rosalie's Trust and Bank Accounts
Rosalie had at least three accounts that she allegedly used to make payments on behalf of Philip: (1) the Washington Mutual account; (2) a checking account at Bank of America, and (3) an account she opened in the name of her trust. Rosalie did not keep contemporaneous accounting records and her trial testimony about expenditures she made from these various accounts was confusing, to say the least. She candidly admitted that she was not "really good about keeping a really good accurate record."
In November 2004, Rosalie executed a revocable trust that had been drafted by Lorie Robertson, the attorney who prepared Joseph's Trust. Philip was named as a 90 percent beneficiary and Rosalie's husband Paul was the other beneficiary. Robertson testified that Rosalie told her the purpose of the trust was to hold Rosalie's inheritance and that Philip was the primary beneficiary because Rosalie was "holding" some of Philip's assets for him and because she was concerned for Philip's welfare. However, Rosalie did not actually transfer the Monterey property into her trust until August 2005. By that time, she had already divided the property, sold the Withers house and refinanced the Terry house property for a second time.
However, Rosalie did expressly acknowledge that she used the Washington Mutual account to make a $10,000 mortgage payment on her home on Jenny's Lane in Fernley, Nevada, which she owned with her husband Paul, and that she also used $58,000 from the refinance of the Monterey property to put a down payment on a new home for herself and Paul, which was located on Aster Lane in Fernley. Rosalie admitted that she may have used the Washington Mutual account and the refinancing money to pay other expenses related to her personal homes and that she never intended for Philip to have an interest in her homes.
After Philip filed this lawsuit, Rosalie retained a forensic accountant who generated a master accounting on her behalf. Rosalie testified that she assisted the accountant by going through her checkbook registers and making notes of the purpose of various payments. Either she or the accountant generated a list of payments that were allegedly made on Philip's behalf. The list, which was admitted as an exhibit at trial, is difficult to follow, but documents payments in excess of $100,000. Philip testified that he carefully reviewed the exhibit and determined that many payments attributed to him were not really made for him. According to Philip's assessment, approximately $39,504 of the payments on Rosalie's list were properly attributed to Philip. G. The Real Estate Venture
Rosalie sold the Withers house in January 2005 and then refinanced the Terry house for a second time in April 2005. Rosalie testified that she took these actions pursuant to her agreement and "partnership" with Philip. She and Philip formed that partnership after Philip proposed that they refinance the Terry house and use the proceeds to invest in real estate in Fernley, Nevada. The purpose of the partnership was to "flip" Fernley properties so they could make a profit.
Rosalie testified that she and Philip found two properties they wanted to purchase together, one on Red Bluff Way and the other on Reese River Road. Philip, who had been living with Rosalie, was going to move into Red Bluff and agreed he would contribute some of his Social Security money for that purchase. Together, Rosalie and Philip convinced Rosalie's husband Paul to join their partnership because they needed his credit to buy the properties.
Rosalie used the Terry house refinance money and the proceeds from the Withers house sale to remodel the Terry house, and to purchase Red Bluff Way in April 2005, and Reese River Road in June 2005. Title to both Fernley properties was taken in the name of Rosalie and Paul as joint tenants with a right of survivorship.
Rosalie testified that she and Philip both tried to sell the two investment properties, but they could not secure a buyer and, as a result, the partnership experienced serious cash flow problems. After Philip moved into Red Bluff, he made one rent payment to Rosalie but then refused to pay any more, taking the position that the property was his inheritance. Rosalie testified that she, Philip and Paul frequently discussed the depleting funds of their partnership. During a meeting in August 2006, Rosalie and Paul told Philip that they would be completely out of money by 2007 and that they would have to use their personal funds to make all the payments. At that point, Philip asked Rosalie to refinance the Terry house again, but she refused. Philip agreed to try to get a job and use his own funds to pay for expenses at Red Bluff, but that never happened. At some point in 2007, Paul loaned personal funds to pay all of the expenses of the three properties owned by the partnership. Eventually, the decision was made to sell the Terry house and Philip agreed that the proceeds of the sale would be used to reimburse Rosalie and Paul for their personal investments.
Philip testified that he never had any desire or intention to buy investment properties in Fernley, Nevada; it was Rosalie, not Philip, who wanted to buy Reese River and Red Bluff for investment purposes. Philip wanted to use his inheritance to purchase a home in Wingfield Springs because, as he testified at trial, "it's right near Reno. That's where everyone I know is. So, I would be able to have my friends over whenever they want to come over. Or I let people, if they're my friends and they're homeless, I would have let them stay there because it's a big house. And it's closer to town."
Philip testified that he moved into the Red Bluff house in 2005 because Rosalie had promised him that he would always have a roof over his head and because he knew the house was purchased with money from the Trust. According to Philip, Rosalie said she would only give him his inheritance if he paid rent. So Philip made one rent payment, but when Rosalie asked for a second payment, Philip told her that he would pay rent after she gave him his inheritance.
Philip testified that between March 2004 and January 2008, he asked Rosalie or Angelo to pay him his inheritance "hundreds, but possibly less than a thousand" times, and that there were occasions when he asked 50 to 100 times on a single day. Rosalie always responded that Philip would receive his inheritance after the Terry house was sold. H. The Terry House Sale
Rosalie sold the Terry house in January 2008 and she used more than half the sales proceeds to pay down her mortgage on her personal residence on Aster Lane. Rosalie testified that she kept most of the proceeds of the Terry house sale as reimbursement for the personal investment that she and Paul made in the partnership with Philip, but she also maintained that she was still paying Philip's bills at that time.
Philip testified that he learned that the Terry house had been sold by looking on the internet and calling the realtor. According to Philip, Rosalie and Paul intentionally avoided his calls at that time and he finally made contact with Rosalie by using someone else's phone. When Rosalie confirmed that the Terry house had sold, Philip asked, demanded and begged for his inheritance. Rosalie told Philip that he would get his inheritance after she did her taxes and that he could get $70,000, but that they would also have to put the Fernley investment properties in Philip's name so that she and Paul could avoid having to file bankruptcy. Philip responded by demanding his inheritance "in full." He screamed and yelled and subsequently appealed to Paul for help, who wished him good luck.
At trial, Rosalie admitted that after the Terry house sold, Philip asked for money. From Rosalie's perspective, Philip was not requesting his inheritance, but money from the partnership which she could not pay him because of all their expenses. Rosalie testified that she attempted to convince Philip to move out of the Red Bluff house so they could rent it out. When he refused, Rosalie authorized her real estate company to initiate eviction proceedings against Philip.
Philip testified that Rosalie evicted him from Red Bluff because he demanded his full inheritance and, after that, he had no fixed home. He returned to California, stayed with his father for a month or so, and then "stayed wherever he could in the meantime." He has been homeless, lived in his car and slept in a friend's car. He has tried to exchange his music skills for a place to sleep. He has lost between 40 and 50 pounds and does not always have enough to eat.
I. Trial Court Proceedings
On September 4, 2008, Philip filed a complaint against Angelo, Rosalie and Paul alleging causes of action for breach of fiduciary duty, failure to distribute trust assets, financial abuse of a dependent adult, fraud and forgery. A year later, on September 4, 2009, a court trial was commenced before the Honorable George Hernandez. On September 30, 2009, the case was submitted without a request for a statement of decision.
On October 5, 2009, the court filed a judgment for the plaintiff. The judgment holds Angelo and Rosalie jointly and severally liable to Philip for (1) breach of fiduciary duty for "wrongfully taking, concealing, and/or disposing of property belonging to a beneficiary of a trust"; (2) failure to distribute trust assets owed to a beneficiary of a trust; (3) financial abuse of a dependent adult; (4) constructive fraud; and (5) actual fraud, including intentional concealment of material facts, false representations and false promises.
The court rejected Philip's claim that Rosalie's husband Paul was a co-conspirator of Rosalie and Angelo. Judgment was not entered against Paul, and his role in these events is not at issue on appeal.
In the judgment, the trial court expressly found that Philip is (1) a dependent adult as defined by the EADACPA (Welf. & Inst. Code, § 15610.23), and (2) a disabled person within the meaning of Civil Code section 1761, subdivision (g). The court also found that Angelo was the trustee of the Trust, that Rosalie was Angelo's agent, and that Rosalie was also an independent fiduciary of Philip due to her parent-child relationship with Philip, her position as an agent of the trustee, and her "admitted role in holding and distributing the assets of the Trust for Philip's benefit."
The trial court also found that, pursuant to Probate Code section 16401, subdivision (b), Angelo was liable to Philip for Rosalie's tortuous acts "due to his actions in directing the agent's performance in refinancing the Monterey property and disbursing proceeds of the Trust; his delegation of fiduciary duties, his failure to exercise prudence in selecting an agent; his failure to review the agent's performance; and his failure to take reasonable steps to compel the agent to carry out the terms of the Trust as they relate to Philip DiGirolamo, a Trust beneficiary."
The trial court found that each of the defendants' unlawful actions caused Philip damage in the principal sum of $327,024.39, and it doubled that amount based on the findings of breach of fiduciary duty, failure to distribute trust assets and fraud. (See Prob. Code, § 859.) Accordingly, the judgment awarded Philip damages in the total amount of $654,048.78. The judgment also awarded Philip attorney fees pursuant to the EADACPA, based on the finding that Angelo and Rosalie committed financial abuse of a dependent adult. (See Welf. & Inst. Code, § 15657.5, subd. (a).)
On December 4, 2009, Angelo filed a notice of appeal from the October 2009 judgment. On July 6, 2010, the trial court filed an order awarding Philip attorney fees in the amount of $509,436.
III. DISCUSSION
A. Preliminary Issues
1. The Amended Judgments
The Appellant's Appendix contains an amended judgment that was filed on December 28, 2009, after Angelo filed his notice of appeal. The Appellant's Appendix also contains a "Register of Actions" which indicates that a second amended judgment was filed in this case in July 2010.
Generally, an appeal "deprives the trial court of jurisdiction of the cause. That court may not vacate or amend a judgment or order valid on its face, or do any other act that would affect the rights of the parties or the condition of the subject matter. [Citations.]" (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 17, p. 78.)
There are exceptions to this general rule. For example, "[p]ending appeal, the trial court retains jurisdiction to determine matters related to attorneys' fees. [Citations.]" (9 Witkin, Cal. Procedure, supra, § 20, p. 82.) Thus, the July 2010 post-judgment attorney fees order was properly adjudicated after the notice of appeal was filed. Furthermore, because the October 2009 judgment awarded attorney fees to Philip, Angelo was not required to file a separate appeal from the post-judgment attorney fee's order. (Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 998 ["when a judgment awards costs and fees to a prevailing party and provides for the later determination of the amounts, the notice of appeal subsumes any later order setting the amounts of the award"]; see also, Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2007) ¶ 2:156:2, p. 2-73.)
However, it is simply not clear from this record whether the trial court had jurisdiction to enter the amended judgments while this appeal from the original judgment was pending. Since neither party addresses this issue at all, we will confine our discussion to the October 2009 judgment and the post-judgment attorney fees order. However, we will also remand this case to the trial court so that it can address any problems or issues regarding the propriety of the amended judgments.
2. Angelo's Bankruptcy
While reviewing the record on appeal, we made the disturbing discovery that Angelo filed for bankruptcy while this appeal was pending. Because the parties failed to inform us of this fact, we issued an order directing them to comply with the provisions of rule 12 of the Local Rules for the Court of Appeal, First Appellate District.
In response to our order, both appellate counsel pleaded ignorance. Their claimed lack of knowledge is perplexing and troublesome in light of the fact that Angelo's bankruptcy is expressly referenced in the attorney fees order and other documents that were included in Appellant's Appendix. In any event, counsel for both parties posit that no harm has been done because, as it turns out, Angelo's bankruptcy case was concluded in April 2010 and, the following month, the bankruptcy court entered a default judgment against Angelo which establishes that the judgment at issue in this case is a non-dischargeable debt.
In light of the bankruptcy court judgment which establishes our jurisdiction to proceed with this appeal, we are not inclined to pursue this matter. We note, however, that the parties and their counsel acted in violation of the automatic bankruptcy stay by actively processing this appeal for approximately five months, and that they have no valid excuse for that conduct or for their failure to timely inform this court about Angelo's bankruptcy.
3. Standard and Principles of Appellate Review
Angelo repeatedly contends that Philip failed to carry his burden of establishing facts essential to one or more of his causes of action. We note at the outset that Angelo (not Philip) has the burden on appeal of establishing that a finding necessary to the judgment was not supported by substantial evidence. (See, generally, Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2007) ¶¶ 8:38-8:39, p. 8-18.) "In [the] future, counsel's failure to acknowledge the proper standard of review might, in and of itself, be considered a concession of lack of merit." (James B. v. Superior Court (1995) 35 Cal.App.4th 1014, 1021.)
Angelo's efforts to establish error are seriously hampered because of his failure to provide an adequate record. As the appellant, Angelo bears the burden of affirmatively showing error by an adequate record. Error is never presumed; the presumption favors the correctness of the lower court's judgment or order. (Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1532-1533 (Null).) Therefore, when the appellant has not provided a complete record, we presume that the evidence was sufficient to support the judgment. (Ibid.; Cosenza v. Kramer (1984) 152 Cal.App.3d 1100, 1102; Pringle v. La Chapelle (1999) 73 Cal.App.4th 1000, 1003.)
In the present case, Angelo's Appellant's Appendix is sparse, to say the least. It does not include such relevant pleadings as Angelo's answer to the complaint, which would establish that he pleaded a statute of limitations defense. Nor does Angelo provide this court with relevant documentary evidence including, for example, the extensive documentation in support of Philip's damages claim. Finally, and most troubling to us, Angelo has failed to provide us with the excerpts from Amy's deposition testimony that were admitted into evidence at trial. As the only non-party family member/beneficiary, Amy's testimony about the events that gave rise to this litigation are obviously relevant to many of the issues on appeal. Angelo's decision not to include this evidence in the record is inexplicable.
The absence of a statement of decision creates another impediment to proving error. "Without a statement of decision, and timely objections to any ambiguities or omissions in it, the doctrine of implied findings applies. 'The doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment. [Citation.]' " (County of Orange v. Barratt American, Inc. (2007) 150 Cal.App.4th 420, 438-439 (County of Orange).)
In the present case, it appear that Angelo mistakenly views the absence of a statement of decision as an opportunity to frame the issues in a manner favorable to him. Thus, for example, some of the factual issues that Angelo raises on appeal are not obviously essential to the judgment. We may address these issues for the sake of expediency, but by no means validate the legal theories that Angelo may be attempting to resurrect.
In summary, as we turn to the merits of this appeal, we are guided by " 'three fundamental principles of appellate review' " which Angelo has largely ignored: " '(1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error. [Citations.]' [Citation.]" (County of Orange, supra, 150 Cal.App.4th at p. 439.) B. Substantial Evidence Issues
1. The Trust Did Not Terminate in April 2004
Angelo contends that the trial court committed reversible error by making an "implied finding" that the Trust did not terminate in April 2004. According to Angelo the purpose of the Trust was to distribute Joseph's assets to the four beneficiaries, that purpose was fulfilled when Angelo made his "final" distribution payments at the end of March 2004, and therefore, as a matter of law, the Trust terminated in April 2004. (See Prob. Code, § 15407, subd. (a) ["A trust terminates when . . . (2) The trust purpose is fulfilled."].)
Angelo fails to support his preliminary contention that the trial court made an implied finding that the Trust did not terminate in April 2004. He takes the position that the court must have made this finding because it is the "platform" for the conclusions that Rosalie was Angelo's agent and that Angelo was joint and severally liable for losses Philip incurred after April 2004. Although this argument is vague, it appears to rest on the erroneous premise that Angelo could not have appointed an agent or incurred any liability in his capacity as trustee after the date the Trust terminated. To the contrary, the Probate Code expressly states that "[o]n termination of the trust, the trustee continues to have the powers reasonably necessary under the circumstances to wind up the affairs of the trust." (Prob. Code, § 15407, subd. (b).) Thus, as Philip's trust expert testified at trial, regardless when the Trust terminated, Angelo had an ongoing duty to ensure that Philip's share of the Trust assets was distributed to Philip.
In any event, we reject Angelo's contention that the evidence compels the conclusion that the Trust terminated in April 2004. Rather, substantial evidence establishes the following pertinent facts:
The purpose of the Trust was to support Joseph during his lifetime and then to distribute Joseph's assets in four equal shares to the four beneficiaries. At the time of Joseph's death, the Trust held three types of assets, personal property, the Monterey property, and the cash/stock accounts. In April 2004, the personal property assets were not fully distributed because, as Angelo admitted at trial, Joseph's coin collection was a Trust asset that had not yet been distributed, even at the time of trial. Furthermore, Angelo did not distribute the Monterey property in accordance with the terms of the Trust by facilitating and authorizing the buy-out. As part of that transaction, Angelo apparently did transfer a one-quarter interest in the Monterey property to each of the four beneficiaries. However, this paper transfer was part of an indivisible transaction pursuant to which Rosalie took legal title to a Trust asset that did not belong solely to her. Finally, Angelo did not distribute Philip's share of the cash to Philip at the end of March 2004, but instead improperly delegated that task to Rosalie by giving her custody of the Washington Mutual account.
Angelo complains that "[h]olding Angelo liable for $1.2 million because he did not divide the coins in four parts is grossly disproportionate and surely not in keeping with [Joseph's] intent." This argument is nonsensical. Angelo was not held liable because he failed to distribute the coins, but rather because he and Rosalie violated their fiduciary duties, committed fraud and financially abused a dependant adult. The relevance of the coin collection was that it was evidence that the assets of the Trust had not been fully distributed and that Angelo had not fulfilled his duties as trustee.
In light of this evidence, we hold that the record supports an implied finding that the Trust did not terminate in April 2004, if such a finding was actually made.
2. Rosalie Was Angelo's Agent
Angelo challenges the trial court's express finding that Rosalie was Angelo's agent. "An agent is one who represents another, called the principal, in dealings with third persons." (Civ. Code, § 2295.) An agency can be either "actual or ostensible"; it is actual when the agent is employed by the principal and ostensible when the "principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him." (Civ. Code, §§ 2298-2300.) "The existence of an agency relationship is a factual question for the trier of fact, whose determination must be affirmed on appeal if supported by substantial evidence. [Citations.]" (Oarlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 965 (Garlock).)
Substantial and mostly undisputed evidence establishes the following facts: Angelo, acting in his capacity as trustee, authorized Rosalie to make arrangements with a title company for a two step, single transaction transfer of the Monterey property, pursuant to which legal title to this Trust asset was transferred from the trustee to Rosalie. After this transfer was completed, Rosalie used legal title to this Trust asset to secure a personal loan. Rosalie then purchased the interests of two beneficiaries in this Trust asset. However, Rosalie did not buy out Philip's interest, but instead expressly acknowledged to the trustee that she was holding the property subject to Philip's interest. Thereafter, Angelo, acting in his capacity as trustee, gave Rosalie custody of the Washington Mutual account that he used to hold and administer the liquid Trust assets. Although both Angelo and Rosalie were signatories on the account, Angelo instructed Rosalie that she was to act as the custodian of Philip's interest in the account. When Rosalie accepted custody of both the Monterey property and the Washington Mutual account, she expressly acknowledged to Angelo that she was accepting Philip's interests in the Trust and that she was responsible for distributing those interests to him.
This evidence amply supports the trial court's finding that Angelo appointed and authorized Rosalie to act as his agent and to assist him in performing his legal obligation to distribute a one-fourth interest in the Trust to Philip. Ignoring this evidence, Angelo contends the trial court's agency finding is not supported by substantial evidence because "Philip failed to prove the essential element of an agency: control." According to Angelo, there is no evidence that Angelo had the ability to control Rosalie's activities or that Rosalie agreed to act under Angelo's control. (Citing Garlock, supra, 148 Cal.App.4th at p. 964.)
Garlock, which is otherwise factually inapposite, states that one of the " ' "essential characteristics of an agency relationship as laid out in the Restatement" ' " is that " ' "a principal has the right to control the conduct of the agent with respect to matters entrusted to him. [Citation.]" [Citations.]' " (148 Cal.App.4th at p. 964.) In the present case, Angelo had the right to control Rosalie's conduct with respect to the matters he delegated to her, i.e., the distribution of Philip's beneficial interest in the Trust assets, because Angelo was the trustee of the Trust. Evidence that Angelo attempted to relinquish that control, by essentially washing his hands of the matter after April 2004, does not undermine the court's finding that Rosalie was Angelo's agent.
3. Fraud
The judgment holds Angelo and Rosalie liable "[f]or actual fraud, including intentional fraud, concealment of material facts, and false promise . . . ." The language of the judgment is expansive, although it specifically identifies three fraudulent statements that the defendants made: (1) "advising plaintiff that he would only be paid his inheritance if he executed a deed transferring title to the Monterey property to Rosalie Pierce"; (2) "falsely advising and promising plaintiff that he would be paid his inheritance upon sale of the Terry Street property"; and (3) "falsely advising plaintiff that he would lose his Social Security benefits if he received an inheritance."
On appeal, Angelo contends that (1) there is insufficient evidence that he made any of the fraudulent statements outlined in the judgment; (2) any statement he may have made to Philip about losing his Social Security benefits if he received an inheritance was true; and (3) Philip could not have reasonably relied on advice from Angelo about the effect that accepting an inheritance would have on Philip's benefits. We reject each of these contentions.
First, Philip's trial testimony constitutes substantial evidence that Angelo personally made at least two of the false statements or promises that gave rise to the finding of fraud. Philip testified that Angelo told him that (1) he would get his inheritance when the Monterey property was sold, and (2) he would lose his benefits if he accepted an inheritance directly from the Trust.
Angelo contends that Philip's trial testimony does not constitute substantial evidence because Philip was not a credible witness. As noted at the outset of our discussion, Angelo has failed to provide a complete record of the trial evidence by, among other things, excluding Amy's trial testimony. Therefore, if Philip's version of events required some corroboration, we would assume that Amy's testimony supports Philip's version of the relevant events. (Null, supra, 206 Cal.App.3d at pp. 1532-1533.) However, no such corroboration is required. This case was tried before a judge who had the opportunity to directly assess witness credibility. We will not question the trial court in that regard.
Angelo's second argument is that the trial court's finding that defendants falsely told Philip that he would lose his Social Security benefits if he received an inheritance must be reversed because Philip actually would have lost his Social Security benefits if he had accepted his inheritance in April 2004.
Angelo's second and third arguments apply only to one of the three fraudulent statements identified by the trial court. Thus, even if his claims had merit, they would not establish reversible error.
According to Angelo, a distinction must be made between Supplemental Social Security Income (SSI) and Social Security Disability Income (SSD) because SSI is a "means-tested" benefits program while SSD is not. Furthermore, Angelo contends, "[t]he evidence presented at trial established that in April of 2004, Philip was receiving SSI, not SSD" and that "[Philip] did not begin receiving SSD, a non-means based benefit that is not affected by other income or an inheritance, until the spring of 2008." Therefore, Angelo concludes, the trial evidence established that Philip would have lost his benefits if he had accepted his inheritance when Angelo was administering the Trust in 2003 and 2004.
The only evidence the defendants offered at trial to support this theory was an application for SSI that Philip filed in August 2003. They did not, however, produce any evidence regarding the outcome of that application. Philip was asked about the application during cross-examination, but his testimony was confusing, to say the least. Construing that testimony in the light most favorable to the judgment, it appears that Philip's application was amended to request SSD before it was fully processed by the SSA. In any event, there is no evidence in this record that Philip actually received SSI in 2003 or at any other time relevant to this case.
Apparently the defendants did not offer evidence at trial that SSI is a means-based program or that any SSI payment that Philip may have received would have been terminated if he accepted his inheritance. At least, Angelo does not identify any such evidence to us.
The appellate record also contains two letters that the SSA sent to Philip, one dated March 24, 2008, and the second with a date of August 7, 2009. Philip produced these letters at trial to establish that receiving his inheritance would not have jeopardized his disability benefits. Both letters provide information about Philip's "current" Social Security benefits. They state that Philip does receive monthly disability (SSD) payments from the SSA, that Philip does not receive supplemental security income benefits (SSI), and that Philip "can receive an inheritance and still keep his disability payments." Contrary to Angelo's contention on appeal, these letters do not state or in any way imply that Philip did not begin receiving SSD until the spring of 2008. Nor do they establish that Philip was receiving SSI in April 2004, as Angelo contends. In fact, both letters expressly state that "Beginning November 2003, the current Supplemental Security Income payment is . . . $0.00."
Angelo's third argument is that Philip could not reasonably have relied on advice about Social Security from a non-lawyer family member because he had his own attorney to help him with his Social Security benefits. At trial, Philip acknowledged that a lawyer helped him file his application for Social Security benefits, but he also testified that he did not ask the lawyer about the implications of receiving an inheritance because he believed Rosalie and Angelo when they told him that he would lose his benefits if he received the inheritance. The trial court's conclusion that Philip reasonably relied on Rosalie's and Angelo's representations is supported by evidence establishing that Philip is permanently disabled by his mental illness, that he depended on his family to support and protect him, and that Angelo was the trustee with express fiduciary duties and obligations to Philip who was a beneficiary of the Trust.
4. Breach of Fiduciary Duty
Angelo contends that there is no substantial evidence to support the trial court's finding that Angelo breached his fiduciary duties to Philip either directly, or indirectly by failing to properly supervise Rosalie.
First, Angelo forfeited this claim of error by failing to set forth in his brief all material evidence on the point and not merely his own evidence. (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246.) For example, Philip's expert on trust administration testified at trial that "there had been a number of breaches of fiduciary duty by both Angelo DiGirolamo as well as Rosalie Pierce." On appeal, Angelo ignores both this testimony and the evidence which supported it.
Second, Angelo's claim that he is not liable for breach of fiduciary duty rests on several factual theories that we have already rejected. For example, Angelo contends there is insufficient evidence that he personally and directly breached his fiduciary duties to Philip because Philip's trial testimony to that effect must be completely disregarded as inherently improbable. We have already rejected this superficial and self-serving argument. Angelo also contends that he could not have breached his fiduciary duty to supervise his agent since Rosalie was not his agent. Viewed in tandem, Angelo's attempts to undermine the trial court's agency finding are hopelessly circular. In essence, Angelo contends that Rosalie was not his agent because he did not control her and that he is not liable for failing to control her because she was not his agent. In any event, we affirm our prior holding that Rosalie was Angelo's agent.
Finally, Angelo contends that Philip failed to prove that Angelo's actions caused him damage. According to Angelo, "[t]he worst case to be made against [him] is that he failed to distribute $42,318 directly to Philip," and since Philip admitted that he received $39,000 from Rosalie, "Philip received all but $3,000 of the $42,318."
As a causation argument, this theory defeats itself by expressly conceding that Angelo caused at least $3,000 of Philip's damages. Furthermore Angelo's self-serving calculation is not supported by proper record citations and, in any event, ignores the evidence against him. Apparently, the $42,318 calculation reflects the sum of the $22,318 balance of Philip's interest in the liquid assets that Angelo turned over to Rosalie and the $20,000 cash payment that Angelo testified he made to Philip but Philip claimed was paid to Rosalie. The most glaring problem with this calculation is that it completely ignores Philip's interest in the Monterey property and the evidence that Philip was not paid for that interest. Suffice it to say, Angelo seriously mischaracterizes his role in this series of unfortunate events and thus ignores the very real consequences of his failure to distribute the assets of the Trust in accordance with the terms of the Trust and with California law. C. Damages
1. Amount of Award
Angelo contends that the damages award is excessive because "[t]he award of nearly $1.2 million against Angelo should shock this Court's conscience."
First, for purposes of substantial evidence review, the damages award was $327,024.39, not $1.2 million as Angelo contends. As the judgment reflects, the court found that Philip suffered damages in the amount of $327,024.39. That figure was then doubled pursuant to the statutory directive of Probate Code section 859. Furthermore, Philip was paid his attorney fees because the defendants violated the EADACPA.
Second, Angelo has waived his claim that the award of $327,024 was excessive because he did not raise this issue in a motion for new trial in the trial court. "A failure to timely move for a new trial ordinarily precludes a party from complaining on appeal that the damages awarded were either excessive or inadequate, whether the case was tried by a jury or by the court. [Citation.] The power to weigh the evidence and resolve issues of credibility is vested in the trial court, not the reviewing court. [Citation.] Thus, a party who first challenges the damage award on appeal, without a motion for a new trial, unnecessarily burdens the appellate court with issues that can and should be resolved at the trial level. [Citation.] Consequently, if ascertainment of the amount of damages turns on the credibility of witnesses, conflicting evidence, or other factual questions, the award may not be challenged for inadequacy or excessiveness for the first time on appeal. [Citation.]" (Jamison v. Jamison (2008) 164 Cal.App.4th 714, 719-720.)
Third, this claim of error is doubly waived on appeal. At trial, Philip supported his damages claim with expert testimony and extensive documentary evidence. Angelo does not acknowledge let alone address this evidence in his appellate brief. Indeed, Philip was compelled to file a Respondent's Appendix in order to provide this court with documents supporting his expert's damages calculations.
2. Lost Profits and Joint and Several Liability
Angelo contends that the trial court committed legal error by (1) holding him liable for Philip's claimed lost profits; and (2) applying the doctrine of joint and several liability in this case. Angelo fails to substantiate either of these legal theories.
Philip's damages claim included one-half the profits that Rosalie and Paul made when the two parcels comprising the Monterey property were sold. On appeal, Angelo contends that Rosalie might be liable for Philip's lost profits, but that Angelo "does not have any profits to disgorge." Although the legal premise of this argument is unclear, Angelo appears to rely on Probate Code section 16440, subdivision (a)(2), which states : "If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances: . . . (2) Any profit made by the trustee through the breach of trust, with interest." Apparently Angelo believes that this statute relieves him of liability for Philip's lost profit since Angelo did not make that profit himself.
On their personal income tax forms, Rosalie and Paul reported capital gains from the sale of both the Withers house ($117,118) and the Terry house ($200,844).
However, Angelo fails to address Probate Code section 16401, subdivision (b) (section 16401(b)), which states: "Under any of the circumstances described in this subdivision, the trustee is liable to the beneficiary for an act or omission of an agent employed by the trustee in the administration of the trust that would be a breach of the trust if committed by the trustee: [¶] (1) Where the trustee directs the act of the agent. [¶] (2) Where the trustee delegates to the agent the authority to perform an act that the trustee is under a duty not to delegate. [¶] (3) Where the trustee does not use reasonable prudence in the selection of the agent or the retention of the agent selected by the trustee. [¶] (4) Where the trustee does not periodically review the agent's overall performance and compliance with the terms of the delegation. [¶] (5) Where the trustee conceals the act of the agent. [¶] (6) Where the trustee neglects to take reasonable steps to compel the agent to redress the wrong in a case where the trustee knows of the agent's acts or omissions."
As reflected in our factual summary, the judgment in this case contains express findings which establish that several of the circumstances set forth in section 16401(b) apply in this case. The trial court found that Angelo (1) directed Rosalie's performance in refinancing the Monterey property and disbursing proceeds of the Trust, (2) delegated his fiduciary duties; (3) failed to exercise prudence in selecting Rosalie as his agent; (4) failed to review his agent's performance; and (5) failed to take reasonable steps to compel Rosalie to carry out the terms of the Trust as they relate to Philip.
On appeal, Angelo ignores these express findings that the trial court made, thus waiving any claim that they are not supported by the evidence. More to the present point, these findings establish the basis for holding Angelo liable under section 16401(b) for damages that Rosalie caused while acting as Angelo's agent. Thus, by conceding that Rosalie is liable for Philip's lost profits, Angelo also essentially concedes that he is liable for those damages as well.
Angelo insists that the concept of joint and several liability does not apply to these facts because this is not a case in which two or more defendants caused a single indivisible injury. According to Angelo, he and Rosalie "performed very different roles," and the damages attributable to him "can be apportioned easily." This argument simply cannot be squared with section 16401(b), the trial court's findings under that statute and the evidence in the record before us. D. Statute of Limitations
Angelo contends that Philip's claims against him are all time barred. According to Angelo, all of the causes of action against him began to accrue on or about March 30, 2004, when he made his final distribution payments. Therefore, Angelo reasons, since four years was the longest limitations period for any of the causes of action alleged against him, Philip's September 2008 complaint is time barred. Assuming that Angelo pleaded the statute of limitations as a defense in his answer to Philip's complaint, this claim of error fails for at least two reasons.
We note for the record that we do not share Angelo's assumption that a three year statute of limitations applies to Philip's cause of action under the EADACPA. The statute of limitations for breach of fiduciary duty is four years. (Code Civ. Proc., § 343.) Arguably, the gravamen of Philip's cause of action under the EADACPA is breach of fiduciary duty and, therefore, a four-year limitations period applies to that claim as well. (Sakai v. Merrill Lynch Life Ins. Co. (N.D. Cal. 2007) 2007 U.S. Dist. LEXIS 35958, 5-7; see also Davies v. Krasna (1975) 14 Cal.3d 502, 515 [" 'The statute of limitations to be applied is determined by the nature of the right sued upon, not by the form of the action or the relief demanded' "]; Smith v. Ben Bennett, Inc. (2005) 133 Cal.App.4th 1507, 1525 [statute of limitations is governed by "gravamen of the cause of action" and the same cause of action asserted in different cases "may be governed by different statutes of limitations, whenever the gravamen of the cause of action is different . . . ."].)
First, the resolution of a statute of limitations defense is normally a question of fact. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810 (Fox).) Here, Angelo fails to adequately articulate the evidentiary basis for his factual assumption that the statutes of limitations on every claim against him, or on any specific cause of action for that matter, necessarily began to run on March 30, 2004, when he made his so-called final distribution payments. It is not our job to sort that argument out for him.
Second, Angelo concedes that the delayed discovery rule applies to the claims asserted against him. (See, e.g., April Enterprises, Inc. v. KTTV(1983) 147 Cal.App.3d 805, 827 [applying rule to breach of fiduciary duty claim]; Quick v. Pearson (2010) 186 Cal.App.4th 371, 378 [rule applies to action for breach of trust pursuant to Prob. Code, § 16460, subd. (a)(2)]; Code Civ. Proc., § 338, subd. (d) [rule applies to fraud claim].) The delayed discovery rule postpones accrual of a cause of action until the plaintiff discovers or has reason to discover the injury and its wrongful cause. (Fox, supra, 35 Cal.4th at pp. 807-808.)
In the present case, substantial evidence supports Philip's theory, first alleged in his complaint, that he did not discover that the defendants' actions were unlawful, or the damage that those actions caused him, until after the Terry house was finally sold in January 2008 and Rosalie refused to pay Philip his inheritance. Philip filed his complaint less than a year after the Terry house was sold. E. The EADACPA
Angelo contends that the trial court committed legal error by holding him liable for violating the EADACPA by committing financial abuse of a dependent adult.
All statutory references in this subsection of our opinion addressing the EADACPA are to the Welfare and Institutions Code.
1. Background
The purpose of the EADACPA "is essentially to protect a particularly vulnerable portion of the population from gross mistreatment in the form of abuse and custodial neglect." (Delaney v. Baker (1999) 20 Cal.4th 23, 33; see also Benun v. Superior Court (2004) 123 Cal.App.4th 113, 123.) "It addresses '[p]hysical' or 'financial abuse,' 'neglect, . . . abandonment, isolation, abduction, or other treatment with resulting physical harm or pain or mental suffering,' '[t]he deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering' [citation], or the 'negligent failure of any person having the care or custody of an elder or a dependent adult to exercise that degree of care that a reasonable person in a like position would exercise' [citation]." (Cotton v. StarCare Medical Group, Inc. (2010) 183 Cal.App.4th 437, 451.)
The term "Dependent adult" is defined in section 15610.23, which states: "(a) 'Dependent adult' means any person between the ages of 18 and 64 years who resides in this state and who has physical or mental limitations that restrict his or her ability to carry out normal activities or to protect his or her rights, including, but not limited to, persons who have physical or developmental disabilities, or whose physical or mental abilities have diminished because of age. [¶] (b) 'Dependent adult' includes any person between the ages of 18 and 64 years who is admitted as an inpatient to a 24-hour health facility, as defined in Sections 1250, 1250.2, and 1250.3 of the Health and Safety Code."
Financial abuse is defined in section 15610.30 which states, in part: "(a) 'Financial abuse' of an elder or dependent adult occurs when a person or entity does any of the following: [¶] (1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. [¶] (2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. [¶] (3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 1575 of the Civil Code."
2. Dependent Adult
Angelo contends that the trial court committed legal error by finding that Philip is a dependent adult. According to Angelo, (1) the trial court misinterpreted "the term 'dependent adult' to include a person who suffers a treatable mental condition such as bipolar disorder and who receives Social Security benefits;" (2) the correct interpretation of section 15610.23 is that it applies only to adults who are "unable to care for their own basic needs or perform the activities of daily life, such as walking, eating, bathing, using the bathroom, driving, shopping, paying bills or maintaining adequate shelter;" and (3) Philip is not a dependent adult because he is capable of caring for his own basic needs and performing activities of daily life. This argument is flawed at every step.
First, we find nothing in this record to support Angelo's contention that the trial court found that an individual with a treatable mental condition who receives Social Security automatically or necessarily qualifies as a dependent adult. There was no statement of decision and the judgment does not contain any language interpreting the term "dependent adult." In other words, Angelo cannot avoid our substantial evidence standard of review by misconstruing the trial court's factual finding as a conclusion of law. Nor can he invoke the doctrine of implied findings in this context. As discussed above, under that doctrine we will imply any factual finding necessary to support the judgment. (County of Orange, supra, 150 Cal.App.4th at pp. 438-439.) Angelo cannot invoke that doctrine to imply a finding that undermines the judgment.
Second, Angelo's interpretation of section 15610.23 conflicts with the unambiguous language of that statute which expressly defines a dependent adult as a person whose abilities and capabilities are "restricted," and does limit that definition to people who are completely "unable" to care for their own basic needs or to perform basic life activities as Angelo contends. In this regard, Angelo's creative use of inapposite case authority does not support his legal theory. Finding examples of dependent adults who are more impaired than Philip does compel the conclusion that Philip is not a dependent adult. Angelo fails to cite a single case which supports his narrow interpretation of the statutory language. Indeed, the only case that Angelo cites which discusses the standard of proof for establishing dependent adult status undermines his argument on appeal. (People v. Matye (2008) 158 Cal.App.4th 921 (Matye).)
Matye, supra, 158 Cal.App.4th 921, was an appeal from a conviction for the abuse and false imprisonment of a dependent adult. The appellant argued, among other things, that there was insufficient evidence to support the jury's finding that the victim was a dependent adult within the meaning of Penal Code section 368, a statute which contains a definition of dependent adult that is virtually identical to section 15610.23. (Id. at p. 925.) Interpreting the relevant statutory language, the Matye court found: " 'Restrict' is not synonymous with 'preclude.' A restriction is only a limitation or restraint. [Citation.] Therefore, it is not necessary to prove that the person is incapable of carrying out normal activities or of protecting the person's rights; it is sufficient if the person's ability to do so is limited in some significant way." (Ibid.) The court then viewed the evidence in the light most favorable to the judgment and found it sufficient to support the jury's finding that the victim in that case was a dependent adult. (Ibid.)
Penal Code section 368, subdivision (h), states: "As used in this section, 'dependent adult' means any person who is between the ages of 18 and 64, who has physical or mental limitations which restrict his or her ability to carry out normal activities or to protect his or her rights, including, but not limited to, persons who have physical or developmental disabilities or whose physical or mental abilities have diminished because of age. 'Dependent adult' includes any person between the ages of 18 and 64 who is admitted as an inpatient to a 24-hour health facility, as defined in Sections 1250, 1250.2, and 1250.3 of the Health and Safety Code."
Matye undermines the first two prongs of Angelo's argument here by confirming our conclusions above that (1) the trial court's finding that Philip is a dependent adult was a finding of fact which we will affirm on appeal if supported by substantial evidence; and (2) the question presented to the trial court was not whether Philip is incapable of performing normal activities or protecting his rights but whether his ability to do so is limited in some significant way.
Finally, we reject the third prong and conclusion of Angelo's argument, i.e., that Philip is not a dependent adult because there is no evidence that he is unable to care for his own basic needs. The evidence in this record shows, among other things, that Philip has been mentally ill since childhood, that he has been institutionalized because of his mental condition more than once, and that he is permanently disabled as a result of his mental illness. As a result of his mental illness, Philip's abilities to maintain employment and to provide a home for himself have been significantly impaired. Furthermore Philip's mental problems significantly impaired his ability to protect his rights as a beneficiary of the Trust. This evidence supports the trial court's express finding that Philip is a dependent adult.
3. Financial Abuse
Angelo contends that, even if Philip is a dependent adult, there is no evidence to support a finding that Angelo committed financial abuse. As reflected above, financial abuse of a dependent adult can occur either directly, when a person with the requisite intent "[t]akes, secretes, appropriates, obtains, or retains real or personal property" of a dependent adult, or indirectly, when such a person "[a]ssists in taking, secreting, appropriating, obtaining, or retaining real or personal property" of a dependent adult. (§ 15610.30, subd. (a).)
Angelo argues the evidence precludes a finding that he directly violated this statute because he did not keep any of Philip's assets for himself. According to Angelo, the evidence shows: (1) Angelo gave Philip's cash to Rosalie, (2) Angelo gave Philip the grant deed for a one-fourth interest in the Monterey property, and (3) although Philip denied that Angelo paid him $20,000 in cash, he admitted that Rosalie ended up with that money. Therefore, Angelo concludes that he "did not take or appropriate [Philip's property] for himself, as required for liability under the statute."
This creative factual argument rests on the legal assumption that section 15610.30 requires proof that the person who committed financial abuse ultimately kept the property for himself. Angelo cites no authority for this assumption and we find no basis for it in the language of the statute itself. In fact, section 15610.30 expressly imposes liability for taking, secreting, appropriating, obtaining "or" retaining the property of a dependent adult. In the present case, there is substantial evidence that Angelo took Philip's cash and gave it to someone else, and that he also appropriated Philip's interest in the Monterey property so that he could effectuate the buy-out which benefited him personally.
Angelo separately contends that he is not liable for assisting Rosalie because there is no evidence that Angelo had "actual knowledge" that he was assisting in the commission of financial abuse. This argument is moot in light of our conclusion that the record supports a finding of direct financial abuse, and it is also erroneous. Angelo's authority for reading an "actual knowledge" requirement into this statute is Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727 (Das).)
Das, supra, 186 Cal.App.4th 727, affirmed a judgment sustaining a demurrer to a complaint alleging that a bank was liable for elder abuse and failure to report elder abuse by a third party. Construing a former version of section 15610.30, the Das court held that when "a bank provides ordinary services that effectuate financial abuse by a third party, the bank may be found to have 'assisted' the financial abuse only if it knew of the third party's wrongful conduct." (Das, supra, 186 Cal.App.4th at p. 745.) This holding has no application here since Angelo is not a bank and Rosalie was not a third party, but rather Angelo's agent. Beyond that, there is substantial evidence that Angelo knew that Rosalie took and kept Philip's inheritance and that Angelo let that happen notwithstanding his obligations and duties to Philip. F. The Attorney Fees Order
Finally, Angelo contends that the post-judgment attorney fees order must be reversed. In that order, the trial court calculated a lodestar figure of $168,577, based on evidence of 557.80 hours of attorney work at a rate of $315 per hour. That lodestar amount was then multiplied by three in light of several factors, including the quality of the attorney work, the results achieved and the contingent risk undertaken. Thus, Philip was awarded $505,731, for attorney fees incurred through judgment.
Philip was awarded an additional $3,705 for work on the attorney fees motion, which resulted in a total fee ward of $509,436.
Angelo's primary argument is that there is no statutory basis for the fee award because the EADACPA does apply in this case. We have already affirmed the trial court's finding that Angelo is liable for violating the EADACPA. Under that statute, "[w]here it is proven by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney's fees and costs." (Welf. & Inst. Code,§ 15657.5, subd. (a).) Therefore, Philip was entitled to an award of attorney fees.
Angelo also argues that the attorney fees award is excessive. His argument consists of this single sentence: "The multiplier of three times the lodestar of [sic] and the resulting award is an abuse of discretion; it shocks the conscience and suggests that passion and prejudice influenced the determination." This conclusory statement is insufficient to merit a substantive response. "[A]n experienced trial judge is in a much better position than an appellate court to assess the value of the legal services rendered in his or her court, and the amount of a fee awarded by such a judge will therefore not be set aside on appeal absent a showing that it is manifestly excessive in the circumstances." (Children's Hospital & Medical Center v. Bonta' (2002) 97 Cal.App.4th 740, 782.) Angelo has not even attempted to make this required showing.
IV. DISPOSITION
The judgment and post-judgment attorney fees order are both affirmed. This case is remanded to the trial court so that it may (1) resolve any lingering issues about the propriety of the so-called amended judgments that have come to our attention during the course of this appeal, and (2) hear Philip's request for attorney fees on appeal.
Haerle, Acting P.J. We concur: Lambden, J. Richman, J.