Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. 115212
Haerle, J.
I. INTRODUCTION
Klara Szanto died on December 5, 2005. Thereafter, Klara’s husband Paul and their son Victor filed a petition to confirm that Klara and Paul’s home in Hillsborough (the Hillsborough property) was an asset of the Paul and Klara Szanto Revocable Trust (the Szanto Trust). Peter Szanto, another son of Klara and Paul, responded by filing a petition under Probate Code section 21320 (section 21320), pursuant to which he sought declaratory relief that he could oppose the trust asset petition without violating a “no contest” provision in Klara’s will. The probate court filed an order confirming that the Hillsborough property was a trust asset and denying Peter’s section 21320 petition. We reverse the part of the order confirming that the Hillsborough property is a trust asset but otherwise affirm.
Because the parties and the decedent all share the same last name, we will refer to these individuals by their first names.
II. STATEMENT OF FACTS
A. The Trust Asset Petition
On May 17, 2006, respondents filed a Petition for Order Confirming Transfer of Trust Asset. According to the petition, Paul and Victor are co-trustees of the Szanto Trust, pursuant to the operative trust document which is dated March 19, 1991, Restated on October 5, 2005.
The petition sets forth the following allegations regarding Paul and Klara’s Hillsborough property. On September 15, 2004, Paul and Klara executed a grant deed transferring title to the real property from themselves “as husband and wife, as Joint Tenants,” to themselves as trustees of the Szanto Trust. On August 31, 2005, Klara and Paul, as trustees of the Szanto Trust, transferred all of their interest in the Hillsborough property to themselves as “Husband and Wife, as Joint Tenants.” The August 31, 2005, transfer was made to comply with the request of a mortgage company “solely for the purpose of refinancing,” and both Paul and Klara understood that “their property was to be retitled back to their trust once the financing was in place.” The petition does not address why a formal transfer was not accomplished prior to Klara’s death.
Respondents sought an order, allegedly pursuant to Estate of Heggstad (1993) 16 Cal.App.4th 943 (Heggstad), that the Hillsborough property is an asset of the Szanto Trust. Respondents further alleged that Klara’s will, dated September 15, 2000 (the 2000 will), provides that all her property be distributed to the Szanto Trust. Therefore, respondents alleged, granting their “Heggstad petition” would effectuate Klara’s intent and avoid the expense of a probate. Respondents stated that, if their petition was denied, they would initiate probate in which case Klara’s interest in the Hillsborough property would pass to the Szanto Trust, but at “additional expense to the Trust.”
B. Peter’s Request for a Continuance
A hearing on respondents’ trust asset petition was scheduled for June 19, 2006. On June 1, 2006, Peter filed, pro per, an ex parte request for a continuance. Peter argued the petition was deceptive on its face and that he needed additional time to explore the relevant issues and determine the potential impact of the respondents’ proposed actions. Peter also argued that respondents’ petition could affect his rights in an action he had filed against his parents and the Szanto Trust in the federal district court in Nevada. According to Peter, there was a pending motion to dismiss the Szanto Trust from the federal action and, if that motion was granted and the trust asset petition in this case was also granted, then Paul and Klara’s most valuable asset would not be available to satisfy any potential judgment he might obtain. According to Peter, the Hillsborough property is valued at approximately $12 million.
That same day, Peter filed a request that the Honorable Rosemary Pfeiffer be disqualified from sitting as a judge in this case on the ground she had “previously demonstrated unreasonable bias” against Peter in an unrelated child support action. Although disagreeing with the factual basis for this request, Judge Pfeiffer recused herself in order to further the interests of justice.
The appellate record reflects that Peter’s ex parte request for a continuance was denied, although the details pertaining to that determination are not available to us.
C. Peter’s First “Response” to Respondents’ Petition
On June 14, 2006, Peter filed, again pro per, a pleading which was referenced as a “Response” to the trust asset petition, accompanied by a citation to section 21320. In this short document, Peter alleged he is a beneficiary of the Szanto Trust “as published on September 26, 1996,” and he sought declaratory relief that filing an opposition to the trust asset petition would not constitute a will contest within the meaning of section 21320.
A hearing on the trust asset petition commenced on June 19, 2006, before the Honorable Robert D. Foiles. At the hearing, Peter requested additional time so he could “prepare an opposition under the safe harbor protection of 21320.” Respondents objected to a continuance and further argued that Peter had failed to show how or why section 21320 could be applied here. Over respondents’ objection, the court granted Peter a continuance so that he could file a proper petition under section 21320.
D. Peter’s Second Response and Petition
On June 21, 2006, Peter filed a pleading captioned as “1. Response to Petition for Order Confirming Transfer of Trust Asset 2. Petition for Declaratory Relief 3. Points and Authorities in Support of Declaratory Petition.” The stated purpose of Peter’s pleading was as follows: “The intent of this petition is to seek a declaration from this Court as to one matter only. A declaration pursuant to Probate Code § 21320 that if petitioner contests the present Petition for Order Confirming Transfer of Trust Asset, that contest would be no ‘will contest’ within the meaning of either of the wills of Klara Szanto as published on September 26, 1996 (Exhibit 2) or as published on September 15, 2000 (Exhibit 3).” Peter alleged that he was entitled to a section 21320 declaration because he is a beneficiary of the Szanto Trust.
Peter maintained that his mother had left two potentially valid wills, the 2000 will referenced in respondents’ petition and an earlier will, executed on September 26, 1996 (the 1996 will). Peter did not acknowledge the validity of either will but did acknowledge that both provided that Klara’s estate was to be transferred into the Szanto Trust, and that both contained no contest clauses. Therefore, Peter sought confirmation that opposing respondents’ petition would not constitute a will contest.
Peter alleged that he would not attack the validity of the Szanto Trust or of either of Klara’s wills. Instead, he intended only to “test the sufficiency, as a matter of law . . . of the [petition].” However, at another point in his very confusing pleading, Peter stated that he “seeks to present this Court with other aspects of Klara Szanto’s year 2000 Will which are in defiance of public policy, and hence void, as they apply to the Petition to Transfer Trust Asset.” At another point, Peter argued that any challenge that he might make to the respondents’ petition which proved successful would necessarily be for the betterment of Klara’s estate and, therefore, could not be found to thwart Klara’s testamentary intent.
Peter did not clearly articulate any specific ground for objecting to the respondents’ petition. He argued instead that the petition was confusing because it contained ambiguous language and that it was deceptive because it did not disclose that, before the petition was filed, Victor obtained Paul’s durable power of attorney. Peter questioned why this allegedly “crucial information” was kept from the court. Peter opined that, if assured his challenge would not result in a forfeiture, he could reveal other “ambiguity and deception” in the respondents’ petition. Finally, Peter stated that if he was given a “no contest” declaration, he would challenge what he “believes, in good faith, to be the multitude of misrepresentation of Klara Szanto’s intent in both putative wills.”
E. The Trial Court’s Ruling
The hearing on both petitions was held before Judge Foiles on July 7, 2006.
At the hearing, Peter stated that his opposition to respondents’ petition, should he be allowed to file one, would be that respondents were attempting to make “an end run around the probate and administration” of Klara’s will. Apparently, Peter was concerned that the real purpose of the respondents’ petition was to obtain a ruling from the court that the 2000 will was valid. Peter claimed that an order granting the petition would necessarily show that the 2000 will was valid and that respondents would then “us[e] this Court’s blessing to validate the Will that they have yet administered or seek some sort of authentication for.”
Peter also questioned respondents’ allegation that the only reason the Hillsborough property was transferred out of the Szanto Trust was to obtain refinancing. He argued that Klara kept meticulous diaries and that those diaries should be produced so Klara’s real intent could be determined. Peter further argued that he wanted to oppose respondents’ petition so that “I can make clear that we need to decide which one of the Wills we’re working under. I need to prove up to the Court the fraud, the undue influence that was exerted on my mother to sign the 2000 will, to sign the 2005 Trust and to make the actual intent of my mother known to the Court.”
Respondents argued that Peter’s claim that respondents were trying to make an end run around the probate law was unfounded. Because the Hillsborough property was transferred out of the Szanto Trust to Paul and Klara as joint tenants, with a right of survivorship, Klara’s share of the property passed directly to Paul and was not subject to probate. Respondents further argued that, to the extent Peter admitted he intended to attack his mother’s stated intentions, his proposed opposition would clearly be a contest.
At the conclusion of the hearing, the court granted respondents’ petition and denied Peter’s petition without making a finding as to whether the latter constituted a will contest. Instead, the court denied the section 21320 petition on “procedural grounds.”
An order granting respondents’ petition and denying Peter’s section 21320 petition was filed September 12, 2006. That order sets forth findings, including that (1) Paul and Klara transferred the Hillsborough property into the Szanto Trust on September 15, 2004; (2) Paul and Klara transferred the Hillsborough property out of the Szanto Trust to “Paul Szanto and Klara Szanto, Husband and Wife as Joint Tenants” on August 31, 2005; (3) “In compliance with the request of the mortgage company, title was changed to Joint Tenancy by Paul Szanto and Klara Szanto solely for the purpose of refinancing”; (4) the Hillsborough property is an asset of the Szanto Trust.
III. DISCUSSION
A. Peter’s Petition
Peter contends his section 21320 petition for declaratory relief was erroneously denied. We review de novo the order denying Peter’s petition. (Hearst v. Ganzi (2006) 145 Cal.App.4th 1195, 1209; Estate of Davies (2005) 127 Cal.App.4th 1164, 1173.)
Section 21320, subdivision (a), states: “If an instrument containing a no contest clause is or has become irrevocable, a beneficiary may apply to the court for a determination of whether a particular motion, petition, or other act by the beneficiary, including, but not limited to, creditor claims under Part 4 (commencing with Section 9000) of Division 7, Part 8 (commencing with Section 19000) of Division 9, an action pursuant to Section 21305, and an action under Part 7 (commencing with Section 21700) of Division 11, would be a contest within the terms of the no contest clause.”
“[S]ection 21320 provides a safe harbor for beneficiaries who seek a judicial determination whether a proposed legal challenge would be a contest, and that is the only issue to be decided when such an application is made. [Citation.]” (Estate of Davies, supra, 127 Cal.App.4th at p. 1173.) The question whether an action constitutes a contest “ ‘within the meaning of a particular no-contest clause depends upon the circumstances of the particular case and the language used.’ [Citations.] ‘[T]he answer cannot be sought in a vacuum, but must be gleaned from a consideration of the purposes that the [testator] sought to attain by the provisions of [his] will.’ [Citation.]” (Burch v. George (1994) 7 Cal.4th 246, 254-255; see also Estate of Coplan (2004) 123 Cal.App.4th 1384, 1388.)
“Therefore, even though a no contest clause is strictly construed to avoid forfeiture, it is the testator’s intentions that control, and a court ‘must not rewrite the [testator’s] will in such a way as to immunize legal proceedings plainly intended to frustrate [the testator’s] unequivocally expressed intent from the reach of the no-contest clause.’ [Citation.] (Burch v. George, supra, 7 Cal.4th at p. 255.)
“As a general rule, the decision about whether the beneficiary’s proposed action would be a will contest may not involve a determination of the merits of the action itself, a rule that ‘makes sense’ because the summary safe harbor procedure could otherwise ‘be used to allow the very form of challenge and protracted litigation the testator sought to prevent.’ [Citation.]” (Estate of Davies, supra, 127 Cal.App.4th at p. 1173.) Furthermore, “specificity is important because the trial court must be able to determine from the section 21320 application whether the proposed action is entitled to safe harbor.” (Estate of Rossi (2006) 138 Cal.App.4th 1325, 1334.)
These rules demonstrate that Peter failed to file a proper application for section 21320 declaratory relief and that the trial court properly denied it. As noted above, the only function of section 21320 is to permit a beneficiary to seek a judicial determination whether a proposed legal challenge would be a contest. (Estate of Davies, supra, 127 Cal.App.4th at p. 1174.) Indeed, by its express terms, this statute permits a beneficiary of an irrevocable will or trust to obtain a determination as to whether a ”particular” motion, petition or other act would constitute a contest within the terms of the no contest clause in the irrevocable instrument with respect to which the petitioner is a beneficiary.
In this case, Peter alleged he is a beneficiary of the Szanto Trust. However, the evidence before the court showed that Peter is not such a beneficiary. Further, even if Peter could have proven otherwise, he did not seek a no contest finding with respect to the Szanto Trust. Instead, he attempted to obtain such a finding with respect to one or both of his mother’s wills. Peter did not allege that he was a beneficiary under either the 1996 will or the 2000 will or that either will was irrevocable. Furthermore, Peter did not seek a declaration with respect to a “particular” motion, claim or other act. Instead, he essentially sought carte blanche to use the respondents’ trust assetpetition as a venue to challenge any conceivable action by Paul, Klara or Victor which related in any way to Klara’s will(s) or the Szanto Trust. Contrary to Peter’s contention on appeal, the lower court was not required to provide such a declaration.
In their trust document, Paul and Klara provided that their assets were to be allocated among their children, identified Peter as one of their children, but directed that the share of their property allocated to Peter was to be distributed to Peter’s children.
As noted above, “specificity” is important so the court can determine whether the proposed action will constitute a contest. (Estate of Rossi, supra, 138 Cal.App.4th at p. 1334.) Indeed, it is considered “good practice” for a proposed pleading to be attached to or filed concurrently with the section 21320 application. (Ross, Cal. Practice Guide: Probate (The Rutter Group Rev. #1 2007) p. 15-40.6, ¶ 15:98.6a.) Here, we do not hold that Peter was required to submit a proposed opposition to the trust asset petition in order to obtain a safe harbor declaration. We do hold, however, that a court must be able to determine the substantive action the applicant intends to take. In this case, Peter’s section 21320 petition was so vague and confusing that it simply was not possible to determine what substantive action Peter proposed to take.
For all these reasons, we hold Peter’s petition was properly denied.
B. The Trust Asset Petition
Peter contends the respondents’ trust asset petition should have been denied. It appears that his primary contention is that respondents erroneously relied on Heggstad, supra, 16 Cal.App.4th 943. Respondents characterized their lower court petition as a “Heggstad petition” and, on appeal, maintain that that case is authority for the lower court order granting their petition. We disagree.
The issue in Heggstad was whether the decedent had created a revocable living trust in real property. (16 Cal.App.4th at p. 947.) Prior to his death, the decedent had executed a trust instrument which named himself as the trustee and which identified all the trust property in a schedule which was attached to the trust instrument. The real property at issue was listed on the attached schedule. However, the decedent did not execute a grant deed conveying this property to himself as trustee of the revocable trust. (Id. at p. 946.) This court held that “a written declaration of trust by the owner of real property, in which he names himself trustee, is sufficient to create a trust in that property and that the law does not require a separate deed transferring the property to the trust.” (Id. at p. 950.)
We confess that we are perplexed as to why respondents refer to their lower court petition as a “Heggstad petition.” Respondents did not seek a ruling from the probate court as to whether a revocable trust in real property had been created. Indeed, there appears to be no dispute that the Szanto Trust was created, that the Hillsborough property was an asset of that trust, and, indeed, that Paul and Klara executed a deed transferring this asset to themselves as trustees of the Szanto Trust. The potential problem respondents addressed by their lower court petition was whether the Hillsborough property was still an asset of the Szanto Trust at the time of Klara’s death in light of events that occurred after the revocable trust in real property was created. No comparable issue was presented to us in Heggstad, supra, 16 Cal.App.4th 943.
On appeal, respondents contend that Heggstad does support their claim that the Hillsborough property is part of the Szanto Trust. They reason that Heggstad holds that a settlor can establish a revocable trust in real property without executing a deed so long as he or she manifests trust intent by declaring him or herself trustee. Therefore, respondents argue, it necessarily follows that a settlor can include real property in a trust that has already been established simply by expressing an intent to do so.
Respondents misconstrue our holding in Heggstad. We found that a deed was not required in that case because relevant authority established that a written declaration of trust was a legitimate alternate method by which a settlor could manifest his intention to create a trust in his real property. (Heggstad, supra, 16 Cal.App.4th at p. 948.) Thus, to the extent Heggstad can be applied to a case in which a settlor has attempted to transfer real property into an already established inter vivos trust, our decision would require either a deed or a written declaration that the property was a trust asset. Nothing in Heggstad supports the notion respondents advance here, i.e., that the Hillsborough property can be declared an asset of the Szanto Trust simply upon a showing that Paul and Klara intended to, but never did, transfer the property back into the trust after the refinancing had taken place.
As we discussed in Heggstad, “[w]here the trust property is real estate, the statute of frauds requires that the declaration of trust must be in writing signed by the trustee.” (16 Cal.App.4th at p. 948.) Respondents acknowledge this rule but find it does not undermine their request for relief because “[t]he trust instrument here was signed by Paul and Klara.” Of course, though, that document was signed before Paul and Klara executed the deed transferring the Hillsborough property out of the Szanto Trust. There is no evidence, nor even a contention by respondents, that Paul and Klara made a written declaration of trust after they formally transferred the property out of their trust.
Therefore, Heggstad does not support a finding that Paul and Klara transferred the Hillsborough property into the Szanto Trust prior to Klara’s death. Indeed, had the trial court made such a finding, we could not affirm it. But, as it happens, the court did not find that Paul and Klara transferred the Hillsborough property into their trust, nor did it rely on or even refer to Heggstad. The court simply found that the Hillsborough property is an asset of the Szanto Trust. We must, therefore, consider whether the record before us supports that conclusion.
The evidence presented below established that, at the time of Klara’s death, Paul and Klara owned the Hillsborough property as “Husband and Wife as Joint Tenants.” “ ‘A distinctive feature of joint tenancy, as opposed to other interests in land, is the right of survivorship. This means that when one joint tenant dies, the entire estate belongs automatically to the surviving joint tenant(s). [Citations.]’ (Grothe v. Cortlandt Corp. (1992) 11 Cal.App.4th 1313, 1317.)” (Estate of Mitchell (1999) 76 Cal.App.4th 1378, 1385.) Therefore, one could argue that when Klara died, the entire Hillsborough property belonged “automatically” to Paul, the surviving joint tenant. Indeed, as noted in our factual summary, respondents made this argument at the July 7, 2006 hearing. Furthermore, in his appellate brief, Peter states his father is the “fee-simple-absolute owner” and the “sole owner” of the Hillsborough property.
On appeal, respondents change their position and contend that the Hillsborough property may not have passed directly to Paul upon Klara’s death because it may have been a community property asset notwithstanding the joint tenancy deed. Nothing we say in this opinion should be construed as resolving this issue which, as best we can determine, has not yet been properly raised in the lower court.
If Paul is the sole owner of the Hillsborough property, he had the authority to transfer that asset into the Szanto Trust. However, there is neither evidence nor even an allegation that Paul made such a transfer. Further, we must again conclude that the principles we discussed in Heggstad, supra, 16 Cal.App.4th 943, could not apply here. Arguably, the trust asset petition, which Paul verified, might constitute a written declaration of trust by the owner of the real property. However, Victor is now a co-trustee along with his father. In other words, this is not a case in which the owner of real property creates a trust in his own real property simply by declaring himself trustee of it. To accomplish a transfer of the Hillsborough property into the Szanto Trust, title to the property must be conveyed to both Paul and to Victor as trustees. There is no evidence in the record that such a conveyance occurred.
For all these reasons, we find that the respondents’ petition should have been denied.
IV. DISPOSITION
The part of the probate court’s order granting respondents’ petition for an order confirming transfer of trust asset is reversed. The part of the order denying appellant’s section 21320 petition is affirmed. The parties are to bear their own costs on appeal.
We concur: Kline, P.J., Lambden, J.