Opinion
2d Civil No. B294401
04-02-2020
ANGELIQUE FRIEND, as Administrator and Trustee, etc., Plaintiff and Respondent, v. THOMAS A. STABEN, SR., Defendant and Appellant; THOMAS A. STABEN, JR. Defendant and Respondent.
Lowthorp Richards McMillan Miller & Templeman and Darin Marx for Defendant and Appellant. The Alvarez Firm, Justin M. Alvarez and David A. Shaneyfelt for Defendant and Respondent. Law Office of Robert M. Baskin and Robert M. Baskin for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No 56-2013-00436007-PR-LA-OXN )
(Ventura County)
This is an appeal from an order of the probate court approving a petition to modify a trust. (Prob. Code, § 15409, subd. (a).) We affirm.
All further statutory references are to the Probate Code unless otherwise indicated.
FACTS
(a) Background
Thomas Staben, Sr. (Thomas) had two adult sons, Matthew and TJ. Matthew established a trust for TJ (TJ Trust) and TJ established a trust for Matthew (Matthew Trust). Both trusts were irrevocable. Thomas's friend and business partner, Mark Golden, was named trustee of the Matthew Trust. Although Thomas is neither settlor, beneficiary, nor trustee of the trusts, it is undisputed that he was the motivating force behind the creation of the trusts, that he intended the corpora of the trusts to be used to benefit his business interests and to the ultimate benefit of his children or their successors after his death.
The trusts were funded by Thomas's property. During proceedings to dissolve Thomas's marriage, Thomas convinced the trial court that the property belonged to his sons and was not part of the marital estate.
One asset of the trusts was Moraga LP, a limited partnership engaged in real property development. Thomas retained a 5.5 percent interest and the remaining 94.5 percent was transferred equally into the trusts. Thomas had a controlling interest as the general partner, thus he retained control over the activities of the limited partnership.
Matthew died in February 2013, leaving a wife and a minor son, Logan. Logan was six years old when Matthew died. On Matthew's death, Logan became the sole beneficiary of the Matthew Trust.
Matthew's death precipitated a number of lawsuits among Thomas, TJ, the trusts, Matthew's estate, and Matthew's wife. Among the actions, Matthew's wife filed a petition pursuant to Probate Code section 850 seeking to determine property held by Thomas and TJ was hers as Matthew's successor.
Logan, through the guardian of his estate, petitioned the probate court to remove Golden as trustee of the Matthew Trust. The petition was on the ground that Golden was acting in the best interest of Thomas and not in the best interest of Logan as beneficiary. The court granted the petition and appointed Angelique Friend as successor trustee. Neither Thomas nor Golden appealed.
Thereafter, the parties entered into a global settlement of their numerous lawsuits. The settlement required, among other matters, that the business of Moraga LP be wound up and that the proceeds be placed in the Matthew and TJ trusts; that the Matthew Trust purchase a home for Logan in the $650,000 to $700,000 range; and that the Matthew Trust pay $60,000 to Matthew's wife.
Both trustees petitioned the probate court to approve the settlement. In support of the petitions, Thomas's counsel told the court: "Tom is agreeing not to reinvest the proceeds from the sale of Moraga. That's been something that Tom has desired to do for years. Tom is giving that right up. [¶] He's agreed that these assets - - that all the monies in Moraga will be distributed out to the trust, and the trustees can handle those assets as they feel is appropriate." The court granted the petitions to approve the settlement agreement. TJ as beneficiary of the TJ Trust appealed the approval, but dismissed the appeal.
(b) Petition for Modification
Simultaneously with the petition to approve the settlement, Friend, as trustee of the Matthew Trust, petitioned to modify the trust in the following respects.
The original trust appointed Golden as trustee and allowed Thomas to name any successor trustee. The modification names Friend as trustee and provides that the court shall appoint any successor trustee.
The original trust restricts distributions to Logan as long as Thomas is alive to as much of the net income of the trust the trustee deems necessary for Logan's health, education, support, and maintenance, or in the alternative, an annual withdrawal that does not exceed the gift tax exclusion. The modification gives the trustee the power to invade the trust principal for Logan's benefit without limit.
The original trust provides that the assets of the trust shall be distributed to Logan upon Thomas's death. The modified trust provides for distributions to Logan one-third at age 25, one-third at age 30, and one-third at age 35.
Thomas objected to the modification. He claimed that the modification would destroy his purpose in creating the trusts. He said he "intended that the corpus of both trusts would continue to be used for matters relating to the family owned and operated businesses." That is why he restricted distributions from the trusts during his lifetime, and reserved the right to remove and appoint the trustee. Thomas raised the only objections to the modification.
PROCEDURE
The petition to modify the trust was originally set to be heard at the same time as the petitions to approve the settlement. The probate court approved the settlement and began a discussion of the petition to modify the trust. During the discussion, Thomas objected to the trust modifications. The judge presiding at the hearing was about to retire, and determined that the matter should be decided by his successor who had experience in estate planning. The matter was continued. Friend stated in her moving papers that the facts were not in dispute. Thomas requested an evidentiary hearing in his opposing papers.
At the hearing on the petition, no one requested an evidentiary hearing, asked to introduce evidence, or objected to proceeding without being able to introduce evidence. The trial court granted the petition on the moving papers and oral argument.
DISCUSSION
I.
Standing
A threshold question is whether Thomas has standing to object to the petition.
Thomas cites Bilafer v. Bilafer (2008) 161 Cal.App.4th 363, 366 for the proposition that the trustor has standing to petition to reform the trust when he claims a drafting error has interfered with the execution of his dispositive intent. But TJ, not Thomas, is the trustor. Thomas is neither the trustor, trustee, nor beneficiary. It is undisputed that Thomas was the motivating force behind the creation of the trust. But Thomas cites no authority that gives the motivating force standing.
Thomas points out that the trust gave him the power to appoint a successor trustee. Thomas cites no authority that such a power gives him standing. At best, it could give him standing to object to the portion of the trust modification that removes that power from him and places it in the superior court. But the superior court in effect took that power from Thomas when it removed Golden and appointed Friend as successor trustee. Thomas did not appeal that order.
In any event, even assuming Thomas has standing to object to the trust modification, his objections are without merit.
II.
Evidentiary Hearing
Thomas contends the trial court erred in refusing his request for an evidentiary hearing.
Thomas requested an evidentiary hearing in his papers filed in opposition to the petition. But Thomas points to no such request at the hearing itself. Nor did Thomas offer any witness to testify at the hearing or object to proceeding without such evidence. That Thomas proceeded at the hearing without requesting an evidentiary hearing, offering witnesses, or objecting, shows he waived his right to an evidentiary hearing. (See McIndoe v. Olivos (2005) 132 Cal.App.4th 483, 487 ["Although the McIndoes criticize the trial court for ruling without considering extrinsic evidence, they never offered any extrinsic evidence for the court's consideration and accordingly, they may not now complain about this on appeal"].)
During Thomas's opening oral argument, Justices Gilbert and Yegan asked counsel Darin Marx whether he specifically asked for an evidentiary hearing when he appeared before Judge Lund. Justices Gilbert and Yegan stressed that they were not asking about the written motion for an evidentiary hearing filed earlier. Mr. Marx answered that he did ask for this hearing in front of Judge Lund and cited pages of the record without specifying whether he was referring to the clerk's or the reporter's transcript.
Friend's counsel argued that Mr. Marx's representation concerning an oral request for an evidentiary hearing was a falsehood.
On rebuttal in response to a further inquiry by Justice Tangeman regarding the oral request for an evidentiary hearing, Mr. Marx acknowledged the citation he gave to the court was to the written request for an evidentiary hearing.
A deliberate misrepresentation to the court constitutes a serious breach of ethics and can be subject to sanctions and appropriate action by the State Bar. We trust Mr. Marx will be more careful concerning representations he makes to this or any other court in the future. (Bus. & Prof. Code, § 6068, subd. (d) [it is the duty of an attorney "never to seek to mislead the judge or any judicial officer . . . ."].)
Thomas's reliance on Estate of Bennett (2008) 163 Cal.App.4th 1303 and Estate of Lensch (2009) 177 Cal.App.4th 667 is misplaced. In Bennett, a party's attorney repeated his claim at the hearing that an evidentiary hearing was necessary. (Bennett, supra, at p. 1308.) In Lensch, at the hearing petitioners requested an evidentiary hearing three times. (Lensch, supra, at p. 672.) Here, Thomas points to no mention of an evidentiary hearing at the hearing on the petition to modify the trust.
Moreover, in order to preserve a claim for appeal that the trial court erred in excluding evidence, the proponent of the evidence must make an offer of proof naming the specific witnesses who will testify and the content of their testimony. (In re Mark C. (1992) 7 Cal.App.4th 433, 444.) Here, Thomas made no such offer of proof.
III.
Unanticipated Circumstances
Friend brought the petition to modify the trust under section 15409, subdivision (a). The subdivision provides: "On petition by a trustee or beneficiary, the court may modify the administrative or dispositive provisions of the trust or terminate the trust if, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust. In this case, if necessary to carry out the purposes of the trust, the court may order the trustee to do acts that are not authorized or are forbidden by the trust instrument."
Here there is evidence of numerous circumstances not known or not anticipated by the settlor: the early death of Matthew causing a change in the financial condition of his young son, the sole beneficiary; the breakdown in the relationships among family members; the global settlement agreement requiring distributions from the Matthew Trust; and Thomas's agreement to forgo any use of the Moraga LP proceeds. Any one of these changes would be sufficient to support modification of the trust.
The trial court could also reasonably conclude that the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust. The trust was established by TJ for the benefit of his brother, Matthew, and upon Matthew's death for the benefit of Logan. While Matthew was alive, the terms of the trust were sufficient to accomplish its purpose. But with Matthew's death, Logan became the sole beneficiary. His needs are different than Matthew's. The trust had to be modified to meet those needs in order to accomplish its purpose of benefiting Logan. That TJ supports the modifications lends further support for the trial court's determination.
IV.
Substantial Evidence
Thomas contends no admissible evidence supports the petition to modify the trust.
Thomas concedes that the petition for modification is verified. He argues, however, that the evidence in support of the petition must be within the personal knowledge of the declarant and not on information and belief. (Citing Schoendorf v. U.D. Registry, Inc. (2002) 97 Cal.App.4th 227, 236 [declaration in support of anti-SLAPP motion].)
Here, Friend's declaration states that the contents of the petition are true of her own personal knowledge, except as to matters stated on information and belief. Thomas argues that nowhere in the petition does Friend identify which statements are based on her own personal knowledge and which are based on information and belief. But Friend's declaration means that the matters stated are true of her own personal knowledge unless they are identified as being on information and belief. In other words, because none of Friend's statements are identified as being on information and belief, all are of her personal knowledge.
Thomas's opening brief also makes reference to other unspecified evidentiary objections, which he claims the trial court failed to address. But Thomas fails to provide supporting argument or authority demonstrating error. The argument is waived. (See Cal. Rules of Court, rule 8.204 (a)(1)(B) [each point must be supported by argument and, if possible, by citation to authority]; Duncan v. Ramish (1904) 142 Cal. 686, 690 [court considers only those specifications of insufficiency that are fully stated and argued].)
Moreover, Thomas's opposition to the modifications itself shows why the modifications are necessary. It is apparent that Thomas views the property held in the Matthew Trust as his own and the trustee as his agent to carry out his instructions. Thomas claims he intended that the corpora of both trusts be used for matters relating to family-owned and -operated businesses. But Matthew is deceased, Logan is seeking the modifications, and TJ is supporting Logan's position. Thomas is the only member of the family who opposes the modifications.
We are not suggesting that Thomas's intentions toward Logan are anything but honorable. But neither Thomas nor the family businesses are beneficiaries of the Matthew Trust; only Logan is. The trustee's duty is to administer the trust solely for Logan's benefit, not for the benefit of Thomas or the family businesses. (§ 16002, subd. (a) ["The trustee has a duty to administer the trust solely in the interest of the beneficiaries"].)
The modification removing from Thomas the right to appoint successor trustees is necessary to ensure a trustee free of a conflict of interest. The modification giving the trustee greater flexibility to invade the trust principal is necessary to ensure adequate funds are available for Logan's support. The modification requiring distributions of the trust corpus when Logan reaches specified ages is necessary to ensure that distributions are made at appropriate times, not simply whenever Thomas dies.
DISPOSITION
The judgment (order) is affirmed. Costs on appeal are awarded to respondents.
NOT TO BE PUBLISHED.
GILBERT, P. J. We concur:
YEGAN, J.
TANGEMAN, J.
Roger L. Lund, Judge
Superior Court County of Ventura
Lowthorp Richards McMillan Miller & Templeman and Darin Marx for Defendant and Appellant.
The Alvarez Firm, Justin M. Alvarez and David A. Shaneyfelt for Defendant and Respondent.
Law Office of Robert M. Baskin and Robert M. Baskin for Plaintiff and Respondent.