Opinion
E066559
08-10-2018
TIARA HOLMSTEDT, Plaintiff and Appellant, v. BRUCE CARD, as Trustee, etc., Defendant and Respondent.
Borden Law Office and Alex R. Borden for Plaintiff and Appellant. Law Offices of Catherine Convy and Catherine Convy for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. MCP1400731) OPINION APPEAL from the Superior Court of Riverside County. Mark Ashton Cope, Judge. Affirmed. Borden Law Office and Alex R. Borden for Plaintiff and Appellant. Law Offices of Catherine Convy and Catherine Convy for Defendant and Respondent.
Tiara Holmstedt appeals a judgment entered after the trial court granted summary judgment in favor of Bruce Edward Card, individually and as the trustee of The Patricia Anne Card Trust (trust). Patricia Anne Card was the mother of both Bruce Card and Holmstedt's deceased mother, Kathleen Card. When she created the trust in 2007, Patricia Card excluded Kathleen Card and Holmstedt, among others. Ultimately, after an amendment in 2009, Patricia Card left her entire estate to Bruce Card, his wife, and their children, with whom she lived at the time. After Patricia Card died, Holmstedt filed a petition seeking to set aside the trust and amendment due to alleged testamentary incapacity, duress and undue influence, mistake of fact, and fraud, and asked the court to impose a constructive trust.
Holmstedt's petition also named hypothetical respondents Does 1 through 25, though no other person or entity has been made a party.
After discovery, Bruce Card moved for and obtained summary judgment on all claims. Holmstedt argues the trial court overlooked evidence creating a triable issue of fact on each claim. We affirm the judgment in full.
I
FACTUAL BACKGROUND
A. The Players
Respondent Bruce Card is a son of Patricia Anne Card, the settlor of the trust at the heart of this case. Patricia lived with Bruce and his wife Nancy Mae Card at their home in Temecula from July 2007 until her death at age 85 in February 2014. Prior to that, Patricia lived briefly (for two to four months) with her adult daughter, Patricia Karen Razo (Patty), in Oregon. Before that, Patricia lived independently for 20 years in Torrance, California.
We use first names to identify most of the people involved in this dispute for readability and to avoid confusion since many of them share a surname. (In re Marriage of McHugh (2014) 231 Cal.App.4th 1238, 1241, fn. 1.)
Patricia was married for many years to James Card. James died on October 31, 2006, years after the couple had separated. Patricia had two other children with James—Kathleen Anne Card and Stephen Gregory Card. Kathleen died before Patricia, in 2013. Holmstedt is Kathleen's only child, so she is a granddaughter of Patricia and a niece of Bruce and Nancy.
B. The Trust and Amendment
On March 30, 2007, before she moved from her home in Torrance, Patricia executed documents forming the trust. The trust was created for the benefit of Patricia and gave her the power to revoke or amend it during her lifetime. "This trust was created to hold the Settlor's combined estate and provide continuity of management of the estate, both during the Settlor's lifetime and upon the Settlor's death and to avoid probate of the estate. During the life of the Settlor, all trust benefits shall accrue to the Settlor." The trust names Bruce as the trustee and Patty as the successor trustee.
When Patricia died the trust assets were to be divided equally between Patty and her children and Bruce and his wife and children. "PATRICIA K. RAZO shall be distributed Fifty percent (50%) of the Trust Estate. In the event [she] predeceases the Settlor, then [her] share shall be distributed to her issue by right of representation. . . . [¶] BRUCE EDWARD CARD shall be distributed Fifty percent (50%) of the Trust Estate. In the event [he] predeceases the Settlor, then [his] share shall be distributed to his spouse. If [he] predeceases the Settlor unmarried or if [he] is separated from his spouse on the date of his death, then his share shall then be distributed to [his] issue by right of representation."
The trust specifically excludes Patricia's children Kathleen and Stephen. In a section entitled "Special Instructions," the trust says, "Out of love and affection, KATHLEEN ANNE CARD, Settlor's daughter, and STEPHEN GREGORY CARD, Settlor's son, shall both be fully and completely disinherited and shall receive nothing from the Trust Estate."
On September 15, 2009, Patricia executed an amendment to the trust. The amendment changed the successor trustee from Patty to Bruce's wife Nancy and removed Patty as a beneficiary. The amended provision on beneficiaries says, "BRUCE EDWARD CARD shall be distributed One hundred percent (100%) of the Trust Estate. In the event [he] predeceases the Settlor, then [his] share shall be distributed to his spouse, NANCY MAE CARD. If [he] predeceases the Settlor unmarried or if [he] is separated from his spouse on the date of his death, then his share shall be distributed to [his] issue by right of representation."
The amended special instructions section says, "Out of love and affection, KATHLEEN ANNE CARD, Settlor's daughter, STEPHEN GREGORY CARD, Settlor's son, and PATRICIA K. RAZO, Settlor's daughter, shall all be fully and completely disinherited and shall receive nothing from the Trust Estate."
C. The Claims
After Patricia died, her granddaughter Tiara Holmstedt (Kathleen's daughter) filed a petition to determine the validity of the trust. In the operative amended petition, Holmstedt named as respondents Bruce, in his capacity as trustee and as an individual, as well as 25 unknown persons and entities (together respondents). She alleged the trust and amendment were invalid and void due to testamentary incapacity, undue influence, duress, mistake of fact, and fraud, and asked the court to impose a constructive trust.
Specifically, she alleged Patricia lacked the mental competence needed to understand and execute the trust on March 30, 2007 or to execute the trust amendment on September 15, 2009. She said Patricia did not remember or understand the testamentary act, the situation of her property, her family relations whose interests would be affected, or the consequences of her actions, which Holmstedt alleged were contrary to Patricia's expressed intentions.
Holmstedt also alleged the respondents exerted undue influence over Patricia and coerced her to execute the trust through duress. Holmstedt alleged respondents occupied positions of trust and confidence with Patricia, who was at the relevant times "aged and infirm, her physical and mental health compromised, and [who] suffered from substantial memory and cognitive limitations." As a result, Holmstedt alleged, respondents were able to "exercise control over [her] mind and actions" and impose their own desires. She alleged respondents isolated Patricia from other family members, dictated or prepared the trust, and arranged for and caused Patricia to execute it.
Holmstedt further alleged Patricia executed the trust based on her mistaken beliefs. She alleged Patricia "erroneously believed, and was led to believe by Respondents, that [Holmstedt] and/or other family members close to [Patricia] had betrayed her by, i) not reaching out to her, ii) not keeping in touch with her, and iii) not caring for her wellbeing during the last several years of her life, when in fact, [Holmstedt] and other family members made numerous attempts to contact and communicate with [Patricia] while [she] was residing in the residence of Respondents." She alleged Patricia would not have disinherited her other children and grandchildren but for these erroneous beliefs, which she attributed to respondents' efforts to isolate Patricia.
Finally, Holmstedt alleged respondents committed fraud by misleading Patricia into executing the trust. She says respondents intentionally misrepresented to Patricia that Holmstedt and other family members no longer cared for and had abandoned her. She says respondents also intentionally thwarted the family members' attempts to communicate with Patricia by intentionally misrepresenting to them that Patricia was unavailable and concealing from Patricia their attempts to communicate with her. Holmstedt alleged Patricia and her family members justifiably relied on respondents' misrepresentations, which led Patricia to "create[] an estate plan that contains unnatural dispositions of her property, which is not consistent with [her] prior wishes."
Holmstedt asked the court to impose a constructive trust to remedy these problems with the creation and amendment of the trust.
D. Respondents' Affirmative Evidence
Respondents moved for summary judgment (Code Civ. Proc., § 437c) on all claims. As a foundation, respondents submitted a series of affidavits by several witnesses aimed at disproving certain elements of each claim.
1. Preparation and execution of the trust on March 30, 2007
Attorney Mark Lewis submitted a declaration about the preparation and execution of the original trust document in 2007. He said he would testify he represented Patricia "and prepared the Patricia Anne Card Trust, Dated March 30, 2007 ('2007 Trust'), on her behalf." He said the trust document accurately reflects what Patricia intended. He said Patricia specifically told him she didn't want to leave any money to Stephen or Kathleen, even though he typically recommends including a small amount for heirs who are to be disinherited so they will have something to lose if they contest the trust.
Lewis said he would testify that it is his standard practice to meet individually and alone with his clients and that he does not prepare documents for clients if he or his employees "have any suspicion of mental incompetence, duress, fraud, mistake of fact or undue influence." He said his paralegal met with Patricia in person and he met with her by telephone. "It is my opinion, that based on the facts and circumstances and speaking with Ms. Card myself on the telephone, reviewing the file, and speaking with [my paralegal], who met with [Patricia], that [she] was not unduly influenced by [Bruce or Patty] in the execution of the documents prepared by my office. [¶] . . . It is also my opinion that [Patricia] did not lack capacity to enter" the trust and other legal documents.
Holmstedt objects to the trial court's reliance on Lewis's declaration, arguing it is inconsistent with his deposition testimony, which controls where there is a conflict. In his declaration, Lewis said he met Patricia by phone, his paralegal met her in person, and he based his declaration on reviewing his files. At his deposition he said he did not recall if he ever saw Patricia personally and did not recall anyone performing services for her independent of reviewing her files. We see no conflict.
2. Preparation and execution of the trust amendment on September 15, 2009
Two years later, Patricia went to attorney Amy Nett to amend the trust to remove her daughter Patty as successor trustee and beneficiary. Nett submitted a declaration about the preparation and execution of the trust amendment in 2009. She said she would testify another attorney, Jack Brown, referred Patricia to her, Patricia called to set up a meeting, and ultimately she represented Patricia for the purpose of amending the trust.
They met in person and alone on June 2, 2009 to discuss the changes. Nett said she believed they met alone because she doesn't remember anyone else being there and her notes do not reflect the presence of anyone else. She said it is her standard practice to note the presence of anyone other than the client. She said Patricia filled out her own intake form, provided her personal information, and gave Nett the names of all her children. She said Patricia told her Stephen and Kathleen "were already receiving nothing by the 2007 Trust and Patricia wanted to remove all references to" Patty as well.
According to Nett, "Patricia told me about all of her issues with [Patty] and [Kathleen] and how great [Bruce] and his wife, [Nancy], were to her." She said she excluded Kathleen because she was already sending her money, among other reasons. Nett's notes say Patricia did not want to give Kathleen money because she was an alcoholic. Patricia said she didn't want to give anything to Patty because she had already paid for three-quarters of the house Patty lives in with her husband. Nett's notes indicate Patricia said she had already given money to her grandchildren for debts and housing, and she did not want to give them more. Patricia told Nett she wanted to give all her property to Bruce, then to Nancy, and then to their children.
Net said she knows the "importance of a testator and settlor's mental competence in executing a Testamentary document and Trust document." She said she "had no reservations as to Patricia's mental competence." She said Patricia went through the original trust document, as well as other legal documents, "and told me what they currently stated," and Nett reviewed them and found them to be consistent with Patricia's description. According to Nett, Patricia "understood the nature of the act of the 2009 Amendment and her familial relations, which she also remembered." She "knew that the interest of [Kathleen] and [Stephen] were already zero in the 2007 Trust," and "wanted [Patty] to be zero, as well, and give her son, [Bruce] 100% of her property." In addition, "Patricia was able to communicate with me what her property was."
Nett said based on her experience, "there were no signs that Patricia was unduly influenced or under duress when making the decision to create and sign the 2009 Amendment to the 2007 Trust." Bruce was not present in the room when Patricia signed the documents.
Holmstedt objects to the trial court's reliance on Nett's declaration, arguing it is inconsistent with her deposition testimony. At her deposition, Nett said she had no specific recollection whether anyone accompanied Patricia to their meeting or whether she asked Patricia why she wanted to exclude Stephen and her grandchildren from her estate plan. Contrary to Holmstedt's argument, this testimony is consistent with Nett's declaration representations.
3. Family testimony about Patricia
Patricia's daughter Patty, testified in proceedings in Los Angeles County Superior Court related to the estate of her sister, Kathleen. Patty said Patricia always said she intended to leave her property to Patty and Bruce. "All along she said she was going to leave it to me and then when she decided to sell her house and come and live with me, she said she was going to leave it to Bruce and I." Patty said her mother asked her and her husband to buy a larger house in Oregon so she could move in with them. Patricia contributed $300,000 to purchasing the larger house. Patty said Patricia took care of herself while they lived together, though she had trouble walking for long distances and used a walker. However, she lasted only four months before moving back to California to live with Bruce. Patty said she spoke with Patricia about once a month after she moved in with Bruce, until Patricia's hearing problems made talking on the phone difficult. They were unable to talk on the phone during the last two years of Patricia's life.
Patricia's brother, Tom Welsh, submitted a declaration about his interactions with his sister. He said he talked to her about once a month during the period relevant here—2007 to 2009—and reported she "always seemed to be mentally sharp." He said Patricia went to live with Patty, but left because she did not like Patty's husband. He said Patricia was good at making decisions for herself. Every time he talked to her, she knew who he was and who the family members were. He also reported he never had trouble getting Patricia on the phone.
Patricia's sister-in-law, Anne Welsh, submitted a declaration making similar points. She said during the years 2007 and 2009 she spoke with Patricia at least two to three times a year for several hours at a time. She said Patricia's physical condition declined in later years, but she did not decline mentally. "Every time I talked to Patricia, she knew who I was and who the family members were. [¶] . . . Patricia understood what I talked to her about, and conveyed to me things going on in her life." She said she never had trouble getting Patricia on the phone while she lived with Bruce.
Bruce and Nancy submitted declarations presenting their testimony about Patricia's life with them. Both said Patricia asked to move in with them in July 2007, just a few months after moving to live with Patty, and she moved in about a week later. They said she had her own room, bathroom, and sitting area. She also had her own television, land line and cellular telephone service, and maintained her own bank accounts and credit cards. Bruce said she was financially independent. Nancy said Patricia sent money to her sister, June, every month. Bruce said she paid many of her own bills and gave money to relatives. Both said Patricia also gave regularly to charities. Both Bruce and Nancy said they never prevented Patricia from seeing or communicating with anyone. Nancy said Patricia spoke regularly with relatives, especially her daughter Patty and her brother Tom. Both said Patricia also communicated with relatives by sending cards and letters, especially to her daughters Patty and Kathleen. According to Bruce, Patricia was always sharp during her life until a few days before she died and she never suffered from mental illness.
Bruce also said he would testify he never pressured Patricia about the trust. He said he was not living with Patricia when she executed the original trust documents. He said he did not pressure her to execute those documents or the 2009 amendment. He said he never confined his mother, and she was free to do as she pleased.
4. Testimony of Patricia's physician
Patricia's personal physician also submitted a declaration. He said he would testify he had been Patricia's primary care physician since before the events of this case until her death in 2014. He said he saw Patricia at least once a year from 2007 to 2014. He said he had reviewed her files, never noted Patricia was not lucid or had any cognitive issues, and said he would have noted such conditions and recommended treatment had he seen any such signs. He said, "Patricia, throughout the time that I was her primary care physician up until the date of her death, was not impaired mentally in any way." He said Patricia sometimes came to her appointments alone and on other occasions came with Bruce and Nancy. He specifically noted seeing her alone on September 3, 2009, less than two weeks before she executed the trust amendment. The doctor reviewed the trust documents and said "[b]ased on my personal experience with Patricia, qualifications and licenses as a Doctor of Osteopathy," he believed she had the ability to understand their terms, her family relations, and whose interests would be affected by the terms of the trust and amendment.
E. Identified Problems with Plaintiff's Evidence
Respondents also identified several serious holes in plaintiff's case. At her deposition, Holmstedt repeatedly admitted she did not know the basis for key allegations, and she did not have information that would support believing those allegations to be true.
Holmstedt said she saw her grandmother about once a month before she moved in with Patty in Oregon after executing the trust. She said she had no trouble getting in contact with Patricia until the move. She admitted she didn't know what her mental capacity was or how her health was on March 30, 2007. Asked how she knew Patricia was unable to understand the nature of the March 30, 2007 trust, she responded, "I don't know." She gave the same answer when asked what information she had that Patricia did not have sufficient mental capacity to remember family relations on March 30, 2007. She admitted Patricia knew who she was when they saw each other and said she wasn't sure if Patricia had substantial memory limitations. Further, she admitted she did not have any reason to believe Patricia didn't know who her relatives were. She also admitted she did not know whether someone other than Patricia had dictated the terms of the 2007 trust.
Despite contrary allegations, she admitted she wasn't sure she believes Patricia was isolated at the time. She agreed she could not give specific examples to show Patricia was easily influenced. Asked for facts to serve as the basis for her statement that Patricia was easily influenced by Patty, she said, "I didn't say she was. I said she might have been, but I don't have anything else," and "I don't have any facts." She gave a similar answer regarding Bruce's influence over Patricia and admitted she wasn't sure about the basis for the allegation that someone had controlled Patricia. She said it was possible Bruce had lied to Patricia. Asked how she knew Bruce tricked Patricia into signing the trust, she responded "I just believe that alienation, it's just what I personally believe, that he alienated her from the rest of us, and she believed whatever he said." But she admitted she did not know what Bruce said, commenting, "I can only guess." Asked whether she believed Bruce or Patty had deceived Patricia into signing the 2007 trust, she responded, "I'm not sure."
Holmstedt gave similar answers regarding her grandmother's capacity when she executed the September 2009 trust amendment. She admitted she didn't know whether Patricia knew what she was reading when she executed the amendment. She said she didn't know what information would support her allegation that Patricia didn't have sufficient mental capacity to remember family relations at the time of the 2009 amendment. She gave the same answer when asked how she knew Patricia did not have sufficient mental capacity to remember who would be affected by the 2009 amendment. And she admitted she did not know whether someone other than Patricia had dictated the terms of the 2009 amendment.
Finally, Holmstedt admitted Patricia never talked to her about what would happen to her property when she passed away. She said she didn't talk to her grandmother about the topic. And she said she didn't remember talking to anyone else about what Patricia intended to do with the estate.
F. Petitioner's Evidence
To support her claims that the trust documents are invalid or void, Holmstedt relies primarily on information about how Patricia conducted her financial affairs through 2007. Much of that evidence comes from Patricia's attempts to manage her financial affairs after her estranged husband died intestate in October 2006.
Bruce was heavily involved in assisting his mother with those affairs. According to Stephen, after their father died, Bruce "started coming up and visiting [Patricia] and making phone calls to her and that sort of thing. . . . [¶] The only thing she mentioned to me was that she was going to let Bruce take care of it because he was a math major in college." On November 22, 2006, Bruce went to the Law Offices of Swan, Carpenter, Wallis & McKenzie LLP and filled out a client information form, listing himself as the client and his parents' estate as the topic of the engagement.
The law firm proposed in a letter to Bruce that they file a petition to request his father's one-half of the property they held as tenants in common and one-half of their business property be transferred to Patricia, so she would own 100 percent of the estate. One of the lawyers cautioned the court would not approve the petition if any of Patricia's children or either of her husband's two children from a prior relationship opposed it. In that event, the lawyer said, Patricia would receive one-third of her husband's share of the estate and the six children would divide two-thirds of the estate. The lawyer closed saying, "If this proposal meets with your mother's approval, please let me know and I'll prepare a retainer agreement for your mother to sign. When that is returned to our office with the retainer, I will prepare the spousal petition and related documents for your review and your mother's signature."
In subsequent months, Bruce and Nancy communicated by email with the law firm, providing details about the estate. According to Stephen, Bruce gave him a letter from Patricia's lawyers, which informed him about the petition and asked him to consent to the court declaring his father's remaining assets community property to be transferred to Patricia. "He came with two pages. One was just a page to sign on, and the first one was just an outline of what it was, which was just we were all agreeing that the estate should all be—he said it was instead of going to probate, if he did all this stuff, everything would go directly to my mother, and she would, subsequently, you know, leave everything to us." Stephen signed the consent form on April 3, 2007. Stephen executed the consent though he believed his mother "never acted like she realized how much money was there, how much property was there," and he thought his brother wasn't telling her everything.
On July 10, 2007, Patricia filed a petition seeking to have her husband's portion of their estate declared community property. In an attachment to the petition, Patricia represented her husband had managed their property and investments during the marriage. "During decedent's marriage to petitioner, decedent assumed responsibility of all financial management of their property. Petitioner received no information concerning investments and from time to time, executed documents concerning real and personal property as requested by decedent."
In September, before the court acted on the petition, Patricia paid $100,000 to her husband's two children from a prior relationship in return for their not opposing her petition. She paid the settlement amount from an account under her own and Bruce's names. Bruce signed the check.
Meanwhile, Patricia undertook a few other transactions that appeared to benefit Bruce. On December 20, 2006, Patricia signed a Merrill Lynch client relationship agreement and transfer on death agreement, designating Bruce as the sole beneficiary. On March 10, 2007, Patricia signed a document purporting to lend $400,000 to Bruce. The document is incomplete, however; it does not include the interest rate, repayment date, or Bruce's signature. On March 28, 2007, she signed two Bank of America forms changing the address for her lines of credit to Bruce's home address. And, central to this dispute, on March 30, 2007, she designated Bruce the trustee of her trust and her attorney-in-fact.
Holmstedt says Bruce's influence continued after these events and continued until her death. She points out the lawyer who, in 2009, referred Patricia to Amy Nett to amend the trust did so only because Bruce asked him to do the work. The attorney believed he had a conflict of interest, however, because the amendment would benefit Bruce. "I have done work for Bruce Card and via a power of attorney, for his mother Patricia Card. I have never actually met with Mrs. Card. Bruce called and asked if I could amend her trust which would benefit him. I explained that I would have a conflict and that his mother would either have to see another attorney or at least get a certificate of Indep. review. Under the circumstances, I suggested that it would be best if she had someone else do the amendment for her. I gave them your name and my understanding is that Patricia will call you and schedule an appointment. If she does, let me know and I will send you a copy of the trust."
She also raises as problematic a real property transaction involving the trust and a trust created for Bruce and Nancy. A purchase and sale agreement dated April 17, 2008, indicates the trust purchased a certain single family residence in Temecula from The Card Family Joint Living Trust for $500,000. In August, a grant deed shows the trust transferred the same property to The Card Family Joint Living Trust as an inter vivos gift.
She points to other evidence she says shows Bruce had a strong influence over his mother. Stephen said Bruce convinced Patricia to move in with him. "He convinced her to move from Oregon to Temecula over many conversations with her while she was living up there and got her to move down to live with him in Temecula." Bruce and Nancy reported Patricia did not drive once she had moved in and relied on them for transportation, including to appointments with doctors and lawyers.
Regarding Patricia's mental capacity as of September 15, 2009, when she executed the amendment to the trust, Holmstedt points only to notes from a visit with her physician from September 3, 2009. The notes say Patricia came to her appointment alone and reported "things [are] slowing down," her balance was poor, and she had problems reading "words wrong." The report from her checkup notes no neurologic problems other than an irregular gait and abnormal sensation in her feet.
G. The Trial Court's Summary Judgment Ruling
The trial court granted respondents' motion for summary judgment in a written ruling. Regarding the claim Patricia lacked capacity, the court held Holmstedt's "evidence that [Patricia] relied on her husband to manage their community assets and then on her son to manage her financial affairs after her husband died . . . does not indicate that [she] was incapable of managing her own finances, just that she did not manage them. She provides no evidence that any of the categories under Probate Code § 811 appl[ies]. As such, [Holmstedt] has not rebutted the presumption that [Patricia] had capacity to execute the trust or amendment to trust."
Regarding the claim that Bruce exercised undue influence over Patricia, the court rejected the claim because Holmstedt was required to show Bruce realized an undue profit, which must be supported by evidence beyond the fact that he realized a greater payment than he would have without the trust, such as evidence that the result departed from Patricia's past expressions of her intentions. The court ruled for Bruce because Holmstedt relied entirely on the trust and Bruce's indication to Stephen that Patricia would someday divide her assets among all her children. The court held that evidence irrelevant because it represented only Bruce's understanding, not Patricia's testamentary intent.
The court held Holmstedt's duress claim failed because she relies entirely on evidence that Patricia lived with Bruce and Nancy and the claim that they controlled her social interactions. The court held, "Living with someone does not establish use of threats or mental coercion . . . [and] [Holmstedt] provides no evidence that [Bruce] and his wife controlled [her] social interactions."
The court rejected Holmstedt's claims that Patricia entered the trust and amendment due to fraud and mistake because all the allegedly false statements occurred after Patricia had executed the original trust documents. Thus, it concluded there was no evidence the trust was invalid or void due to mistake or fraud. Since the original trust, not the amendment, excluded Holmstedt, the court held she did not have standing to challenge the amendment based on the allegations of fraud and mistake that occurred after Patricia executed the original trust documents.
Finally, the court granted summary judgment as to the claim for constructive trust because "there is no claim supporting an assertion that [Bruce] is wrongfully holding property."
II
DISCUSSION
A. Standard of Review
Because Holmstedt appeals from the trial court's order granting Bruce summary judgment, we examine the record independently to determine whether triable issues of fact exist to warrant reinstating the action. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142 (Wiener).)
"A defendant meets its burden of showing that a cause of action has no merit 'if that party has shown that one or more elements of the cause of action . . . cannot be established. . . .' Once the defendant meets the foregoing burden, 'the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to that cause of action . . . [and] set forth the specific facts showing that a triable issue of material fact exists as to that cause of action.'" (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 780, quoting Code Civ. Proc., § 437c.) "[A] moving defendant need not support his motion with affirmative evidence negating an essential element of the responding party's case. Instead, the moving defendant may . . . point to the absence of evidence to support the plaintiff's case. When that is done, the burden shifts to the plaintiff to present evidence showing there is a triable issue of material fact. If the plaintiff is unable to meet her burden of proof regarding an essential element of her case, all other facts are rendered immaterial. [Citations.]" (Saelzler, at pp. 780-781)
In performing our independent review, we view the evidence in the light most favorable to Holmstedt. (Wiener, supra, 32 Cal.4th at p. 1142.) "[W]e liberally construe [Holmstedt's] evidentiary submissions and strictly scrutinize [Bruce's] own evidence, in order to resolve any evidentiary doubts or ambiguities in [Holmstedt's] favor." (Ibid.)
B. Lack of Capacity
Holmstedt argues a triable issue of fact exists as to whether Patricia lacked capacity to execute the trust and the amendment.
"A person challenging the validity of a trust instrument on the grounds that the trustor lacked capacity to execute the document . . . carries the heavy burden of proving such allegations. [Probate Code] Section 810, subdivision (a) creates 'a rebuttable presumption affecting the burden of proof that all persons have the capacity to make decisions and to be responsible for their acts or decisions.'" (Doolittle v. Exchange Bank (2015) 241 Cal.App.4th 529, 545 (Doolittle).) "A judicial determination that a person is totally without understanding, or is of unsound mind, or suffers from one or more mental deficits so substantial that, under the circumstances, the person should be deemed to lack the legal capacity to perform a specific act, should be based on evidence of a deficit in one or more of the person's mental functions rather than on a diagnosis of a person's mental or physical disorder." (Prob. Code, § 810, subd. (c).)
Holmstedt attempts to flip the statutorily mandated presumption. She argues we should apply Civil Code section 39, subdivision (b), which requires a "rebuttable presumption affecting the burden of proof that a person is of unsound mind . . . if the person is substantially unable to manage his or her own financial resources or resist fraud or undue influence." We decline the invitation. Civil Code section 39 applies by its terms to conveyances and contracts. Probate Code section 810 applies to trusts. In any event, as we discuss below, there is no evidence Patricia was unable to manage her own financial resources, only that she chose to delegate much of the management to others.
A determination that a person "lacks the capacity to execute a trust must be supported by evidence of a deficit in at least one of specified mental functions that 'by itself or in combination with one or more other mental function deficits, significantly impairs the person's ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.'" (Doolittle, supra, 241 Cal.App.4th at p. 545, quoting Prob. Code, § 811, subd. (b), italics added.) The specified mental deficits include problems with alertness and attention (such as orientation to time and place, and ability to concentrate), information processing (such as memory, communication, recognition of familiar persons), thought processes (such as disorganized thinking, hallucinations, and delusions), and the ability to modulate mood and affect (such as states of euphoria, anger, anxiety, apathy, and the like). (Prob. Code, § 811, subd. (a).)
Holmstedt simply has not presented evidence Patricia suffered from any such mental deficits. She relies, almost exclusively, on evidence showing Patricia delegated or deferred to her husband and her son Bruce to conduct significant financial affairs. So, she relies on Patricia's own statement in a court filing that "During [husband's] marriage to [Patricia], [he] assumed responsibility of all financial management of their property. [Patricia] received no information concerning investments and from time to time, executed documents concerning real and personal property as requested by [her husband]." A wife's deference to her husband in making financial decisions, common for much of the 20th Century, is in no way evidence that the wife was incapable of making such decisions, much less that she suffered deficits in mental functioning that made her incapable.
Holmstedt also relies heavily on Bruce's involvement in trying to ensure his mother inherited her husband's estate after he passed away. Bruce's brother Stephen said Bruce spoke to Patricia about these issues and Patricia told him "she was going to let Bruce take care of it because he was a math major in college." Bruce retained and consulted with a lawyer and helped arrange a payment to his father's children from a prior relationship to settle their claims to the estate. Again, as the trial court rightly concluded, this evidence does nothing to show Patricia was incapable of understanding the nature of her decision to enter the original trust or the consequences of that decision for her family members. It shows only that she chose to delegate rather than handle these financial affairs for herself. Holmstedt provides no authority to support the proposition that a person's decision to delegate financial decisions can show she lacked the capacity to make them, and we are aware of none. To the contrary, we hold such evidence, without more, cannot establish lack of capacity as a matter of law.
The evidence of Patricia's mental incapacity when she executed the amendment to the trust is even weaker. Holmstedt points to notes taken by her physician at an appointment on September 3, 2009. Those notes say she came to her appointment alone and reported "things [are] slowing down," her balance was poor, and she had problems reading "words wrong." However, the report from her checkup notes no cognitive deficiencies and no neurologic problems other than an irregular gait and abnormal sensation in her feet. More, Patricia's physician submitted a declaration saying he had never noted Patricia exhibited any cognitive problems. He said he would testify "Patricia, throughout the time that I was her primary care physician up until the date of her death, was not impaired mentally in any way." We conclude there is no evidence to support finding Patricia suffered deficits in mental functioning that made her unable to make the decisions embodied in the amendment to the trust.
We recognize some courts apply an even more forgiving standard (Prob. Code, § 6100.5) for finding a party incapable of executing an amendment to a trust. (See Andersen v. Hunt (2011) 196 Cal.App.4th 722, 731; Doolittle, supra, 241 Cal.App.4th at p. 830.) We conclude Holmstedt has not met the higher standard, and therefore need not decide whether the lesser standard applies. --------
Holmstedt's own testimony underscores the problems with her evidence. She admitted she didn't know what Patricia's mental capacity was when she executed the original trust. Asked how she knew Patricia couldn't understand the nature of the trust, she responded, "I don't know." She was unable to identify information showing Patricia lacked the mental capacity to remember family relations, and she admitted Patricia knew her when they saw each other.
She gave similar answers about Patricia's capacity in September 2009. She admitted she didn't know whether Patricia knew what she was reading when she executed the amendment. She said she didn't know what information would support her allegation that Patricia didn't have sufficient mental capacity to remember family relations at the time of the 2009 amendment. She gave the same answer when asked how she knew Patricia didn't have sufficient mental capacity to remember who would be affected by the 2009 amendment. In short, Holmstedt imparted no information that could fill the evidentiary gaps we have identified.
By contrast, respondents have provided substantial evidence showing Patricia was not suffering from any mental deficiency when she executed the trust documents. Patricia's attorneys both recounted their experiences with her. Attorney Mark Lewis, who prepared the 2007 trust document, said his paralegal met with Patricia in person and he met with her by telephone. He reported the trust document reflects what she told them she wanted, specifically that she did not want to leave money for Stephen or Kathleen. Attorney Amy Nett, who prepared the 2009 amendment, said she met with Patricia alone and in person. She said the amendment reflected what Patricia told her. She said Patricia wanted to remove Patty as a beneficiary and secondary trustee, and reiterated her desire that Stephen and Kathleen receive nothing. Neither attorney saw any reason to doubt her capacity to understand and decide to execute the documents. As we have mentioned, her physician reached a similar conclusion based on his personal experience and reviewing her records. Finally, several family members remembered Patricia as being mentally sharp, not impaired in any way during the times relevant to this case.
We therefore conclude the trial court correctly granted respondents' summary judgment on the claim that Patricia lacked capacity to enter the trust and the amendment.
C. Undue Influence
Holmstedt argues the trial court erred by granting summary judgment because there is a triable issue of fact as to whether Bruce exercised undue influence over Patricia.
Generally, California law allows a person to dispose of her property as she sees fit, without regard to whether the dispositions specified are appropriate or fair, so "[t]estamentary competence is presumed." (Estate of Sarabia (1990) 221 Cal.App.3d 599, 604.) However, the presumption can be overcome and a testamentary document may be set aside if procured by undue influence. (Rice v. Clark (2002) 28 Cal.4th 89, 96; Prob. Code, § 6104.) "Undue influence is pressure brought to bear directly on the testamentary act, sufficient to overcome the testator's free will, amounting in effect to coercion destroying the testator's free agency." (Rice, at p. 96.) The doctrine applies to any testamentary document, including an inter vivos trust. (Ibid.; David v. Hermann (2005) 129 Cal.App.4th 672, 684.)
The contrary presumption is overcome and a rebuttable presumption of undue influence arises if (but only if) the challenger shows the person who allegedly exerted undue influence (1) had a confidential relationship with the testator; (2) actively participated in preparing or executing the trust in a non-incidental fashion; and (3) accrued undue profit by virtue of the trust. (Estate of Sarabia, supra, 221 Cal.App.3d at p. 605.) If this presumption is activated, the proponent of the trust has the burden of producing evidence that the document was not procured by undue influence. (Ibid.)
The trial court concluded Holmstedt failed to present evidence sufficient to create a triable issue of material fact as to whether Bruce accrued undue profit by virtue of the trust. We agree. Holmstedt cannot show undue profit simply by showing Bruce received more under the trust than he would have received had there been no trust. (Estate of Sarabia, supra, 221 Cal.App.3d at pp. 607-608.) She was required to provide evidence beyond the terms of the instrument, such as evidence about Patricia's past statements of her testamentary intentions or prior will and trusts. (Ibid.) Holmstedt provides no such evidence. Indeed, she concedes Patricia had no prior estate plan and there is no evidence of her past testamentary intentions. Instead she stands entirely on Stephen's representation about a conversation he had with Bruce. According to Stephen, Bruce, seeking consent to their father's estate going to Patricia, said "she would, subsequently, you know, leave everything to us." As the trial court held, this statement does not present Patricia's prior testamentary intention, but Bruce's expectation about what she would do in the future. As such, it is insufficient to establish the undue profit element, and the trial court properly granted summary judgment on this claim.
Again, Holmstedt's testimony undercut her own case and respondents submitted affirmative evidence that Bruce did not profit unduly from the trust and amendment. Holmstedt admitted Patricia never talked to her about what would happen to her property when she passed away, she didn't talk to her grandmother about the topic, and didn't remember talking to anyone else about what Patricia intended to do with the estate. Meanwhile, Bruce submitted a declaration and notes from Amy Nett, who prepared the trust amendment. She reported she met alone with Patricia and Patricia explained why she wanted to disinherit her daughters Kathleen and Patty. "Patricia told me about all of her issues with [Patty] and [Kathleen] and how great [Bruce] and, his wife, [Nancy] . . . were to her." Patricia told her she excluded Kathleen because she was already sending her money, among other reasons. Nett's notes say Patricia did not want to give Kathleen money because she was an alcoholic. Patricia said she removed Patty as a beneficiary because she had already paid for three-quarters of the house Patty lives in with her husband. In addition, Nett's notes say Patricia said she had already given money to her grandchildren for debts and housing, and she did not want to give them more. Patricia told Nett she wanted to give all her property to Bruce, then to Nancy, and then to their children.
Estate of Gelonese (1974) 36 Cal.App.3d 854, is not to the contrary. In that case, the Court of Appeal concluded there was substantial evidence to sustain the determination that the will resulted in undue profit to two beneficiaries. The court concluded "[t]he will was an unnatural one in that it did not treat all of decedent's children equally. Charles and Rosie were bequeathed only $100 each and the residue was devised and bequeathed one-third each to Lena, Robert and Peter. Lena and Robert, two of the proponents, were active in procuring the execution of the will and received thereunder two-thirds of the residue of a substantial estate." (Id. at p. 866.) What distinguishes Estate of Gelonese from this case is the challengers there presented evidence "decedent wanted her children to share equally in her estate." (Ibid.) Here, Holmstedt failed to present similar evidence, conceded she did not know anything about Patricia's intentions, and Bruce presented substantial affirmative evidence that Patricia had specific reasons for choosing to treat her children differently, which she explained to her attorney.
D. Duress
Holmstedt argues the trial court erred by granting summary judgment because there is a triable issue of fact as to whether Patricia acted under duress when she executed the trust and amendment. She argues she provided sufficient evidence of duress to survive summary judgment by showing "Patricia was dependent upon [Bruce] and Nancy. [Bruce] was involved in the control and management of Patricia's legal affairs," and Bruce "engaged in several transactions with Patricia and her Trust, from which he benefitted."
Even if we accepted Holmstedt's characterization of the evidence, we would not find it sufficient to create a fact issue for trial on duress. Duress is "shown where a party 'intentionally used threats or pressure to induce action or nonaction to the other party's detriment. [Citation.]' [Citations.] The coercion must induce the assent of the coerced party, who has no reasonable alternative to succumbing." (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1523.) Thus, Holmstedt was required to show Bruce induced Patricia to execute the trust and the amendment by means of threats or pressure that robbed her of her agency. The fact that Patricia lived with Bruce and Nancy (after the original trust was executed) is not sufficient to establish coercion. And even the evidence of Bruce's involvement in Patricia's legal affairs and property transactions does nothing more than establish the opportunity for mischief, not its occurrence. This evidence is especially ineffective held up against the declarations of Bruce, Nancy, Patricia's brother and sister-in-law, and Patricia's two attorneys who worked on the trust instruments, all saying they believed Patricia determined her own course.
E. Mistake and Fraud
Finally, Holmstedt argues the trial court erred in granting summary judgment on her mistake and fraud claims. Bruce shifted the burden on summary judgment to Holmstedt by offering to testify he never pressured Patricia about the trust and by submitting declarations from Patricia's attorneys saying she consulted them alone and understood and endorsed the contents of the trust.
On appeal, she relies entirely on Stephen's testimony that he believes Bruce "withheld information from Patricia concerning her assets," "provided Patricia with misinformation because [she] did not seem to know the nature and extent of her assets," and that "Patricia was likely manipulated by [Bruce] and led to believe false facts which resulted in the disposition of Patricia's assets."
The testimony Holmstedt relies on is not evidence of mistake or fraud. It is merely Stephen's speculation about the cause of his mother's decision to exclude him as a beneficiary. Unable to understand the decision, he posits that Bruce manipulated her. Speculation is not evidence, however, and cannot create a triable issue of fact to defeat summary judgment. (Advent, Inc. v. National Union Fire Ins. Co. of Pittsburgh (2016) 6 Cal.App.5th 443, 459.)
F. Constructive Trust
Holmstedt challenges the court's order granting summary judgment on her request for a constructive trust. She argues we should reinstate that claim if we reinstate any of her other claims. Since we decline to do so, there is no support for finding Bruce wrongly acquired or detained property rightfully belonging to someone else, and therefore no basis for imposing a constructive trust. (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.)
III
DISPOSITION
We affirm the judgment. Appellant shall bear costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
SLOUGH
J. We concur: McKINSTER
Acting P. J. MILLER
J.