Opinion
NOT TO BE PUBLISHED
Superior Court County of Santa Barbara No. 01046070, Denise De Bellefeuille, Judge.
Greenwald, Hoffman, Meyer & Montes; Raul M. Montes. Ambrecht, Arnold, Tokuyama & Brittain, Eric M. Tokuyama, for Appellant.
Hollister & Brace, A Professional Corporation, Susan H. McCollum and Marcus S. Bird, for Respondent.
YEGAN, Acting P.J.
Douglas Mack, as beneficiary of the Janina M. Bowey Revocable Trust of 1997 (trust), appeals from an order awarding $51,356.91 fees and costs against the trust in a real estate matter. The award is based on an April 2, 2007 Order For Preliminary Distribution in which the probate court found the trust was contractually obligated to sell a Montecito estate (Ravenscroft) to respondents Jon R. Sorrell and Marie L. Sorrell. We affirm.
Facts and Procedural History
Douglas Mack and David Hinshaw (Mack/Hinshaw) are executors of the Estate of Janina M. Bowey and co-trustees of decedent's trust. In 2006, they sold Ravenscroft to respondents for $4.5 million based on the representation that the sale would not require probate court confirmation. Before escrow closed, Mack/Hinshaw claimed the sale was subject to a probate court overbid because the estate was selling the property.
Respondents filed a petition for preliminary distribution to enforce the residential purchase agreement (Prob. Code § 11600 et seq) and a second petition to compel arbitration. Mack/Hinshaw filed objections and opposed the petitions. As estate executors, they argued that the estate was selling the property even though decedent's will devised the property to the trust. (See § 7000 [title passes to devisee on decedent's death].) As trustees, Mack/Hinshaw claimed the sale was subject to estate administration and that the trust was not a party to the residential purchase agreement.
All statutory references are to the Probate Code unless otherwise stated.
The probate court ordered the executors (Mack/Hinshaw) to distribute Ravenscroft to the trust and found that the trustees (Mack/Hinshaw) were "obligated to convey title" to respondents. The parties were ordered to arbitrate any dispute concerning the sale, pursuant to the arbitration clause in the residential purchase agreement. The court further ordered that, upon close of escrow, the sale proceeds would first be distributed by court order to the Internal Revenue Service, California Franchise Tax Board, and other taxing agencies, and that the net sale proceeds be released to the trust. Costs, including attorney fees, were awarded against the trust and later determined to be $51,356.91.
First Appeal
As estate executors, Mack/Hinshaw appealed from the order for preliminary distribution. (B198474.) On February 5, 2008, we dismissed the appeal as moot because the estate had already distributed the property to the trust and the trust had conveyed the property to respondents.
Second Appeal: Award for Costs
After the probate court awarded costs, Mack/Hinshaw filed a second appeal as estate executors. On June 17, 2008, we dismissed Hinshaw's appeal on the ground that he lacked standing to appeal the cost award. Mack was permitted to proceed with the appeal in his capacity as a trust beneficiary. (See e.g., Graham v. Lenzi (1995) 37 Cal.App.4th 248, 254.)
Section 11624
Mack does not dispute the amount of the costs award but claims that attorney fees are not recoverable in a probate proceeding. He relies on section 11624 which provides that in ordering the preliminary distribution of estate assets, a probate court may only award costs. "The general rule is that attorney's fees are not recoverable as costs except where expressly allowed by statute or agreed to by express contract. [Citations.] This rule applies in probate proceedings." (Estate of Bevelle (1947) 81 Cal.App.2d 720, 722 [discussing former § 1232].)
Section 11624 states: "The costs of a proceeding under this article shall be paid by the distributee or the estate in proportions determined by the court."
Here attorney fees were awarded against the trust, not the estate, and were a recoverable cost based on the residential purchase agreement. (Code Civ. Proc., § 1033.5, subd. (a)(10(A); Santisas v. Goodin (1998) 17 Cal.4th 599, 606.) In opposing the petition for preliminary distribution and petition to compel arbitration, Mack switched hats as coexecutor and cotrustee. In this appeal, he dons a third hat – that of trust beneficiary. Mack, however, has not appealed from the order for preliminary distribution which is final and includes the finding that he (as co-trustee) is bound by the residential purchase agreement. (§ 11605 [order for preliminary distribution "is conclusive as to the rights of all interested parties"]; Estate of Callnon (1969) 70 Cal.2d 150, 156; 14 Witkin, Summary of Cal. Law (10th ed. 2005) Wills and Probate, § 726, p. 813.)
Paragraph 22 of the Residential Purchase Agreement provides: "In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller . . . .
Jurisdiction
Mack's assertion that the probate court lacked jurisdiction to award fees is equally without merit. In trust matters, a probate court is a court of general jurisdiction and has all the powers of the superior court. (§ 17001; Estate of Hilton (1996) 44 Cal.App.4th 890, 903-904, fn. 12; Estate of Beard (1999) 71 Cal.App.4th 753, 775 [discussing probate court's broad equitable jurisdiction].) Because the trust is being administered in California, Mack (as trustee and trust beneficiary) is subject to the jurisdiction of the probate court. (§ 17003.)
The 1990 law revision comment to section 17001 states in pertinent part: "This section, along with Sections 17000 and 17004, is intended to eliminate any notion that the 'probate court ' is one of limited power or that it cannot dispose of matters properly brought before it . . . ." (54A West's, Ann. Cal. Codes (1990), Probate, § 17001, p. 184.)
Mack claims that the costs were awarded ex parte and without notice to the trust. The record indicates that Mack appeared through counsel and that counsel was served with the petition for fees and costs. It is disingenuous to now claim that the award for costs violates Mack's due process rights.
Super-Priority Lien
Mack finally contends that that award for fees and costs is an invalid estate lien and could leave the estate with no funds to pay taxes. (See Behniwal v. Mix (2005) 147 Cal.App.4th 621, 624 [award for attorney fees does not have priority over tax liens and may not be paid "off the top"].) The argument is without merit. The order for preliminary distribution provides that the sale proceeds shall first be distributed "to the Internal Revenue Service, the California Franchise Tax Board, or any other taxing agency . . ." and that the net sale proceeds distributed to the trust. (See § 11603, subd. (b)(2) [authorizing distribution of estate assets subject to limitations or conditions].) The order further provides that the trustees (Mack/Hinshaw) may, at their election, pay respondents' costs from the net sale proceeds. The estate and the trust have suffered no harm.
Mack's remaining arguments have been considered and merit no further discussion.
Mack argues that the amount of fees must be determined by the arbitrator, not the probate court. The issue was waived and may not be asserted for the first time on appeal. (See e.g., Children's Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 776.) Waiver aside, the Residential Purchase Agreement excludes from arbitration "any matter that is within the jurisdiction of a probate . . . court."
The judgment (order awarding fees and costs) is affirmed. Respondents are awarded costs on appeal.
We concur: COFFEE, J., PERREN, J.