Opinion
A158590
07-30-2021
KENTON KEADING, Plaintiff and Appellant, v. HILJA M. KEADING et al., Defendants and Respondents.
NOT TO BE PUBLISHED
Contra Costa County Super. Ct. No. MSP16-00402
FUJISAKI, ACTING P.J.
In the proceedings below, Kenton Keading was declared a vexatious litigant (Code Civ. Proc., § 391, subd. (b)) and ordered to furnish security in order to maintain his pending cases. He failed to do so, and the probate court dismissed with prejudice his petition to invalidate a trust amendment. Kenton, appealing in propria persona, contends the dismissal for failure to furnish security should have been without prejudice. We conclude any error was not prejudicial and affirm.
Due to the commonality of the Keading last name, we refer to the Keading family members by their first names. No disrespect is intended.
All statutory references are to the Code of Civil Procedure unless otherwise stated.
FACTUAL AND PROCEDURAL BACKGROUND
A detailed discussion of the facts underlying the dispute between siblings Kenton and Hilja M. Keading, which we adopt and incorporate by reference, is set out in our partially published opinion in Keading v. Keading (2021) 60 Cal.App.5th 1115 (Keading I) and in our unpublished opinion in Keading v. Keading (March 30, 2021, A157476) (nonpub. opn.) (Keading II).
Kenton and Hilja were the beneficiaries of a family trust created by their parents, Lucille and Lewis. The trust was amended several times, and surviving settlor Lewis executed a final amendment in October 2015 providing for a “net equalization” in the trust assets between the siblings.
After Lewis passed away, Hilja filed a petition in probate court in 2016 to remove Kenton as trustee of the family trust and appoint a successor trustee, and to recover trust assets in case No. MSP16-00402 (the 402 action). Hilja alleged that Kenton fraudulently executed and recorded a deed purporting to transfer the parents' residence and adjoining property from the trust to himself and Lewis as joint tenants. She further alleged that Kenton sold a vehicle that had been assigned to the trust and that he forced Lewis to sign a stock certificate over to him shortly before Lewis died. According to the petition, “Kenton is angry that Hilja is an equal beneficiary with him under the terms of the Trust as amended and believes he is entitled to all of his parents' assets.”
Hilja's 2016 petition, along with several other relevant records from the proceedings below, are the subject of her request for judicial notice. Kenton has also filed a request for judicial notice of “Court Transcripts for [Keading II] filed with this court.” We grant Hilja's request. (Evid. Code, § 452, subd. (d).) Although we deny Kenton's apparent request for judicial notice of the entire appellate record from Keading II on relevance grounds, we observe that all records necessary to our analysis and disposition, including the vexatious litigant order reviewed in Keading II, are contained in the record before us.
The probate court held a trial on Hilja's petition and in August 2017 issued its statement of decision finding Kenton liable for elder abuse and breach of fiduciary duty. In the court's words, the evidence established that “Lewis was lucid, unpressured, and fully informed, when he executed [the October 2015 trust] amendment. More to the point, Kenton has not challenged the validity of the amendment, and therefore its validity will not be questioned in this proceeding.”
More than a year later, in September 2018, Kenton filed a petition in propria persona in the 402 action seeking to invalidate the October 2015 trust amendment. Kenton alleged that Hilja unduly influenced Lewis to execute the amendment; that the amendment misstated facts; and that the amendment sought to combine the trust assets in a manner that violated the terms of the original trust and the bypass trust, neither of which could be modified after Lucille's death. Kenton further argued his petition was not time-barred because of notice and service defects in the trustee's notice served by Hilja in 2016. The petition sought injunctive relief, imposition of a constructive trust, and damages.
Meanwhile, in February 2019, Kenton filed a separate civil complaint in case No. C19-00331 asserting one cause of action against Hilja for elder abuse (the 331 action). Like his 2018 petition in the 402 action, Kenton's elder abuse complaint alleged that Hilja had procured the October 2015 trust amendment by unduly influencing Lewis while acting as his caregiver.
On May 21, 2019, the probate court in the 402 action (Hon. John H. Sugiyama) granted Hilja's motion to declare Kenton a vexatious litigant. The court found that Kenton was a vexatious litigant within the meaning of section 391, subdivision (b)(3), and that Hilja was entitled to a prefiling order under section 391.7, subdivision (a). The court also examined Kenton's pending cases, including his 2018 petition in the 402 action and his 2019 elder abuse complaint in the 331 action, and determined there was no reasonable probability he would prevail in these matters. Specifically, the court found that Kenton's 2018 petition “should have been, but was not, filed as a counter-claim related to” Hilja's 2016 petition proceedings and was therefore “collaterally estopped.” Additionally, the court concluded Kenton's 2018 petition was “time barred pursuant to Probate Code section 16061.8.” Finally, the court found that Kenton's elder abuse complaint in the 331 action “faces the same infirmities” in that “it is collaterally estopped and time barred.”
The probate court thereupon issued a prefiling order requiring Kenton to obtain leave of court to file new litigation in the courts of this state. The court also ordered Kenton to furnish $100,000 security “[f]or each pending proceeding or action... within ten days from the date of entry of this order or face dismissal without prejudice of each pending proceeding or action for which the security is not furnished.” Kenton did not furnish security.
In late May 2019, shortly after the probate court issued its vexatious litigant order, attorney Timothy McCandless substituted in as Kenton's counsel of record in the 402 action.
Meanwhile, Hilja demurred to Kenton's 2019 elder abuse complaint in the 331 action on various grounds. In June 2019, the trial court (Hon. Jill C. Fannin) sustained Hilja's demurrer without leave to amend. Although the court did not find Kenton's elder abuse claim to be barred by collateral estoppel, it determined the claim was a compulsory cross-claim that had to be asserted in the 402 action because the two actions “concerned the same transactional nucleus of facts[.]” The court further concluded it lacked jurisdiction to hear Kenton's elder abuse claim because the validity of the trust provisions fell under the exclusive jurisdiction of the probate court, and Kenton's elder abuse claim sought to nullify the effect of the October 2015 amendment. Finally, the court found the elder abuse claim was time-barred under Probate Code section 16061.8.
Kenton's request for leave to appeal from the trial court's order in the 331 action was denied by this court for “[failure] to show a reasonable possibility that his appeal has merit.”
In August 2019, two days before a scheduled hearing on Kenton's 2018 petition in the 402 action, Hilja filed a declaration “in Support of Order Dismissing” the petition based on Kenton's failure to furnish the security required in the vexatious litigant order. At the August 8, 2019, hearing, Kenton's attorney McCandless argued that Kenton's 2018 petition should not be dismissed because the vexatious litigant order was not a ruling on the status of the trust. Hilja's counsel, Andrew Verriere, responded that the vexatious litigant order “clearly” dealt with the merits of the petition. He also stated the court found the petition was time-barred and barred by res judicata and determined “Mr. Keading is a vexatious litigant.” Verriere accused McCandless of sanctionable conduct for pursuing “an objectively frivolous petition, ” to which McCandless replied, “[A]ll I've done is file a substitution of attorney. Out of obligation to my client, I have to appear at the hearing, and I take no responsibility for that petition.”
The probate court dismissed Kenton's 2018 pro se petition in the 402 action for failure to furnish security. In doing so, the court noted that “Mr. McCandless takes no responsibility for the underlying petition. That's not to say, Mr. Verriere, that Mr. McCandless may not later attempt to file a new petition reasserting the same claims; but with respect to the previously filed petition for which Mr. Kenton Keading must [accept] responsibility and sole responsibility, I am now dismissing that petition.” The court asked McCandless to “determine in consultation with your client what he wishes to do next; and in that respect, Mr. Verriere, we may see the same petition with Mr. McCandless accepting responsibility for that.” Despite its statements anticipating McCandless's future filing of a petition on Kenton's behalf, the probate court issued a written order dismissing Kenton's 2018 petition “with prejudice.”
This court granted Kenton's request for leave to appeal the dismissal.
While this appeal was pending, this court affirmed the judgment in favor of Hilja in the 402 action. (See Keading I, supra, 60 Cal.App.5th at pp. 1130-1131.) We also affirmed the vexatious litigant order. (Keading II, supra, A157476, 2021 Cal.App.Unpub. Lexis 2125 [nonpub. opn.], at p. *30.)
DISCUSSION
A. Dismissal for Failure to Furnish Security
The vexatious litigant statutes (§§ 391-391.7) “ ‘are designed to curb misuse of the court system by those persistent and obsessive litigants who, repeatedly litigating the same issues through groundless actions, waste the time and resources of the court system and other litigants.' ” (In re Marriage of Rifkin & Carty (2015) 234 Cal.App.4th 1339, 1345.)
Section 391.1 permits a defendant in any litigation pending in a court of this state to move for an order requiring the plaintiff to furnish security. To require the security, the court must determine that the plaintiff is a vexatious litigant within the meaning of section 391, subdivision (b), and that there is no reasonable probability the plaintiff will prevail in the litigation against the moving defendant. (§ 391.3, subd. (a).) The court may also issue a prefiling order prohibiting the plaintiff from filing “any new litigation in the courts of this state in propria persona” without first obtaining leave from the presiding judge of the court where the litigation is to be filed. (§ 391.7, subd. (a).)
If security is not furnished as ordered, “the litigation shall be dismissed as to the defendant for whose benefit it was ordered furnished.” (§ 391.4.) Section 391.4 does not state whether such dismissal is to be with or without prejudice. While it goes without saying that a vexatious litigant who fails to furnish security would not be permitted to refile a dismissed pleading in propria persona, Kenton contends such dismissal must be without prejudice to refiling through counsel. Hilja provides no response to this contention, and we are not aware of any decisional authority directly on point.
The California Supreme Court has recognized that the vexatious litigant statutes were “modeled in part on former section 834 of the Corporations Code” (now Corp. Code, § 800, subd. (d)) which required a plaintiff in a shareholder derivative action to post security if the defendant established there was no reasonable probability that the litigation would benefit the corporation or its shareholders. (Moran v. Murtaugh Miller Meyer & Nelson, LLP (2007) 40 Cal.4th 780, 785.) Thus, Kenton's position appears indirectly supported by Ensher v. Ensher, Alexander & Barsoom, Inc. (1960) 187 Cal.App.2d 407 (Ensher), which determined the trial court erred in dismissing a shareholder derivative action with prejudice due to the plaintiff's failure to post security.
In Ensher, the appellate court first observed that Corporations Code former section 834 “makes no provision for dismissal with prejudice, ” and that dismissal of an action generally does not operate as a bar to another action for the same cause of action. (Ensher, supra, 187 Cal.App.2d at pp. 410-411.) Ensher then concluded: “ ‘[W]here the dismissal of an action does not purport to go to the merits of the case, the trial court has no authority to include within the judgment of dismissal an order which in effect precludes the plaintiff from instituting another action in which the merits of the controversy may be litigated.' ” (Id. at p. 411.) As Ensher noted, a dismissal under former section 834 of the Corporations Code for failure to post security is not a determination of the merits of any issue in the action. (Ensher, at p. 411.) Similarly, with certain exceptions not relevant here, section 391.2 provides that “no determination made by the court in determining or ruling [on a vexatious litigant] motion shall be... a determination of any issue in the litigation or the merits thereof.”
Still, Ensher is not dispositive of the issue presented here, as the vexatious litigant statutes address unique policy concerns regarding abuse of the judicial process that shareholder derivative suits do not. On this score, we find Muller v. Tanner (1969) 2 Cal.App.3d 438 (Muller) to be instructive. There, the appellate court affirmed the trial court's decision to strike a complaint that was identical to a prior complaint filed by a vexatious litigant who had failed to furnish security, even though the second complaint was signed by an attorney. The court held that to permit the second suit would allow the plaintiff to evade the security ruling and “encourage the vexatious litigation which the statute was designed to prevent. The filing of the second suit is an abuse of the process of the court.” (Id. at pp. 443-444.) “The fact that plaintiff secured an attorney to lend his name to the subsequently filed complaint avails him naught. The provisions of the vexatious litigant statute, which the court acted to protect in this action, do not preclude a stay or dismissal because an attorney is used in the action in which the motion is made.” [Citations.] Therefore, the use of an attorney in this case should not deprive the court of the power to protect itself from abuse of the judicial process.” (Id. at p. 444.) Accordingly, Muller supports the conclusion that the probate court below had the inherent power to dismiss Kenton's petition with prejudice-even to refiling through counsel-in order to protect the judicial process from abuse. (Id. at pp. 443-444; see also In re Shieh (1993) 17 Cal.App.4th 1154, 1167-1168 [prefiling order may extend to new litigation filed through attorney where attorney ostensibly representing vexatious litigant serves as “mere puppet[]”].)
Beyond these authorities however, we note the probate court's vexatious litigant order stated that the consequence for failing to furnish security would be “dismissal without prejudice.” (Italics added.) And the court's remarks at the August 8, 2019, hearing (e.g., “we may see the same petition with Mr. McCandless accepting responsibility”) further reinforce the conclusion that the court's dismissal at the August 8, 2019 hearing was intended to be without prejudice to refiling through counsel.
Based on the foregoing, we think it is probable that the “with prejudice” language of the order dismissing Kenton's 2018 petition was erroneously included in the trial court's written order. Assuming that to be the case, we next consider whether the perceived error was prejudicial.
We reject Kenton's additional contention that the trial court erred in dismissing his 2018 petition while the vexatious litigant order was pending appeal. The automatic stay of proceedings under section 916 did not apply to the dismissal of Kenton's 2018 petition for failure to furnish security, as that dismissal had no effect upon and in no way impaired the effectiveness of this court's jurisdiction to resolve the appeal of the vexatious litigant order. (See Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629.) Kenton additionally contends his 2018 petition was not subject to the probate court's prefiling order because it preceded the prefiling order and was not “new” litigation. However, Kenton's 2018 petition was subject to the remedies under sections 391.1 to 391.6 applicable to pending actions, including the security requirement (§ 391.3, subd. (a)) and dismissal for failure to furnish security (§ 391.4). (Shalant v. Girardi (2011) 51 Cal.4th 1164, 1170, 1176.)
B. Prejudice
Our state Constitution provides that “[n]o judgment shall be set aside, or new trial granted, in any cause, ... for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” (Cal. Const., art. VI, § 13.) Prejudice is not presumed (§ 475), and the appellant has the burden of establishing both error and a miscarriage of justice (Denham v. Superior Court (1970) 2 Cal.3d 557, 566). On this score, the appellant “bears the duty of spelling out in his brief exactly how the error caused a ‘miscarriage of justice.' ” (Paterno v. State of California (1999) 74 Cal.App.4th 68, 106.)
“ ‘[A] “miscarriage of justice” should be declared only when the court, “after an examination of the entire cause, including the evidence, ” is of the “opinion” that it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.' ” (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.) “ ‘[P]robability' in this context does not mean more likely than not, but merely a reasonable chance, more than an abstract possibility.” (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 715 (College Hospital).)
Generally, the dismissal of a pleading without prejudice places the plaintiff in a position more favorable than a dismissal with prejudice would. (See Johnson v. County of Fresno (2003) 111 Cal.App.4th 1087, 1096 [dismissal with prejudice is judgment on merits between plaintiff and dismissed defendant]; Tokerud v. Capitolbank Sacramento (1995) 38 Cal.App.4th 775, 778 [dismissal without prejudice does not bar another timely action involving same parties and same cause of action].) That said, this general distinction does not appear dispositive of the question before us, for a dismissal without prejudice of Kenton's 2018 petition would not, ipso facto, have cleared the way for him to continue his attacks on the October 2015 trust amendment. We must still examine the entire cause before us and decide whether Kenton has carried his burden of showing a miscarriage of justice.
To that end, we observe Kenton claims he was deprived of “the opportunity to fully litigate this matter at a point in the future.” But that contention is unpersuasive based on our examination of the entire cause. Because Kenton was found to be a vexatious litigant and had failed to furnish the required security, his only recourse to continue litigating his petition in the courts of this state was to refile the petition through counsel. However, as discussed above, the trial court could have stricken the refiled petition pursuant to Muller in order to protect the judicial process from abuse. (Muller, supra, 2 Cal.App.3d at pp. 443-444.)
Furthermore, while Kenton had, at one point, retained attorney McCandless to represent him, it is notable that McCandless refused to take responsibility for Kenton's 2018 petition at the August 8, 2019, hearing and gave no indication that he planned to refile the petition on Kenton's behalf. Nowhere in the record or in Kenton's appellate briefing-which he filed in propria persona-is there any indication that McCandless or any another attorney would likely have refiled the petition on his behalf had the dismissal been without prejudice. We conclude Kenton's mere suggestion of an abstract possibility of refiling the petition through counsel falls short of the reasonable probability standard for prejudicial error. (College Hospital, supra, 8 Cal.4th at p. 715.)
We also find persuasive Hilja's contention that were this matter remanded and Kenton allowed to refile his petition through counsel, the petition would ultimately be barred by the compulsory cross-complaint rule of section 426.30 and the statute of limitations under Probate Code section 16061.8. Kenton's prior pleadings attempting to invalidate or nullify the October 2015 trust amendment were all found defective on these grounds. In ruling on the vexatious litigant matter, the probate court found that Kenton's 2018 petition was time-barred and should have been brought “as a counter-claim” to Hilja's March 2016 petition. Although this ruling did not constitute a determination on the merits (§ 391.2), we conclude it is highly probable the probate court would reach the same conclusions on a direct pleading challenge. Indeed, shortly after the probate court's ruling, the trial court in the 331 action sustained Hilja's demurrer to Kenton's 2019 elder abuse complaint-which also sought to nullify the effect of the October 2015 amendment based on allegations of undue influence by Hilja-on compulsory cross-complaint and statute of limitations grounds.
We affirmed that ruling in Keading II, holding that substantial evidence supported the determination that Kenton's 2018 petition and 2019 elder abuse complaint were “unmeritorious as a matter of law.” (Keading II, supra, A157476 at p. *19.) Both pleadings “related to Hilja's previously adjudicated claims against Kenton in [case No. MSP16-00402] in which the court expressly found ‘[t]he last clear, lucid, considered disposition of the trust was to equalize the distribution between Hilja and Kenton.' It was reasonable for the trial court to regard both as compulsory counterclaims which should have been asserted earlier.” (Keading II, at pp. *19-*20.)
Kenton nevertheless contends that section 426.30 does not preclude him from reasserting the claims in his 2018 petition because the pleading “far exceeded the narrow claim of undue influence” and “challenged [Hilja's 2016] petition on other grounds... in addition to requesting the imposition of a constructive trust and injunctive relief.” This argument misapprehends the relatedness standard for compulsory cross-complaints.
Under California's compulsory cross-complaint statute, a party is prohibited from asserting a claim if, when answering a complaint in a prior suit, the party failed to allege in a cross-complaint any related cause of action against the plaintiff. (§ 426.30, subd. (a).) “ ‘Related cause of action' means a cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” (§ 426.10, subd. (c).) The relatedness standard does not require an absolute identity of factual backgrounds, only a logical relationship between them. (ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69, 82.)
Kenton's claims in his 2018 petition challenging the October 2015 amendment constitute related causes of action to Hilja's 2016 petition, as both arise from the same series of occurrences involving the disposition of the family trust, as amended in October 2015. It makes no difference that Kenton sought different remedies or that he challenged the October 2015 trust amendment on other grounds in addition to undue influence. Kenton's 2018 petition was still logically related to Hilja's 2016 petition for purposes of the compulsory cross-complaint rule, and any further attempt to reassert his related causes of action through counsel would likewise be barred by the compulsory cross-complaint statute (§ 426.30).
Furthermore, Kenton provides no response to Hilja's argument that his claims seeking to invalidate or nullify the October 2015 trust amendment are now time-barred. Under Probate Code section 16061.8, “[n]o person upon whom the notification by the trustee is served pursuant to this chapter... may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him or her, or 60 days from the date on which a copy of the terms of the trust is delivered pursuant to Section 1215 on him or her during that 120-day period, whichever is later.” (Prob. Code, § 16061.8.)
The issue of when Kenton received notification for purposes of Probate Code section 16061.8 was already determined in the 331 action. There the trial court found that Kenton had received the notification on March 15, 2016. That finding is entitled to collateral estoppel effect because it is identical to the issue presented here, and because it was actually and finally litigated and necessarily decided on the merits against Kenton. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341; see Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1564-1565 [order sustaining demurrer is sufficiently firm to be accorded issue preclusive effect].) Thus, even if Kenton were to refile his petition through counsel, it is inevitable that his trust contest would be rejected given its untimeliness under Probate Code section 16061.8.
In sum, Kenton has not carried his burden to show a reasonable probability that he was actually deprived of the opportunity to refile and maintain his dismissed petition through counsel. Thus, although the probate court appears to have erroneously dismissed Kenton's 2018 petition with prejudice, Kenton fails to establish that the error resulted in a miscarriage of justice.
DISPOSITION
The judgment is affirmed. In the interests of justice, each side shall bear its own costs on appeal.
WE CONCUR: Petrou, J. Jackson, J.