Opinion
A149532
12-17-2018
FEMKE F. KNUDSON et al., Plaintiffs and Appellants, v. RALDA A. RYER, Individually and as Trustee, etc., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Contra Costa County Super. Ct. No. MSP1201243)
In their third appeal in this longstanding dispute over a family trust, Femke F. Knudson and Ingrid J. Huntley (collectively, plaintiffs) claim the trial court abused its discretion by awarding Ralda A. Ryer attorney fees pursuant to Code of Civil Procedure section 2033.420. We affirm the order. We also impose monetary sanctions on plaintiffs and their attorney for this frivolous appeal. (Cal. Rules of Court, rule 8.276.)
Undesignated statutory references are to the Code of Civil Procedure. Section 2033.420 permits an award of attorney fees where a party denies a request for admission and the truth of the requested admission is later proved. We refer to certain parties by their first names for clarity. Plaintiffs have not filed a reply brief.
FACTUAL AND PROCEDURAL BACKGROUND
Judith and Melchior Wesenhagen were married and had five children: Femke, Ingrid, Ralda, Mickel, and Humphrey. Melchior and Judith owned a home in Campbell and property in Brentwood, Concord, and Walnut Creek. They created a trust, which they amended and restated in July 2000. In 2008 and 2009 amendments, Melchior and Judith directed that the Brentwood, Concord, and Walnut Creek properties be distributed to Ralda, "free of trust," "[u]pon the death of the surviving spouse." Judith died in August 2010. After her death, Melchior moved out of the Campbell home and began living with Ralda.
Melchior amended and restated the trust in December 2010 (December 2010 Trust). The December 2010 Trust named Melchior as sole trustee and Ralda as sole successor trustee, and provided the Campbell, Brentwood, and Concord properties would go to Ralda. In 2011, Melchior made cash transfers to Ralda; he also transferred the Brentwood and Concord properties to her via gift deeds. That same year, Melchior sold the Campbell home and gave Ralda the proceeds.
Melchior died in January 2012. A few months later, Humphrey retained attorney Jon R. Vaught to investigate his "potential Trust rights." In April, Vaught sent Ralda the first of several demand letters "demanding information and a detailed accounting of the Trust. His April 8 . . . letter threatened [Ralda] with probate litigation if she did not timely provide the information sought." In May 2012, Humphrey declared bankruptcy.
A. Plaintiffs' Petition Against Ralda and Their First Appeal
In October 2012, Humphrey and plaintiffs filed a petition against Ralda. As relevant here, they (1) challenged Ralda's appointment as sole successor trustee and requested her removal; (2) alleged Ralda unduly influenced Melchior to transfer real property to her; and (3) alleged Ralda committed financial elder abuse. The petition attached the December 2010 Trust. The parties litigated the successor trustee issue, and in May 2013, the trial court determined Ralda was the sole successor trustee. Plaintiffs appealed, and received extensions of time to file their opening brief. In December 2013, plaintiffs dismissed the appeal when their opening brief was due. (Humphrey Wesenhagen et al. v. Ralda Ryer (Dec. 30, 2013, A139239) [nonpub. order].)
In 2013, the bankruptcy court determined Humphrey concealed his trust claims from the bankruptcy trustee, and that those claims belonged to the trustee. Ralda and the bankruptcy trustee settled Humphrey's claims. In 2013, the trustee moved for approval of the proposed settlement. Plaintiffs purchased Humphrey's claims from the bankruptcy estate.
B. Discovery
After plaintiffs dismissed their appeal, the case returned to the trial court. In 2014 and 2015, the parties conducted extensive discovery on plaintiffs' remaining claims, including their allegations that Ralda obtained transfers of trust property from Melchior by means of undue influence, and that Ralda committed financial elder abuse. In September 2014, Ralda propounded 93 requests for admission on Femke, and 88 requests for admission on Ingrid. The requests addressed plaintiffs' allegations regarding (1) Melchior's mental, physical, and emotional condition from May to September 2011; (2) Ralda's behavior toward Melchior in 2010 and 2011; (3) the transfers of the Concord and Brentwood properties; (4) the transfer of the proceeds from the Campbell residence; (5) the transfer of cash in May 2011; (6) the creation of the December 2010 Trust; and (7) Ralda's purported financial elder abuse. Plaintiffs responded in October 2014, denying the majority of the requests.
Plaintiffs served subpoenas on the banks where the trust maintained accounts, and on Melchior's health care provider. In October 2014, these third parties produced over 4,000 pages of documents. In November 2014, Ralda responded to plaintiffs' written discovery and produced hundreds of pages of documents. Plaintiffs deposed Ralda, Mickel, and Melchior's trust attorney. In March 2015, Ralda deposed plaintiffs. Plaintiffs also deposed Melchior's treating physician from 2008 to 2011, who testified Melchior was "sharp-minded," alert, and that he had no memory issues.
Plaintiffs did not seek permission to withdraw or amend their responses to the requests for admission. (§ 2033.300, subd. (a).)
C. Trial, Judgment, and Plaintiffs' Second Appeal
The court held a five-day trial. In a December 2015 decision, the court rejected plaintiffs' claims and determined the evidence "did not establish" Ralda pressured Melchior to "transfer properties to her. On the contrary, the evidence supports the conclusion that the transfers were made by a very grateful father to a devoted daughter. [Ralda] took [Melchior] into her home and cared for him. She tended to his physical and emotional needs without assistance from her siblings. [Melchior's] handwritten letters confirm his gratitude to her and disappointment regarding his other children, with the exception of Mickel." The court also concluded Melchior was "mentally competent and very astute," as demonstrated by the deposition testimony of his treating physician, and the medical records received into evidence. As the court explained, "[t]he uncontroverted evidence establishes that [Melchior] acted of his own free will and volition. There is no evidence supporting even an inference that [Ralda] pressured [Melchior] to transfer property to her." (Italics added.)
The court determined the transfers of the rental properties were consistent with trust amendments providing that Melchior and Judith's rental properties would "go to [Ralda] upon the death of the survivor of them. The 2009 and 2010 amendments to the trust also provided that rental properties go to [Ralda]. The inter vivos transfer of these properties by [Melchior] to [Ralda] are consistent with the stated intent in his estate planning documents." The court reached the same conclusion regarding the Campbell property, noting the December 2010 Trust provided the "Campbell home was to go to [Ralda] upon [Melchior's] death. It was at his direction that the Campbell home was sold and the proceeds ultimately transferred to [Ralda]."
Next, the court determined the 2011 bank transactions were done at Melchior's direction and that "[t]ransfers of assets to [Ralda] made by [Melchior] during his life time were consistent with his intent as expressed in his estate planning documents." Finally, the court concluded Ralda lovingly cared for Melchior and that he was happy in her home. Melchior "expressed disappointment regarding his other daughters who rarely came to visit him. He expressed concern that these children wanted to place him in an assisted living facility. [Ralda] was the only one who took him into her home and cared for him. She is the logical person to receive gifts from her father, which cannot be interpreted as an inequitable result."
The court entered judgment for Ralda, and plaintiffs appealed. Approximately six months later, the appeal was dismissed at plaintiffs' request. (Wesenhagen et al. v. Ryer (Dec. 15, 2016, A148621) [nonpub. order].)
D. Ralda's Motion for Attorney Fees and Costs
In April 2016, Ralda moved for attorney fees and costs pursuant to section 2033.420. She argued plaintiffs knew—before they responded to the requests for admission—they had no evidence supporting the allegations in the petition and therefore had no reasonable ground to believe they would prevail at trial on any of the matters they denied. In support of the motion, Ralda relied on documents offered in Humphrey's bankruptcy proceeding, including (1) declarations from Melchior's trust attorney which demonstrated the December 2010 Trust was not the product of undue influence; (2) declarations from plaintiffs which illustrated their lack of knowledge supporting their undue influence claims; and (3) declarations from third parties which described Melchior's physical and mental state during the relevant time period.
In opposition, plaintiffs claimed many of the requests for admission were not of substantial importance and that they had reasonable grounds to believe they would prevail. In a supporting declaration, attorney Vaught averred plaintiffs spent a considerable amount of money prosecuting the case, which constituted "significant evidence of [their] good faith belief they would prevail . . . when they rejected the requests for admission." The court granted the motion and awarded Ralda $127,440 in attorney fees pursuant to section 2033.420. The court determined (1) plaintiffs failed to admit the truth of the requests for admission; (2) Ralda proved the truth of those matters at trial; (3) the admissions were directed to matters of substantial importance; and (4) plaintiffs lacked reasonable grounds to believe they would prevail on those matters at trial. Plaintiffs appealed.
The court also awarded Ralda $12,013.30 in costs pursuant to Probate Code section 1002. Plaintiffs do not challenge the award of those costs.
DISCUSSION
I.
The Court Did Not Abuse Its Discretion in Awarding Fees
Under Section 2033 .420
Plaintiffs contend the court erred by awarding Ralda attorney fees under section 2033.420. Under that statute, if a party fails to admit the truth of any matter when requested, and the party requesting that admission thereafter proves the truth of that matter, "the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees." (§ 2033.420, subd. (a).) As relevant here, the court must make an order awarding the requested expenses unless it finds that "[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter." (§ 2033.420, subd. (b)(3).) "To justify denial of a request, a party must have a 'reasonable ground' to believe he would prevail on the issue. [Citations.] That means more than a hope or a roll of the dice." (Grace v. Mansourian (2015) 240 Cal.App.4th 523, 532 (Grace).) We review the court's ruling for abuse of discretion. (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 903.)
Plaintiffs offer only one basis to reverse the order: that they "reasonably entertained [a] good faith belief they would prevail" at trial. This argument is "forfeited as unsupported by 'adequate factual or legal analysis.' " (Singh v. Lipworth (2014) 227 Cal.App.4th 813, 817 (Singh).) The order—which concluded plaintiffs did not have a reasonable grounds to believe they would prevail on the matters at trial—"is presumed to be correct, and all intendments and presumptions are indulged to support it on matters as to which the record is silent. [Citation.] It is the appellant's burden to affirmatively demonstrate reversible error." (California Pines Property Owners Assn. v. Pedotti (2012) 206 Cal.App.4th 384, 392.) This burden includes (1) supporting all appellate arguments with legal analysis and appropriate citations to the material facts in the record; and (2) showing exactly how the error caused a miscarriage of justice. (Gunn v. Mariners Church, Inc. (2008) 167 Cal.App.4th 206, 218; In re Marriage of McLaughlin (2000) 82 Cal.App.4th 327, 337.)
Plaintiffs have failed to satisfy this burden. Their opening brief fails to set out the requests for admission that are the subject of the appeal and recites lengthy passages of trial testimony without adequate record citations. The brief is mostly "lifted word for word" from their unsuccessful trial court opposition. This is not " 'meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error.' " (Singh, supra, 227 Cal.App.4th at p. 817.) Few cases in plaintiffs' opening brief concern section 2033.420, and the relevant cases—such as Grace v. Mansourian, supra, 240 Cal.App.4th 523 and Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618—do not assist them. Appellate courts " 'are not required to perform an unassisted study of the record or a review of the law relevant to a party's contentions on appeal. [Citations.] Instead, a party's failure to perform its duty to provide argument, citations to the record, and legal authority in support of a contention may be treated as a waiver of the issue.' " (In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 808.) We affirm on this basis alone.
The "relevant facts" in plaintiffs' brief consist primarily of a summary of the evidence they offered at trial. Plaintiffs' reliance on this evidence is puzzling. Anticipated trial testimony may provide a "good reason" to deny a request for admission (see Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 513) but plaintiffs do not argue they possessed knowledge of this evidence when they denied the requests for admission. Additionally, in its decision, the court concluded there was no evidence supporting plaintiffs' claims.
Plaintiffs repeatedly state they had a "good faith" belief they would prevail at trial, but repetition does not make it so, and their disagreement with the court's conclusion does not establish that conclusion was outside "the bounds of reason." (Stull v. Sparrow (2001) 92 Cal.App.4th 860, 864.) "[T]there must be some reasonable basis for contesting the issue in question before sanctions can be avoided." (Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d at p. 511.) Plaintiffs have not established a reasonable basis. When they denied the requests for admission, plaintiffs knew the trust documents demonstrated Melchior's intent to transfer the properties to Ralda, that Melchior was of sound mind, and that his decisions were not the product of undue influence.
In light of this evidence, plaintiffs' belief that they could prove the requested admissions at trial, "however firmly held, was not reasonable." (Grace, supra, 240 Cal.App.4th at p. 530.) Under the circumstances, the "court appropriately determined that there were no good reasons for the denial." (Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d at p. 512.) We conclude the court did not abuse its discretion in awarding attorney fees and costs pursuant to section 2033.420. (Grace, at p. 532.)
II.
Monetary Sanctions are Appropriate Because the Appeal is Frivolous
Ralda seeks monetary sanctions against plaintiffs for prosecuting a frivolous appeal. Plaintiffs opposed the motion and waived argument on the issue of sanctions. (Cal. Rules of Court, rule 8.276.) "An appeal may be found frivolous and sanctions imposed when the appeal (1) 'is prosecuted for an improper motive—to harass the respondent or delay the effect of an adverse judgment,' or (2) 'indisputably has no merit—when any reasonable attorney would agree that the appeal is totally and completely without merit.' [Citation.] [¶] Counsel and their clients have a right to present issues that are arguably correct. An unsuccessful appeal should not be penalized as frivolous if it ' " 'presents a unique issue which is not "indisputably" without merit' . . . , involves facts which are 'not amenable to easy analysis in terms of existing law' . . . , or makes a reasoned 'argument for the extension, modification, or reversal of existing law' . . . ." ' " (Westphal v. Wal-Mart Stores, Inc. (1998) 68 Cal.App.4th 1071, 1081 (Westphal).)
Given the extremely deferential abuse of discretion standard of appellate review, the ample evidence supporting the order, and the absence of meaningful analysis by plaintiffs in their opening brief, "we conclude this appeal 'indisputably has no merit.' There are no unique issues, no facts that are not amenable to easy analysis in terms of existing law, and no reasoned argument by [plaintiffs] for the extension of existing law." (Westphal, supra, 68 Cal.App.4th at p. 1081.) A failure to prevail does not mean an appeal is frivolous, but sanctions are warranted here. (Simonian v. Patterson (1994) 27 Cal.App.4th 773, 784-785 [appeal was "totally and completely devoid of merit"; appellants' briefs "hint[ed]" the trial court erred but the record "conclusively demonstrate[d] the validity of the trial court's findings and exercise of discretion"].)
Plaintiffs' arguments in opposition to the sanctions motion are unavailing. The motion is not, as plaintiffs claim, "premature." Sanctions are appropriate because we have upheld the order and concluded the appeal is completely devoid of merit. (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 193.) Next, plaintiffs claim the appeal is not frivolous because they had a "subjective belief that the trial court abused its discretion in awarding [Ralda] her fees." Assuming the accuracy of that statement, we are not persuaded. " '[T]he total lack of merit of an appeal is viewed as evidence that appellant must have intended it only for delay.' " (Kleveland v. Siegel & Wolensky, LLP (2013) 215 Cal.App.4th 534, 557.) Finally, plaintiffs urge us to consider their prior conduct, and to decline to award sanctions because neither they, "nor their counsel have been sanctioned . . . in this case," and because their attorney has not been sanctioned by an appellate court. We have considered plaintiffs' prior conduct, and it supports an award of sanctions. Plaintiffs' pattern of filing appeals—including this meritless appeal—has delayed resolution of this litigation.
"The damages suffered by [Ralda] resulting from this frivolous appeal are the reasonable value of [her] counsel's services . . . in defending this appeal." (Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1217.) Ralda requests $32,960.70, supported by a declaration from counsel showing the attorney fees and costs incurred to oppose the appeal. Plaintiffs do not challenge this amount. In determining the amount of sanctions, we may also consider "the degree of objective frivolousness and delay, and the need to discourage similar conduct in the future." (Bucur v. Ahmad, supra, 244 Cal.App.4th at p. 194.) Here, the objective frivolousness is high, and there is a need to deter this type of conduct, which has delayed resolution of this dispute and has burdened this busy court with an appeal that is completely unjustified.
We find $32,960.70 to be a " 'reasonable number for defending an appeal.' " (Singh, supra, 227 Cal.App.4th at pp. 825, 830 [appellants' attorney conceded amount of sanctions requested was reasonable]; Bucur v. Ahmad, supra, 244 Cal.App.4th at pp. 194-195 [attorney declaration established client incurred $31,311 in attorney fees to oppose the appeal and brief the sanctions issue]; Kleveland v. Siegel & Wolensky, LLP, supra, 215 Cal.App.4th at p. 558 [incurring $52,727.56 to defend appeal was "reasonable"].)
Plaintiffs are assessed sanctions in the amount of $32,960.70, payable to Ralda within 30 days after issuance of the remittitur, to compensate her for the expense incurred in opposing this frivolous appeal. Plaintiffs' attorney, Jon R. Vaught is jointly and severally liable for the sanctions. "[S]anctions may be assessed solely against a lawyer who, because the appeal was so totally lacking in merit, had a professional obligation not to pursue it . . . ." (In re Marriage of Schnabel (1994) 30 Cal.App.4th 747, 755-756; Bus. & Prof. Code, § 6068, subd. (c).) This opinion constitutes a written statement of our reasons for imposing sanctions. (Westphal, supra, 68 Cal.App.4th at pp. 1082-1083.)
DISPOSITION
The order awarding Ralda attorney fees and costs (§ 2033.420; Prob. Code, § 1002) is affirmed. Ralda is awarded costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).) Plaintiffs and their attorney, Jon R. Vaught, are ordered to pay $32,960.70 to Ralda for bringing this frivolous appeal. This obligation is joint and several. All sanctions shall be paid no later than 30 days after the date the remittitur is issued. A copy of this opinion shall be forwarded to the State Bar of California upon issuance of the remittitur.
/s/_________
Jones, P. J. We concur: /s/_________
Needham, J. /s/_________
Bruiniers, J.
Retired Associate Justice of the Court of Appeal, First Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.