Opinion
B226265
12-13-2011
SUSAN ADAMS, Appellant, v. TERRI ENNIS, Respondent.
Law Office of Louise A. Lewis, Louise A. Lewis and Richard C. Harding for Appellant. Law Office of Peter J. Rimel and Peter J. Rimel for Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BP119057)
APPEAL from a judgment of the Superior Court of Los Angeles County, Reva G. Goetz, Judge. Reversed and remanded with directions.
Law Office of Louise A. Lewis, Louise A. Lewis and Richard C. Harding for Appellant.
Law Office of Peter J. Rimel and Peter J. Rimel for Respondent.
Susan Adams appeals the dismissal of her Probate Code section 850 petition to set aside two real property transfers from her grandfather's living trust to two other trusts. Appellant alleged that the transfers were to a prohibited person under section 21350 and that they were obtained by fraud and undue influence. The probate court sustained respondent Terri Ennis's demurrer on the ground that appellant's petition was barred by the three-year statute of limitation in section 21356, subdivision (b). Appellant contends that the petition was timely due to her delayed discovery of the material changes to her grandfather's trust. We agree and reverse with directions that the probate court enter a new order overruling the demurrer.
Unless otherwise indicated, all subsequent references are to the Probate Code.
FACTUAL AND PROCEDURAL SUMMARY
James and Frances Ireland, appellant's grandparents, owned real property located on Decorah Road in Diamond Bar, California (the Decorah property) and a 50 percent interest in a duplex located on Oleander Drive in Los Angeles (the Oleander property). Appellant held title to the other 50 percent of the Oleander property. In 1990, the Irelands transferred the Decorah property and their 50 percent interest in the Oleander property under a revocable living trust (the Ireland Trust). The Ireland Trust provided that the settlors' 50 percent interest in the Oleander property would go to appellant upon the death of the surviving settlor. Ten percent of the remaining trust estate was to go to three great-grandchildren and the other 90 percent to appellant's mother, Virginia Adams. The trust named Virginia Adams as a successor trustee with the caveat that if she failed or ceased to act as trustee, appellant would perform that function. The Irelands' wills, executed in 1993, conformed to this estate planning scheme.
Mrs. Ireland died in 1996, leaving Mr. Ireland as the surviving settlor/trustee. Respondent became his caregiver in 1996, and in 1997 she moved into the Decorah property, where he lived. In 2003, respondent, along with another named defendant, Lynn F. Olson, caused Mr. Ireland to deed the Decorah and Oleander properties from the
Ireland Trust to two other trusts—the Decorah and Olenander Trusts. The Decorah Trust, set up in 1999 and executed in Nevada in 2002, named Olson as trustee, Mr. Ireland as primary beneficiary, and respondent as successor beneficiary and successor trustee. Appellant has not seen the documents establishing the Olenander Trust. But upon receiving notification of the recorded deed transferring the Oleander property to the Olenander Trust, appellant asked her mother and grandfather about the significance of this transfer. Her grandfather assured them that he had set up the trust to separate his properties, and that the only change was in the name of the trust, with all material provisions remaining the same.
Appellant refers to the trust by the name that appears on the deed, and so will we, despite the apparent misspelling.
The petition assumes that the provisions of the Olenander Trust are the same as those of the Decorah Trust because the transfer deeds to both properties are the same. A "„[p]laintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true.'" (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550).
Mr. Ireland died in 2005, and Virginia Adams died in December 2008, leaving appellant as the successor trustee of the Ireland Trust and executrix of Mr. Ireland's estate. After her mother's death, appellant discovered that the Ireland Trust had been replaced by the Decorah and Olenander Trusts. In October 2009, appellant filed a petition to invalidate the property transfers to the two trusts under section 850. The petition consisted of two causes of action: (1) fraud and undue influence, and (2) violation of section 21350, subdivision (a). Respondent demurred on four alternative grounds: "(1) The complaint brought under California Probate Code section 21350 . . . is barred by the provisions of California Probate Code section 21356. ¶ (2) The complaint . . . is barred by laches. ¶ (3) The complaint does not . . . allege sufficient facts to support a claim of fraud. ¶ (4) The complaint does not state sufficient facts to support a claim of undue influence." Olson, the other named defendant, was not a party to the demurrer. Appellant opposed. At the December 30, 2009, hearing, the court put the matter over to allow appellant to amend the petition.
Appellant filed a supplement to the petition in April 2010. In it, she alleged that Virginia Adams, who was ill at the time, knew respondent remained at the Decorah property after Mr. Ireland's death. But having never seen the Decorah Trust and transfer deed or the Olenander Trust, Virginia Adams trusted her stepfather's assurance that there had been no substantive change but only a name change in the Ireland Trust. Mr. Ireland had not changed his will and at the end of 2003 was overheard teasing his great-grandchildren that they would inherit the responsibility for making repairs to the Decorah property. At the hearing on April 28, 2010, the court took the matter under submission. On June 1, 2010, it sustained the demurrer without leave to amend on the ground that it was barred by section 21356, subdivision (b) because Virginia Adams had notice of the property transfers before Mr. Ireland's death but failed to investigate.
This appeal was filed on July 30, 2010. Upon this court's reminder, an order of dismissal was filed on August 27, 2010.
DISCUSSION
I
We review de novo an order sustaining a demurrer to determine whether the complaint states facts sufficient to state a cause of action. (CPF Agency Corp. v. Sevel's 24 Hour Towing Service (2005) 132 Cal.App.4th 1034, 1042.) "[W]e give the complaint a reasonable interpretation, reading it as a whole and its parts in their context." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "[W]e assume the truth of the facts alleged in the complaint and the reasonable inferences that may be drawn from those facts." (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 883.)
Part 3.5 of division 11 of the Probate Code, sections 21350 et seq., supplements the common law of undue influence by restricting donative transfers to certain categories of individuals. (Rice v. Clark (2002) 28 Cal.4th 89, 96-97.) A care custodian of a dependent adult who is the transferor cannot validly be a recipient of a donative transfer. (§ 21350, subd. (a)(6).) The statute of limitation for this part provides that "[a]n action to establish the invalidity of any transfer described in Section 21350 can only be commenced within the periods prescribed in this section as follows: [¶] . . . [¶] "(b) In case of any transfer other than by will, within the later of three years after the transfer becomes irrevocable or three years from the date the person bringing the action discovers, or reasonably should have discovered, the facts material to the transfer." (§ 21356.) Section 21356 incorporates the delayed discovery rule, which postpones accrual of a cause of action until plaintiffs discover it, or until they have "reason to at least suspect that a type of wrongdoing has injured them." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox).) "In other words, plaintiffs are required to conduct a reasonable investigation after becoming aware of an injury, and are charged with knowledge of the information that would have been revealed by such an investigation." (Id. at p. 808)
Here, the probate court ruled that Virginia Adams had notice of the transfers before her father died, and she failed to further investigate. Without overtly stating the rule, the court effectively concluded that appellant could not take advantage of the delayed discovery rule because of her mother's inaction during the statutory period. The court's conclusion that Virginia Adams had notice of more than one transfer goes beyond the allegations in the petition. The petition did not allege that Virginia Adams knew of the Decorah property transfer, and the supplement to the petition alleged quite the opposite—that neither appellant nor her mother knew about it when they talked to Mr. Ireland. It alleged further that Virginia Adams never saw the Decorah transfer deed or the Decorah and Olenander Trusts. The only notice with which appellant's mother may be charged is of the transfer of the Oleander property to the Olenander Trust.
The supplement refers to Virginia Adams's belief in Mr. Ireland's explanation that "the transfers were merely a 'name change,'" but the use of the plural in this statement is anomalous because elsewhere the supplement restates the allegation in the petition that Mr. Ireland was asked and gave assurances only about the Olenander Trust.
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Respondent claims that appellant "had notice of a new co-owner of the Oleander property in January, 2003." This claim goes beyond the allegations of the petition. Nor can it reasonably be inferred from those allegations or from the transfer deed, as the deed transferred the property from the Ireland to the Olenander Trust without identifying the beneficiaries or trustee of the Olenander Trust. The petition and supplement consistently alleged that when appellant was notified that the Olenander property had been transferred to a new trust, Mr. Ireland assured both her and her mother that the transfer was only in name, and they both believed him. Respondent argues that, because appellant alleged Mr. Ireland's advanced age, ill health and diminished mental capacity to substantiate the cause of action for fraud and undue influence, she could not also truthfully allege that she believed him. Respondent forgets that "'[w]e treat the demurrer as admitting all material facts properly pleaded."' (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) Without more, the allegations in the petition that respondent isolated Mr. Ireland from his family and made herself indispensable to him do not establish that as a matter of law appellant or her mother had reason to suspect an injury to their family's property interest in the Irelands' estate.
Based on the allegations in the petition and supplement, which we must accept as true for purposes of the demurrer, neither Virginia Adams nor appellant had notice that the provisions of the Olenander Trust were materially different from those of the Ireland Trust. The court's conclusion that knowledge of the transfer deed triggered the requirement to further investigate is legally incorrect. Without a reason to suspect an injury to her family's property interest, Virginia Adams was not required to investigate further. (See Fox, supra, 35 Cal.4th at p. 807.) Thus, her failure to open probate on Mr. Ireland's will after his death or to explore respondent's reasons for staying at the Decorah property after Mr. Ireland's death does not amount to a failure to investigate for purposes of delayed discovery. The same is true for appellant.
Because neither appellant's mother nor appellant had reason to discover the facts material to the transfer, the statute of limitation in section 21356 did not start running until after Virginia Adams's death in 2008, when appellant discovered the Decorah Trust and deed. The petition was filed in 2009 and is not barred by the three-year statute of limitation. The demurrer was improvidently sustained on this ground for the additional reason that it did not raise the statute of limitation as a bar to the entire petition but solely as barring appellant's statutory claim under section 21350.
II
"A judgment of dismissal after a demurrer has been sustained without leave to amend will be affirmed if proper on any grounds stated in the demurrer, whether or not the court acted on that ground." (Carman v. Alvord (1982) 31 Cal.3d 318, 324.) But respondent's brief does not contain any argument that the trial court's ruling was correct on any of the other grounds stated in the demurrer: laches or failure to allege sufficient facts to support a claim of fraud or undue influence. Arguments not properly made on appeal are considered forfeited. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 961, fn. 11.)
Instead of proper arguments, respondent's brief contains unnecessary invective, random attacks on appellant's statement of the facts, and challenges to the factual allegations of the petition that are not proper on demurrer and were not raised in the trial court. Thus, respondent's appellate counsel writes that appellant "spits in the face of the trial judge when [she] has the nerve to say" that he erred. Respondent uses the brief on appeal to argue with allegations in the petition that the Ireland Trust and the Ireland's estate plan were greatly changed even though, as we have discussed, the purpose of a demurrer is not to test the accuracy or truthfulness of such allegations.
The parties argue over the use of the words "caregiver," "care provider," and "cohabitant" to describe respondent in their various papers. The proper characterization of respondent may be relevant to determine whether she is covered by section 21350, which prohibits donative transfers to care custodians, or whether she falls under the exception for cohabitants in section 21351. But since the demurrer was not based on the ground that the petition failed to allege facts sufficient to state a claim under section 21350, the argument is not pertinent to this appeal.
DISPOSITION
The judgment is reversed with directions to vacate the order sustaining the demurrer to the section 850 petition and to enter a new order overruling the demurrer. The matter is remanded for further proceedings consistent with this opinion. Appellant is to recover her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
EPSTEIN, P. J.
We concur:
WILLHITE, J.
MANELLA, J.