Opinion
C079412
01-31-2017
JOHN M. ANDRUSIAK, Plaintiff and Respondent, v. GARY A. BUYLE, as Trustee, etc., Defendant and Appellant.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. PP20120181)
This case involves a dispute over the ownership of a house that was described in two successive and contradictory trusts—the Marcia Buyle Trust dated March 11, 2004, and the Marcia Buyle Revocable Living Trust dated July 23, 2007. Appellant Gary Buyle, who is Marcia's son and was named the successor trustee under both trusts, appeals from a final order granting respondent John M. Andrusiak's petition pursuant to Probate Code section 17200 to determine beneficiaries and distribution of property and ruling that the property was to be administered under the terms of the 2004 trust. The heart of the dispute is whether the trial court correctly ruled that the 2007 trust was inoperative because Marcia never transferred the house from the 2004 trust to the 2007 trust in her capacity as trustee of the 2004 trust. We conclude the trial court erred because the 2007 documents were sufficient to convey good title to the real property. Therefore, we reverse the trial court's order and remand for further proceedings consistent with this opinion.
We refer to the parties and the decedent by their first names to avoid confusion. No disrespect is intended.
Undesignated statutory references are to the Probate Code.
I. BACKGROUND
A. 2004 Trust Documents and Will
On March 11, 2004, Marcia executed a revocable trust naming herself as trustee during her lifetime and Gary as the successor trustee. The document began by stating that Marcia, "the Settlor of this trust, declares that she has set aside and holds in trust all of her property which is described on Schedule A attached hereto." As relevant to this appeal, Schedule A includes residential real property located at 5813 20th Avenue in Sacramento, California.
The 2004 trust provides that upon Marcia's death, the trustee shall distribute to Marcia's daughter, Cecile Andrusiak, "the Settlor's family residence at 5813 20th Avenue, Sacramento, California . . . if she is then living, and if not, to her son," John, if he survives Marcia. It also states that while the settlor is alive, the trust may be revoked or amended: "The Settlor may at any time revoke this instrument, in whole or in part, by written instrument, in which event, the Trustee shall deliver to the Settlor all or the designated portion of the trust assets."
Also on March 11, 2004, Marcia executed a will that, after making specific bequests, contains a pour-over provision giving the remainder of her estate to the trustee of the 2004 trust.
Five days later, a deed was recorded transferring the 20th Avenue property from Marcia as an individual to Marcia as trustee of the 2004 trust. B. 2007 Trust Documents and Will
On July 23, 2007, Marcia executed a revocable living trust, again naming herself as the trustee and Gary as the successor trustee. In the declaration of trust, "Marcia Buyle, called the grantor, declares that she has transferred and delivered to the trustee all her interest in the property described in Schedule A attached to this Declaration of Trust. All of that property is called the 'trust property.' The trustee hereby acknowledges receipt of the trust property and agrees to hold the trust property in trust, according to this Declaration of Trust." Schedule A listed the 20th Avenue house as well as the equity in the house. Significant to this litigation, the 2007 trust provides that upon Marcia's death, the trustee shall distribute "[a]ll Marcia Buyle's interest in the house located at 5813 20th Ave., Sacramento, CA 95820 . . . in equal shares to Richard A. Buyle and Gary A. Buyle."
On the same day she signed the 2007 trust, Marcia executed an "Assignment of Property" that stated, "I, Marcia Buyle, as grantor of the Marcia Buyle Revocable Living Trust dated July 23, 2007, hereby assign and transfer all of my rights, title and interest in the following property: [¶] . . . [¶] 2. The equity from the 5813 20th Ave., Sacramento, CA 95820 . . . house[] [¶] . . . [¶] to Marcia Buyle, as trustee of the Marcia Buyle Revocable Living Trust dated July 23, 2007."
Also on that same day, Marcia executed a will that left her entire estate to the 2007 trust. The will expressly revokes all previous wills and codicils.
No deed transferring the 20th Avenue property to the 2007 trust was recorded. C. Trial Court Proceedings
Marcia died on September 27, 2012. She was survived by her sons, Gary and Richard Buyle, and her grandson, John. Cecile Andrusiak predeceased Marcia.
On December 12, 2012, John filed a petition under section 17200 to ascertain beneficiaries and determine distribution of property and for an account under section 16062, subdivision (a). Specifically, John contended he was entitled to the 20th Avenue property under the terms of the 2004 trust. On April 6, 2015, the trial court issued a "Ruling After Trial" granting John's petition on that issue. The court held the property was to be administered under the terms of the 2004 trust because the 2007 trust had no property to administer because it was never funded. Specifically, the court stated, "the 20th Avenue property was held in title by Marcia Buyle as trustee of the 2004 Trust. Thus, her purported execution of the Assignment of Property concerning that property, to the 2007 Trust, was ineffective because she did not have individual title to the property and did not purport to convey title in her capacity as trustee of the 2004 Trust to the 2007 Trust. Put simply, Marcia Buyle attempts, per the Assignment to 'assign and transfer' in her capacity as an individual, property that she did not have title to convey. That renders the attempted transfer ineffective and the 2007 Trust inoperative because it has no property to administer." Though it did not need to reach the issue, the court also found there was insufficient evidence to support John's claim that Marcia was acting under undue influence at the time the 2007 trust was prepared and executed. Additionally, the court stated it was of the mind that the issue of the need for an accounting was moot or waived, but gave John 30 days to renew his request.
Gary timely appealed.
II. DISCUSSION
A. Principles of Appellate Review
We begin by reviewing the nature of this appeal. Generally speaking, a trial court's written ruling that is not a statement of decision cannot be used to impeach a judgment. (Tyler v. Children's Home Society (1994) 29 Cal.App.4th 511, 551-552.) But this—contrary to Gary's representations in his notice of appeal and opening brief—is not an appeal from a final judgment. Indeed, the record does not reflect that any judgment was entered. Instead, Gary challenges the "Ruling After Trial" that granted John's petition pursuant to section 17200. This is itself an appealable order and there is no indication it was tentative. (§ 1304, subd. (a).) Therefore, it is this ruling that is the subject of our review, and we reject John's contention that the ruling is not binding for any purpose.
"The probate court has wide discretion to make any order and take any action necessary or proper to dispose of matters presented by a petition under section 17200. (§ 17206.) The applicable standard of review is therefore abuse of discretion. We are mindful, however, that '[t]he abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious.' " (Manson v. Shepherd (2010) 188 Cal.App.4th 1244, 1258-1259.)
Gary argues the trial court erred in concluding Marcia failed to transfer the 20th Avenue house to the 2007 trust merely because she did not purport to transfer title in her capacity as trustee of the 2004 trust. In his opening brief, Gary frames this primarily as a failure of the trial court to consider extrinsic evidence suggesting Marcia intended to transfer the property in her capacity as trustee. But, since Gary submitted his opening brief, a decision in a similar case in the Fourth District Court of Appeal has explained that the trial court's error does not turn on any conflicting extrinsic evidence because it was one of law. (Carne v. Worthington (2016) 246 Cal.App.4th 548, 563-564 (Carne).) And so we review de novo the question of whether the 2007 trust documents were legally sufficient to convey the property from the 2004 trust to the 2007 trust. (Id. at p. 563; see also Walton v. City of Red Bluff (1991) 2 Cal.App.4th 117, 124 ["As the court took no extrinsic evidence on the meaning of the documents, we exercise our independent judgment in this review"].) B. 2007 Trust
Because we agree, we do not need to reach Gary's alternative arguments in favor of reversing the trial court's decision.
Probate Code section 15200 et seq. sets forth various requirements for the creation of a valid trust. Section 15200 itself provides, in relevant part, that a trust may be created by any of the following: "(a) A declaration by the owner of property that the owner holds the property as trustee. [¶] (b) A transfer of property by the owner during the owner's lifetime to another person as trustee." Further, the applicable statute of frauds necessitates that any trust containing real property be "evidenced by one of the following methods: [¶] (a) By a written instrument signed by the trustee . . . . [¶] (b) By a written instrument conveying the trust property signed by the settler . . . . [¶] (c) By operation of law." (§ 15206.) The creation of a trust also requires: (1) trust intent, (2) trust property, (3) a lawful trust purpose and (4) a beneficiary. (§§ 15201-15205; Chang v. Redding Bank of Commerce (1994) 29 Cal.App.4th 673, 684; 13 Witkin, Summary of Cal. Law (10th ed. 2005) Trusts, § 26, p. 598.) The trial court's ruling that the 2007 trust was inoperative turned on the trust property requirement: "A trust is created only if there is trust property." (§ 15202.) Specifically, the question presented by this appeal is whether Marcia actually transferred the disputed property from the 2004 trust to the 2007 trust.
The trial court correctly recognized that, under California law, a declaration of trust under section 15200, subdivision (a), is sufficient by itself to create a trust without the need for a separate conveyance of the property by deed. (Estate of Powell (2000) 83 Cal.App.4th 1434, 1443; Estate of Heggstad (1993) 16 Cal.App.4th 943, 950-951.) And here it is undisputed that Marcia possessed the legal authority to transfer property from the 2004 trust to the 2007 trust. She was the sole settlor and trustee of both trusts, the 2004 trust was revocable by her, and she held title to the 20th Avenue property in her capacity as trustee of the 2004 trust. The 2007 trust documents were, however, imperfect in that they purported to transfer the 20th Avenue property from Marcia in her individual capacity, even though she no longer held title in her individual capacity. The trial court held that Marcia's "execution of the 2007 Trust instrument and the 2007 property assignment as the grantor and trustee of the 2007 trust and not as trustee of the 2004 trust are fatal to the transfer because as trustee of the 2004 Trust, she could not validly transfer the subject real property by means of the later execution of written declarations and assignments in her individual name." We disagree with this ruling because it turned on a mistaken assessment regarding Marcia's ability to transfer title. The signature of an individual who is the trustee of a revocable living trust and has the power to direct the sale of property is sufficient to convey good title from the trust. (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1350.) Thus, the 2007 trust documents were sufficient to transfer the property from the 2004 trust to the 2007 trust.
Likewise, under section 15200, subdivision (b), a trust agreement signed by the settlor and trustee manifesting the settlor's present intent to thereby transfer specified property is also sufficient to transfer property to the trust without the need for a separate deed. (Carne, supra, 246 Cal.App.4th at pp. 557-559; see also 3 Miller & Starr, Cal. Real Estate (4th ed. 2015 § 8.3, p. 8-20 ["There is no required form of deed that must be used to effectuate a conveyance"].)
John asserts Gary failed to meet his burden under Evidence Code section 662 to overcome the presumption that the 20th Avenue property remained in the 2004 trust. Evidence Code section 662 provides that "[t]he owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof." Without deciding whether this statute applies to this dispute, we conclude Gary fulfilled any burden because the 2007 documents actually transferred the property to the 2007 trust and thus demonstrate new ownership of the property by clear and convincing evidence. (Carne, supra, 246 Cal.App.4th at pp. 557-564.)
The Fourth District Court of Appeal reached the same conclusion in Carne. As in this case, the decedent was the settlor and trustee of the original trust, which was revocable during his lifetime. (Carne, supra, 246 Cal.App.4th at p. 552.) The decedent later executed a second trust that, unlike this case, did not name himself as a trustee. (Ibid.) The second trust stated the decedent transferred the property listed on an attached schedule to the trustee of the second trust, but the decedent did not execute a separate deed transferring the property from the first trust to the second trust. (Id. at pp. 551-553.) The trial court ruled this was ineffective to actually transfer the property into the second trust. (Id. at pp. 555-556.) The Court of Appeal reversed, holding the second trust was sufficient to constitute a valid transfer of property. (Id. at pp. 558-559, 563-564.) In particular, the appellate court reasoned that because—at the time of the execution of the second trust—the first trust was a revocable living trust, the decedent owned the property as the sole trustee of the first trust, and the decedent had the power to transfer the property, his signature on the second trust was sufficient to convey good title from the earlier trust to the later trust. (Id. at p. 564.) We agree with the analysis in Carne and, for the same reasons, conclude the 2007 trust declaration and the assignment of property were sufficient to transfer the 20th Avenue house to the 2007 trust.
As such, it was not a declaration of trust under section 15200, subdivision (a), but a transfer of property under section 15200, subdivision (b). (Carne, supra, 246 Cal.App.4th at p. 560.) --------
We decline John's invitation to affirm the trial court's ruling on alternative grounds that require us to imply the trial court made factual findings in John's favor that cannot be inferred from its order. Primarily, John contends we must affirm the trial court's ruling on the basis it implicitly found Marcia lacked the intent to create the 2007 trust. We disagree. If anything, our review of the court's ruling suggests it reached the opposite conclusion. The trial court quoted and appeared to adopt the following reasoning from Estate of Heggstad, supra, 16 Cal.App.4th at p. 948 as its own: "Here, the written document declaring a trust in the property described in Schedule A was signed by the decedent at the time he made the declaration and constitutes a proper manifestation of his intent to create a trust." Additionally, the trial court rejected John's undue influence claim: "[F]rom the testimony provided at trial, it appears witnesses were present at the execution of the 2007 Trust instrument (i.e., Nancy Jones and Judy Simpson) and no one testified she was pressured into signing the instrument. Accordingly, it has not been proven to the Court's satisfaction that the Settlor's free will was subjugated to [Gary's]." Neither of these passages nor any other portion of the trial court's ruling support any implication that the trial court reached the remarkable conclusion that Marcia voluntarily signed the 2007 trust but did not intend it to have any legal effect.
John also argues we should imply the trial court found Marcia intended the 2004 trust to require the delivery of the property to a new trust by deed if it was revoked. This argument is seemingly defeated by the fact that—as John appears to concede—Marcia's 2007 trust documents appear to satisfy the requirements for a valid deed. (See Carne, supra, 246 Cal.App.4th at p. 558, fn. 17 [holding trust satisfied elements of a valid deed].) Nevertheless, if we assume John meant to assert the 2004 trust requires the delivery of property by a separate, recorded deed, then again we conclude the court's order is not susceptible to such an interpretation. Further, this argument would find no support in the record. The 2004 trust merely states that if the settlor revokes the trust, "the Trustee shall deliver to the Settlor all or the designated portion of the trust assets." This delivery was accomplished by the 2007 trust and the concurrently executed assignment of property because they were sufficient to transfer and deliver the property. (See ibid. [holding trust satisfied elements of a valid deed, including delivery].) John seeks to support these arguments with testimony from the attorney who prepared the 2004 trust:
"And this states if the trust is revoked, the trustee—this is standard language, the trustee would deliver back to the settlor any trust property.
"Q. When it would come to real property that you deeded to the trust, how would you deliver that back?
"A. You would do that by a deed."
This testimony regarding how the attorney thought the property would be delivered back in the event of a revocation is insufficient to limit the means by which Marcia was permitted to lawfully transfer the 20th Avenue property or to support a finding that the 2007 trust documents were insufficient to accomplish the transfer. (See Carne, supra, 246 Cal.App.4th at p. 558, fn. 17.) Thus, we see no alterative theory on which we may affirm the trial court's ruling.
III. DISPOSITION
We reverse the trial court's order and remand for further proceedings consistent with this opinion. Appellant Gary Buyle shall recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) and (4).)
/S/_________
RENNER, J.
We concur:
/S/_________
RAYE, P. J.
/S/_________
MURRAY, J.