Opinion
A159204
03-24-2022
Estate of ESTHER BELL TWINE, Deceased. v. MICHAEL NASH, Claimant and Appellant. MAZZETTA CAMPBELL, Petitioner and Respondent,
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. PRO127073
BROWN, J.
Esther Bell Twine created a 2001 trust of which Mazzetta Campbell was the sole surviving beneficiary and a December 2015 trust of which Michael Nash was a beneficiary. Michael appeals from a probate court judgment confirming the validity of the 2001 trust and declaring the December 2015 trust void due to lack of capacity and undue influence. He argues the probate court's finding regarding Twine's mental capacity was flawed in several respects. He also argues the court erred in ruling that all Twine's bank accounts were assets of the 2001 trust.
Because several individuals involved in this case share the last name Nash, we refer to them by their first name for clarity.
Michael has not shown any error in the court's ruling that Twine was subject to undue influence when she created the December 2015 trust. That ruling is sufficient to support the judgment's invalidation of the December 2015 trust, so we will affirm that aspect of the judgment. But we agree that the probate court erred in ruling that all of Twine's accounts were assets of the 2001 trust, so we will modify that portion of the judgment.
BACKGROUND
In 2001, Twine created a revocable trust that named Frances Buck Oliver, her half-sister, as beneficiary upon Twine's death and Campbell, Oliver's daughter, as the successor beneficiary if Oliver predeceased Twine. The trust estate included a property in East Palo Alto and "[a]ll accounts in banks, or in other financial institutions." Oliver died in 2009.
In November 2014, Twine designated pay-on-death beneficiaries for her accounts at the San Francisco Federal Credit Union (SFFCU). She designated Jabari and Jakari Perry, who were Campbell's children and Twine's grandnephews; and Tina Turner Morfitt, Renita Carter, and Tonisha Oliver, who were some of Campbell's siblings and Twine's nieces. At the time, Twine's accounts at SFFCU held over $160,000.
In March 2015, Twine suffered a medical event consistent with a stroke and was admitted to a hospital. While she was in the hospital, Campbell had a power of attorney prepared appointing Campbell as Twine's attorney in fact, and Twine signed it. Campbell used the power of attorney to write checks out of Twine's account at U.S. Bank to pay Twine's expenses and to transfer money out of Twine's name to ensure that Twine could continue to receive Medi-Cal benefits.
When Twine's sister, Mary Irving, learned that Twine was in the hospital, Irving obtained a restraining order to exclude Campbell from the hospital. In April 2015, while she was still in the hospital, Twine created a new revocable trust naming herself and her sister, Mary Irving, as trustees. The trust estate consisted solely of the East Palo Alto property that had been in the 2001 trust. The beneficiaries of the trust upon Twine's death were Irving and Harold Turner, who was Campbell's brother.
Twine moved in with Irving. Tracy Nash, who was Twine's and Irving's niece, was also living with Irving and began caring for Twine. Irving died in November 2015. Days later, Twine replaced the existing beneficiaries of her SFFCU accounts with four new individuals: Turner; Michael, who was Twine's first cousin, once removed; Tracy; and Kim Nash, who was another of Twine's nieces. Twine then moved in with Tracy's mother, and Tracy continued to care for her.
In December 2015, Michael came to California from his home in Arizona. The day after Michael's arrival, Tracy and Michael took Twine to a U.S. Bank branch, where she closed her account. That evening, Tracy and Michael took Twine to sign papers for a new estate plan an attorney had created. The trust created as part of that plan named Twine and Michael as trustees and Turner, Michael, Matthew Hall, Jr., and Tracy as beneficiaries upon Twine's death. Twine signed a general transfer of all of her property, including bank accounts, into the new trust. Twine also signed a grant deed transferring the East Palo Alto property into the trust.
A week after creating the December 2015 trust, Twine flew with Tracy to Arizona. Twine moved in with Michael, and Tracy continued to care for her. Twine died a few months later in March 2016.
Campbell filed a request for instructions seeking to confirm the validity of the 2001 trust. Michael filed a petition seeking to confirm the validity of the December 2015 trust and alleging a claim of financial elder abuse against Campbell. At the conclusion of a trial in February 2018, the probate court confirmed the validity of the December 2015 trust and dismissed Michael's elder abuse claim. The judge who presided over that trial retired the next month.
The probate court granted Campbell's motion for a new trial. After a second trial, the probate court issued a statement of decision in Campbell's favor in September 2019. The court ruled that Campbell had "carried her burden of proof and shown that the April 2015 and December 2015 Trusts were the product of undue influence or that [Twine] did not have the mental capacity to create the trusts." The court entered a judgment declaring only the 2001 trust to be valid. The judgment also declared that any changes to Twine's bank accounts after April 2015 were void and that all of Twine's accounts as of April 2015 were deemed assets of the 2001 trust.
DISCUSSION
I. Lack of capacity and undue influence
Michael first contends the probate court erred in determining Twine lacked legal capacity to execute the December 2015 trust. He contends an expert opinion regarding Twine's mental capacity that the probate court relied on was not substantial evidence, other witnesses who saw Twine after March 2015 opined that she had capacity, the probate court relied on a non-existent exhibit containing hearsay evidence that the probate court had excluded during the trial, and the probate court's reliance on this excluded evidence violated his right to due process.
We need not address these arguments in detail because, even if one or more of them had merit, it would not justify reversal of the judgment. "[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment." (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609.) A reversal of the judgment is warranted only if an error by a trial court is prejudicial, meaning it "resulted in a miscarriage of justice." (Cal. Const., art. VI, § 13.) "An appellant in a civil case establishes an error was prejudicial by showing there is 'a reasonable probability that in the absence of the error, a result more favorable to the appealing party would have been reached.'" (In re Marriage of Morton (2018) 27 Cal.App.5th 1025, 1051.)
Michael has not shown a reasonable probability that the judgment would be more favorable to him in the absence of error in the probate court's finding as to lack of capacity, because he attacks only one of the two bases for the invalidation of the December 2015 trust. In its statement of decision, the probate court ruled that Campbell had "carried her burden of proof and shown that the April 2015 and December 2015 Trusts were the product of undue influence or that the Decedent did not have the mental capacity to create the Trusts." The judgment similarly states that the April and December 2015 trusts were the product of undue influence. Undue influence is an independently sufficient reason for invalidating a trust. (Prob. Code, § 6104 [will is ineffective to the extent it was procured by undue influence]; Lintz v. Lintz (2014) 222 Cal.App.4th 1346, 1354, 1358 [affirming order voiding trust documents based on undue influence].)
All statutory citations are to the Probate Code.
Michael's arguments regarding the probate court's capacity finding, even if correct, would not require the reversal of the probate court's undue influence finding." 'Undue influence is quite distinct from testamentary capacity. The former presupposes the existence of the latter.'" (Estate of Olson (1912) 19 Cal.App. 379, 386.) Twine's possession of the mental capacity to execute the December 2015 trust would not be inconsistent with the probate court's finding that she was subject to undue influence. (Estate of Baker (1982) 131 Cal.App.3d 471, 485-486 [jury verdict that testator was of sound mind but provisions of will were obtained by undue influence was proper]; see Cal. Trust & Probate Litigation (Cont.Ed.Bar 2020) § 6.21 ["a claim of undue influence can be sustained without any proof of mental dysfunction," but proof of a weakened state of mind can help prove undue influence].) Moreover," '[s]oundness of mind and body does not imply immunity from undue influence. It may require greater ingenuity to unduly influence a person of sound mind and body, and more evidence may be required to show that such a person was overcome than in the case of one weak of body and mind. But history and experience teach that minds of strong men and women have often been overborne, and they have been by a master mind persuaded to consent to what in their sober and normal moments, and free from undue influence, they would not have done.'" (Estate of Baker, at p. 486.)
Because the court's undue influence finding was a separate basis for the judgment and is presumed correct, to obtain a reversal of the judgment Michael as the appellant must show error in both that ruling and the lack of capacity finding. (Jameson v. Desta, supra, 5 Cal.5th at pp. 608-609.) Michael's opening brief acknowledged that allegations of undue influence were at issue during the trial. But he did not mention the probate court's ruling regarding undue influence, much less argue that it was unsupported by substantial evidence or otherwise in error. Campbell argued in the opening pages of her respondent's brief that undue influence made the December 2015 void, but Michael still did not file a reply brief to address the issue. Michael's failure to address the undue influence ruling means reversal of the judgment is not justified, regardless of any error in the probate court's finding that Twine lacked capacity to create the December 2015 trust.
We requested supplemental briefing regarding whether the probate court's undue influence finding was independently sufficient to support the judgment and whether Michael's failure to address it forfeited any challenge to it. In his supplemental brief, Michael argues the probate court made no finding regarding undue influence because it stated in the disjunctive that Campbell had "shown that the April 2015 and December 2015 Trusts were the product of undue influence OR that [Twine] did not have the mental capacity to create the Trusts." The statement of decision could have been clearer, but we reject Michael's interpretation of it. As Michael admits, prior to stating that Campbell carried her burden of proof, the probate court described the factors relevant to a finding of undue influence and then discussed various facts relevant to those factors. Moreover, even assuming the statement of decision is ambiguous, the judgment expressly states that the April and December 2015 trusts were the product of undue influence.
II. Bank accounts
In addition to declaring the 2001 trust to be Twine's only valid trust, the probate court also ruled that "all of the accounts in the name of [Twine] as of April 1, 2015 are deemed an asset of the December 2001 trust." This ruling apparently rested on the probate court's determination that Twine's actions after March 2015 were void for lack of capacity and undue influence, making ineffective her November 2015 designation of Turner, Michael, Kim, and Tracy as the beneficiaries of her SFFCU accounts. The probate court also noted in its factual findings in the statement of decision that the 2001 trust statement identified all of Twine's bank accounts as trust assets.
Michael raises two arguments against the portion of the judgment dealing with Twine's bank accounts, and we agree with the second so we need not discuss the first. In his second argument, Michael argues the ruling is error because Twine had named pay-on-death beneficiaries of her SFFCU accounts and did not intend to include those accounts in the trust. Michael does not develop the argument with citation to authority, but his argument appears to rely on section 5302, subdivision (b)(2). That statute provides that, subject to an exception not relevant here, on the death of the sole owner of a pay-on-death account the balance of the account belongs to the surviving named payees. (§§ 5139, 5302, subd. (b)(2).) By the plain language of the statute, upon Twine's death the balance of her SFFCU accounts belonged to the beneficiaries named for the account. The probate court invalidated all of the changes to Twine's accounts after April 1, 2015, so the November 2015 designation of beneficiaries was ineffective and the November 2014 designation of beneficiaries became operative again. Pursuant to section 5302, the sums in the SFFCU accounts belonged to the beneficiaries named on the November 2014 form, Jabari and Jakari Perry, Tina Turner Morfitt, Renita Carter, and Tonishia Oliver.
Campbell defends the probate court's judgment as reflecting an implicit determination that Twine's bank accounts were assets of the 2001 trust because the trust stated that all of Twine's bank accounts were trust assets. This argument is inconsistent with section 5302. Section 5302, subdivision (b)(2) states that sums in a pay-on-death account belong to the payees upon the account holder's death and does not provide for an exception if there is evidence of a contrary intent. Subdivision (a) of section 5302, which governs rights of survivorship on joint accounts, does include such an exception, so the omission in subdivision (b)(2) indicates the Legislature did not intend to permit evidence of contrary intent to prevail over the beneficiary designation of a pay-on-death account. (People v. Arriaga (2014) 58 Cal.4th 950, 960.) Additionally, even if Twine's designation of pay-on-death beneficiaries could be overcome by evidence that Twine intended her SFFCU accounts to be assets of her trust, there is insufficient evidence of such intent here. Twine named the beneficiaries on the accounts in November 2014, more than a decade after she created the 2001 trust. This time sequence suggests that she intended the designation of beneficiary to control over the terms of the trust, not the reverse. Campbell cites nothing that would indicate Twine later intended to revoke the 2014 designation of beneficiaries or otherwise give the terms of the 2001 trust priority over the more recent designation of beneficiaries.
Because Twine's SFFCU accounts were not assets of the 2001 trust, the portion of the probate court's judgment declaring that all of Twine's accounts were trust assets was incorrect. However, Twine's SFFCU accounts are the only accounts Michael has identified that had pay-on-death beneficiaries and should be excluded from the 2001 trust. Pay-on-death beneficiary designations are self-operative, so the judgment need not dispose of the SFFCU accounts. (See § 5304 ["Any transfers resulting from the application of Section 5302 are effective by reason of the account contracts involved and this part and are not to be considered as testamentary"]; Recommendation proposing New Probate Code (Dec. 1989) 20 Cal. Law Revision Com. Rep. (1989) p. 1409 ["A transfer under this part [containing section 5304] is effective by reason of the provisions of this part and the terms of the account or deposit agreement. This transfer avoids the need for a probate proceeding to accomplish a transfer"].) Accordingly, our remedy for the error will be to modify the judgment to exclude the SFFCU accounts from its reach.
DISPOSITION
The judgment is modified to exclude Twine's accounts at SFFCU from the assets of the 2001 trust. As modified, the judgment is affirmed. Campbell is entitled to her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(4) ["In probate cases, the prevailing party must be awarded costs unless the Court of Appeal orders otherwise, but the superior court must decide who will pay the award"].)
WE CONCUR: POLLAK, P. J.,
Judge of the Superior Court of California, County of Alameda, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.