Opinion
E080568
11-18-2024
ESTATE OF JORGE CUEVAS, Deceased. v. CATALINA GORDILLO-CUEVAS et al., Objectors and Respondents. MICHEELLE CUEVAS, Individually and as Administrator, etc. et al., Petitioners and Appellants,
Fullerton, Lemann, Schaefer &Dominick and Thomas W. Dominick; The Law Offices of Gastone Bebi and Gastone Bebi, for Petitioners and Appellants. Bagula Resolution Center and Associates and Mark S. Bagula, for Objectors and Respondents.
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County. No. PRRI2200493 Jacqueline C. Jackson, Judge. Reversed.
Fullerton, Lemann, Schaefer &Dominick and Thomas W. Dominick; The Law Offices of Gastone Bebi and Gastone Bebi, for Petitioners and Appellants.
Bagula Resolution Center and Associates and Mark S. Bagula, for Objectors and Respondents.
OPINION
FIELDS, J.
I. INTRODUCTION
In 2010, Jorge Cuevas and Catalina Gordillo-Cuevas executed a document (Trust Agreement) establishing the Diana Cuevas and Jimmy Gordillo Trust (the Trust) and conveyed title to a parcel of real property (the Avocado Property) to the trustee of the Trust. The Trust Agreement named Jorge and Catalina as the beneficiaries of the Trust and further provided that upon their death, the beneficial interest in the Trust would pass to their six children from prior relationships in equal proportions. Following Jorge's death, Catalina asserted her authority to terminate the Trust as the "sole beneficiary" and directed the trustee to convey title in the Avocado Property directly to her. In response, Jorge's children, Micheelle and Diana Cuevas (collectively, petitioners), objected to Catalina's request and filed a petition pursuant to Probate Code section 1700 et seq., seeking judicial intervention to determine whether Catalina had authority to unilaterally terminate the Trust.
Undesignated statutory references are to the Probate Code.
Catalina and the trustee (collectively, respondents) filed a motion for summary judgment, arguing that the plain language of the Trust Agreement vested Jorge's beneficial interest in the Trust in Catalina upon his death, rendering Catalina the sole beneficiary entitled to terminate the Trust for any reason. In the alternative, respondents requested summary adjudication of seven issues. The trial court granted summary judgment and declined to rule on any alternative requests for summary adjudication. Petitioners appeal from the judgment.
Upon our independent review of the Trust Agreement, we conclude the trial court erred in granting summary judgment because respondents' evidence was insufficient to meet their initial burden as the moving party on summary judgment. As such, we reverse the judgment on this basis, and need not address the alternative arguments raised by the parties on appeal.
II. BACKGROUND
A. Operative Pleading
According to the operative petition, during the course of their marriage, Jorge and Catalina acquired the Avocado Property, created the Trust, and conveyed title to the Avocado Property to the trustee of the Trust. At the time, Jorge had two children from a prior relationship, Diana and Micheelle; and Catalina had four children from a prior relationship, Jimmy Gordillo, Ezequiel Gordillo, Jesus Gordillo, and Edgar Gordillo. Following Jorge's death in 2020, Catalina purported to terminate the Trust and directed the trustee to convey title to the Avocado Property to her. Ezequiel, who was the trustee at the time, complied with the request and purported to execute a grant deed conveying title to the Avocado Property to Catalina, over the objection of Jorge's children.
As a result, Micheelle and Diana sought: (1) a judicial determination that the Trust could not be terminated or revoked by Catalina; (2) an order determining that title to the Avocado Property rightfully belonged to the Trust and directing Catalina to convey title in the Avocado Property back to the Trust; (3) a judicial determination that the grant deed conveying title in the Avocado Property to Catalina is void or voidable; (4) an order imposing a constructive trust to the extent Catalina refused to reconvey the Avocado Property back to the Trust; (5) an order removing the current trustee for breach of trust; and (6) an award of damages against the trustee.
B. Respondents' Motion for Summary Judgment
In September 2022, respondents filed a motion for summary judgment on the ground that Catalina is the "sole beneficiary of the trust and pursuant to the terms and language of the Trust, she is entitled to terminate the Trust in any manner allowed, including transfer of title." Alternatively, Catalina sought summary adjudication of various issues related to the parties' dispute.
Specifically, the motion identified the following issues: (1) "The beneficial interest of Jorge Cuevas in the Trust did not pass to Petitioner as administrator of his estate"; (2) "The beneficial interest of Jorge Cuevas in the Trust did not pass to Petitioners as his heirs"; (3) "[Catalina] is the sole Beneficiary as defined in the Trust Agreement"; (4) "The Trust is terminable or revocable prior to twenty years"; (5) "There was an agreement signed by all required beneficiaries and the Trustee to terminate the Trust"; (6) Trustee [Ezequiel] had the authority to transfer the Trust property"; and (7) Trustee [Ezequiel] did not have the obligation to object to the termination of Trust pursuant to the Trust Agreement's terms."
As evidence in support of summary judgment, respondents submitted: (1) a copy of the grant deed conveying title to the Avocado Property to Jorge and Catalina as "husband and wife as joint tenants"; (2) a copy of the Trust Agreement executed by Jorge and Catalina in 2010; (3) a copy of a grant deed executed by Jorge and Catalina conveying title to the Avocado Property to the designated trustee identified in the Trust Agreement; (4) a purported "Agreement to Terminate Trust" and "Notice of Termination of Trust Agreement" executed solely by Catalina;; and (5) a copy of a grant deed executed by the trustee conveying title to the Avocado Property to Catalina.
The Trust Agreement named Jorge and Catalina as beneficiaries, each entitled to a 50% interest in "all of the earnings, avails and proceeds of the Trust property according to their interests." The Trust Agreement further provided that (1) no beneficiaries would hold any legal or equitable right, title, or interest to any realty held in trust; (2) no beneficiary had the right to require partition of any real estate held in trust; (3) any "act, decision or direction" of the beneficiaries under the Trust required unanimous agreement by all beneficiaries; (4) the death of a beneficiary will not result in termination of the Trust; and (5) the Trust could only be terminated upon "written notice signed by all of [the] beneficiaries and delivered to the Trustee ...."
The Trust Agreement contained provisions permitting a beneficiary to assign his or her interest in the Trust, provided the beneficiary obtains the consent of all other beneficiaries or gives the other beneficiaries the right of first refusal to purchase the interest. Additionally, in a section bearing the heading: "Death or Incapacity of Trustee," the Trust Agreement included the following provision: "In the event of the death of any beneficiary, his or her right and interest hereunder, except as otherwise provided, shall pass to his or her executor or administrator and to his heirs at law." Finally, the Trust Agreement provided that upon the death of both Jorge and Catalina, the beneficial interest in the Trust shall automatically pass to their six children, with each child having an equal share.
Petitioners filed an opposition to the motion for summary judgment raising various legal arguments related to the interpretation of the Trust Agreement and requesting the trial court consider extrinsic evidence to interpret any purported ambiguity. In December 2022, the trial court held a hearing on the motion, declined to consider any extrinsic evidence, granted the request for summary judgment, and declined to rule separately on the requests for summary adjudication. Petitioners appeal from the judgment.
III. DISCUSSION
A. Summary Judgment Principles, Standard of Review and Issue Presented
"Summary judgment is appropriately granted when the moving party establishes there is no triable issue of material fact and that it is entitled to judgment as a matter of law." (Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 683.) While the procedure for summary judgment is set forth in Code of Civil Procedure section 437c, it may be utilized in probate proceedings. (Code Civ. Proc., § 437c; Prob. Code, § 100; Estate of Perry (1996) 51 Cal.App.4th 440, 443.)
"Appellate courts independently review an order granting summary judgment or summary adjudication. [Citation.] In performing this independent review, appellate courts apply the same three-step analysis as the trial court." (Moreno v. Visser Ranch, Inc. (2018) 30 Cal.App.5th 568, 578; Mosley v. Pacific Specialty Insurance Company (2020) 49 Cal.App.5th 417, 422 (Mosley).)" 'First, we identify the issues framed by the pleadings.... Second[], we determine whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in movant's favor.... [T]he third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue.' . . . [W]e construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it.'" (Mosley, at pp. 422-423; Doe v. Department of Corrections (2019) 43 Cal.App.5th 721, 732-733.)
In this case, the issue framed by the pleading is clear. The petition seeks to challenge Catalina's assertion that she is entitled to unilaterally terminate the Trust under the terms of the Trust Agreement. And respondents argued in the trial court below and now on appeal that their entitlement to summary judgment rests upon this determination. Thus, the issue, as framed by the pleadings, is whether the undisputed facts established respondents' entitlement to judgment on the ground that the Trust Agreement gave Catalina the authority to unilaterally terminate the Trust following Jorge's death. As we explain, the evidence presented on summary judgment was insufficient to support such a conclusion, as a matter of law, requiring reversal in this case.
B. Respondents Failed to Meet Their Initial Burden on Summary Judgment
Here, the very first argument asserted by petitioners in opposition to summary judgment was the failure of respondents to meet their initial burden as the moving party on summary judgment. Specifically, petitioners asserted that the language of the Trust Agreement did not support respondent's assertion that Catalina obtained the right to unilaterally terminate the Trust after Jorge's death, and petitioners have renewed this argument on appeal. We agree that, absent any other evidence, the language of the Trust Agreement alone does not establish Catalina's right to unilaterally terminate the Trust and, as a result, respondents failed to produce evidence to show they were entitled to judgment as a matter of law on the petition.
In moving for summary judgment, respondents submitted the Trust Agreement as evidentiary support and argued that no extrinsic evidence was necessary to interpret the document. Thus, we look solely to the language of the Trust Agreement to determine whether it is susceptible to the interpretation advanced by respondents such that it would entitle them to summary judgment, without regard to the interpretation adopted by the trial court. (Betts v. City National Bank (2007) 156 Cal.App.4th 222, 231 ["Where . . . '[t]he parties presented no extrinsic evidence to the trial court to aid in the interpretation of the trust document . . ., we must deduce the intent of the trustor[] from the face of the document' "]; Estate of Cairns (2010) 188 Cal.App.4th 937, 944 [" '[u]nder applicable rules of interpretation of written instruments, where there is no conflicting evidence, the reviewing court must independently interpret the document' "].)
On its face, the Trust Agreement specifies that any acts, decisions, or direction concerning the Trust property required unanimous agreement by all the beneficiaries; the death of a beneficiary will not result in termination of the Trust; and the Trust could only be terminated with written consent of all of the beneficiaries. This language makes clear that termination of the Trust requires the consent of all persons holding a beneficial interest in the Trust, and the parties do not dispute this point on appeal. Thus, to obtain summary judgment, respondents were required to produce evidence that would support a conclusion that Catalina succeeded to Jorge's interests in the Trust at the time she purported to terminate the Trust.
However, our review of the Trust Agreement discloses no language providing or suggesting that upon the death of one beneficiary, that beneficiary's interest in the Trust reverts to the surviving beneficiaries. Notably, while respondents have repeatedly asserted that this is a reasonable interpretation of the Trust Agreement, they never cite to any place in the record where language suggesting such an intent can be found in the Trust Agreement. Nor have they cited to any legal authority for the proposition that a court is entitled to presume such an intent where a writing is silent on the matter. Thus, there was no evidence in the record to support the conclusion that Catalina succeeded to Jorge's interests upon his death.
Instead, as petitioners correctly recognize, the only clause that mentions the transfer of a beneficiary's rights and interests upon the death of only one beneficiary is found in paragraph 11 of the Trust Agreement, which states: "In the event of the death of any beneficiary, his or her right and interest hereunder, except as otherwise provided, shall pass to his or her executor or administrator and to his heirs at law." Under the plain meaning of this provision, Jorge's rights and interest under the Trust pass to the executor of his will, if any, then the administrator of his estate, if any, and finally to those deemed his heirs at law. Absent any competing or contrary language in the Trust Agreement or simply ignore this provision in its interpretation of the Trust Agreement.
Given this conclusion, it is unnecessary for us to address respondent's claim that other provisions in the Trust Agreement are ambiguous regarding which persons succeed to Jorge's rights and interests. Where the Trust Agreement contains a clear and explicit provision addressing the issue, the fact that other provisions may fail to address the issue becomes irrelevant.
Thus, in light of the language set forth in paragraph 11 of the Trust Agreement, it was incumbent upon respondents to produce evidence to show that Catalina held the rights to Jorge's beneficial interest as the executor of his will, the administrator of his estate, or his sole heir at law in order to show that she alone held all of the beneficial interests in the Trust. However, respondents presented no evidence on any of these issues and made no attempt to make such a showing in moving for summary judgment. Absent such evidence, there was no basis to conclude that Catalina succeeded to Jorge's rights under the Trust Agreement at the time she sought to unilaterally terminate the Trust.
Further, while the evidence presented on summary judgment was sufficient to show that Catalina should be considered one of Jorge's heirs at law, respondents did not proffer any evidence to show that Catalina should be considered Jorge's only heir.
Where the evidence presented on summary judgment is not sufficient to support a prima facie showing that the moving party is entitled to judgment as a matter of law, the trial court must deny summary judgment. (Weinstein v. St. Mary's Medical Center (1997) 58 Cal.App.4th 1223, 1228 ["The moving party is not entitled to summary judgment unless and until it meets its procedural burden of establishing one of [the] grounds for granting the motion, regardless of whether the opposing party responds or presents any evidence"]; Mosley, supra, 49 Cal.App.5th at p. 434 [same].) Because the evidence in this case was not sufficient to meet respondents' initial burden on summary judgment, the trial court erred in granting summary judgment in their favor.
C. Respondents' Arguments are Unpersuasive
With respect to paragraph 11 of the Trust Agreement, respondents assert various arguments regarding why the provision should be disregarded. As we explain, we find each of these arguments unpersuasive.
First, respondents repeatedly argue that interpreting the Trust to transfer Jorge's rights and interest under the Trust Agreement to the executor of his will or administrator of his estate is contrary to the intent of the Trust because there is no provision that permits a contingent, successor beneficiary to obtain his or her interest in the Trust prior to the death of both Jorge and Catalina. However, recognizing that the Trust Agreement provides that the executor of Jorge's will or administrator of Jorge's estate holds Jorge's rights does not constitute a determination of who ultimately stands to inherit the beneficial interest. After all," '[t]he executor or administrator occupies a fiduciary relationship in respect to all parties having an interest in the estate including heirs . . . and creditors and, . . . as a fiduciary, has the duty towards such parties to protect their legal rights in the estate.'" (Estate of Sapp (2019) 36 Cal.App.5th 86, 102.) Thus, even if one of Jorge's daughters is recognized as the administrator of Jorge's estate, in her capacity as an administrator, she does not exercise Jorge's rights for her own personal benefit, but for the benefit of all those who are entitled to receive a portion of Jorge's estate.
It may well be that Catalina ultimately stands to inherit Jorge's beneficial interest in the Trust at the time of distribution of the assets in Jorge's estate after resolution of any competing claims that may be raised in an appropriate probate proceeding. But this determination is beyond the scope of this appeal. The only question presented in this appeal is whether the evidence in support of summary judgment was sufficient to establish that Catalina held Jorge's rights under the Trust Agreement at the time she sought to terminate the Trust. And, as we have already concluded, the evidence presented on summary judgment failed to make this showing.
While the parties both represent that Jorge died intestate, the record before us is not sufficient for this court to reach that conclusion, as the record before us does not include any probate petitions other than the challenge related to the Trust and, as a result, no record of any judicial determinations regarding whether Jorge actually died intestate, who has received letters of administration regarding Jorge's estate, or who stands to inherit from Jorge's estate. In fact, respondents concede that no such determination has been made, noting that no parties submitted any evidence to show who might stand to inherit from Jorge's estate, and acknowledging that "there could conceivably be a will created after this Trust that might have named [Jorge's] heirs" and "there is no guarantee that these heirs would have been Micheelle and Diana both and only."
Second, respondents suggest that interpreting the Trust Agreement to provide for Jorge's rights and interest to pass to an administrator of his estate would be inconsistent with the general purpose of a trust to avoid probate. However, "[a] trust may be created for any purpose that is not illegal or against public policy," (§ 15203) and it is not evident from the language of the Trust Agreement that the purpose of this Trust was to avoid probate.
In fact, the Trust Agreement itself expressly states that the purpose of the Trust is to "hold full legal and equitable title to the Trust Property until its sale, disposition, or liquidation, or until the trust is terminated or expires by its own terms and/or as a matter of law." While Catalina submitted a declaration stating that she and Jorge held such intent, the trial court did not accept or consider extrinsic evidence in interpreting the Trust Agreement, and respondents continue to assert that consideration of extrinsic evidence is inappropriate on appeal.
However, even assuming that Jorge and Catalina created the Trust to avoid probate, interpreting the Trust Agreement to provide that Jorge's executor or administrator succeeds to his rights under the Trust would not frustrate this purpose. Hypothetically, even if Jorge's estate is generally subject to probate, the Trust would appear to protect the Avocado Property itself from any probate proceeding. The Trust explicitly provides that no beneficiary holds any legal or equitable title to the real property held in trust, and no beneficiary has the right to partition any such property. Thus, so long as the Trust remains in place, the Avocado Property is not subject to sale or partition absent Catalina's consent, and the administrator of Jorge's estate is entitled only to receive Jorge's share of any benefits distributed by the trustee. Upon Catalina's death, the Trust Agreement provides that their six children succeed to the beneficial interest in the Avocado Property under the Trust, again avoiding the need for the property to be administered in probate.
Thus, even accepting that the purpose of the Trust is to avoid probate, interpreting paragraph 11 to provide for the administrator of Jorge's estate to succeed to his rights and interests under the Trust Agreement does not appear to frustrate this purpose. It may well be that extrinsic evidence in future proceedings discloses a contrary intent, requiring the trial court to adopt a different interpretation of the Trust Agreement. However, this question is, again, beyond the scope of this appeal, as respondents did not offer any extrinsic evidence in support of summary judgment to support any intent beyond that disclosed by the express language of the Trust Agreement.
Third, respondents argue that the placement of paragraph 11 is "not a place where one would normally consider a trust to create beneficiary status." While we agree placement of this provision in the section of the Trust Agreement bearing the heading "Death or Incapacity of Trustee" is unusual, this unusual placement alone would not justify an interpretation which essentially ignores the clause in its entirety. "The words of an instrument are to receive an interpretation that will give every expression some effect, rather than one that will render any of the expressions inoperative." (§ 21120.) Notwithstanding the placement of the clause, the wording of the clause is otherwise unambiguous and capable of being given effect. Thus, the mere placement of this provision under an unusual heading does not, in our view, warrant ignoring the plain meaning of the provision.
Finally, we disagree with respondents' suggestion that Catalina can be considered the sole beneficiary of the Trust because, by operation of law, she succeeds to Jorge's half of any community property. It is true that when one spouse dies intestate, the surviving spouse stands to inherit the deceased spouse's half of any community property (§ 6401, subd. (a)), and generally, no administration is necessary to pass community property to a surviving spouse under section 6401. (§ 13500.) However, community property held in a revocable trust is not governed by these provisions and is instead, "governed by the provisions, if any, in the trust for disposition in the event of death." (§ 13504.) Thus, Catalina cannot benefit from the rules normally applicable to automatic transfer of community property upon Jorge's death where the Trust Agreement provides otherwise. And in this case, as we have already explained, the Trust Agreement provides that the rights to Jorge's beneficial interest in the Trust pass to the executor or administrator of his estate.
Notably, the Avocado Property was acquired during the course of Jorge and Catalina's marriage before being placed in trust. Absent any other evidence, the Avocado Property is presumed to be community property. (Fam. Code, § 760;In re Marriage of Valli (2014) 58 Cal.4th 1396, 1399-1400.) The fact that the Avocado Property was held in trust did not change the community nature of the property. (Fam. Code, § 761, subd. (a) ["community property that is transferred in trust remains community property during the marriage"].)
While it is possible that in the course of administration of Jorge's estate, it will be determined that Jorge's beneficial interest in the Trust will pass to Catalina, this determination is again, beyond the scope of the issues tendered on summary judgment. Respondents presented no evidence to suggest that such a determination and distribution had already been made at the time Catalina sought to unilaterally terminate the trust such that she should be considered the sole beneficiary entitled to terminate the Trust.
D. It is Unnecessary to Address the Remaining Issues Raised on Appeal
Because we conclude that respondents failed to meet their initial burden on summary judgment, it is unnecessary for us to address whether petitioners' evidence in opposition also showed a triable issue of material fact. "A party is entitled to summary judgment only if it meets its initial burden of showing there are no triable issues of fact and the moving party is entitled to judgment as a matter of law.... This is true even if the opposing party fails to file any opposition. [Citation.] 'The court's assessment of whether the moving party has carried its burden-and therefore caused a shift-occurs before the court's evaluation of the opposing party's papers. [Citations.] Therefore, the burden on the motion does not initially shift as a result of what is, or is not, contained in the opposing papers. And because a reviewing court employs the same three-step process in the course of its de novo review of a summary judgment [citation], this conclusion applies with equal force on appeal.'" (Mosley, supra, 49 Cal.App.5th at pp. 434-435.) Thus, we need not address appellant's alternative arguments that their evidence in opposition showed that the Trust was irrevocable, that a unilateral termination was contrary to the settlors' intent, or that any termination was only effective as to a portion of the Trust. Likewise, we need not address respondents' arguments that other provisions in the Trust do not support appellant's position.
Further, because neither party directed arguments specifically towards the alternative requests for summary adjudication in their briefs, we need not address them here. (Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 973, fn. 3 ["Although we review summary judgments de novo, our review is limited to issues which have been adequately raised and briefed"]; Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125 [same]; Laabs v. Southern California Edison Co. (2009) 175 Cal.App.4th 1260, 1271, fn. 5 [same].) It is appropriate, instead, to permit the trial court the opportunity to consider and rule upon these separate requests in the first instance should respondents wish to renew this request following remand. (Dua v. Stillwater Ins. Co. (2023) 91 Cal.App.5th 127, 139 ["An appellate court may decline to resolve in the first instance issues that a trial court's initial erroneous ruling made it unnecessary for the trial court to address"]; Espinoza v. Warehouse Demo Services, Inc. (2022) 86 Cal.App.5th 1184, 1194 [declining to rule on summary adjudication in the first instance and electing to remand the matter to the trial court to decide following reversal of summary judgment]; see Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1225 [remanding for consideration of alternative requests for summary adjudication after reversal of grant of summary judgment].)
We briefly observe that summary adjudication can only be granted if it disposes of "one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty" (Code Civ. Proc. § 437c, subd. (f)(1)), and such a motion cannot be used to seek preliminary disposition of general issues in the case (Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1136). It is unclear whether all of the identified issues in respondents' notice would be the proper subject of a request for summary adjudication. However, we leave it to the trial court to make that determination in the first instance with the benefit of proper argument and briefing from the parties.
IV. DISPOSITION
The judgment is reversed. Petitioners to recover their costs on appeal.
We concur: RAMIREZ P. J., CODRINGTON J.