Opinion
D070154
11-06-2017
RHONDA TINTLE DAVIS, Plaintiff and Appellant, v. MARGARET ANN ESTHER TINTLE LIGHTMAN et al., Defendants and Respondents.
Rhonda Tintle, in pro. per., for Plaintiff and Appellant. Goodwin Brown Gross & Lovelace and Gina D. Stein for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. Nos. 37-2015-00002089-PR-TR-CTL, 37-2009-00152324-PR-TR-CTL) APPEAL from orders of the Superior Court of San Diego County, Julia C. Kelety, Judge. Affirmed. Rhonda Tintle, in pro. per., for Plaintiff and Appellant. Goodwin Brown Gross & Lovelace and Gina D. Stein for Defendants and Respondents.
Plaintiff and appellant Rhonda Tintle Davis (Davis), has filed several petitions and motions to challenge the terms and administration of a 1989 family trust established by her late parents on behalf of their three children. (Prob. Code, § 17200, subd. (b) [proceedings concerning internal affairs of a trust].) The other two siblings and beneficiaries are defendant and respondent Margaret Ann Esther Tintle Lightman (Lightman), who formerly served as the successor trustee, and a brother, Arthur Tintle Jr. (Arthur Jr.; he has not appeared as a party to this appeal).
All further statutory references are to the Probate Code unless noted.
Representing herself on appeal, Davis challenges a series of probate court orders that dismissed her allegations that Lightman was administering an invalid 2003 restatement of the trust created by their father Arthur Tintle Sr. (the 2003 restatement), and her claims that Lightman's trust administration was fraudulent. The probate court ruled that Davis's 2015 petition to invalidate the trust amendment was time barred on the invalidity question, as shown by the filing and withdrawal of her similar petitions in 2009 and 2011, at a time when she was represented by counsel. The court addressed Davis's additional allegations of breach of trust in a related ruling, which determined that a no contest clause contained in the 2003 restatement was enforceable and resulted in Davis's disinheritance as a beneficiary, due to the lack of probable cause for her invalidity allegations. (§ 21310 et seq. [no contest clause statutory scheme].) Finally, the court denied Davis's subsequent motion to reinstate her withdrawn 2009 trust petition, brought on grounds of mistake of fact, inadvertence, surprise, or excusable neglect. (Code Civ. Proc., § 473.)
On appeal, Davis primarily contends her recent filings to attack the validity of the 2003 restatement were justified by her delayed discovery of Lightman's fraudulent conduct as trustee, which operated to toll the applicable limitations statutes. (§ 16460, subd. (a)(2) [three-year limit for filing after discovery of claim]; Code Civ. Proc., § 338, subd. (d) [three years for fraud ]; Code Civ. Proc., § 343 [four-year catchall statute].) Davis also argues that her then attorney gave her bad advice when filing and withdrawing the 2009 petition, and thus she is entitled to have it reinstated with expanded allegations about the invalidity of the original trust provisions. The record does not bear out any of her contentions, and we affirm the orders.
I
BACKGROUND FACTS AND 2009-2011 LITIGATION
Davis alleges that there are no existing copies of the original 1989 version of the Tintle Family Trust. After her mother Anna died in 2000, her father Arthur Sr., as settlor, executed the 2003 restatement. As relevant here, the 2003 restatement allocated the trust assets by granting one percent to Davis and 39 percent to Arthur Jr. The remaining 60 percent went to Lightman and her family. The 2003 restatement named Lightman as the successor trustee upon Arthur Sr.'s death and specifically states that "in no event" shall Davis ever be appointed trustee.
The 2003 restatement contains a no contest clause which provides that any gift of a beneficiary who directly or indirectly contests the restatement will pass as if the beneficiary had predeceased the settlor without issue. Arthur Sr. died in April 2009, and the restated trust became irrevocable. Lightman began acting as successor trustee and gave a copy of the 2003 restatement to Davis.
A no contest clause in a will or trust instrument "creates a condition upon gifts and dispositions provided therein. [Citation.] In essence, a no contest clause conditions a beneficiary's right to take the share provided to that beneficiary under such an instrument upon the beneficiary's agreement to acquiesce to the terms of the instrument." (Burch v. George (1994) 7 Cal.4th 246, 254.)
In December 2009, Davis brought a safe harbor petition under the provisions of former section 21320. She obtained declaratory relief as requested, that her ensuing "Petition for Redress of Breach of Trust and for Return of Property" did not constitute a contest of the 2003 restatement, to trigger its no contest clause. (In re Tintle Family Trust (Super. Ct. San Diego County, 2009, No. 37-2009-00152324-PR-TR-CTL).) Both in filing her safe harbor application and the petition itself (the "2009 petition"), Davis was represented by the law firm of Procopio, Cory, Hargreaves & Savitch, LLP. At that time, Davis was alleging that the original 1989 trust required the surviving spouse to create and fund a deceased spouse's subtrust after the first spouse's death. She alleged breaches of trust by her father as trustee and subsequently by Lightman, who had each failed to establish and fund such a marital trust in the 2003 restatement.
As explained in Donkin v. Donkin (2013) 58 Cal.4th 412, 426-427, statutory amendments effective in 2010 discontinued this separate "safe harbor" declaratory relief procedure in former section 21320.
Two years later, Davis's attorney filed and served a notice of withdrawal of the 2009 petition. The court granted the request to withdraw the 2009 petition and on August 2, 2011, it was dismissed with prejudice. No further action was taken in the original case after August 2, 2011, until March 10, 2015. At that time, the court ordered it to be consolidated into the present case initiated by Arthur Jr. in January 2015, when he filed his own petition to "Instruct the Trustee." Arthur Jr. sought relief from the probate court by claiming that as successor trustee, Lightman had failed to adequately account for trust assets. Numerous hearings ensued on Arthur's requests for relief, including removal of the trustee.
II
CURRENT PETITIONS AND MOTIONS
On November 2, 2015, Davis filed her "Petition to Invalidate Trust Amendment; For Breach of Trust; To Remove Trustee; For Other Relief" (the 2015 petition). Davis primarily sought to set aside and invalidate the 2003 restatement on the basis of alleged undue influence and elder abuse committed by Lightman against Arthur Sr. Davis separately asserted claims against Lightman for subsequent breaches of her fiduciary duties as trustee.
Lightman responded with an amended accounting, objections, and assertions of affirmative defenses that the applicable statutes of limitations barred the 2015 petition. The court ordered further briefing on the limitations issues and held a hearing on March 3, 2016. In its minute order, the court dismissed a portion of the 2015 petition with prejudice, to the extent that it challenged the validity of the 2003 restatement. The court ruled that the petition was untimely in that respect, because Davis's filing of her 2009 petition showed that she had been "aware of the existence and terms of the 2003 Restatement," but did not pursue her claims until November 2, 2015. The court continued the remaining breach of trust claims to a future hearing date. Lightman served notice of the March 3, 2016 order. On April 4, 2016, Davis filed the first of her three notices of appeal.
Also on April 4, 2016, Lightman filed a petition for an order enforcing the no contest clause in the 2003 restatement (the "2016 disinheritance petition"). She sought findings that Davis's 2015 petition amounted to a direct contest of the 2003 restatement of trust, without probable cause, and that enforcement of its no contest clause should be ordered. This would result in confirmation that Davis's one percent interest in the restated trust would pass as if she had predeceased the settlor without issue. Lightman contended that once Davis lost her status as a beneficiary, the remaining breach of trust claims in the 2015 petition should be dismissed with prejudice, for lack of standing.
Under the current version of section 21311, no contest clauses remain enforceable in response to (1) direct contests brought without "probable cause," as that term is defined in its subdivision (b); (2) creditor claims; and (3) a challenge to a transfer of property that amounts to a "forced election" between alternative types of property rights. (See Donkin v. Donkin, supra, 58 Cal.4th at pp. 425-427.) --------
In April 2016, Lightman and Arthur Jr. notified the court that they had reached a stipulation for Lightman to resign as trustee and for her to be replaced soon by a private professional fiduciary. In the meantime, Lightman continued to pursue the 2016 disinheritance petition.
On April 6, 2016, Davis filed a "Motion to Reinstate Case; Motion to Set Aside Withdrawn Breach of Trust Petition for Inheritance [of] Deceased Spouse's Portion of A-B Marital Trust." She sought an order allowing her to pursue the 2009 petition on grounds that she had withdrawn it only as a result of mistake, inadvertence, surprise, excusable neglect, or delay caused by bad legal advice. Davis was again alleging that the original 1989 trust required the original and successor trustees to create and fund a deceased spouse's subtrust for her late mother. Davis also filed a response to the 2016 disinheritance petition, on May 19, 2016.
At the hearing on the 2016 disinheritance petition on May 24, 2016, the probate court took judicial notice of the pleadings in the case. The court ruled that "[a]t least by October 31, 2009, when she filed her first petition in this matter," Davis was on notice of the 2003 restatement and its terms. When she filed a direct contest to the same restatement six years later, her filing was made "well after the Statute of Limitations had run." Based on the facts known to Davis at the time she filed this contest, the court found that "no reasonable person would believe that there was a reasonable likelihood that the requested relief would be granted, even after reasonable investigation." (§ 21311, subd. (b).) The court dismissed the remaining trust claims with prejudice. Lightman served Davis with notice of entry of the order on the 2016 disinheritance petition. On July 18, 2016, Davis filed a notice of appeal from the May 24, 2016 order, and it was added to the initial appeal. While the first two orders were on appeal, Lightman filed an objection to Davis's pending motions.
Apparently, settlement negotiations with a private dispute resolution firm were being pursued, and Davis told the court that she was being unfairly shut out from them. The settlement negotiations were never completed.
After a hearing on September 2, 2016, the probate court issued a minute order denying Davis's motions. After identifying procedural defects in the motions, the court substantively addressed their allegations of mistake, surprise or excusable neglect, pursuant to the terms of Code of Civil Procedure section 473, subdivision (b). The court ruled that Davis had failed to comply with the statutory requirement that such a motion shall be made '' 'within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.' " Because Davis's motion was filed nearly five years after the 2009 petition was withdrawn and dismissed, without an adequate showing for the delay, the court denied the requests to reinstate it. Lightman served Davis with notice of the entry of this order denying the motions. Davis filed her third notice of appeal, which designated the order appealed from as a postjudgment order. (§ 1300 et seq.; Code Civ. Proc., § 904.1, subd. (a)(2)-(13).)
III
RULES OF REVIEW
A. Appealability
In response to Davis's third notice of appeal, this court sent a letter to the parties requesting that the respective appellate briefs address whether the September 2, 2016 order is appealable and if so, the specific statutory grounds for the appeal. (Code Civ. Proc., § 904.1.) They have not substantially complied with this request. In addition to arguing the merits of each of the three orders, Davis seems to argue that only the first one was properly appealable, due to some kind of stay imposed under her first notice of appeal.
In trust disputes, the Probate Code provisions concerning appealability are exclusive. (§ 1300 et seq.; Estate of Stoddart (2004) 115 Cal.App.4th 1118, 1125-1126.) Section 1304, subdivisions (a) and (d) indicate that orders in proceedings that concern the internal affairs of a trust (§ 17200 et seq.) or no contest rulings (under former § 21320), are appealable. (See Kalenian v. Insen (2014) 225 Cal.App.4th 569, 571-572 [holding orders denying motions to vacate dismissal orders are cognizable on appeal where equitable relief is sought].)
The California Rules of Court require us to construe notices of appeal liberally. (Cal. Rules of Court, rule 8.100(a)(2).) Each of these successive rulings is closely related and pertains to the same subject matter on trust administration and validity, but was raised in a different procedural context that required individualized rulings. We are satisfied that the subject orders are properly before this court and will address the merits of each.
B. Applicable Standards
In Scharlin v. Superior Court (1992) 9 Cal.App.4th 162, 168, the court explained that when construing a trust instrument, the intent of the trustor must be ascertained "from the whole of the trust instrument, not just separate parts of it." In resolving each petition and motion brought before it, the court was required to exercise judicial discretion within the confines of applicable trust interpretation principles and statutory law. " ' "To exercise the power of judicial discretion all the material facts in evidence must be known and considered, together also with the legal principles essential to an informed, intelligent and just decision." [Citation.]' [Citations.] 'The appropriate [appellate] test for abuse of discretion is whether the trial court exceeded the bounds of reason.' [Citations.] [¶] ' . . . To be entitled to relief on appeal from the result of an alleged abuse of discretion it must clearly appear that the injury resulting from such a wrong is sufficiently grave to amount to a manifest miscarriage of justice . . . . ' " (Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1448-1449.)
At the pleading stage of the proceedings, where issues of credibility or conflicting evidence have not yet arisen, a trial court's interpretation of a will or trust instrument presents a question of law. (Burch v. George, supra, 7 Cal.4th at p. 254.) The appellate court likewise independently construes the trust instrument. (Ibid.) No contest clauses are strictly construed. (Ibid.)
In the sequence followed here, the court initially found that the 2015 petition was time-barred on the invalidity issue, but continued the hearing to consider its other allegations on removal of the trustee, etc. (Leader v. Cords (2010) 182 Cal.App.4th 1588, 1594-1595 [a proceeding brought concerning the internal affairs of a trust, under § 17200, includes settling of accounts and determining propriety of acts of the trustee].) At the subsequent hearing, the 2016 disinheritance petition required interpretation of Davis's 2015 petition and whether it amounted to a violation of the no contest clause in the 2003 restatement, as being brought without probable cause. (§ 21311, subd. (b) ["probable cause" to bring a contest of a trust requires reasonable belief of a "reasonable likelihood that the requested relief will be granted"].)
To the extent the trial court was required to make underlying factual findings upon conflicting evidence in resolving the competing petitions, our appellate review examines the record for substantial evidence support for the findings on which the legal rulings were based. (In re Estate of Fain (1999) 75 Cal.App.4th 973, 987-988 [review of rulings on contested accountings or alleged breaches of fiduciary duty applies the substantial evidence standard].) We next examine the record for any support for the rulings that rejected Davis's claim of justifiably delayed discovery of her causes of action, and of entitlement to reinstate the 2009 petition. We then consider the ruling that accepted Lightman's position that the 2015 petition amounted to a contest of the trust that was brought without probable cause.
IV
APPELLATE ARGUMENTS
A. Delayed Discovery
The three-year statute of limitations in section 16460, subdivision (a)(2) makes allowances for the delayed discovery rule. Under it, a petitioner must plead and prove facts showing: " ' "(a) Lack of knowledge. (b) Lack of means of obtaining knowledge (in the exercise of reasonable diligence the facts could not have been discovered at an earlier date). (c) How and when [s]he did actually discover the fraud or mistake. Under this rule constructive or presumed notice or knowledge are equivalent to knowledge. So, when the plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to [her] investigation (such as public records or corporation books), the statute commences to run." ' " (Quick v. Pearson (2010) 186 Cal.App.4th 371, 378.)
A plaintiff may attempt, within the complaint or petition itself, to make a showing of excuse for late filing, in anticipation of a limitations defense. (5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, §§ 929-930, pp. 344-346.) Pleaded facts that may justify avoidance of a statutory bar include circumstances of fraud or mistake that led to delayed discovery or accrual of the claim. (Ibid.; County of Alameda v. Superior Court (1987) 195 Cal.App.3d 1283, 1286.) In support of Davis's 2015 petition to invalidate the 2003 restatement, she pleaded that she did not discover any fraud until the accounting was filed by Lightman in May 2015, and until Arthur Jr. told Davis then that the 2003 restatement was signed by Arthur Sr. under circumstances of Lightman's elder abuse or undue influence (e.g., use of a notary who was a friend). Arthur Jr. also came to suspect Lightman's trustee activities, objecting to her first accounting (May 2015), whereupon the court required an amended one (Jan. 2016).
Alternatively, Davis claimed that she received bad legal advice from the attorney who filed her 2009 petition, by limiting it to claims about the failure to fund the deceased spouse's trust. She now argues she could not have anticipated that any further claim would be necessary. Similarly, in her motion to reinstate the 2009 petition, she contended that her former attorney did not thoroughly investigate the fraud allegations and she could not afford to pursue it further, after he left the firm.
In that 2009 petition, Davis had alleged breaches of trust by both Arthur Sr. and Lightman, and sought orders for return of trust property. While still represented by counsel, she withdrew that petition and it was dismissed with prejudice on August 2, 2011. The 2015 petition seeks similar remedies on similar grounds of suspicion of Lightman's acts as trustee. Disregarding the terms of the 2003 restatement, Davis alleges that Arthur Sr., "in his lucid moments, always intended that all of his property to be divided equally among his children." On appeal, Davis expands her theories to include Arthur Jr.'s alleged misconduct.
The probate court concluded that Davis was unable to show, from the nature of her claims, that she "could not have made earlier discovery despite reasonable diligence, which is required for a successful assertion of delayed discovery." (Quick v. Pearson, supra, 186 Cal.App.4th at p. 376.) This finding is well supported both as to the 2015 petition and the motions for relief. Davis was aware of the existence and terms of the 2003 restatement when she filed the 2009 petition regarding that restatement, and at that time she did not agree that it represented the true intent of the settlor, Arthur Sr. After 2011 and until 2015, Davis took no action to seek to invalidate the 2003 restatement. Neither her 2015 petition nor the later motion to reinstate the 2009 petition set forth sufficient facts to show that a mistake of fact, inadvertence, surprise, or excusable neglect occurred and caused her to delay more than six months in bringing an additional challenge to the administration of the trust. (Code Civ. Proc., § 473, subd. (b).) The court noted that Davis had not provided a declaration under penalty of perjury that she " 'was unaware that her [former] attorney at Procopio, et al. had withdrawn her 2009 Breach of Trust action until after the fact.' " Even assuming that was true, "this still does not explain why she did not sooner seek relief given that she was served with notice of the request for the withdrawal of her petition on July 28, 2011." The court was not required to accept her explanation on why she did not act with reasonable diligence earlier.
Resolution of a statute of limitations bar normally requires that questions of fact be resolved, but where the essential facts are uncontradicted and susceptible of only one legitimate inference, the statutory restrictions can be applied as a matter of law. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.) A limitations period begins to run "when the plaintiff suspects, or should suspect, that she has been wronged." (Id. at p. 1114. ) When Davis brought her 2009 petition, she pled Lightman had engaged in several forms of objectionable behavior as trustee. Davis cannot show how the rejected May 2015 accounting and the requirement that an amended one be filed created a new or different set of suspicious circumstances in trust administration. The court correctly analyzed the pleadings and the record in concluding that the 2015 petition was untimely under the applicable limitations periods. (§ 16460, subd. (a)(2).)
B. Existence of Contest to Trust Provisions
In supervising the administration of trusts, the probate court has general powers and duties. (Schwartz v. Labow (2008) 164 Cal.App.4th 417, 427.) "To preserve the trust and to respond to perceived breaches of trust, the probate court has wide, express powers to 'make any orders and take any other action necessary or proper to dispose of the matters presented' " by a petition concerning the internal affairs of a trust. (Ibid.; §§ 17200, 17206.) An abuse of discretion standard applies in reviewing a ruling on whether a trustee should be removed or if alleged trustee misconduct caused loss to the trust's beneficiaries. (Schwartz, supra, at p. 430; Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 894.)
Section 21310, subdivision (b) defines a "direct contest" of an instrument, such as a trust, as meaning a contesting petition that alleges the invalidity of its terms on various grounds, including "(1) Forgery. [¶] (2) Lack of due execution. [¶] (3) Lack of capacity. [¶] (4) Menace, duress, fraud, or undue influence." (Ibid.) " 'Whether there has been a "contest" within the meaning of a particular no-contest clause depends upon the circumstances of the particular case and the language used.' " (Burch v. George, supra, 7 Cal.4th at pp. 254-255; see Leader v. Cords, supra, 182 Cal.App.4th at p. 1599 [accounting matter that included allegations of trustee's breach of trust qualified as a contest of the trust]; Estate of Fain, supra, 75 Cal.App.4th at p. 991 [contest of account based on breach of fiduciary duty].) Here, Davis's 2015 petition requested orders finding breaches of trust had occurred, justifying removal of the trustee. By May 24, 2016, the court also had before it Lightman's petition to resolve internal affairs of the trust under section 17200.
Reasonably interpreted in light of "the circumstances of the particular case and the language used," the 2015 petition clearly qualifies as a contest of the trust. (Burch v. George, supra, 7 Cal.4th at pp. 254-255.) The court had a sufficient basis in the record to find that the facts known to Davis, at the time she filed her new petition in 2015, would not have given a reasonable person a basis to believe that there was a reasonable likelihood that the requested relief would be granted, even after discovery and investigation were pursued. (§ 21311, subd. (b).) Under the terms of the 2003 restatement, the act of filing such a direct contest of the trust's terms was a violation of the no contest clause, resulting in disinheritance. Davis's one percent interest in the trust passed as if she had predeceased the settlor without issue.
The remaining claims in the 2015 petition likewise challenged the appointment of the successor trustee pursuant to the terms of the trust. The record supports the rulings that granted Lightman's 2016 disinheritance petition and also denied Davis's motions to set aside the dismissal of her 2009 petition or for reinstatement of it. On appeal, Davis has not demonstrated that these discretionary decisions exceeded the bounds of reason or that prejudicial legal error occurred. (Estate of Gilkison, supra, 65 Cal.App.4th at p. 1450.)
DISPOSITION
The orders are affirmed. Costs on appeal to respondent.
HUFFMAN, Acting P. J. WE CONCUR: IRION, J. DATO, J.