Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. HP09431193.
MARCHIANO, P.J.
James Amelia Kennedy (decedent) died intestate on May 3, 2008, survived by his wife, Darlene E. Kennedy (respondent), two adult daughters, Terri Lea Perry (appellant) and Cindy Kennedy, and an adult grandson, Anthony Minor. Respondent wife petitioned to establish her title to the stock of A & J Electric Service, Inc. (A&J), a small electrical contracting business decedent operated before he died. Appellant daughter Terri Lea Perry objected to the petition, seeking to retain the business as an asset of decedent’s estate.
After a trial of the matter, the court found that respondent had “shown by clear and convincing evidence that an oral trust existed between [decedent] and [respondent], that the shares of [A&J] are held in trust by [decedent’s estate] for the benefit of [respondent], and that [respondent] holds equitable title to and ownership of the A&J shares.” The court ordered that title to the A&J stock be vested in respondent.
Appellant argues that the court’s findings were not supported by substantial evidence, and that establishment of the trust was contrary to public policy. However, the evidence overwhelmingly supported recognition of the oral trust, and the public policy argument lacks merit. We therefore affirm the order.
I. FACTS
Respondent wife and decedent began living together in 1997, and were married in 2001, at ages 57 and 64, respectively. Respondent testified that she and decedent made a “pact” when they got engaged to pool their property and care for each other for the rest of their lives. Consistent with the pact, her husband made respondent a joint tenant with a right of survivorship in the home that he purchased for them, and respondent made decedent the primary beneficiary of her $130,000 IRA, her only substantial asset, changing her daughter Tracy to a contingent beneficiary.
When respondent was asked at trial how the pact came about, she said, “We were talking about how we were going to care for one another.... I was looking for security. [Decedent] was looking for someone that would be sincere in... their love for him. And so we just made a pact that this was going to be... our last marriage and we were going to try to make it right and... leave all our baggage behind us and move forward.”
Decedent incorporated A&J in 1982. Decedent told respondent that the corporate records had been lost for years, and virtually no corporate formalities were ever observed. Corporate records discovered after decedent’s death included a stock ledger showing the issuance of 500 shares to decedent in 1982 for $12,500, and an undated and unsigned share certificate for those shares in decedent’s name. Respondent wife began doing clerical work for A&J in 1997, and continued working for the business thereafter.
Decedent began receiving Social Security and union pension benefits in December 2002, after turning age 65. He wanted to retire at that point and tried to sell the business, but found no buyers. When he applied for the union pension, he executed a certificate stating the he had “ceased employment in the Electrical Industry in the United States.” He did no further electrical work after that point, but continued to manage A&J’s business, obtaining jobs and supplies. Before decedent began collecting retirement benefits, his annual salary at A&J was approximately $90,000, and respondent’s annual salary was approximately $30,000; thereafter, decedent drew no salary and respondent’s salary increased to $90,000. Respondent wrote the payroll checks, and decedent cashed them.
When decedent applied for pension benefits, he told respondent that he could not collect his pension if he continued to own A&J, and said that he was transferring the company stock to her. Consistent with that understanding and representation, respondent was listed as the owner of all of A&J’s common stock on A&J’s tax returns from 2002 on; previous tax returns had shown decedent as the owner. Decedent agreed to receive a lower pension benefit during his lifetime so that respondent could continue to receive the same amount after he died.
Decedent was diagnosed with cancer in March 2008, about seven weeks before his death in May 2008. Audley Barnhill, a business acquaintance of decedent’s, testified that, about a week before decedent’s death, decedent told him that he had put all of the A&J stock in respondent’s name for tax purposes. Barnhill told decedent to make an estate plan.
A&J’s accountant, David Solotky, testified that decedent told him shortly before his death that he wanted all of his property to go to respondent, not his children. Solotky said that decedent came into his office and began drafting a living trust on Solotky’s software, which asked for answers to questions and generated a document based on the responses. Decedent told Solotky that he did not have all of the information he needed to answer the questions posed in the program and said that he would return, but died before doing so.
The trust document decedent began to create near the time of his death was saved on Solotky’s computer, and admitted into evidence as Exhibit 10. It provided in relevant part:
“[Respondent] shall be given [decedent’s] interest in real property—[home address], 100% of the stock in [A&J], brokerage account at North American Clearing, common stock Developers Diversified, Nordic boat, Starfire boat, Travel Supreme 5th Wheel Trailer, Cadillac Escalade, Infinity G35 and jewelry. If [respondent] does not survive [decedent], that property shall be given to Tracy Silva [respondent’s daughter].
“[Appellant]—Adult daughter of [decedent] shall be given one dollar.
“Cindy Kew [Kennedy]—Adult daughter of [decedent] shall be given one dollar.
“[Respondent] shall be given [decedent’s] interest in the trust property not otherwise specifically and validly disposed of by this Part.”
Respondent testified that decedent told her, consistent with the foregoing draft trust provisions, that he did not want to leave anything to his children; leaving all of his property to respondent was part of their pact. Respondent said that decedent received calls from appellant on Father’s Days, but otherwise had no contact with his children. Appellant visited decedent once after he was diagnosed with cancer. Decedent told respondent to give appellant some family photos after he died; respondent gave the photos to her attorney, and he gave them to appellant.
Appellant daughter testified that she was raised by grandparents, and did not see decedent until she was 16 years old. “After that, ” appellant testified, “we had a lot of contact. We would go to dinners, lunches, sometimes... he would even hook up with Cindy [Kennedy]. [¶]... I called him on his birthday. I called him on Father’s Day....” She saw decedent at a lunch in the summer of 2007, at a hospital in March 2008, when he told her he was dying, and at his home the Saturday before he died. At the 2007 lunch, they discussed that decedent would be leaving his house and pension to respondent, and that “what’s left is [A&J].” Decedent told her at the lunch that she and Cindy “would never have to worry, that he would take care of us.” Decedent never told her that he had transferred A&J to Darlene, but also never told her that he would be giving A&J to her and Cindy when he died.
Appellant testified that when she was getting ready to leave after her visit with decedent at his home in 2008, “he said, before you go kid, write down your name and your address, you know, all your information so that next week when I go down I can include you and Cindy. I’m going to call Cindy, get hers, and include you in my trust....” However, respondent told her that, as soon as she left that day, decedent changed his mind about including her and Cindy in the trust.
II. DISCUSSION
In general, “[e]xcept as otherwise provided by statute, the manifestation of intention to create a trust may be made by written or spoken words or by conduct, ” and “[n]o particular form of words or conduct is necessary....” (Rest., Trusts § 24.) In this state, “[t]he existence and terms of an oral trust of personal property may be established only by clear and convincing evidence, ” and “[t]he oral declaration of the settlor, standing alone, is not sufficient....” (Prob. Code, § 15207, subd. (a) & (b).) “ ‘[S]ome corroboration in the form of a transfer, earmarking or written evidence [is required] in order to uphold a trust supported by an oral rather than written declaration of [a deceased] settlor.’ ” (13 Witkin, Summary of Cal. Law (10th ed. 2005) Trusts, § 30, p. 602.) “Although it is necessary, in order to establish a trust, to offer clear and convincing proof, such proof may be indirect, consisting of acts, conduct, and circumstances [citations], and the question whether the showing is clear and convincing is primarily one for the trial court [citations].” (Hansen v. Bear Film Company, Inc. (1946) 28 Cal.2d 154, 173; see also Kobida v. Hinkelmann (1942) 53 Cal.App.2d 186, 193 [whether the evidence for a trust is clear and convincing “is for the trial court to determine”].)
Strong evidence was presented of decedent’s intention that respondent receive the A&J stock. He told respondent that he was giving her the stock, and that he believed he could not own the stock and collect his pension. He evidenced his intention to give respondent the stock by listing her as the owner of the stock on A&J’s tax returns, telling a business acquaintance that he had transferred the stock to her, and telling his accountant that he wanted her to have all of his property. His intention was further corroborated by the trust agreement he began drafting shortly before his death, which provided for respondent’s receipt of the stock.
Giving the A&J stock to respondent was consistent with the pact to which she testified, whereby she and decedent agreed to take care of each other and pool all of their assets. Existence of the pact was evidenced by a number of acts apart from those concerning the A&J stock: respondent named decedent as the primary beneficiary of her IRA; decedent put respondent on title to their home; and decedent agreed to receive lower pension payments so that respondent could continue to receive the same payments after he died.
Balanced against all of this evidence was appellant’s testimony that decedent told her that he would take care of her and her sister, and include them in his trust. However, the evidence established that decedent was not close to his children. He apparently had little or no contact with Cindy Kennedy, and little contact with appellant. According to appellant’s testimony, decedent did not even know her address when he purportedly said that she and Cindy would be included in his trust. Decedent told respondent and his accountant that he did not want his children to receive any of his property when he died, his draft trust agreement gave only one dollar each to appellant and Cindy, and the agreement provided that respondent’s daughter, rather than appellant or Cindy, would receive his property if respondent predeceased him.
The court plainly had substantial evidence from which to find that the A&J shares in decedent’s intestate estate were held in trust for respondent’s benefit. The court was the judge of credibility of the parties and the witnesses.
Appellant contends that recognition of the trust would be contrary to public policy because decedent’s purported transfer of the A&J stock to respondent was merely a “sham” to enable him to collect his pension while continuing to work. (See Prob. Code, § 15203 [“[a] trust may be created for any purpose that is not illegal or against public policy”].) However, its is largely irrelevant that decedent may have had multiple motives for giving respondent the A&J stock. We agree with respondent that any impropriety in connection with the pension was a matter between decedent and his union. In any event, the 2002 transfer of A&J stock to respondent was only part of the evidence for the trust in question, and the finding that the trust existed would have been supported by substantial evidence even if that transfer had not occurred.
III. DISPOSITION
The order directing that title to the A&J stock be vested in respondent is affirmed.
We concur: Margulies, J., Dondero, J.