Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County. No. RIP080442 Lawrence W. Fry, Judge.
Maurice Edward Franklin Law Offices and Maurice Edward Franklin for Petitioner, Cross-objector and Appellant.
Higgs, Fletcher & Mack, John Morris and Paul J. Pfingst for Objector, Cross-petitioner and Respondent.
OPINION
Ramirez P.J.
The Estate of Robert E. Sandhoff (the estate), appeals from a judgment determining that the estate did not own any interest in a certificate for 170, 000 shares of Kilamac Farms, Inc. (Kilamac), representing a one-third interest in the corporation, whose only asset was beach front property in Hawaii. Kurt Sandhoff (Kurt), the son of Robert E. Sandhoff (Robert) and administrator of the estate, had been indebted to cross-petitioner Randi Fjaeran (Fjaeran), owner of the remaining shares, for various taxes and ongoing expenses relating to the Hawaii property and had not included Fjaeran as a creditor when he declared bankruptcy in 1992. Kurt also failed to mention the 170, 000 shares certificate as an asset in the bankruptcy. After discovering the discharge in bankruptcy, Fjaeran made a motion to reopen the bankruptcy which was granted, and purchased whatever interest Kurt had in the shares at the subsequent bankruptcy trustee’s auction.
To avoid confusion, we will refer to the Sandhoffs by their first names.
Kurt claimed he had transferred the shares to his father in 1990, and that the shares were property of the probate estate. Fjaeran then cross-petitioned in the probate court, obtaining a determination that she owned the certificate. The trial court found Kurt’s testimony about the transfer of the shares was not credible. On appeal, the estate argues that (a) the court failed to provide a statement of decision; (b) there is insufficient evidence to support the trial court’s various factual findings; and (c) the trial court erred in determining it lacked jurisdiction to hear his motion for new trial. We affirm.
Fjaeran filed a motion to impose sanctions on grounds that the appeal is frivolous. We requested a response to the motion from Kurt. Although it was a very close case, we decline to order sanctions at this time.
BACKGROUND
This complicated story began in 1981, when Kurt, a licensed real estate broker, purchased a one-third interest in 12.6 acres (approximately) of ocean-front property called Kilamac Farms, Inc., on the island of Kauai, Hawaii, along with Fjaeran, and another couple (the Shaws), from the Kilauea Bay Consortium. The original promissory note taken by Kilauea Bay Corsortium was secured by the entire property. The new owners entered into a “Homesite Agreement, ” allowing each owner to construct a separate residence on the property. The Homesite Agreement provided that each owner would be financially responsible for his or her pro rata share of taxes, assessments, or other expenses relating to the property. To this end, a bank account was opened, into which money was to be deposited by all owners to cover the expenses.
In 1983, the parties executed an Amendment to Home Site Agreement, allowing Fjaeran to purchase the Shaws’ portion of the property. In 1984, title to the property was transferred to a newly formed corporation, Kilamac. The corporation issued 510, 000 shares of stock, which were divided into equal thirds among the owners: 170, 000 shares to each.
However, Fjaeran did not purchase the Shaws’ interest until approximately 1987.
Shortly after the property was purchased, Kurt did not deposit his share, so Fjaeran advanced money from her personal account to cover the expenses. Because Kurt frequently became indebted to Fjaeran for the various obligations concerning the property, he pledged his share certificate to Fjaeran as security for those debts on several occasions. In 1988, Kurt owed approximately $61,000 to the Kilauea Bay Consortium on the original purchase of the property. At that time, Kurt did not have the share certificate because he had pledged it as security pursuant to a 1987 settlement agreement with Fjaeran.
To make the final payment on the note to Kilauea Bay Consortium, Kurt claimed he borrowed the money from his father Robert. However, there was no written agreement or promissory note memorializing the loan. Kurt sent a cashier’s check to Kilauea Bay Consortium, but learned that Fjaeran had already made the payment pursuant to the 1987 settlement agreement. Fjaeran demanded reimbursement of the approximately $62,000, plus additional sums owed by Kurt to Fjaeran arising from the settlement of litigation pertaining to other real property.
After Kurt reimbursed Fjaeran for the remaining balance he owed, she surrendered the stock certificate to Kurt in early March 1990. However, Kurt still owed Fjaeran money for maintenance and taxes pertaining to the Kilamac property, which was not repaid until September 1990. Kurt testified that he endorsed the certificate over to Robert on March 19, 1990. Despite the purported transfer to Robert, on June 6, 1990, Kurt executed a compromise and settlement agreement with Fjaeran representing himself as the owner of shares in Kilamac, and in 1991, when Fjaeran sued Kurt over a boundary dispute, Kurt defended the action all the way to the Hawaii Supreme Court as the owner of the property.
The Hawaii Supreme Court ruled in favor of Fjaeran, determining that the structure Kurt erected on his portion of the property encroached on Fjaeran’s share. The Hawaii Supreme Court ordered Kurt to remove it.
In 1992, Kurt declared bankruptcy, but did not list the Kilamac shares on any of the schedules, and did not include Fjaeran or Kilamac as creditors. Without any notice to Fjaeran, the United States Bankruptcy Court entered a discharge on October 12, 1993, and a closure on August 11, 1994.
In December 1993, Robert suffered a severe stroke requiring the establishment of a conservatorship. Initially, Robert’s conservatorship estate was administered by two successive public appointees, neither of whom listed the certificate for 170, 000 shares of Kilamac in the conservatorship inventory of assets, nor were the expenses associated with Kilamac listed as conservatorship liabilities. Kurt never informed either of the conservators of the omission. In 1999, Kurt petitioned to be appointed to serve as conservator of his father’s person and estate, and he was appointed. He did not amend the inventory to include the certificate.
At some point, Fjaeran realized she had not received any notices regarding the corporate taxes of Kilamac from the Franchise Tax Board. She learned that Kurt had changed the address to his address in Nevada. In 2000, Fjaeran located Kurt and learned that Kurt had declared bankruptcy without including her as a creditor. Fjaeran notified the bankruptcy trustee of this fact, and in April 2001, she made a motion to reopen the bankruptcy. On May 16, 2001, an order granting the motion to reopen the bankruptcy was filed.
On April 9, 2001, Robert died, and Kurt was appointed as the administrator of the estate. In March 2002, the bankruptcy trustee made a motion for an order approving the sale of Kurt’s right, title or interest in the Kilamac share certificate by auction. Initially, Kurt objected to any sale of the shares to Fjaeran, but otherwise consented to the sale of the shares to the estate. Kurt’s position at that time (March 2002) was that the share certificate had been pledged as security for a debt to his father. Subsequently, in May 2003, the estate changed its position; it now objected to the sale on the ground that the certificate had been transferred to his father and was now property of the estate.
However, that same month, Kurt filed a report of status of administration relating to the estate, without mentioning the 170, 000 shares of Kilamac as property of the estate. On June 5, 2003, Kurt prepared the first and final account and report of conservator, and included the 170, 000 shares certificate as part of the estate.
In August 2003, the bankruptcy court granted the bankruptcy trustee’s motion and authorized the sale of the bankruptcy estate’s right, title and interest in the shares. In its order, the bankruptcy court overruled objections to the proposed sale made by the estate. One of the objections raised by the estate was that the trustee was barred from recovering the share certificate by the statute of limitations. Neither Kurt nor the estate appealed the order. At auction, Fjaeran purchased the shares and an order confirming the sale of the estate’s right, title and interest, if any, as is, where is, and without warranties, was filed on November 10, 2003. No appeal was taken from this order.
Prior to May 2003, Kurt had never informed Fjaeran or Kilamac of the transfer of the shares to his father, even though the Homesite Agreement provided that each owner would be responsible for his or her share of taxes, assessments and other charges pertaining to the parcel. Additionally, Kurt never informed Robert of the ongoing litigation involving the Hawaii property or of the ongoing obligations relating to Kilamac. He asserted at trial that he omitted to list the shares in his 1992 bankruptcy because the shares had been transferred to Robert, but when Robert’s conservatorship was initiated, the first conservator was not informed of the shares.
Kurt also failed to inform the bankruptcy court or the probate court of the transfer prior to May 2003.
Despite the alleged transfer, between 1990 and 2000 Kurt continued to treat the shares and the property as his own: (a) he leased the Kilamac property to Ralph Adamson up until approximately the year 2000; (b) he applied for a building permit for the Kilamac property in August 1995 acting on his own; (c) he made an offer to purchase a portion of an adjacent parcel, which was contiguous to what he described as “my parcel, ” in September 1995, because he intended to move his family to the property; (d) Kurt signed a letter to Fjaeran in November 1995, offering to sell her the property for $2 million; (e) Kurt placed an advertisement in a real estate magazine in May 2000, offering to sell the property; and (f) in September 2000, Kurt sent a “Shareholder’s Demand for Inspection” for financial records to Kilamac, with a followup demand sent in October 2000, describing himself as the “1/3 shareholder of stock.” All of these actions were taken by Kurt without Robert’s knowledge.
Also, on at least eight occasions between 1990 and 2003, Fjaeran and Kurt were involved in litigation over various disputes relating to the Kilamac property and its expenses. In November 2000, Kurt filed a small claims action against Kilamac seeking damages as a penalty for the corporation’s failure to produce records. In December 2000, while he was acting as conservator of Robert’s conservatorship estate, Kurt filed a verified complaint in his own name seeking declaratory, injunctive, and other equitable relief against Kilamac and Fjaeran. In January 2004, Kurt filed another action against Kilamac in small claims court. In all of the litigation, Kurt held himself out as the owner of the 170, 000 shares as a co-owner of the property.
On October 21, 2003, Kurt, as administrator of the estate, filed a petition in the probate court to determine ownership of the share certificate respecting Kilamac. (Prob. Code, § 850.) Fjaeran cross-petitioned to establish her ownership and right to possession of the stock certificate. Following a court trial, the matter was taken under submission. On June 25, 2008, the trial court issued a ruling by minute order finding that (1) neither Robert nor the estate owned any right, title, or interest in the 170, 000 shares of stock in Kilamac; (2) Kurt did not own any right, title or interest in the shares; (3) Fjaeran was the sole owner of all right, title, and interest in the shares of stock in Kilamac; and (4) Kurt, individually and as administrator of the estate of his father, was ordered to deliver the share certificate to Fjaeran.
On July 9, 2008, Kurt, as administrator of the estate, requested a statement of decision. Fjaeran’s counsel prepared a proposed statement of decision along with a proposed judgment and served each on Kurt and the estate. Receiving no objections, the trial court signed the statement of decision on September 16, 2008, striking out the word “proposed” in the title of the document, and it was filed on September 23, 2008. The judgment was filed the same date. Notice of entry of the judgment was served on Kurt and the estate on October 3, 2008, by Fjaeran’s counsel.
Although this request was untimely (Code Civ. Proc., § 632) [request must be made within 10 days after the court announces its tentative decision], Fjaeran’s counsel prepared a proposed statement of decision along with the proposed judgment, forfeiting any claim of untimeliness.
We grant the request for judicial notice filed on October 4, 2010.
On behalf of the estate, Kurt filed a notice of intent to move for new trial on October 29, 2008. The trial court denied the motion on the ground the court lost jurisdiction. On December 3, 2008, the estate appealed.
Although Kurt acted both as an individual and as the administrator of his father’s estate, only the estate has appealed.
DISCUSSION
1. The Trial Court Issued a Statement of Decision.
The estate’s first argument is labeled as a challenge to the lack of a statement of decision, but includes various sub-issues challenging the trial court’s factual findings. Contrary to the estate’s position, the record includes a statement of decision, signed by the trial court judge who heard the trial. The estate’s complaint focuses on the fact that Fjaeran’s counsel prepared and served a document entitled, “Proposed Statement of Decision, ” which the trial court signed after striking out the word “proposed.” This is standard practice; a proposed statement of decision was prepared and, when no timely objection to it was made, the court signed the statement of decision, striking out the word “proposed, ” and it was filed, constituting a statement of decision.
During oral argument, counsel for the estate maintained that a clerical error in the proof of service (a typographical error in one digit of the zip code of counsel’s address) of the statement of decision voided it. However, in the appellant’s opening brief, the estate did not assert this challenge in its argument on appeal, although it made reference to the proof of service in its statement of the case. In any event, in the opening brief the estate acknowledged being served with a copy of the proposed statement of decision by opposing counsel and did not assert a lack of opportunity to object to the proposed statement.
Having resolved the primary question, we turn to the estate’s challenges to the various findings made by the trial court.
a. Standard of Review
When findings of fact are challenged, we employ the substantial evidence standard of review to determine whether there is any substantial evidence, contradicted or uncontradicted, which supports the finding. (Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1516.) In determining whether there is substantial evidence, we presume the trial court found the losing plaintiff’s evidence lacks sufficient weight and credibility to carry the burden of proof. (Bookout v. State of Calif. ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486.) We must treat all evidence unfavorable to the judgment as not having sufficient verity to be accepted by the trier of fact. (Barthels v. Santa Barbara Title Co. (1994) 28 Cal.App.4th 674, 680.) We have no power to judge the effect or value of the evidence, weigh the evidence, consider the credibility of witnesses, or resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom. (Kimble v. Board of Education (1987) 192 Cal.App.3d 1423, 1427.)
b. There Is Substantial Evidence to Support the Court’s Findings
(i) In its first challenge, the estate argues there is insufficient evidence to support the finding that the bankruptcy court’s decision, overruling the estate’s statute of limitations objection to Fjaeran’s claim in Kurt’s bankruptcy, was binding on the estate. We disagree. The trial court admitted into evidence the objections interposed by the probate estate to the proposed bankruptcy auction. Those objections included a statute of limitations defense. The trial court also admitted into evidence the order made by the bankruptcy court authorizing the sale of the share certificate, in which the bankruptcy court expressly overruled the estate’s objections. The bankruptcy court thus ruled on the statute of limitations objection and there was no appeal from the bankruptcy court’s ruling. The bankruptcy court’s resolution of the claim that Fjaeran’s claim was untimely is final. The trial court correctly found that the estate’s claim was barred.
(ii) In its second challenge, the estate argues that the “implied finding” that the share certificate was redeemed from the pledge to the deceased is not supported by any evidence. The trial court never made such a finding in its statement of decision, and no such finding may be implied from the statement that Kurt had pledged the stock certificate from time to time to cover financial obligations.
(iii) The estate’s third challenge is that, as a pledgee in possession, the estate held the negative right to retain the pledged security until the principal obligation had been satisfied. However, at trial (and ultimately in the bankruptcy proceedings relating to the auction of the certificate), Kurt testified that the estate’s position was that the 1990 assignment to Robert made the estate the owner of the shares. Having abandoned the position that the shares were pledged as a security, the estate cannot now argue there was a lien.
Further, the claim fails on its merits where the estate never established the existence of a security agreement, which is required to comply with the statute of frauds. A security agreement is required to establish a security interest. (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1067-1068.) A separate formal document entitled “security agreement” is not always required to satisfy the signed-writing requirement (Komas v. Future Systems, Inc. (1977) 71 Cal.App.3d 809, 813-814), but a security agreement must be a writing which creates or provides for a security interest. (Needle v. Lasco Industries, Inc. (1970) 10 Cal.App.3d 1105, 1108.) The certificate for the Kilamac shares did not create or provide for a security interest.
(iv) The estate’s fourth challenge is that the trial court’s implied rejection of the uncontradicted testimony of Kurt was arbitrary and improper. We disagree. As we have pointed out above, we do not reweigh evidence or reassess the credibility of witnesses. (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1531.) Resolution of conflicts in the evidence, assessment of the credibility of the witnesses and the weight to be given the opinions of experts are all matters within the exclusive province of the trier of fact. (In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 204, quoting Ellena v. State of California (1977) 69 Cal.App.3d 245, 256; see also As You Sow v. Conbraco Industries (2005) 135 Cal.App.4th 431, 454.)
During the trial, the court observed that Kurt’s testimony was evasive and lacking in credibility. Although the estate describes Kurt’s testimony as “uncontradicted, ” we note that Kurt’s own actions in his treatment of the certificate (holding it out as his own in litigation, offering it for sale to third parties, applying for building permits for the property represented by the shares, and making demands of the Kilamac board for information as a shareholder and officer of the corporation) speak louder than any words in contradicting his own testimony. The fact that the forensic expert testified that the ink used to sign the transfer to Kurt’s was available in 1990, did not establish that the certificate was transferred then. There was no error.
(v) The estate’s fifth challenge claims error in the trial court’s finding that Fjaeran’s cross-petition was timely filed. We disagree. On appeal, the estate argues that the applicable statute of limitations is that which is found in Code of Civil Procedure section 366.2, although in its answer to Fjaeran’s cross-petition, the estate did not assert this particular statute of limitations. The estate did not preserve this particular objection for review on appeal.
However, even if the objection had been preserved, the estate’s point is not well-taken. Code of Civil Procedure section 366.2 applies where a person against whom and action may be brought on a liability of the person, whether arising in contract, tort, or otherwise, dies before the expiration of the applicable limitations period. (Code Civ. Proc., § 366.2, subd. (a).) On the date that Robert died, Fjaeran could not have brought an action against Robert because she had not yet purchased the Kilamac shares in the bankruptcy auction. She did not become a “creditor” of the estate, and could not have brought an action against Robert until she purchased the stock certificate and the estate challenged her ownership, in 2003.
The bankruptcy sale was confirmed in November 2003. Fjaeran filed her response to the estate’s action to determine ownership of the shares (Prob. Code, § 850) in January 2004, within one year of acquiring her interest, and asserted that she was the bona fide purchaser of the stock. Her cross-petition was timely.
We do not find it necessary to discuss whether Fjaeran’s answer to the estate’s petition to determine ownership of the shares qualified as a “claim” because the estate did not raise this point in the trial court and does not discuss it in the appeal.
2. The Trial Court Correctly Determined that the Motion for New Trial Was Untimely.
The estate argues that the court erroneously determined that it lacked jurisdiction to consider the motion for new trial because the proof of service of the notice of entry of judgment was defective insofar as it was missing a digit in the zip code. The estate’s assertion that the proof of service was defective is not well taken. The estate was timely and correctly served with a copy of the proposed statement of decision and proposed judgment by Fjaeran’s counsel, and the estate acknowledged receipt of the notice of entry of judgment. It is true that the proof of service of the notice of entry of judgment on the estate’s attorney was missing a digit in the zip code. But because the notice was actually received, any defect affecting the presumption that service has been made is immaterial.
Code of Civil Procedure section 659 requires the party intending to move for a new trial to file with the clerk and serve upon each adverse party a notice of his intention to move for a new trial within 15 days where a notice of entry of judgment has been either mailed by the clerk or served upon him by any party. (Code Civ. Proc., § 659, subpara. (2).) This requirement is jurisdictional. (Ehrler v. Ehrler (1981) 126 Cal.App.3d 147, 153, citing Douglas v. Janis (1974) 43 Cal.App.3d 931, 936.) Motions for new trial are subject to strict time limits that begin to run when the party seeking relief is served with a written notice of entry of judgment. (Palmer v. GTE California, Inc. (2003) 30 Cal.4th 1265, 1267.)
Code of Civil Procedure section 1013 governs service by mail, and provides that service is complete at the time the notice is deposited in the mail. (§ 1013, subd. (a).) A successful service by mail requires strict compliance with the statute. (Silver v. McNamee (1999) 69 Cal.App.4th 269, 279.) Compliance with the statute raises a presumption the mailing was received by the addressee. (Conservatorship of Wyatt (1987) 195 Cal.App.3d 391, 396.) When the presumption is raised, the burden is on the addressee to prove non-receipt; the sender is under no burden to prove receipt. (Silver, at p. 280.)
The rule of strict compliance is satisfied by substantial, rather than literal, compliance. (Conservatorship of Wyatt, supra, 195 Cal.App.3d at p. 397, citing Douglas v. Janis, supra, 43 Cal.App.3d at p. 937.) Thus, where the record shows that counsel for the party served with the notice of entry of judgment admitted that he actually received a copy of the notice of entry in the mail, his argument that the proof of service was defective is considered to be hypertechnical. (Wyatt, at p. 397; see also Tobin v. Oris (1992) 3 Cal.App.4th 814, 826 [overruled on a different point in Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 983, fn. 12].)
Fjaeran’s counsel served the notice of entry of judgment on the estate’s counsel, and on Kurt, the administrator of the estate. Although the proof of service reflects an incorrect zip code in the mailing address for the estate’s counsel, the estate’s counsel admitted to actually receiving the notice. Having acknowledged actual receipt, any defect in the proof of service is immaterial because no presumption of receipt is needed to show the notice was served. The notice of entry of judgment was served upon the estate and triggered the time period in which the estate was required to file his motion for new trial. (Tri-County Elevator Co. v. Superior Court (1982) 135 Cal.App.3d 271, 275.)
Despite the error in the zip code, the estate was served with the notice of entry of judgment and acknowledged receiving it; that service triggered the 15-day time limit. The trial court correctly found it lacked jurisdiction to entertain the motion for new trial.
DISPOSITION
The judgment is affirmed. Cross-petitioner Fjaeran is awarded costs on appeal.
We concur: Hollenhorst J., King J.