Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. BP096660, Aviva K. Bobb, Judge.
Anderson, McPharlin & Conners, David T. DiBiase and Jason C. Love for Defendant and Appellant.
Richard D. Cleary; Kalisch, Cotugno & Rust, Mark Kalisch and Richard N. Rust for Plaintiff and Respondent.
WOODS, J.
Respondent John T’Sang (T’Sang) commenced a proceeding pursuant to Probate Code section 21320 to determine whether a proposed petition he planned to file would violate the no contest clause in a declaration of trust (the original trust) executed by Warwick A. Sims (Sims). The trial court ruled the proposed petition would not constitute a contest and granted T’Sang’s application.
All further statutory references are to the Probate Code. Section 21320 provides a “safe harbor” for beneficiaries who seek an advance judicial determination of whether a proposed legal challenge would be a contest.
Appellant Henry Lien (Lien) contends the court below erred in ruling the petition does not violate the no contest provision contained in the original trust. Lien argues (1) the probate court erred as a matter of law in ruling that T’Sang’s proposed challenge does not constitute a contest; and (2) the extrinsic evidence demonstrates the probate court erred as a matter of law in granting T’Sang’s safe harbor petition. We reject appellant’s claims of error and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On August 3, 1995, Warwick Sims established a revocable living trust designating himself as trustee and both Judith Sims and John T’Sang as first successor co-trustees. Upon the death of Warwick Sims, the trust property was to be distributed as follows:
· 51 percent to Sims’ sister Judith Sims;
· 25 percent to T’Sang;
· 15 percent to Sims’ parents Albert and Edna Sims; and
· 9 percent divided among four friends (3 percent to Cletus Arnold, 3 percent to Estela Aguila, 2 percent to Jered Barclay and 1 percent to Jason Haw).
In addition, the trust contained the following no contest clause: “If any beneficiary in any manner, directly or indirectly, contests or attacks this instrument or any of its provisions, any share or interest in the trust given to that contesting beneficiary under this instrument is revoked and shall be disposed of in the same manner provided herein as if that contesting beneficiary had predeceased WARWICK A. SIMS.”
Sims also executed his last Will on August 3, 1995, naming Judith Sims and John T’Sang as co-executors. According to the terms of the Will, all the residue of Sims’ estate poured over into the Sims’ trust upon his death. The pourover Will contained a no contest provision similar to the no contest clause in the trust.
Sims made no changes to his estate plan from 1995 until he met Lien in 2005. Lien was an active member of the State Bar of California and practiced at the firm of Selvin & Weiner from 1998 until May 2005 when he ceased practicing. Lien confided in Kathryn Stanton, a friend and fellow lawyer at Selvin & Weiner, that he was involved in a “special relationship” with Sims and “it was very difficult because they had to keep their relationship very secret and private.” When Lien met Sims, Lien learned that Sims was suffering from terminal colorectal cancer. By April 2005, Lien had seen Sims’ trust and mentioned to Sims that he knew “at least one estate attorney, Kathryn Stanton [and] asked [Sims] if he needed a referral. [Sims] said, at that point, no. He was going to learn what he needed to learn off of the internet . . . .” Lien left Selvin & Weiner in May 2005 and started working at Sims’ art gallery.
On September 8, 2005, Lien wrote to Sims’ physician describing himself as Sims’ attorney and caretaker. On September 13, 2005, Lien contacted Attorney Stanton and informed her that Sims was very ill, was in the hospital and asked Stanton to help Sims with Sims’ estate plan. Stanton first met with Sims at UCLA Hospital on September 14, 2005. The next day, Stanton returned to the hospital room and Sims executed a first amendment to his trust. The first amendment purported to change Sims’ estate plan as follows:
· Lien was given the limited liability company Glass Garage LLC but with the proviso that the home and garden store owned by the LLC would pass to T’Sang;
· Lien would also get 20 percent of the residue and another 20 percent of the residue to Glass Garage LLC which effectively gave Lien 40 percent of the residue;
· it would reduce Judith Sims’ share of the residue from 51 percent to 40 percent;
· it would reduce T’Sang’s share of the residue from 25 percent to 20 percent;
· it omitted the gift to Sims’ parents; and
· it provided for cash gifts totaling $49,000 to seven friends and employees of Sims.
In addition, the September 15th amendment did not include a no contest clause.
Less than two weeks later, on September 27, 2005, Lien again contacted Attorney Stanton telling her Sims wished to make further changes to his estate plan. Stanton spoke with Sims by telephone and then prepared a second amendment. The second amendment dated September 28, 2005, benefited Lien by increasing his direct share of the residue from 20 percent to 40 percent. The second amendment further reduced T’Sang’s share from 20 percent to 10 percent and reduced the LLC’s share from 20 percent to 10 percent, effectively giving Lien 50 percent of the residue. In addition, the second amendment increased the cash gifts to friends and employees of Sims to a total of $108,000 and added a gift of $40,000 to Sims’ parents. The amendment of September 28, like the September 15 amendment, did not include a no contest provision. Amendment No. 2 does recite that Sims “reaffirms the provisions of his Living Trust as amended by Amendment No. 1, . . .”
Sims died on October 1, 2005.
T’Sang filed the petition for declaratory relief under Probate Code section 21320 on February 7, 2006, requesting an order that his proposed petition to determine the validity of the two trust amendments would not be a contest of Sims’ original trust or Will. The petition alleged that the two trust amendments were the result of undue influence by Lien and requested an order declaring the two amendments invalid.
Lien filed opposition to T’Sang’s petition and requested an opportunity to conduct discovery. The parties agreed upon discoverable items and upon completion of discovery, T’Sang and Lien submitted declarations and other evidentiary materials in support of and in opposition to the petition. The court conducted a hearing on September 12, 2006, and the matter was taken under submission. On November 9, 2006, the court ruled that T’Sang’s proposed petition would not violate the no contest clause in the trust.
Lien filed a timely notice of appeal. This order is appealable since the ruling amounts to a construction of the trust instrument. (Scharlin v. Superior Court (1992) 9 Cal.App.4th 162, 167.)
DISCUSSION
1. Standard of Review
“Where, as here, a trial court rules on a section 21320 [safe harbor] application without referring to extrinsic evidence, the appeal presents a question of law and requires us to independently construe the trust to determine whether the proposed petition violates the no contest clause. [Citation.] ‘In construing a trust instrument, the intent of the trustor prevails and it must be ascertained from the whole of the trust instrument, not just separate parts of it.’ ([Citation]; § 21102, subd. (a) [‘The intention of the transferor as expressed in the instrument controls the legal effect of the dispositions made in the instrument.’].) We review the trust de novo, considering the circumstances under which the document was made in order to place ourselves in the position of the trustor to interpret the document. [Citation.] Each case depends upon its own peculiar facts and thus case precedents have little value when interpreting a trust.” (McIndoe v. Olivos (2005) 132 Cal.App.4th 483, 487.)
This court may independently interpret the trust instrument and review the trial court’s ruling de novo. (Burch v. George (1994) 7 Cal.4th 246, 254.)
2. Statutory Scheme – Section 21305
Respondent T’Sang is challenging the two 2005 amendments to the original trust. Effective January 1, 2001, the legislature amended the law governing no contest clauses, adding section 21305. Section 21305 lists actions that do not constitute contests unless expressly identified in the no contest clause as a violation of the clause. Specifically, “[a] challenge to the validity of an instrument, contract, agreement, beneficiary designation, or other document, other than the instrument containing the no contest clause” does not constitute a challenge. (§ 21305, subd. (a)(3); italics added.)
However, subdivision (c) provides: “Subdivision (a) does not apply to a codicil or amendment to an instrument that was executed on or after January 1, 2001, unless the codicil or amendment adds a no contest clause or amends a no contest clause contained in an instrument executed before January 1, 2001.” In this case, neither amendment added a no contest clause or amended the no contest clause in the original trust, therefore section 21305 does not apply. When section 21305 does not apply, “the common law and the rule of strict construction govern the no contest clause of the estate plan as written.” (Estate of Rossi (2006) 138 Cal.App.4th 1325, 1339.)
3. Application of common law and rules of strict construction
“An in terrorem or no contest clause conditions a beneficiary’s right to take under a will or trust instrument on acquiescence to the terms of the instrument. [Citations.] It discourages challenges by beneficiaries by imposing a penalty of forfeiture. [Citation.] [¶] The law regarding no contest clauses is not uniform. Some jurisdictions refuse to give effect to no contest clauses; others give effect to the clause only when a person files a contest without probable cause.” (Jacobs-Zorne v. Superior Court (1996) 46 Cal.App.4th 1064, 1072-1073.)
Under the rules of strict construction, “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. . . . Therefore, even though a contest clause is strictly construed to avoid forfeiture, it is the testator’s intentions that control, and a court ‘must not rewrite the [testator’s] will in such a way as to immunize legal proceedings plainly intended to frustrate [the testator’s] unequivocally expressed intent from the reach of the no-contest clause.’” (Burch v. George, supra, 7 Cal.4th at pp. 254-255; brackets in original; internal quotation marks omitted.)
4. The no contest clause must be strictly construed
Appellant contends “the unambiguous language of the Sims Trust demonstrates, as a matter of law, that a contest to the two amendments violates the no contest provision found in the original trust instrument.” Appellant is mistaken. The no contest language used by Sims in the original trust is specifically restricted to any beneficiary who “contests or attacks this instrument or any of its provisions.” This no contest clause does not mention amendments to the trust; nor do the amendments include no contest clauses. Given the precise language used by Sims in the original trust, it cannot be said that Sims unequivocally intended the no contest clause to apply to amendments.
We note, in its opening brief, counsel for appellant relies on an unpublished opinion. Appellant’s opening brief states “the further analysis contained herein is derived principally from [an] unpublished opinion . . . and [appellant] notes such to provide proper credit to the author of these arguments.” However, citing to unpublished opinions violates the rules of court and is improper. (Cal. Rules of Court, rule 8.115 [“an opinion of a California Court of Appeal . . . that is not certified for publication or ordered published must not be cited or relied on by a . . . party in any other action.”].)
Appellant agrees no contest clauses are to be strictly construed but contends that common law is clear that an amendment to a trust does not have to repeat the language of the original instrument to have all of the provisions of the original apply with equal force as though the original and the amendment were one and the same document. Appellant, relying on Estate of Hite (1909) 155 Cal. 436, 447-448, states “a trust amendment need not, indeed should not contain its own no contest clause. Rather it need only state that it ‘reaffirms’ all of the original trust’s provisions except those expressly modified by the amendment.” Such argument does not assist appellant. Hite is distinguishable because that case involved codicils to a will not trust amendments and trusts are not subject to the same formalities as wills. In addition, the testator in Hite declared that he “reread, reconsidered, reordained, and republished, ratified and confirmed his will” effectively incorporating by reference the no contest clause into the codicil.
Here, amendment No. 1 merely states “[Sims] hereby amends his Living Trust” by deleting and adding certain provisions, and amendment No. 2 states Sims “hereby reaffirms the provisions of his Living Trust as amended by Amendment No. 1, and further amends his Living Trust by modifying [specific] sections.” Since amendment No. 1 in no way reaffirmed or republished the original trust, amendment No. 2 was effectively amending amendment No. 1; nor did Sims specifically incorporate by reference the no contest clause of the trust into the amendments. The rules of strict construction do not permit a rewriting of the amendments to include terms that are not there.
5. The amendments were separate instruments
Appellant also contends the Sims trust is comprised of both the initial trust instrument and the two amendments, that these were not separate instruments but rather became one whole as republished. Again, appellant is mistaken. We find the original trust and the amendments are each separate instruments.
Probate Code section 45 defines “instrument” as any “will, trust, deed, or other writing that designates a beneficiary or makes a donative transfer of property.” Giving effect to its plain meaning, we find the amendments qualify as instruments under section 45 because each designated beneficiaries. In addition, each made donative transfers of property. As noted above, the original trust no contest clause is limited to a person who “contests or attacks this instrument or any of its provisions.” That is not the case here. T’Sang is contesting the validity of the amendments only. Had Sims intended that a contest to a trust amendment be a contest to the original trust, he could have so stated but did not.
Finally, the court in Rossi clarified that an amendment to a trust is a separate instrument from the trust. “The language in [section 21305] subdivision (a)(3) clearly recognizes instruments or other documents separate from the instrument containing the no contest clause, and that those separate instruments or documents may be the subject of a safe harbor challenge.” (Estate of Rossi, supra, 138 Cal.App.4th at p. 1338.) In Rossi the court rejected any suggestion section 21305, subdivision (a)(3) was inapplicable because the amendment became part of the trust. “The will, trust and second amendment [in Rossi] are separate instruments under section 45, and [testator] executed all three instruments in 2003, long after the effective date of section 21305. He was therefore subject to its provisions.” (Id. at p. 1340.)
To the extent appellant argues the amendments are part of the trust and therefore the challenge violates the no contest clause, he is in error. The no contest provision in the original trust made no mention of amendments to the trust or that any contest or challenge to any amendment would result in a forfeiture.
6. The trial court properly disregarded extrinsic evidence in granting the safe harbor petition
Appellant, relying on Estate of Kaila (2001) 94 Cal.App.4th 1122, argues “[t]his court may consider extrinsic evidence to discern a testator’s intent only if the instrument is ‘ambiguous’” and “in determining that extrinsic evidence is admissible in proceedings under Section 21320, the Kaila court considered the Supreme Court’s decision in Burch v. George, supra.” Burch noted, “[e]vidence of the circumstances surrounding the execution of the trust instrument is properly admissible to ascertain its meaning and intent.” However, the intention of the transferor as expressed in the instrument controls the legal effect of the dispositions made in the instrument and the rules of construction apply where the intention of the transferor is not indicated by the instrument. (§ 21102.) Given the clarity of the language used in the no contest clause of the original trust instrument in this case, there is no need to resort to extrinsic evidence.
In spite of appellant’s agreement that extrinsic evidence is unnecessary in this case, appellant then asks this court to consider certain extrinsic evidence, including a declaration from attorney Stanton who drafted the two trust amendments in 2005. We decline to do so. The trial court properly disregarded the extrinsic evidence to interpret the 1995 instrument. We determine the intent of the trustor from the specific language used. “The court determines only what the [trustor] did do by the manner in which he expressed himself.” (Estate of Casey (1982) 128 Cal.App.3d 867, 871.) As a result, the probate court properly granted the safe harbor petition holding the proposed petition challenging the validity of the two amendments did not violate the no contest clause in the original declaration of trust.
DISPOSITION
The order is affirmed. Respondent is entitled to costs on appeal.
We concur: PERLUSS, P.J., ZELON, J.