Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. PES 06-289350
NEEDHAM, J.
After her husband’s death, a wife relied on written transmutation agreements to support her claim that several items of property were community property, to which she was entitled under the terms of the decedent’s will, rather than his separate property, which was to pass to a trust under the terms of the will. The executor filed a petition seeking to have the disputed property transferred to the estate. Husband’s children, who were beneficiaries of the trust, sought to file a reply in support of this petition. Because we conclude this proposed filing by husband’s children did not violate the no contest clause of the will, we uphold the probate court’s order granting their safe harbor petition filed under Probate Code section 21320.
Further statutory references are to the Probate Code.
I. FACTUAL AND PROCEDURAL BACKGROUND
Appellant Lonna A. Wais (wife) married decedent Marshall I. Wais (husband) in 1986 and remained married to him until his death almost twenty years later. Husband had four natural children from two former marriages: respondents Michael Wais, Laura Wais, Marshall Wais, Jr. and Peter Wais (collectively, “husband’s children”). At the time of his marriage to wife, husband had built a personal fortune in the steel industry, with holdings that included a steel company, business real estate, homes in San Francisco, Rancho Mirage and Mexico, and a significant investment portfolio. Husband and wife signed a prenuptial agreement providing for the characterization of property acquired before and after the marriage.
An adopted daughter, who was the natural child of one of decedent’s former wives, is not a party to this proceeding.
In his will executed on February 11, 1998, husband left all of his community property to wife, with the residue of his estate (i.e., his separate property) pouring over into the Marshal I. Wais Trust, of which wife was the income beneficiary and husband’s children were the remainder beneficiaries. The will did not itemize husband’s property or describe any particular items of property as community or separate property. Article Seven of the will was a “no contest” provision that stated: “WILL CONTESTS: [¶] If any beneficiary under this Will, or any Codicil to it, or under the Marshall I. Wais Trust, in any manner, directly or indirectly, contests or attacks this will, or any Codicil to it, or the Marshall I. Wais Trust, or any of the provisions thereof, any share or interest in my estate otherwise given to that contesting beneficiary under this Will, or any Codicil to it, or the Marshall I. Wais Trust is revoked and shall be disposed of in the manner provided herein as if that contesting beneficiary has predeceased me without issue.” A comparable no contest provision was included in the trust, although it is not directly at issue here.
A codicil irrelevant to the claims in this case was executed on March 6, 2000.
Husband died on August 27, 2006 and the will was admitted to probate on December 14, 2006. Robert L. Farmer (executor) was appointed executor as provided in the will. Wife filed a spousal property petition (apparently dismissed without prejudice) that listed numerous assets as community property. Also presented were two written agreements signed by wife and husband that purported to transmute property in husband’s name to community property. The first agreement, dated January 27, 1987, declared that a home in Rancho Mirage then standing in husband’s named was owned by husband and wife as community property; the second agreement, dated March 27, 2000, stated that 16 pieces of property listed in an attached exhibit, which included real property, notes receivable and financial accounts, were owned by husband and wife as community property regardless of the manner in which title was held.
Questioning the validity of these transmutation agreements, husband’s children requested that executor obtain and disclose to them documents that might affect the characterization of the property claimed by wife to be community property. Wife opposed disclosure of the documents sought, claiming a right of privacy in them. Executor filed a “Petition for Instructions Authorizing Disclosure of Information,” which requested that the court authorize the disclosure of these documents to husband’s children. Executor also filed a “Petition to Require Transfer of Property to Estate, for Restitution, and for Other Appropriate Relief [Prob. Code, § 850],” which sought the transfer to the estate of property claimed by wife to be community property if it were determined that such assets had been improperly transmuted.
Husband’s children prepared but did not file proposed responses supporting the executor’s petitions: a “Reply in Support of Petition for Instructions Authorizing Disclosure of Requested Information” and a “Reply in Support of Petition to Require Transfer of Property to Estate, For Restitution, And For Other Appropriate Relief.” They filed a safe harbor petition seeking a judicial determination that they would not violate the will’s no contest provision by filing the proposed replies. (§ 21320.) The probate court issued an order determining that the proposed replies did not violate the no contest provision of the will. Wife appeals. (§1303, subd. (j).)
Under section 21320, “a beneficiary may, without violating a no contest clause, apply to the court for a determination whether a particular act would be a contest....” This procedure provides a “safe harbor” for beneficiaries who seek an advance judicial determination of whether a proposed challenge would result in forfeiture of their rights under the will. (Betts v. City National Bank (2007) 156 Cal.App.4th 222, 232.)
I. DISCUSSION
Wife contends the probate court erred when it granted the safe harbor petition after concluding that proposed filings by husband’s children did not violate the no contest clause of the will. Having reviewed the issue de novo (Giammarrusco v. Simon (2009) 171 Cal.App.4th 1586, 1600 (Giammarrusco)), we conclude the trial court’s ruling was correct.
A no contest clause imposes a penalty of forfeiture upon a beneficiary who challenges a will, trust or other instrument or some of its provisions. (Burch v. George (1994) 7 Cal.4th 246, 254-255, 265 (Burch).) “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.” (Id. at p. 254.) While no contest clauses are enforceable and promote the public policies of discouraging litigation and effectuating the intent of the testator, they are also disfavored by the policy against forfeiture. (Estate of Richter (1993) 12 Cal.App.4th 1361, 1367 (Richter); see also § 21304; Burch, supra, 7 Cal.4th at p. 254.) They must be strictly construed and not extended beyond the testator’s plain intent. (Richter, at p. 1367; Burch, at p. 254.)
The no contest provision in this case applied to any beneficiary who, “directly or indirectly, contests or attacks this Will, or any Codicil to it, or the Marshall I. Wais Trust, or any of the provisions thereof.” A “direct contest” is defined as “a pleading in a proceeding in any court alleging the invalidity of an instrument or one or more of its terms” based on lack of capacity, fraud, undue influence or similar grounds. (§ 21300, subds. (a) & (b).) An “indirect contest” means “a pleading in a proceeding in any court that indirectly challenges the validity of an instrument or one or more of its terms” based on grounds not enumerated in the statute. (§ 21300, subd. (c).) We agree with the trial court that respondents’ proposed filings did not amount to either a direct or indirect challenge to the validity of the will within the meaning of the no contest clause
In addition to the definitions of a contest contained in section 21300, section 21305 provides “(a) For instruments executed on or after January 1, 2001, the following actions do not constitute a contest unless expressly identified in the no contest clause as a violation of the clause: [¶].... [¶] (2) An action or proceeding to determine the character, title, or ownership of property.” This provision does not affect our analysis of husband’s will, which was executed before January 1, 2001. Nor do we consider the effect of sections 21310-21315, which narrow the definition of a will contest but will not become operative until January 1, 2010. (Stats. 2008, ch. 174 § 2.) We note, however, that nothing in these statutes runs counter to our conclusion that under the statutory and case law applicable to husband’s will, the efforts of his children to characterize the disputed property as separate property did not amount to a contest.
The first proposed filing at issue in the safe harbor petition was a reply supporting executor’s petition for instructions regarding the disclosure of information about the transmutation agreements. As wife acknowledges in her reply brief, this argument is now moot because the probate court has since granted executor’s petition for disclosure of the information at issue and no further purpose could be served by the filing of a reply supporting it.
The second proposed filing was a reply supporting executor’s motion to transfer to the estate property that had allegedly been transmuted into community property. Wife claims that because the motion by executor and the proposed reply in support of it essentially sought to recharacterize community property as husband’s separate property, they were inconsistent with husband’s intent that community property pass directly to her and amounted to a contest of the will. We disagree.
“Normally, a beneficiary’s attempt to have property characterized in a particular way (i.e., as joint tenancy property, domestic partnership property, community property, or the like) is not considered an attack on the will or on provisions within the will.” (Jacobs-Zorne v. Superior Court (1996) 46 Cal.App.4th 1064, 1083 (Jacobs-Zorne).) When determining whether a claim involving the characterization of property amounts to a “contest,” we consider a number of factors, including “the particular language of the no contest clause; whether the testamentary instrument specifically enumerates the property and its distribution; whether the testamentary instrument specifically characterizes the property (e.g., as separate versus community property); and whether the challenge, if successful, would result in thwarting the testator’s intent.” (Nairne v. Jessop-Humblet (2002) 101 Cal.App.4th 1124, 1128 (Nairne).)
In cases where a will does not specify the disposition of a particular piece of property or indicate that it belongs to a specified class of property (such as community or separate property), courts have found that actions to determine the character of that property are not tantamount to a will contest. Thus, in Jacobs-Zorne, supra, 46 Cal.App.4th 1064, the decedent had left a will that included a no contest provision and disposed of his separate property and his one-half interest in community property. (Id. at pp. 1068-1069.) He referred to his property in general terms only and did not designate any of it as separate or community property. (Ibid.) Before his death, he transferred several financial accounts that were previously his separate property to himself and his wife in joint tenancy. (Id. at p. 1069.) The court determined that his wife’s petition to declare these accounts joint tenancies rather than property of the estate did not amount to a will contest. (Id. at pp. 1069, 1078-1081.) The will’s reference to the testator’s property in general terms showed that he did not intend to force an election between the wife’s right to inherit under the will and her joint ownership rights. (Id. at p. 1081.)
This result was consistent with Richter, supra, 12 Cal.App.4th 1361, in which the decedent left a will under which his wife was to receive 20 percent of his estate. (Id. at p. 1364.) The court granted the wife’s safe harbor petition after determining that the will’s no contest clause would not be violated by her proposed petition to determine the community’s interest in the estate’s assets. (Id. at 1370.) The court noted that the decedent had described his estate in general terms and was thus “referring to that property owned by him which he had a right to dispose of by will.” (Id. at p. 1369.) “Inferentially, it was the decedent’s intent to dispose of his separate property in the residuary clause of his will. This being the case, determining [the wife’s] community property interests in any property held by her or the decedent would not thwart this intent, only ensure that the property actually disposed of by the decedent was his separate property.” (Id. at p. 1370.)
In Estate of Black (1984) 160 Cal.App.3d 582 (Black), the court held that a petition by a beneficiary claiming a one-half interest in property possessed by the decedent under an implied domestic partnership theory (former § 81.5; Marvin v. Marvin (1976) 18 Cal.3d 660) did not violate the no contest clause of the will disposing of the decedent’s property when the will referred to the property in general terms only. (Black, at pp. 589-590.) It noted, “[p]roceedings by beneficiaries to assert claims to property based on a source of right independent of the will have been held not to be ‘contests’ under a variety of forfeiture clauses.” (Id. at p. 590.)
As in the cases cited above, husband’s will disposed of his property in general terms only, and did not purport to designate any particular piece of property as community or separate. His intent, as expressed in his will, was to have his community property pass to wife and to have his non-community property pass into his trust, under which wife and his children were beneficiaries. The proposed reply supporting the executor’s petition to transfer certain property to the estate did not challenge the validity of the will, the trust, or any of their provisions. Rather, the efforts of the executor and husband’s children to appropriately characterize the disputed property as community or separate, and thus to ensure that separate property passed to the trust, would accomplish husband’s intended distribution of property under his will.
The cases on which wife relies are distinguishable because they involved efforts by a beneficiary to characterize property in a manner contrary to the express terms of the will or trust at issue. In Burch, supra, 7 Cal.4th 246, the court held that where a trustor had expressed the intent to dispose of specific property and had described that property in a schedule attached as an exhibit to the trust, his wife’s claim to that property under community property laws triggered the no contest clause of the trust. (Id. at pp. 254-258.) It did not matter that the decedent might have been mistaken about the character of the property described in the trust; the specification of that property, along with directions to dispose of all of it under the provisions of the trust, showed that decedent intended his wife to either take the distribution provided for her under the trust or renounce that distribution and pursue her independent legal rights. (Id. at p. 257.)
The court in Burch quoted Witkin with approval: “ ‘If the testator refers to the property bequeathed or devised in general terms without identifying it as separate or community, it may be inferred that he intended only to dispose of his own interest (his separate property and one-half the community property), and no election is necessary.... [Citation.]’ (12 Witkin, Summary of Cal. Law (9th ed. 1990) Wills and Probate, § 55, pp. 93-94.) On the other hand, ‘if the testator declares that all the property is his separate property, thus clearly indicating a belief that he is disposing of the entire estate, election is required. [Citations.] “It is of no concern that he was mistaken in his belief that the wife had no community interest in the property devised. His manifest intention to devise the estate as an entirety, and irrespective of any right which might be asserted on behalf of the marital community, is the controlling factor.” [Citation.]’ (12 Witkin, supra, § 55, p. 94.)” (Burch v. George, supra, 7 Cal.4th at p. 257.)
See now 14 Witkin, Summary of California Law (10th ed. 2005) Wills & Probate, § 553 et seq.
Nor is this case like Estate of Pittman (1998) 63 Cal.App.4th 290, in which adult children who were beneficiaries of a trust violated its no contest clause by attempting to reclassify property that their mother and her husband had jointly designated as community or separate. (Id. at pp. 294, 304.) “[T]he Pittman trust contained an extremely broad no contest clause prohibiting not only a ‘contest’ of the trust as that term of art is traditionally utilized, but also prohibiting one from seeking to obtain an adjudication that a provision is void and additionally prohibiting anyone from seeking ‘otherwise’ to void, nullify, or set aside the trust or any of its provisions. [¶] Provisions of the trust declare that all property listed on the particular schedules is of a particular type; each item of property is meticulously listed and characterized. By challenging the characterization of the property on the schedules, the [children] have contested the provisions of the trust declaring the nature of the property in each schedule.” (Id. at pp. 304-305; contrast Nairne, supra, 101 Cal.App.4th at pp. 1126-1127, 1129-1130 [son’s complaint alleging that a contract with his mother gave him full ownership of a residence that was otherwise allocated in her trust would violate no contest provision of the trust]; Estate of Kazian (1976) 59 Cal.App.3d 797 [when wife’s will declared that all property in her name was her separate property, husband’s petition to have all property in the estate declared community property violated the no contest clause by challenging the validity of a term of the will].)
Wife argues that we should consider the transmutation agreements themselves as extrinsic evidence that husband intended for her to inherit that property as community property under the terms of his will. She reasons that because the transmutation agreements show that husband believed the property affected to be community property, any effort to recharacterize that property as separate property would violate his intent as expressed in the will and would run afoul of the no contest clause. We are not persuaded.
Wife’s argument presupposes the validity of the transmutation agreements, an issue that is not within the scope of a safe harbor petition. (See In re Estate of Davies (2005) 127 Cal.App.4th 1164, 1173 [court cannot determine merits of beneficiary’s proposed action in safe harbor proceeding].) In any event, while it is true that a court may consider extrinsic evidence to interpret a no contest clause so long as it is offered to show a meaning to which the language is reasonably susceptible (Giammarrusco, supra, 171 Cal.App.4th at p. 1601; Estate of Kaila (2001) 94 Cal.App.4th 1122, 1133), the no contest clause in this case precluded only challenges to the will, its codicils or the trust. Husband’s execution of separate writings tending to show that he believed certain property was community property does not mean that at the time he executed the will, he intended to disinherit any beneficiary seeking a judicial determination as to the true nature of such property. (See Richter, supra, 12 Cal.App.4th at p. 1370 [separate writing indicating that decedent believed certain property was his separate property did not render wife’s petition to determine her community property interest a will contest when the will itself did not purport to dispose of those assets as separate property].) While the transmutation agreements will be critical to resolving the ultimate question of how that property should be characterized (an issue on which we express no opinion), they do not render the proposed reply supporting a transfer of that property a “contest” under the terms of the will.
Wife also argues that an attack on a separate instrument such as the written transmutation agreements in this case may amount to a will contest when it is designed to thwart the testator’s express wishes. She relies on Genger v. Delsol (1997) 56 Cal.App.4th 1410, 1420, in which the court considered the effect of a no contest clause in a trust instrument that specifically gave the trustee the power to effectuate a stock redemption agreement designed to provide for wife. It concluded that wife’s efforts to set aside that redemption agreement, which was a cornerstone of the estate plan, would amount to an indirect attack on the trust and would frustrate the decedent’s intent. (Id. at pp. 1420-1422.) In this case, by contrast, husband’s intent under the will—to transfer his community property to wife and his separate property to the trust—was not undermined in any way by a petition seeking to determine the nature of the property at issue. (Contrast also Zwirn v. Schweizer (2005) 134 Cal.App.4th 1153, 1154-1156, 1160 [nephew’s “creditor claim” seeking to enforce oral agreement with aunt and uncle to leave him a portion of their estate violated no contest clause when aunt’s will and trust provided for disposition that did not include the nephew].)
III. DISPOSITION
The judgment (orders granting safe harbor petitions under section 21320) is affirmed. Costs on appeal are awarded to respondents.
We concur. SIMONS, Acting P. J., BRUINIERS, J.