Opinion
D081729 D082778
05-17-2024
Estate of AMY CATHARINE KILLPACK, etc., Deceased. v. JOHN F. CIHAK, Objector and Respondent. KAVEH MICHAEL GORGANI, Individually and as Special Administrator, etc., Petitioner and Appellant,
RMO, David G. Greco, Kristen A. Friedman, Sean D. Muntz, and Phillip J. Szachowicz for Petitioner and Appellant. Law Offices of Rodney L. Donohoo, Rodney L. Donohoo and Kevin T. Rhine for Objector and Respondent.
NOT TO BE PUBLISHED
CONSOLIDATED APPEALS from a judgment and order of the Superior Court of San Diego County, No. 37-2019-00012669-PR-LS-CTL, John B. Scherling and Robert C. Longstreth, Judges. Affirmed.
RMO, David G. Greco, Kristen A. Friedman, Sean D. Muntz, and Phillip J. Szachowicz for Petitioner and Appellant.
Law Offices of Rodney L. Donohoo, Rodney L. Donohoo and Kevin T. Rhine for Objector and Respondent.
CASTILLO, J.
We are asked to resolve the ownership rights to a house. In 2009 and 2011, John and Donna Cihak entered into two agreements with their daughter Amy Cihak to ultimately provide Amy with a home. Over several years, John and Donna gifted fractional interests in the property to Amy and intended to do so until Amy fully owned it. Unfortunately, in 2018, Donna passed away, and three months later Amy died by suicide.
Amy's former boyfriend, Kaveh Michael Gorgani, filed a Probate Code section 850 petition as special administrator and beneficiary of Amy's estate, naming John as the respondent, in his individual capacity. Gorgani alleged John was in possession of the property and sought to enforce the 2011 agreement, which allegedly required John to transfer that property to Amy's trust after Donna's death. He also claimed entitlement to ouster damages and rent payments that John had collected. Gorgani's petition proceeded by way of bench trial and, after Gorgani's case in chief, the trial court granted John's motion for judgment. The court primarily relied on the 2009 agreement, which gave John the option to purchase the property for $1,000 upon notice of an intended transfer to a third party to that agreement. Gorgani, such a third party, was the sole beneficiary of Amy's trust. Therefore, even were John required to transfer the property to Amy's trust, he still had the option to purchase the property, which he sought to exercise. The court also ruled Gorgani could not obtain relief from John as an individual because John held title as trustee of a trust that owned the property.
On appeal, Gorgani contends John's option to purchase the property had expired, as the agreement required John to exercise his option to purchase within 30 days of notice "of the intended transfer and/or the event giving rise to the intended transfer" to a third party. Gorgani argues that in ruling John had not received such notice, the court misinterpreted the agreement. He urges Amy's death was the event giving rise to the intended transfer such that notice of Amy's death sufficed. He also argues John as an individual was a proper party to the lawsuit as a party to the agreements.
We conclude the trial court interpreted the notice requirement correctly because Amy's death and the fact that Gorgani was the beneficiary of Amy's trust did not evidence an intended transfer-only the potential for one. As trustee, Gorgani still had to take action to transfer the property to himself, and once he intended to do so, he had to give John notice. We also conclude John as an individual was not a proper party to the lawsuit. Gorgani provides no authority to support his claim that the circumstances of this case warrant departure from the basic principle that a trustee holds legal title to property owned by a trust such that the proper procedure to reach trust property is to sue the trustee in the trustee's representative capacity.
While Gorgani challenges an order denying his motion for summary adjudication of an affirmative defense on the basis John failed to meet his burden of proof, as the moving party, Gorgani had the initial burden of production, which he does not claim to have met. Any error would nonetheless be harmless.
Finally, Gorgani argues the trial court lacked jurisdiction to grant John's motion for prevailing party attorney fees, as the case was automatically stayed when he appealed. Yet it is settled that filing an appeal does not stay proceedings to determine an award of attorney fees.
We thus affirm the judgment and order granting John's attorney fees.
I.
A.
In 2009, John and Donna entered into an agreement with Amy regarding property located in San Diego, California, which they owned as tenants in common. Contemporaneously, John and Donna transferred their undivided interest in the property to their trust, and Amy transferred her interest to her trust. John and Donna as trustees of their trust and Amy as trustee of her trust were also parties to the 2009 agreement.
At issue in this case is paragraph 3.2 of the 2009 agreement, providing an option to purchase. If any party intended to sell, transfer, or assign his, her, or its interest in the property, the other parties had the option to purchase the interest for $1,000. This term did not apply to transfers between parties; however, for transfers to third parties, the transferor was required to notify the other parties "of the intended transfer and/or the event giving rise to" it. The other parties then had 30 days to exercise the option.
In 2011, John, Donna, John as trustee of his trust, Donna as trustee of her trust, John and Donna as trustees of their trust, Amy, and Amy as trustee of her trust entered into another agreement regarding the property. This agreement supplemented, but did not supersede, the 2009 agreement. The recitals stated that John and Donna acquired the property to provide Amy with a home. Over the years, they gifted fractional interests in the property to Amy and intended to do so until Amy fully owned it. The recitals stated the intention "that upon the death of either John or Donna the remaining interests in the property . . . shall be transferred to Amy." At issue here is paragraph 3.3 of the 2011 agreement, which stated that "[p]romptly upon the death of John or Donna (the 'Decedent'), the survivor of John or
Donna" and the relevant trustees "shall execute such documents as are necessary to convey to Amy 100% fee title to the" property.
Donna passed away in July 2018. Amy died by suicide three months later, with John and law enforcement discovering her body on October 10, 2018.
B.
On November 1, 2019, Gorgani filed a section 850 petition as special administrator and beneficiary of Amy's estate against John as an individual. Gorgani sought an order requiring John to execute the necessary documents to transfer 100 percent of the property to Amy's trust per the 2011 agreement. He later supplemented his petition to allege Amy owned 62.75 percent of the property upon her death and John denied Amy's estate access to and possession of the property. Gorgani sought the value of the ouster and the rents John had collected.
In December 2019, John, in his individual capacity and as trustee of his and Donna's trust, filed a complaint disputing the validity of the 2011 agreement. He alleged Gorgani was Amy's short-term boyfriend from approximately 20 years ago. John sought to rescind and declare the 2011 agreement void on the basis that all the parties operated under material mistakes of fact. The cases were consolidated.
On July 29, 2021, John in his individual capacity sent Gorgani, as trustee of Amy's trust, notice of his intention to exercise the 2009 agreement's option to purchase, enclosed with a $1,000 check. The notice stated: "I acknowledge that there has not currently been any attempt by you as Trustee to transfer the Property to a person other than another Owner. I further understand that, absent a court order, you currently do not have authority to so transfer the Property, and cannot attempt to do so. However, I wish to advise you now that I will be exercising my option to purchase the Trust's entire ownership interest in the Property."
Gorgani moved for summary judgment on his petition and John's complaint. Alternatively, he sought summary adjudication of several issues, including unilateral and mutual mistake. The court granted summary adjudication of John's claim of unilateral mistake and denied (1) summary adjudication of all other issues and (2) summary judgment. John subsequently dismissed his complaint.
C.
Gorgani's petition proceeded to a bench trial in January 2023. The parties stipulated to the admission of multiple documents, including Amy's will, her trust documents, and the property's deeds.
According to John, the deeds showed that as he and Donna transferred fractional interests in the property to Amy over the years, Amy quitclaimed her interest in the property to her trust. Additionally, under Amy's will, the entirety of her estate passed to her trust. Amy's original trust, created the same day as the 2009 agreement, left the trust assets to John and Donna. Amy amended her trust in January 2011, maintaining that the trust's interest in the property would be distributed to John and Donna.
On August 31, 2018, one month after Donna's passing and two months before Amy's, Amy amended her trust to make Gorgani the sole beneficiary.
Keith Meeker, who created the 2009 and 2011 agreements also prepared the August 2018 amendment to Amy's trust. Meeker testified he did not notify John before Amy's death of John's removal from Amy's trust or the change in the property's beneficiary.
A few days after Amy's death, Gorgani encountered John and John's son at the property. John's son, believing Gorgani knew Amy intended to die by suicide but did nothing to prevent it, was upset and refused Gorgani access to the property. After police informed John that Gorgani had the right to access the property, John gave him a key. Gorgani testified that he returned to the property within a month and the key did not work. He did not tell John he was going back to the property or that the key did not work.
John testified that Gorgani never said he needed access or that his key did not work. He testified he never denied Gorgani access and only changed the lock about one year after Amy's passing, when he rented out the property. John rented out the property in his capacity as trustee of his and Donna's trust because he held title to the property in trust, not individually.
D.
At the close of Gorgani's case in chief, John moved for judgment on three bases. First, as shown by the deeds in evidence, John in his individual capacity lacked authority to transfer the remainder of the property to Amy's estate or trust because the property was held in his and Donna's trust. Had Gorgani properly named John as trustee, notice to the beneficiaries of the trust, John and Donna's grandchildren, would have been required. Second, the deeds show Amy's portion of the property was held solely in her trust. Because Gorgani filed the petition as a beneficiary and representative of Amy's estate, not trustee of Amy's trust, he lacked standing to seek recovery of the rents and damages for the alleged ouster. Finally, John asserted that he had the right to purchase Amy's trust's share of the property for $1,000 under the 2009 agreement. He argued the 30-day period to exercise the option had yet to start because he did not receive notice of any intended transfer to a third party to the 2009 agreement.
After a lengthy discussion, the trial court found John's motion well-taken based on his first and third arguments. It did not reach John's second argument. The court granted John's motion for judgment and denied Gorgani's petition in its entirety.
II.
A.
As an initial matter, because there was no statement of decision, the doctrine of implied findings applies. It is a "cardinal principle of appellate review" that a "judgment or order of the lower court is presumed correct, all intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown." (In re Julian R. (2009) 47 Cal.4th 487, 498-499 [cleaned up].) We thus presume "the trial court found all facts necessary to support the judgment." (In re Marriage of Ditto (1988) 206 Cal.App.3d 643, 649.)
Gorgani argues for the first time on reply that because the trial court refused to issue a statement of decision, no presumptions should be made about the trial court's findings and reversal is required. (Whittington v. McKinney (1991) 234 Cal.App.3d 123, 127.) He claims he made an appropriate and timely oral request for a statement of decision, as required when trial concludes within one calendar day. (Code Civ. Proc, § 632.)
Gorgani waived this argument by failing to raise it in his opening brief. (Price v. Victor Valley Union High School Dist. (2022) 85 Cal.App.5th 231, 250.) It fails nonetheless because, as the trial court pointed out, Gorgani did not make his request "in the proper form." Section 632 requires the request to "specify those controverted issues as to which the party is requesting a statement of decision," but Gorgani only stated generally "[w]e would request a statement of decision." "A party is not entitled to a statement of decision based on a 'general inquisition.'" (Conservatorship of Hume (2006) 140 Cal.App.4th 1385, 1394.)
B.
1.
As to the judgment's merits, Gorgani first argues the trial court erred in finding John was not obligated to transfer the property to Amy when Donna died. The court did not so find, and there is no basis in the record to imply such finding. Rather, the court explained this issue was a red herring in the context of the relief Gorgani sought, given John had and sought to exercise the option to purchase the property. Additionally, while the 2011 agreement required John to "promptly" transfer full title to the property to Amy upon Donna's death, on appeal Gorgani points to no authority or language in either of the agreements that supports his position that the option to purchase was extinguished once the property belonged solely to Amy. Therefore, as the court concluded, John still had the option to purchase the property.
2.
Gorgani next contends John's option to purchase expired. He argues that, in ruling John had not received notice of a transfer to a third party, the court misinterpreted the 2009 agreement's requirement that the transferring party give notice "of the intended transfer and/or the event giving rise to the intended transfer." Gorgani and John agree our review is de novo. (Tribeca Companies, LLC v. First American Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1110 (Tribeca).) Based on our independent review, we conclude the trial court interpreted the notice requirement correctly.
According to Gorgani, the court's ruling ignored that notice of "the event giving rise to the intended transfer" sufficed, and Amy's death was that triggering event "because a trust beneficiary's interest vests upon death of the Trustor." He claims the court's ruling "focused only on John's purported lack of knowledge about the intended transfer." Gorgani misunderstands the trial court's reasoning.
The court did not ignore that notice of an event giving rise to a transfer was sufficient; rather, it noted the option to purchase term concerned transfers to third parties and thus required notice of an event giving rise to a transfer to a third party. Here, notice of just the event of Amy's death was insufficient, as John, ignorant of Amy's removal of him as her trust's beneficiary, did not know that event gave rise to a potential transfer to a third party. Further, even had John known Gorgani was now the beneficiary of Amy's trust, her death did not automatically trigger a transfer of the property out of the trust. Therefore, John did not have notice that the property was being transferred to a third party such that Amy's death satisfied the notice requirement as intended by John and Donna.
The court reasoned that John and Donna wanted to take care of their daughter but did not want her to be able to transfer the property outside the family. Gorgani's interpretation would do exactly what they were trying to prevent-allow Amy's contrary wishes to govern and result in transfer to a third party. The court was not convinced the 2009 agreement contained a loophole allowing the result Gorgani sought. Moreover, the court explained Gorgani was not just some "random guy"; he was "exactly the kind of person [John and Donna] didn't want the property to go to," "mak[ing] the equities of this all the stronger, not to mention trying to effectuate the intent of. . . the trustor and everything else we try to do in these cases."
We agree with the trial court's interpretation of the notice requirement and its reasoning. The 2009 agreement required notice "of the intended transfer and/or the event giving rise to the intended transfer" not just the potential for a transfer. (Italics added.) Arguably, Amy's trust evidenced her intent to transfer the property to a third party, but her death did not evidence Gorgani's intent as trustee to transfer the property to himself. He still had to take some action to transfer the property to himself, and once he intended to do so, he had to first give John notice.
As Gorgani contends, this analysis focuses on the intended transfer to a third party and John's knowledge thereof; it does not, however, ignore that the notice requirement can be satisfied via notice of "the event giving rise to the intended transfer." Rather, it interprets the term, which admittedly could be clearer, so as to give effect to the parties' intent to prevent third-party transfers. (Tribeca, supra, 239 Cal.App.4th at p. 1111.) Gorgani appears to complain the trial court focused on what would be "fair," but "where one construction would make a contract unusual and extraordinary and another construction, equally consistent with the language employed, would make it reasonable, fair, and just, the latter construction must prevail." (Sayble v. Feinman (1978) 76 Cal.App.3d 509, 513.) So it is here.
Finally, we reject Gorgani's contention that John had notice of not just the event, but also Gorgani's intent to transfer the property, by way of his section 850 petition demanding compliance with the 2011 agreement. He claims John judicially admitted as much when his civil complaint alleged that Gorgani's section 850 petition sought conveyance of the property to Amy's estate under the 2011 agreement. However, a transfer to Amy's estate or trust was a permitted transfer under the 2009 agreement that did not trigger the option to purchase. While Gorgani also claims John was on notice of his intent to transfer the property via receipt of the section 16061.7 notice to contest Amy's trust, the portions of the record Gorgani cites do not show, as he contends, that the notice included the terms of Amy's trust. Even if it did, however, it would not have satisfied the notice required for the option to purchase for the reasons discussed above.
3.
Gorgani also argues the trial court erred in ruling (1) John was not the appropriate party to the lawsuit and (2) notice to the beneficiaries of John and Donna's trust was required. He contends John waived the argument by failing to assert it pretrial, while John claims he preserved it by asserting the affirmative defense of failure to state a claim. Because Gorgani did not raise his waiver argument below, he forfeited it on appeal. (In re Marriage of Crosby & Grooms (2004) 116 Cal.App.4th 201, 212.)
On the merits, Gorgani does not dispute that John and Donna's trust was the record owner of the property and John held title to the property only as trustee. He argues John as an individual was nonetheless a proper party to the lawsuit because (1) he, as an individual, was a party to the 2009 and 2011 agreements; (2) he, as trustee of his and Donna's trust, filed a complaint concerning those agreements; and (3) that case was consolidated with this case. However, Gorgani cites no authority to support his position that these three facts together mean the court could compel John (1) as an individual to transfer the property to Gorgani, when the property was owned by John and Donna's trust; or (2) in his capacity as trustee to transfer the property to Gorgani, when Gorgani did not name John in that capacity as a respondent to his petition. Only a trustee holds legal title to property held in trust. (Boshernitsan v. Bach (2021) 61 Cal.App.5th 883, 892.) Thus, the proper procedure to ensure that trust property will be available to satisfy a judgment, whether for damages, breach of contract, or specific performance, is to sue the trustee in the trustee's representative capacity. (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1349 (Galdjie).)
Gorgani's claim that the trial court erred in denying his petition as to the rent payments and ouster damages for Amy's share of the property at the time of her death fails for similar reasons. Gorgani contends substantial evidence does not support a finding that he was not entitled to those damages, as John admitted to renting the property out and changing the locks. However, John signed the lease as trustee; listed the owner as "John F. Cihak, Trustee"; and testified he did this because he held legal title to the property as trustee of his and Donna's trust, not as an individual. "A claim based on a contract entered into by a trustee in the trustee's representative capacity, . . . may be asserted against the trust by proceeding against the trustee in the trustee's representative capacity, whether or not the trustee is personally liable on the claim." (Prob. Code, § 18004; Galdjie, supra, 113 Cal.App.4th at p. 1348.) Gorgani provides no authority to depart from this principle.
C.
Gorgani contends reversal is required because the trial court erred in denying his motion for summary adjudication on the issue of mutual mistake. His argument has no merit; further, any error was harmless.
In his complaint, John sought to rescind the 2011 agreement due to mutual mistake. He also raised mutual mistake and unilateral mistake as affirmative defenses to Gorgani's petition. John abandoned any claim of unilateral mistake, and the court granted summary adjudication in favor of Gorgani on the issue as a result.
As to mutual mistake, the court explained that Gorgani addressed the issue as though only John made a mistake and relied on authority relating to unilateral mistake. As he thus failed to show the claim of mutual mistake lacked merit, the court ruled that Gorgani failed to carry his initial burden as the moving party.
On appeal, Gorgani claims the trial court's denial of summary adjudication due to his failure to properly brief the issue erroneously placed the burden on him. According to Gorgani, because John asserted mutual mistake as an affirmative defense, establishing it was John's burden. Gorgani argues he properly identified mutual mistake as an issue for summary adjudication by including it in his notice of motion and separate statement, and John failed to establish a triable issue of material fact because he submitted no evidence on the issue.
Gorgani's premise, however, is misplaced. Gorgani cites to a court's explanation to the jury during trial that defendants have the burden of proof on affirmative defenses. (Citing Hobbs v. Bateman Eichler, Hill Richards (1985) 164 Cal.App.3d 174, 199.) Putting aside that a trial court's comments are not authority, the burden of proof is different on summary judgment than at trial. The party moving for summary adjudication bears the burden of persuasion as well as the initial burden of production to establish a prima facie showing that justifies a ruling in the party's favor. (Robert T. Miner, M.D., Inc. v. TustinAve. Investors (2004) 116 Cal.App.4th 264, 270.) Thus, when a plaintiff moves for summary adjudication on an affirmative defense, the plaintiff bears the initial burden to show there is no triable issue of material fact as to the defense such that the plaintiff is entitled to judgment on the defense as a matter of law. If the plaintiff does not do so, the motion simply must be denied; no burden shifts to the defendant. (See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 900.)
Gorgani does not contend he met his initial burden of showing John's claim of mutual mistake was meritless. Therefore, the burden never shifted to John, and Gorgani's claim thus fails.
Even had the trial court erred in denying summary adjudication of John's mutual mistake affirmative defense, the error was harmless. John did not rely on a theory of mutual mistake when moving for judgment, nor did the court in granting John's motion. As Gorgani notes, John "abandoned the mistake claim at trial." Gorgani makes no effort to explain how a different result would have been probable with summary adjudication of mutual mistake. Therefore, he fails to meet his burden to demonstrate prejudice. (Overkill Farms, Inc. v. Lopez (2010) 190 Cal.App.4th 1248, 1271.)
D.
Finally, Gorgani appeals the trial court's order granting John's motion for attorney fees. Gorgani does not dispute that the agreements provided for prevailing party attorney fees, nor does he take issue with the amount of the award. Rather, he contends the court lacked jurisdiction to hear John's motion because the case was automatically stayed when he appealed. Gorgani is mistaken.
Subject to certain exceptions, the perfecting of an appeal stays proceedings in the trial court on the judgment or order appealed from, as well as matters embraced therein or affected thereby. (Code Civ. Proc, § 916, subd. (a).) It is well settled that determining an award of attorney fees is a collateral matter not stayed by the filing of an appeal. (Domestic Linen Supply Co., Inc. v. L J T Flowers, Inc. (2020) 58 Cal.App.5th 180, 187.) Therefore, the trial court retained jurisdiction to grant John's motion. (Korchemny v. Piterman (2021) 68 Cal.App.5th 1032, 1052.)
The case Gorgani cites is inapposite because it addressed staying the enforcement of a judgment for attorney fees and costs, not the award of such fees and costs. (Pecsok v. Black (1992) 7 Cal.App.4th 456, 457.)
III.
The judgment is affirmed. The order granting John's motion for attorney fees is also affirmed. John is to recover his costs on appeal.
WE CONCUR: IRION, Acting P. J., DO, J.