Opinion
B306124
10-28-2022
GEORGETTE KALENIAN et al., Plaintiffs and Respondents, v. GEORGE ELIAS INSEN, Individually and as Trustee, etc., Defendant and Appellant.
MacLean Chung Law Firm and G. Thomas MacLean, Jr., for Defendant and Appellant. Osborn Law and Richard G. Osborn for Plaintiffs and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. BP120314 Michael C. Small, Judge. Affirmed.
MacLean Chung Law Firm and G. Thomas MacLean, Jr., for Defendant and Appellant.
Osborn Law and Richard G. Osborn for Plaintiffs and Respondents.
MOOR, J.
Appellant George Elias Insen appeals from a probate court order construing his father's trust and awarding damages in favor of Georgette Kalenian, Ida Reza, and Elizabeth Van Item (collectively the petitioners). The probate court found the trust document on its face unambiguously distributed the trustor's one-half interest in a commercial property to his daughters, Kalenian, Reza, Van Item, and Ainian. George presented extrinsic evidence that the trust contained a latent ambiguity, because it was reasonably susceptible of a different interpretation, but the probate court resolved the conflicting extrinsic evidence in favor of distribution to the daughters. On appeal, George contends: (1) the petitioners' claim for relief under Probate Code section 17200, including construction of the trust instrument, was barred by the applicable statute of limitations; (2) extrinsic evidence established the trust document was ambiguous and the trustor intended for George to receive the interest in the commercial property; (3) the claim for relief under section 17200 should not have been adjudicated, because it was not an issue presented to the court for determination under the parties' updated joint trial statement; and (4) the claim to property in the possession of a trustee under section 850 was barred by laches. The petitioners contend the appeal must be dismissed, because the notice of appeal did not list George in his capacity as trustee of his family trust, and he was an indispensable party in this capacity.
Because several participants share the last name Insen, they will be referred to individually by their first names for ease of reference. No disrespect is intended. The parties' brother Alex Insen was originally named as a petitioner, but he died during trial in the probate matter and no personal representative was substituted as a party in the pending action. The parties' sister Juliet Ainian was named as a respondent with respect to the probate court petition, but did not participate until after trial and is not a party on appeal.
All further statutory references are to the Probate Court unless otherwise stated.
In the interests of justice, we construe the notice of appeal to have been brought by George individually and in his capacity as trustee of his family trust. The probate court's finding that the statutes of limitation were equitably tolled while the petitioners pursued a civil action was supported by substantial evidence, and George has not shown that any applicable statute of limitation barred the petitioners' probate claims. The probate court's findings that the trust document was not ambiguous on its face and that the trustor intended to distribute the commercial property to his daughters are supported by substantial evidence. The petitioners' claim for relief under section 17200, which included the proper construction of the trust document and valuation of the property for the purpose of calculating damages, was presented to the probate court for determination in the joint trial statement and the updated joint trial statement. The court's ruling under section 17200 must be affirmed. Because the relief granted under section 850 was duplicative of the relief granted under section 17200 and the quiet title claim, we need not address the issue of laches related to section 850. Therefore, we affirm.
FACTS AND PROCEDURAL BACKGROUND
Family and Property History
The parties' parents, Elias George Insen and Mary Insen, immigrated from Syria to the United States in 1967. They had six children: Kalenian, George, Ainian, Reza, Van Item, and Alex. Elias's primary language was Arabic, but he also understood Armenian and English, and could read advertisements in English.
Elias owned residential real property in Los Angeles that had the family home and three small rental units. The street addresses were 1175, 1173, 1173 1/4, and 1173 1/2 North Edgemont Street (collectively the Edgemont property).
In April 1978, when George was 22 years old, he and an individual named Ronald Arroyo purchased commercial property in Los Angeles with the street address of 3655 West Pico Boulevard (the Pico property). The owner executed a grant deed transferring the property to Arroyo and George, with each receiving an undivided 50 percent interest. The purchase price for the Pico property is not part of the record on appeal. Kalenian recalled that her parents had owned a four-unit property in Hollywood, which they sold to provide the down-payment to purchase the Pico property. George recalled that Elias borrowed $40,000 on the Edgemont property, which he lent George to purchase the Pico property.
After the initial purchase, George began operating his business, George's Auto Repair, on the Pico property in 1978. In July 1978, Arroyo and George executed a quitclaim deed transferring their interests in the Pico property to an individual named George Ksajikian and to George, with each receiving an undivided 50 percent interest. On July 21, 1978, Bank of America lent $45,000 to George and Ksajikian.
Two years later, in 1980, a deed was recorded in the chain of title that did not match the interests conveyed in the prior deed. Ksajikian and his wife executed a quitclaim deed transferring the Pico property to Elias and Mary. The deed failed to specify that it transferred an undivided half interest in the property only.
In 1982, George incorporated Insen's Inc., doing business as George's Auto Repair. George was the sole shareholder. The family members referred to George's Auto Repair as the shop, and did not differentiate between the business and the real property. It is undisputed that Elias did not own any interest in the business, George's Auto Repair, and held only the undivided half interest in the underlying real property derived from the Ksajikians' quitclaim deed.
Elias worked as a welder at a wheelchair manufacturer until he retired in 1986. After he retired, he frequently went to George's Auto Shop to visit with his son George, help out with the business, and chat with customers. For two years, Elias worked as an employee of George's Auto Shop. George and Elias were together much of the time. Alex remained dependent on his parents, continued to live at the Edgemont property, and struggled with employment and mental health issues.
Creation of the Elias Trust
Mary passed away in 1998. On June 23, 1999, Elias created the Elias George Insen Separate Property Trust (the Elias Trust). The lawyer who assisted Elias to execute the documents read portions aloud in English, and George translated to his father. The Elias Trust named George as the successor trustee. The distribution provisions directed the trustee to distribute Elias's personal property according to a separate letter among his papers at his death, or if no letter existed, to Alex. If Alex were not alive or declined the bequest, the personal property would be distributed equally to Kalenian, Ainian, Reza, and Van Item (collectively the daughters).
The trustee was directed to make specific distributions to two people. The trustee was to distribute to Alex: "property located at 1175 North Edgemont Street, Los Angeles, California 90029, property located at 1173 North Edgemont Street, Los Angeles, California 90029, property located at 1173 1/4 North Edgemont Street, Los Angeles, California 90029, and property located at 1173 1/2 North Edgemont Street, Los Angeles, California 90029." The Elias Trust directed that George, individually, was to continue to pay half of the mortgage payments on the Edgemont property, unless and until Alex refinanced the property.
The trustee was to distribute to George: "business (George's Auto Repair) located at 3655 West Pico Boulevard, Los Angles, California 90019." The remaining balance of the trust estate was to be distributed in equal shares to the daughters.
A schedule attached to the Elias Trust listed Elias's property as follows: "Property located at 1175 North Edgemont Street, Los Angeles, CA 90029 (APN #554-027-019) [¶] Fifty Percent (50%) of property and business (George's Auto Repair) located at 3655 West Pico Boulevard, Los Angeles, CA 90019 (APN #5081-014-025) [¶] Washington Mutual Savings Account [¶] Washington Mutual Checking Account [¶] 1984 Lincoln Continental."
The organization that drafted the Elias Trust provided instructions for funding the trust. Elias signed a comprehensive transfer of assets to the trust, as well as separate real estate assignment forms that assigned his rights, title, and interest in the Pico property and the Edgemont property to the trust. Elias also executed a quitclaim deed transferring his share of the Pico property to himself as trustee of the Elias Trust. He executed another quitclaim deed to transfer his interest in the Edgemont property to himself as trustee of the Elias Trust.
Elias received several asset assignment forms to transfer the ownership of his other assets. Elias completed an asset assignment form for his Washington Mutual savings and checking accounts, which was notarized. He also completed a change of ownership notification to send to Washington Mutual. The remaining asset assignment forms supplied by the organization were not completed. There is no evidence that Elias completed as asset assignment form transferring any purported interest in George's Auto Repair or Insen, Inc. to the Elias Trust.
Elias executed an assignment of personal property to transfer automobiles, household furnishings, clothing, jewelry, the contents of a safe deposit box, china, silverware, appliances, books, computers, and pictures to the trust.
Elias's 2001 tax return did not refer to George's Auto Repair or Insen, Inc. He listed one-half ownership of the Pico property as rental property and stated that he had $10,000 in rental income from the Pico property, but listed no deductions for insurance, depreciation, repairs, or taxes.
Documents Obtained Through Undue Influence
Elias's health declined and he was hospitalized in 2003. Elias gave Kalenian the combination to his safe, where she found $60,000 in cash that she moved to a safe in her house.
On May 8, 2003, while Elias was in the hospital, he executed two documents prepared by George's attorney Ira Mishkind. One of the documents was an amendment to the Elias Trust substituting a new distribution provision that gave the Edgemont property, the Pico property, and any interest that Elias owned in the business known as George's Auto Repair to George. The amendment included a request for Alex to be allowed to live in one of the residences on the Edgemont property subject to a mutual agreement about the payment of expenses for his occupancy, and for George to provide in his own testamentary documents for the Edgemont property to be distributed to Alex upon George's death. The remainder of Elias's estate was to be distributed to the daughters in equal shares.
The other document was a quitclaim deed as to one-half interest in the Pico property to George. The intent of the quitclaim deed was to correct the impression in the chain of title, based on the imprecise language of the 1980 deed from Ksajikian to Elias and Mary, that Elias owned the entire Pico property.
George's Actions as Successor Trustee
Elias died on May 23, 2003, and George became the successor trustee of the Elias Trust. George sent a letter dated June 11, 2003, to each of his siblings pursuant to section 16061.7. The letter informed them that the Elias Trust was created on June 23, 1999, and amended on May 8, 2003. As a result of Elias's death, the Elias Trust became irrevocable, George became the trustee, and the recipient of the letter was entitled to receive a copy of the terms of the trust. The letter warned that an action to contest the trust could not be brought more than 120 days from the date of service of the notification or, if later, not more than 60 days after receipt of a copy of the terms of the trust. George directed the recipient to contact attorney Mishkind with any questions.
At a family meeting shortly after Elias's death, George explained that he received the Edgemont property and each daughter received $12,000 in cash after funeral expenses. More than one person asked what would happen to Alex, and George stated that he would be taking care of Alex going forward. The Pico property and George's Auto Repair were not mentioned at the meeting. A few months later, the daughters received some jewelry from the estate that held sentimental value only.
In December 2003, George, as trustee of the Elias Trust, executed quitclaim deeds releasing any interest in the Edgemont property and the one-half interest in the Pico property to himself as an individual married man, as his sole and separate property.
On April 15, 2005, George and his wife Estela Insen established the Estela and George Insen Trust (the Estela Trust), of which they are the settlors, trustees, and beneficiaries. George executed grant deeds transferring the Edgemont property and one-half interest in the Pico property from himself to George and Estela as trustees of the Estela Trust.
George put the Edgemont property up for sale, and at first asked Reza-who had obtained his real estate license-to list it as his first listing. George agreed to pay Reza's husband a two percent commission. Reza's husband brought an offer from a prospective buyer, but George did not want to review the offer and cancelled the listing. After the listing was cancelled, Reza's husband learned George sold the property to the same buyer without paying a commission to Reza's husband.
At a family birthday party in February 2006, George announced that the Edgemont property had been sold. The Pico property was not discussed. Van Item began to mistrust George at this point.
In March 2006, Alex told Reza that George refused to pay the rent necessary for Alex to stay at the Edgemont property. When Alex asked to see the trust, George accused Alex of calling him a liar and said he would not give Alex anything.
Based on George's actions in selling the Edgemont property and refusing to give anything to Alex, Reza suspected something was wrong. In March 2006, she researched property records and found the quitclaim recorded on the Pico property, which Elias signed from his hospital bed. She told Kalenian what she had learned.
Ainian and her husband attempted to mediate between the siblings. Reza asked Ainian's husband to ask George for a copy of the trust. Ainian's husband said George refused to give a copy to Reza, which Reza relayed to Kalenian and Van Item. None of the petitioners asked George directly to see a copy of the trust.
Civil Action
On May 5, 2006, Kalenian, Reza, Van Item, and Alex (collectively plaintiffs) filed a civil action against George and Estela, individually and as trustees of the Estela Trust. The civil action alleged causes of action for imposition of a constructive trust, declaration of a resulting trust to prevent unjust enrichment, breach of fiduciary duty, and breach of oral agreement. The complaint alleged that while Elias was hospitalized in May 2003, George exercised undue influence to obtain Elias's signature on documents through misrepresentations. The plaintiffs' lawyer asked for a copy of the Elias Trust in connection with the litigation, which George provided in September 2006.
A bench trial was held before Judge Richard L. Fruin, Jr., in the civil action. The court issued a lengthy and thorough statement of decision on December 17, 2008. The court found George's testimony about his father's intent with respect to the provisions of the trust amendment was not reliable. The court found that the 2003 trust amendment and the 2003 quitclaim deed were obtained through undue influence. The court cancelled both documents. The court imposed a constructive trust for Alex's benefit over the proceeds from the sale of the Edgemont property and the rental income that George received before the sale. The court noted that the 2003 quitclaim deed did not have an effect on Elias's 1999 estate plan. The court stated that the plaintiffs had raised an issue in argument, although not in their pleadings, that Elias's one-half interest in the Pico property should have been distributed to the daughters under the residuary clause of the Elias Trust. The court concluded that the distribution provision contained an ambiguity by giving the "business" of George's Auto Repair to George. The court added that it had not resolved the ambiguity, believing it to be beyond the pleadings and a matter of internal trust administration within the jurisdiction of the probate court. Under section 17200, a trustee or beneficiary may petition the probate court to resolve questions of the construction of a trust instrument, the validity of a trust provision, ascertaining the beneficiaries, and determining to whom property shall pass. The court concluded that the determination as to which party inherited the trust's interest in the Pico property should be decided in the probate court, and suggested the parties might settle the issue among themselves. George was not liable for financial elder abuse or punitive damages.
George argued that the claims were barred under section 16061.8, which provides 120 days for a person to contest a trust after notice from the trustee, or 60 days from delivery of a copy of the trust during the 120-day period, whichever is later. The trial court concluded section 16061.8 did not apply to a claim of undue influence, and even if it did, the notices that George sent were ineffective, because they did not comply with statutory requirements for the text of the notice.
On April 6, 2009, the trial court entered judgment in the civil action in accordance with the statement of decision. The court awarded costs to the plaintiffs, and pre-judgment interest to Alex. The total amount awarded to Alex was $743,225.51.
In August 2009, the parties entered into a settlement agreement resolving several issues, including withdrawal of their respective appeals from the judgment and payment of the monetary award in favor of Alex. As part of the agreement, George resigned as trustee of the Elias Trust. The parties agreed that any claim filed in probate court by December 31, 2009, regarding the Pico property, would be deemed filed as of January 30, 2009.
George paid the judgment. All of the proceeds went to pay the plaintiffs' attorney fees and costs, which totaled more than $1 million.
Probate Action
On December 30, 2009, Kalenian, Reza, Van Item, and Alex filed a petition in probate court against George, individually, as trustee of the Elias Trust, and as trustee of the Estela Trust, and against Ainian. The petition sought an order under section 17200 to determine the construction of the Elias Trust and the beneficial interests in that trust, compel an accounting and restitution, remove the trustee, remedy breach of trust, order distribution of trust assets, and terminate the Elias Trust. In addition, the petition alleged conversion, quiet title, and violation of Business and Professions Code section 17200. The petition was denied without prejudice after Kalenian, Reza, Van Item, and Alex failed to make an appearance on June 29, 2010, but the dismissal was eventually vacated.
In November 2010, George filed a petition against all of his siblings to establish a resulting trust and for relief under section 850. George alleged he was the equitable owner of the Pico property and the business at all times, and Elias's name was added to the title solely to protect George's interest in the event of his death. In addition, to the extent the Elias Trust claimed to hold any equitable interest in the Pico property or George's Auto Repair, the instruction to distribute the business at the Pico property to George was intended to distribute any and all interest in the personal property and real property to George.
In March 2011, Kalenian, Reza, Van Item, and Alex filed an amended petition against George, individually and in his capacity as trustee for the two trusts, and Ainian. The cause of action under section 17200 sought, among other remedies, for the probate court to cancel all deeds by which George acquired title in the Elias Trust's property, impose an equitable lien and constructive trust on property wrongfully taken from the Elias Trust, construe the Elias Trust to provide for distribution of undivided 12.5 percent interests in the Pico property to the proper beneficiaries, surcharge the trustee an amount equal to half the value of the Pico property, surcharge an amount equal to twice the value of the Pico property as a penalty under section 859, order restitution of all unjust enrichment, and award a money judgment against George in the amount of the value of the petitioners' interests in the Pico property and the use thereof, as well as other general and special damages.
In May 2011, Kalenian, Reza, Van Item, and Alex brought a motion for summary judgment as to the claims in George's section 850 petition. At the hearing on the summary judgment motion in August 2011, there was no appearance for George. Judge Mitchell L. Beckloff granted the motion for summary judgment of George's section 850 petition and scheduled a default prove-up hearing on the amended petition filed by Kalenian, Reza, Van Item, and Alex, which was ultimately set for December 15, 2011.
Due to miscommunication, Kalenian, Reza, Van Item, and Alex did not appear for the default prove-up hearing, which they believed had been taken off calendar pending mediation. Because there were no appearances on December 15, 2011, the probate court denied the amended petition without prejudice. On December 22, 2011, Judge Beckloff entered a written order granting the motion for summary judgment of George's section 850 petition after striking portions of the proposed order which would have estopped George from contesting the Elias Trust's ownership of one-half interest in the Pico property. George's attorney of record was suspended from the practice of law a few months later, and George substituted new counsel in the probate matters.
More than a year after the order was entered, Kalenian, Reza, Van Item, and Alex filed a motion to vacate the denial of their amended petition under the mandatory and discretionary provisions for relief in Code of Civil Procedure section 473, subdivision (b). The probate court denied the motion to vacate, from which Kalenian, Reza, Van Item, and Alex appealed. In an opinion that was published in part, another panel of this appellate court reversed the order denying the motion to vacate, thereby reinstating the amended petition. (Kalenian v. Insen (2014) 225 Cal.App.4th 569, 572.)
First Stage of Probate Trial
The parties filed a joint trial statement setting forth the issues to be litigated. The contested issues for the probate court to determine were as follows: whether George was a beneficiary of the Elias Trust; whether the distribution provisions gave the Elias Trust's one-half interest in the Pico property to George as a specific bequest or to the daughters as residuary beneficiaries; whether George was collaterally estopped by the civil judgment or the summary judgment on his section 850 petition; whether any party violated the no contest clause of the Elias Trust; whether George was subject to double damages under section 859 as a result of transferring the Elias Trust's one-half interest in the Pico property to himself and then to the Estela Trust; the value of the Elias Trust's one-half interest at the time it was transferred from the trust and at the time of trial; and whether the amended petition was barred by the statute of limitations or laches. On the issue of valuation, the joint statement explained that the petitioners asserted they were entitled to recover, as beneficiaries of the Elias Trust, twice the value of the one-half interest in the Pico property at the time it was transferred by George from the Elias Trust or at the time of trial, at their election.
Judge Maria E. Stratton presided over the first stage of the probate trial. Evidentiary hearings were held on July 21 and 27, 2015. After two days of testimony, Kalenian, Reza, Van Item, and Alex requested, and the probate court granted, permission to file a second amended petition adding facts related to the statute of limitations and a claim to property in the possession of a trustee under section 850. On October 26, 2015, the petitioners filed the operative second amended petition. Further testimony was taken on February 1 and 2, 2017.
George testified that Arroyo and Ksajikian paid nothing for the undivided one-half interest in the Pico property that they received in earlier deeds. Their names were added in order to use their credit ratings to secure a mortgage for the property. Elias and Mary did not provide any money for the business, George's Auto Repair. They loaned him $40,000 for the purchase of the Pico property, which George repaid approximately two or two and half years later, although he does not have documentation to show the loan was repaid. His parents did not pay anything for the undivided one-half interest that they held in the Pico property. George also paid off the mortgage on the Pico property.
George was present when his father executed the Elias Trust, and the distribution provisions were read aloud. George believed the distribution of George's Auto Repair to him in the trust document referred to the Pico property and was intended to give George back the half of the Pico property that Elias had received in 1980. George stated that George's Auto Repair did not pay any rent to Elias for the Pico property, and there were no other businesses on the property at the time that the Elias Trust was created. At one point, George borrowed $70,000 from his parents to buy a home from Kalenian. The loan was not in writing and George paid it back, but he has no documentation. George believed the Edgemont property was worth approximately $600,000 at the time of his father's death, with a mortgage of approximately $200,000. George testified that when he was 17 years old, he worked and helped his parents pay off a second mortgage on the Edgemont property. He helped his parents financially by giving them money to reduce the burden of their mortgage on the Edgemont property.
Ainian's husband testified that George paid most of the mortgage and expenses on the Edgemont property. George had told Ainian's husband that the trust amendment clarified a mistake in the original trust about the Pico property.
Van Item testified that she did not know whether Elias owned an interest in the Pico property or the business. Before her father died, she did not understand that the business and the real property were separate, and he had never discussed the Pico property. Elias treated his children equally while he was alive. Van Item had a great relationship with her father, although she did not speak with him as much as George and Kalenian, because she understood very little Arabic. Van Item saw the trust document for the first time in September 2006 as part of the civil litigation.
Reza testified that her mother provided financial help to Reza's family at times. Her mother said she and Elias received monthly rental income from the Pico property. Her mother said the business belonged to George, and her parents did not distinguish between the business and the real property in conversation. Reza first saw the trust document in approximately September 2006, after the civil lawsuit was filed.
Kalenian testified it was common knowledge in the family that when their parents died, Alex would be able to stay at the Edgemont property and live off the rent from the other units. If the main house was too big for him and he could not manage it, he could live in one of the smaller units and rent out the house.
Real estate appraiser Daniel Poyourow testified as an expert witness. In his opinion, the value of the Pico property as a whole was $960,000 in December 2003, $2.1 million in June 2007, and $2,975,000 in July 2015. There was no adequate data from which to value an undivided half interest in the property; the pool of buyers for a one-half interest from strangers is small. His valuation was based on the assumption that the buyer would remove the dilapidated improvements on the property. The existing improvements were a liability and would require paying a contractor to remove. He did not take into account any environmental impact or clean up. He did not discuss the fair market rental value or the impact of the existing tenant, George's Auto Repair, on the valuation.
The parties concluded their case presentations on February 2, 2017. Closing briefs were submitted in writing, and the probate court issued a ruling on December 1, 2017. The court found there was no ambiguity from the plain language on the face of the trust document. According to the terms of the document, Alex received the Edgemont property, George received the business known as George's Auto Repair, and the four daughters shared in the residue of the estate equally, including Elias's one-half interest in the Pico property.
After considering the extrinsic evidence, the probate court found the evidence supported finding that Elias intended to give his interest in the Pico property to his daughters. In particular, the court relied on the evidence that Elias loved his children equally and treated them the same, regardless of gender. Elias wanted to ensure that Alex was provided for financially, due to his mental health issues. When the trust was read to Elias before he signed it, George did not question him about the provisions.
The probate court found George's testimony was not credible. Elias gave George money over the years to assist with purchasing the Pico property and establishing his business, and although George testified that he repaid the money, George had no documentation showing repayment. The court could not find that George's obligations to his father were satisfied based on his testimony.
The probate court also relied on the values of the property to conclude that Elias intended to give the one-half interest in the Pico property to his daughters. If George received the interest in the Pico property, the daughters received nothing of comparable value. The court concluded that it was irrelevant whether Elias mistakenly believed that he could bequeath George's Auto Repair. Elias intended to distribute his trust assets to equalize his children's financial situations at his death. If George, as the child in the most secure situation and most successful financially, ended up without a bequest because he already owned George's Auto Repair, so be it. It made no sense, after credible testimony about Elias's lifelong generous assistance and concern for all his children, that he left a windfall to his sons and comparatively nothing to his daughters. There was no direct credible evidence of Elias's intent. Accordingly, the court found that with extrinsic evidence, the distribution clauses were not ambiguous, and the Pico property was part of the residue of the estate.
In addition, the probate court found that the civil litigation was timely filed. If Judge Fruin had decided to interpret the trust document within the civil case, there would have been no statute of limitations issue. The probate court found that the statute of limitations was tolled during the pendency of the civil action, so the probate petition deemed filed as of January 30, 2009, was timely and not barred by the statute of limitations.
Second Stage of Probate Trial
On January 5, 2018, the parties discussed with the probate court the issues remaining to be tried on the second amended petition. The first trial adjudicated the proper interpretation of the trust instrument and George's statute of limitations defense. Counsel for the petitioners and Alex stated that remedies issues remained.
As a result of Judge Stratton's elevation to the appellate court, the probate matter was transferred to Judge Michael C. Small. At a hearing on September 4, 2018, the parties and the court discussed that Alex had died. The petitioners' attorney stated the remaining issues were a section 17200 claim, the section 850 petition and penalties under section 859, and valuation of the Pico property based on evidence already in the record. George's attorney disagreed that there was another section 17200 claim to be adjudicated beyond the interpretation of the trust document. George's attorney asserted that defenses based on the statute of limitations and laches remained to be adjudicated as to the petitioners' section 850 claim, but petitioners' attorney disagreed.
George's attorney insisted on an agreement about the remaining issues, so that he would know what evidence to elicit from his witness. The parties submitted an updated joint trial statement on September 5, 2018. They agreed that the issues remaining to be decided were: (1) whether the summary judgment ruling on George's section 850 petition meant George had no interest in the Pico property, and therefore acted in bad faith by failing to turn the property over to petitioners after the judgment became final; (2) whether either party violated the no contest clause of the trust; (3) whether George was liable for penalties under section 859 because he unduly influenced Elias to execute the trust amendment, misappropriated the trust's interest in the Pico property through malice, fraud, or oppression, or misappropriated the trust's interest in the Pico property by retaining the property after losing the section 850 petition; (4) the value of the Elias Trust's former interest in the Pico property at the time of transfer from the trust, as of December 2003, as of July 2015, and at present; and (5) whether the statute of limitations or laches barred the section 850 claim in the second amended petition.
On September 6, 2018, the probate court discussed the updated joint trial statement and the issues remaining to be determined at length with the parties. Before George's attorney called George as the sole witness on the remaining issues, he confirmed with the court and the petitioners' counsel that the only remaining contested issues being litigated were the issues listed in the updated joint trial statement.
George provided further testimony, and the parties submitted closing briefs. In the petitioners' closing brief, they requested remedies under section 17200, similar remedies under section 850, and penalties under section 859. Among other arguments in George's closing brief, he argued that the petitioners were not entitled to monetary damages in addition to an order directing the sale of the property and payment of half the proceeds to the petitioners. The evidence showed that the value of the property had increased over time and was available to be sold, so the petitioners were not damaged. Awarding half the proceeds from the sale in addition to monetary damages would be a form of punitive damages. George argued that the court should value the Pico property at the time of the December 2003 quitclaim deed and deny the request for monetary damages.
On February 28, 2019, the probate court issued its ruling on the submitted matters. The court found that the petitioners proceeded slowly, but had not unreasonably delayed in the pursuit of their claims, and George failed to show any prejudice. George was not prevented from calling any witnesses as a result of the delay. Therefore, the section 850 claim was not barred by laches. The court also found that neither party violated the no contest clause of the trust document.
The probate court found the petitioners were entitled to monetary damages arising from George's transfer of the half-interest in the Pico property to himself, without consideration, in contravention of the distribution provisions of the Elias Trust. The measure of damages was half of the highest value for the Pico property from the date of the transfer to the start of trial, plus prejudgment interest.
Appraiser Poyourow's testimony was uncontroverted. The highest estimated value for the Pico property was $2,945,000, and half of the value was $1,472,550. Prejudgment interest totaled $2,208,750.
The probate court declined to order the sale of the Pico property. The petitioners had not requested sale of the property in the second amended petition and could bring a separate petition seeking an order for the sale of the Pico property.
On the issue of whether George's actions with respect to the one-half interest in the Pico property were undertaken in bad faith, the probate court found it was a close call, but that on balance, George did not act in bad faith. As a result, the petitioners were not entitled to double damages under section 859. At the time of Elias's death, George owned one-half of the Pico property and had been operating George's Auto Repair on the property. The distribution provisions of the Elias Trust provided the business to George, which none of the parties viewed separately from the Pico property. Under the circumstances, it was not unreasonable for George to believe that Elias intended the one-half interest in the Pico property to go to him. Judge Stratton's findings-that the Elias Trust unambiguously required transfer of the one-half interest in the Pico property to petitioners and that George's testimony to the contrary was not credible-did not equate to bad faith. The finding of undue influence also did not mean George necessarily acted in bad faith with respect to the documents. The court also rejected the argument that the summary judgment order against George on his section 850 petition prevented him from arguing that the one-half interest in the Pico property belonged to him under the Elias Trust, when Judge Beckloff expressly deleted such findings from the summary judgment order and Judge Stratton had allowed George to proceed to trial on the issue of interpretation and ownership.
Based on these findings, the probate court ruled on each of the petitioners' claims. The court noted the merits of the section 17200 claim were determined in Judge Stratton's order. As further relief, the court set aside the December 2003 quitclaim deed and subsequent acts that George took in September 2005 purporting to transfer the Elias Trust's one-half interest in the Pico property to himself and to the Estela Trust. The court also awarded monetary damages of $1,472,500, plus prejudgment interest of $2,208,750.
The probate court found the cause of action for reformation was moot and the quiet title claim had been adjudicated by the December 1, 2017 order. The court granted partial relief on the claim under sections 850 and 859, and subject to the bar on double recovery, awarded monetary damages of $1,472,500, plus prejudgment interest of $2,208,750. The court denied the request for double damages in light of the finding that George did not act in bad faith.
George filed objections to the ruling. George argued that the attorney who prepared the 2003 trust amendment and quitclaim deed had been deposed for the civil case, but died before he could be deposed for the probate matters, which prejudiced George. George also objected that the petitioners' right to an award of monetary damages was not an issue for adjudication listed in the updated joint trial statement. In addition, there were no legal grounds to support awarding the petitioners their one-half interest in the Pico property as well as monetary damages equal to the value of the petitioners' one-half interest in the property. George noted that petitioners owned only a portion of the one-half interest, so argued it was inaccurate to determine damages based on the full amount. George argued that the claim under section 17200, among other claims, not listed as contested matters for adjudication under the updated joint trial statement. George also asserted that monetary damages could not be awarded under section 850, only transfer of title and double damages in the event of bad faith.
The petitioners filed a motion for relief from the updated joint trial statement, arguing that it was absurd to conclude counsel had consciously abandoned his clients' valuable affirmative claims that they had been litigating for more than 11 years. The original joint statement had provided for trial of all the issues, which was the operative statement on which the trial before Judge Stratton had been conducted. The updated joint statement was a supplemental statement as to issues remaining for trial, because the petitioners case presentation was essentially complete. George filed a response.
A hearing was held on the motion for relief from the updated joint trial statement and George's objections on April 24, 2019. In arguing for a statement of decision, George's counsel noted that the issues were intertwined and relied on the same evidence.
The probate court considered each of George's objections to the court's ruling. The court overruled most of George's objections to monetary damages, including George's arguments that the updated joint trial statement precluded an award of monetary damages, that there was no legal basis for an award of monetary damages, and that petitioners are not entitled to both return of the property and monetary damages for the appreciated value of the property. The court noted that the petitioners' second amended petition sought the value of the interest in the Pico property that George deeded to himself. The joint trial statement clearly raised the valuation issue. The valuation of the property, which was the compensation that petitioners sought at all times, was set forth in the updated joint trial statement as well. George, as trustee, breached the trust by transferring the interest in the Pico property, which was the legal basis for monetary damages. The court also concluded that the petitioners were not required to elect between remedies; monetary damages and return of the interest in the Pico property were two separate remedies for two separate harms. The monetary damages addressed the petitioners' Loss of the use and enjoyment of their inheritance for many years that George improperly exercised ownership and enjoyed the benefits of the Pico property. The court sustained George's objection, however, to the calculation of prejudgment interest, and found the correct calculation was $1,693,432.50.
As to George's objection that the section 17200 claim was not included in the updated joint trial statement, the probate court noted again that valuation of the Pico property was at issue from the joint trial statement through the proceeding. The court sustained George's objection that section 850 does not authorize an award of monetary damages; the court revised its ruling on this issue. The court overruled objections on the basis of laches.
The petitioners' motion to be relieved from the updated joint trial statement was denied without prejudice, because the updated joint trial statement did not prevent the petitioners from recovering monetary damages. Although the petitioners had not labeled the issue as monetary damages, it was clearly framed and addressed in the joint trial statement and the parties' closing briefs.
The petitioners filed a motion for an award of attorney fees as the prevailing parties under equitable principles in the amount of $2,128,073.10. The petitioners also filed a motion to apportion the attorney fees and costs incurred among the petitioners and Ainian to prevent a windfall recovery to her. They sought a contribution of $558,232 from Ainian, which was far more than the value of the undivided one-eighth interest in the Pico property that she received as a result of the petitioners' litigation. George opposed the petitioners' motions, and Ainian filed a response to the motion to apportion attorney fees to her.
The motions were heard on October 17, 2019. In discussion of the motion to apportion attorney fees to Ainian, the probate court noted that the petitioners had received substantial monetary damages and a share of the Pico property, while Ainian received a share of the property only. The court took the motions concerning attorney fees under submission. On October 23, 2019, the probate court denied the motion for attorney fees as against George. The probate court granted the motion to apportion fees to Ainian in part, allocating $41,250.30 to her.
The probate court entered a written ruling on the second amended petition on January 13, 2020, which incorporated the subsequent rulings. On May 22, 2020, a notice of appeal was filed in the name of "George Elias Insen" from the order entered on January 13, 2020.
DISCUSSION
Standing
George contends that the designation of "George Elias Insen" in the notice of appeal was sufficient to appeal individually and as trustee of the Estela Trust, consistent with the references to George throughout the probate proceedings. We construe the notice of appeal to have been taken by George individually and as trustee of the Estela Trust.
A notice of appeal must be liberally construed in favor of sufficiency. (Cal. Rules of Court, rule 8.100(a)(2).) This rule includes defects in the designation of the appealing parties. (K.J. v. Los Angeles Unified School Dist. (2020) 8 Cal.5th 875, 885886.) We must construe the notice of appeal to include the omitted trustee designation, where it is reasonably clear that the party intended to join the appeal and there is no argument that the respondents were misled or prejudiced by the omission. (See Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 22.)
In this case, the parties and the probate court often referred to George without differentiating between to his individual actions and his actions as trustee of either trust. The petitioners have not shown any prejudice will result from construing the notice of appeal to include George in his capacity as trustee of the Estela Trust in addition to him in his individual capacity. Therefore, in the interests of justice, we construe the notice of appeal to encompass both.
The petitioners filed a motion to dismiss the instant appeal on April 6, 2022, on the grounds that George, as trustee of the Estela Trust, had not appealed and was an indispensable party. Since this court has construed the notice of appeal to include George as trustee of the Estela Trust, the motion to dismiss the appeal is denied.
Equitable Tolling of Statute of Limitations
George raises several issues on appeal related to whether the petitioners' claims were barred by the applicable statutes of limitation. We conclude that the doctrine of equitable tolling applied to each statute of limitations and substantial evidence supports the probate court's finding that the statutes of limitation were equitably tolled during the pendency of the civil case. As a result, George has not shown that any statute of limitations barred the petitioners' claims in the probate proceeding.
A. Standard of Review
When the material facts are not disputed, the effect of a statute of limitations can be resolved as a matter of law. (Moss v. Duncan (2019) 36 Cal.App.5th 569, 574.) However, when the facts are disputed, the appellate court must affirm the lower court's resolution of disputed factual issues if supported by substantial evidence. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)
Equitable tolling is also a fact intensive issue for determination by the lower court, and we must affirm the lower court's finding if it is supported by substantial evidence. (Thomas v. Gilliland (2002) 95 Cal.App.4th 427, 434; Hopkins v. Kedzierski (2014) 225 Cal.App.4th 736, 745-746.) In comparison, the lower court's determination on the issue of laches is reviewed under the abuse of discretion standard. (Straley v. Gamble (2013) 217 Cal.App.4th 533, 537.)
B. General Law Applicable to Equitable Tolling
"The equitable tolling of statutes of limitations is a judicially created, nonstatutory doctrine. (See Elkins v. Derby (1974) 12 Cal.3d 410, 420 & fn. 9; Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 650.) It is 'designed to prevent unjust and technical forfeitures of the right to a trial on the merits when the purpose of the statute of limitations-timely notice to the defendant of the plaintiff's claims-has been satisfied.' (Appalachian Ins. Co. v. McDonnell Douglas Corp. (1989) 214 Cal.App.3d 1, 38.) Where applicable, the doctrine will 'suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness.' (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370 [Lantzy].)" (McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 99 (McDonald).)
Equitable tolling may suspend or extend the statute of limitations when a plaintiff with several legal remedies reasonably and in good faith pursued one and the notice function of the statute of limitations was served. (McDonald, supra, 45 Cal.4th at p. 100; Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1192.) "Thus, it may apply where one action stands to lessen the harm that is the subject of a potential second action; where administrative remedies must be exhausted before a second action can proceed; or where a first action, embarked upon in good faith, is found to be defective for some reason." (McDonald, at p. 100.) The equitable tolling rule suspends the running of the limitations period through the date on which the decision in the first action becomes final. (Elkins v. Derby, supra, 12 Cal.3d at p. 413, fn. 1.)
"Though the doctrine of equitable tolling is judicially created and operates independently of the literal wording of most statutes of limitations, it is not immune to the operation of such statutes." (McDonald, supra, 45 Cal.4th at p. 105.) "First, the Legislature may, if it so chooses, expressly negate application of equitable tolling to a limitations period by specifying that the list of tolling bases a statute of limitations contains is exhaustive." (Ibid.) "Second, even in the absence of an explicit prohibition, a court may conclude that either the text of a statute or a manifest legislative policy underlying it cannot be reconciled with permitting equitable tolling." (Ibid.)
"In Lantzy, [supra, 31 Cal.4th 363] for example, [our Supreme Court] concluded the 'structure and tone' of the text of Code of Civil Procedure section 337.15 suggested equitable tolling should not apply. (Lantzy, at p. 373.) The sheer length of the limitations period in question-10 years-likewise suggested a legislative intent to preclude equitable tolling. (Id. at p. 379.) Perhaps of greatest significance, however, the legislative history reflected a clear intent to adopt a statute of limitations that would curtail the 'indefinite "long tail" defect liability' that made it difficult for participants in the construction industry to obtain affordable insurance. (Id. at pp. 374-376; see also Beal Bank, SSB v. Arter & Hadden, LLP (2007) 42 Cal.4th 503, 509-511 [where limitations period was intended to curtail specific insurance problems in an industry arising from open-ended liability, statute should be interpreted in favor of limited tolling].) Application of equitable tolling to periods during which a defendant was making repairs would, we concluded, fundamentally compromise that legislative intent, a consideration that outweighed any corresponding harm to the plaintiffs arising from foreclosure of their claims. (Lantzy, at pp. 378-379.)" (McDonald, supra, 45 Cal.4th at pp. 105-106.)
C. Section 16460
George contends the petitioners' claim under section 17200 for construction of the Elias Trust was barred by the statute of limitations contained in section 16460, a statute that he argues is not susceptible to the doctrine of equitable tolling. We disagree.
1. Equitable Tolling Applies to Section 16460
George contends the doctrine of equitable tolling does not apply to section 16460, because it is inconsistent with the text of the statute. We conclude that no inconsistency has been shown.
Section 16460, subdivision (a)(1), provides: "If a beneficiary has received an interim or final account in writing, or other written report, that adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years after receipt of the account or report. An account or report adequately discloses existence of a claim if it provides sufficient information so that the beneficiary knows of the claim or reasonably should have inquired into the existence of the claim."
Section 16460 does not contain an exhaustive list of bases for tolling that precludes applying the doctrine of equitable tolling. (See McDonald, supra, 45 Cal.4th at p. 105 [Code of Civil Procedure sections 340.6 and 366.2 each contain an exhaustive list of bases for tolling the statute of limitations provided].) There is also nothing in the text of the statute or any legislative policy that cannot be reconciled with permitting equitable tolling during the period the petitioners were pursuing another legal remedy. Section 16460 provides a statute of limitations of three years from the date of discovery of the trustee's breach, which is not a particularly lengthy statute of limitations. There is no suggestion that the Legislature wished to curtail the liability of fiduciaries for a breach of trust by enacting section 16460. George's argument is based principally on the fact that the statute contains a limitation period; that fact is not sufficient to preclude equitable tolling, otherwise no statute of limitation would be subject to the doctrine. We also reject George's contention that equitable tolling does not apply because landowners need to have certainty about their rights. Section 16460 has broad application to a range of breaches of trust that do not involve disputes over land, and there is no persuasive reasons to read into it an exception for equitable tolling when the rights to land are involved. Nor is there any persuasive reason why such any interest would outweigh a beneficiary's interest in remedying a breach of trust by a fiduciary. We conclude the statute of limitations contained in section 16460 is subject to the doctrine of equitable tolling.
2. Substantial Evidence Supports Equitable Tolling
George contends the probate court erred by finding the statutes of limitation applicable to the petitioners' probate claims were equitably tolled during the civil case. We conclude, however, that the court's finding is supported by substantial evidence.
The petitioners filed their civil action for causes of action arising out of the 2003 trust amendment and quitclaim deed that Elias executed in the hospital, resulting in the cancellation of those documents. The probate court in the civil case expressly found that the claims in the civil action were not barred by any statute of limitations raised by George, and the court entered a final judgment in the civil action on April 6, 2009. The probate petition, under the parties' settlement agreement, was deemed to have been filed by January 30, 2009, which was two months before the final judgment in the civil case. George had adequate notice from the civil action that if the court found the 2003 trust amendment and quitclaim deed invalid, the proper interpretation and disposition of the Pico property under the 1999 trust document would be at issue. The petitioners reasonably pursued a civil action in good faith, which accomplished cancellation of the 2003 documents and reduced the issues to be determined in a potential second action. Before the 2003 documents were cancelled, the proper construction of the 1999 trust document was irrelevant, and the petitioners had no claim to distribution under the 1999 trust document. The court's finding that equitable tolling applied during the pendency of the civil action is supported by substantial evidence.
3. Limitation Period of Section 16460 Did Not Bar Claim
George contends the petitioners' claim under section 17200 for construction of the Elias Trust was barred by the statute of limitation contained in section 16460 based on the letters that George sent to his siblings after Elias's death. We disagree.
George's notices to his siblings told them the dates of the Elias Trust and the amendment, said the trust was irrevocable and he was trustee, and that they could receive a copy of the operative trust documents. The notices did not constitute an account or report, and did not disclose the existence of a claim for breach of trust. In his briefs on appeal, George does not explain how his notification letters disclosed to the petitioners that they had an interest under the 1999 trust document or that George had taken any action in breach of the trust.
Simply notifying the petitioners that they were entitled to receive a copy of the trust did not, in itself, alert them that George breached the trust. A trustee, as a fiduciary, is required to account and disclose material information to the beneficiaries. (Hudson v. Foster (2021) 68 Cal.App.5th 640, 662.) "There is a distinction made 'between cases where a plaintiff is under a duty to inquire and those in which he has no such duty until he has notice of facts sufficient to arouse the suspicions of a reasonable man.' (Bennett v. Hibernia Bank (1956) 47 Cal.2d 540, 563 (Bennett).) A plaintiff who has no duty to inquire because of a fiduciary relationship does not need to show that he or she could not have discovered the facts earlier with a diligent inquiry. (Ibid.) [¶] Once a party actually becomes aware of facts which would make a reasonably prudent person suspicious of wrongdoing by a fiduciary, the party is put on inquiry notice and has a duty to investigate. (Bennett, supra, 47 Cal.2d at p. 563; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1394.) At that point, '[a] person with "actual notice of circumstances sufficient to put a prudent man on inquiry" is deemed to have constructive notice of all facts that a reasonable inquiry would disclose. [Citations.]' (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1319.) It is significant, however, that when a fiduciary relationship exists between the parties, facts which would ordinarily require investigation may not excite suspicion and less diligence is required. (Bennett, supra, at pp. 559-560.)" (Hudson, at pp. 667-668.) Merely telling the petitioners that they have a right to receive a copy of the terms of the trust was not sufficient disclosure to make a reasonably prudent person suspicious of wrongdoing by George.
We note that even if the notices that George provided under section 16061.7 were sufficient to make a reasonably prudent person suspicious of wrongdoing, based, for example, on the date of the 2003 trust amendment while Elias was hospitalized, the petitioners filed their probate petition within three years of receiving the notices after accounting for equitable tolling of the limitation period during the civil action. The notices were dated June 11, 2003, and the petitioners filed their civil action within three years, on May 5, 2006. The probate petition was deemed to have been filed before the final judgment was entered in the civil action. Therefore, the petitioners commenced their probate petition within three years after receipt of the notices, due to the equitable tolling of the statute while they pursued remedies in the civil action.
D. Code of Civil Procedure Sections 318 and 319
George contends the petitioners' claim under section 17200 was also barred by the statutes of limitation contained in Code of Civil Procedure sections 318 and 319, which he argues are not susceptible to the doctrine of equitable tolling. We disagree.
Code of Civil Procedure section 318 provides: "No action for the recovery of real property, or for the recovery of the possession thereof, can be maintained, unless it appear that the plaintiff, his ancestor, predecessor, or grantor, was seized or possessed of the property in question, within five years before the commencement of the action."
Code of Civil Procedure section 319 provides: "No cause of action, or defense to an action, arising out of the title to real property, or to rents or profits out of the same, can be effectual, unless it appear that the person prosecuting the action, or making the defense, or under whose title the action is prosecuted, or the defense is made, or the ancestor, predecessor, or grantor of such person was seized or possessed of the premises in question within five years before the commencement of the act in respect to which such action is prosecuted or defense made."
Neither statute contains an exhaustive list of bases for tolling which would prohibit application of equitable tolling. The limitation periods are not unusually long. There is nothing in the text of the statutes or legislative policy that precludes equitable tolling during the period the petitioners were pursuing another legal remedy for breach of fiduciary duty and undue influence. In fact, in cases seeking the recovery of real property where the facts allege breach of fiduciary duty or undue influence, courts have applied a date-of-discovery rule" 'when strict adherence to the date of injury rule would result in unfairness to the plaintiff and would encourage wrongdoers to mislead their fiduciary to delay bringing suit. It is particularly appropriate when the defendant maintains custody and control of a plaintiff's property or interests.'" (Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1529; Estate of Young (2008) 160 Cal.App.4th 62, 77.) We conclude Code of Civil Procedure sections 318 and 319 are amenable to equitable tolling as a result of the petitioners' civil action for breach of fiduciary duty and undue influence.
As discussed above, the probate court's finding of equitable tolling is supported by substantial evidence. The probate petition in this case was filed within the five-year statutes of limitation contained in Code of Civil Procedure sections 318 and 319 after accounting for the equitable tolling. Elias died on May 23, 2003, and the civil action was filed within three years on May 5, 2006. The limitations period was equitably tolled by the civil action, and the probate petition was deemed to have been filed before the final judgment was entered in the civil action. As a result, the petition was timely filed under Code of Civil Procedure sections 318 and 319 as well.
E. Quiet Title
George additionally contends the probate court should have found the cause of action for quiet title barred by the five-year statute of limitations for adverse possession. This is simply incorrect.
" 'To establish title by adverse possession, the claimant must establish five elements in connection with his occupancy of the property. [Citations.] (1) Possession must be by actual occupation under such circumstances as to constitute reasonable notice to the owner. [Citations.] (2) Possession must be hostile to the owner's title. [Citations.] (3) The holder must claim the property as his own, either under color of title, or claim of right. [Citation.] (4) Possession must be continuous and uninterrupted for five years. [Citations.] (5) The possessor must pay all of the taxes levied and assessed upon the property during the period. [Citation.] Unless each one of these elements is established by the evidence, the plaintiff has not acquired title by adverse possession.' (West v. Evans (1946) 29 Cal.2d 414, 417.)" (Estate of Seifert (2005) 128 Cal.App.4th 64, 67-68.)
The statute of limitations for a quiet title action based on an adverse possession theory "does not begin to run until someone presses an adverse claim against the person holding the property." (Crestmar Owners Assn. v. Stapakis (2007) 157 Cal.App.4th 1223, 1228.) The statute of limitations for adverse possession does not run when the parties have a fiduciary relationship. (Estate of Seifert, supra, 128 Cal.App.4th at p. 68.) A trustee's possession of property is not adverse to the beneficiary, and therefore, the trustee cannot acquire title by adverse possession. (Ibid.)
In this case, George's possession of the Elias Trust's interest in the Pico property was not adverse to the petitioners until, at the earliest, when he transferred the one-half interest in the Pico property to himself as the trustee of the Estela Trust on April 15, 2005. The probate petition was filed within five years of the property transfer to the Estela Trust. The statute of limitations for adverse possession did not apply, or if it applied, it did not run in this case.
Construction of the 1999 Trust Document
George contends the 1999 trust document was ambiguous, and the extrinsic evidence established that Elias intended to distribute his interest in the Pico property to George. We conclude that the probate court's construction of the document based on the court's resolution of disputed extrinsic evidence is supported by substantial evidence.
The interpretation of a trust provision is subject to de novo review unless there is an ambiguity and conflicting extrinsic evidence as to the meaning of the ambiguous terms. (Johnson v. Greenelsh (2009) 47 Cal.4th 598, 604.) To interpret a trust document, a court first considers whether the language of the document is reasonably susceptible to the interpretation urged by a party in light of the extrinsic evidence presented, and if the court decides the language is reasonably susceptible of the interpretation urged, the extrinsic evidence is admissible to interpret the trust agreement. (Estate of Kaila (2001) 94 Cal.App.4th 1122, 1132-1133.)
"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." (Scharlin v. Superior Court (1992) 9 Cal.App.4th 162, 168.) "The words of an instrument are to receive an interpretation that will give every expression some effect, rather than one that will render any of the expressions inoperative." (§ 21120.) "All parts of an instrument are to be construed in relation to each other and so as, if possible, to form a consistent whole. If the meaning of any part of an instrument is ambiguous or doubtful, it may be explained by any reference to or recital of that part in another part of the instrument." (§ 21121.)
In this case, we agree with the probate court that there is no ambiguity on the face of the 1999 trust instrument. Schedule A of the trust document states that Elias owned a 50 percent interest in the property and the business George's Auto Repair located at 3655 West Pico Boulevard. The trust distributes the business George's Auto Repair located at 3655 West Pico Boulevard to George. The property located at 3655 West Pico Boulevard is not expressly distributed to any beneficiary, so is part of the remainder of the estate passing to the daughters.
George provided extrinsic evidence of a latent ambiguity, however. He argued that the distribution to George included the property, based on evidence that Elias did not own any interest in the business located at 3655 West Pico Boulevard and all of the family members referred to the business and the property as a single entity. If the gift to George referred solely to the business, the provision was unnecessary, and George would inherit nothing under the trust.
The probate court considered the conflicting extrinsic evidence as to whether the gift to George included the Pico property and found Elias intended to provide his interest in the Pico property to his daughters. We conclude the probate court's finding is supported by substantial evidence. Elias loved his children equally and treated them the same. Elias and Mary made substantial loans to George at various times for which he did not have evidence of repayment. The probate court found George's testimony that he satisfied his obligations to his parents was not credible. We note that the trust directed George to continue to pay half the mortgage payments on the Edgemont property unless and until Alex refinanced the mortgage. The document implies half of the outstanding mortgage, or $100,000, was loaned to George, and George was personally responsible for repayment. In comparison, the value of Elias's one-half interest in the Pico property in 2003 was approximately $480,000, so each daughter received an interest valued at approximately $120,000. From the evidence, the probate court could reasonably conclude Elias forgave loans to George outside the four corners of the trust document that were equivalent to the value of the daughters' shares of the Pico property, which was consistent with Elias's equal treatment of his children.
We must interpret the trust document to give effect to every expression, rather than render any provision inoperative, but the fact that Elias did not own an interest in the business George's Auto Repair did not render the specific gift of the business to George meaningless. Elias may have been mistaken about his ownership interest, as the probate court suggested, since the schedule of assets listed 50 percent ownership in the business. Alternatively, Elias may have intended to distribute any interest that he owned to George in an abundance of caution, to prevent disputes over ownership. We note that the gift to George in the 2003 trust amendment continued to distribute any interest in the business to George, rather than simply substituting Elias's interest in the Pico property. Providing for distribution of the business in the 2003 trust amendment, in addition to distribution of the Pico property, shows the language was not meaningless or a mistake. We conclude substantial evidence supports the probate court's construction of the document, based on the court's resolution of conflicts in the extrinsic evidence, and that the Pico property was part of the residue of the estate.
Adjudication of Section 17200 Claim
George contends the probate court erred by determining the petitioners' claim for relief under section 17200, including monetary damages, because the section 17200 claim was not presented to the probate court for determination. This is simply incorrect: Judge Stratton construed the distribution provisions of the trust document in the first stage of the trial, which was an issue identified in the joint trial statement. The relief sought required valuation of the Pico property in order to calculate monetary damages. Evidence of the property's value was presented in the first stage of the trial, and the issue of valuation was clearly identified in the updated trial statement for the second stage of trial. The petitioners' claim under section 17200 was identified for adjudication in both stages of the probate trial.
Laches
George contends the probate court abused its discretion by failing to apply the doctrine of laches to bar the petitioners' claim under section 850. Because we conclude the probate court's rulings on the section 17200 claim and the quiet title cause of action must be affirmed, and the relief provided in connection with section 850 was duplicative, we need not address whether the petitioners were additionally entitled to the same relief under section 850.
DISPOSITION
The January 13, 2020 order is affirmed. Georgette Kalenian, Ida Reza, and Elizabeth Van Item are awarded their costs on appeal.
We concur: RUBIN, P. J. TAMZARIAN, J. [*]
[*]Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.