Opinion
NOT TO BE PUBLISHED
Superior Court County No. P072122 of Ventura Frederick H. Bysshe, Jr., Judge
Kenneth Noel Marinos in pro per, Appellant.
Greg W. Jones; Hathaway, Perrett, Webster, Powers, Chrisman & Gutierrez, for Respondent.
YEGAN, J.
Kenneth Noel Marinos appeals from a dismissal on demurrer entered in favor of respondents: Jeffrey C. Brown, individually and as Trustee of the Chris Marinos Family Trust and Trustee of the Chris and Helen W. Marinos Charitable Foundation; and Brown's attorney, Michael F. Perrett of the law firm of Hathaway, Perrett, Webster, Powers, Chrisman & Gutierrez. The trial court sustained, without leave to amend, a demurrer to appellant's Petition to Redress on res judicata grounds. The court also denied appellant's request to preserve evidence (Code Civ. Proc., § 2035.030). We affirm.
Appellant claims he was wrongfully disinherited when respondents fraudulently obtained a substituted judgment order in 1996 and executed estate planning documents on behalf of appellant's mother, Helen Marinos (Helen). (Prob. Code, § 2580 et seq.) Appellant asserted the same claim in a cross-complaint to Brown's 2005 quiet title action. The cross-complaint was dismissed on demurrer and the subject of two appeals. (B194647, B207361.)
The substituted judgment statutes (Prob. Code § 2580 et seq.) provide that a probate court has the discretion "to order a 'substituted judgment' that authorizes a conservator on behalf of a conservatee to take necessary or desirable action to facilitate estate planning, when a reasonably prudent person in the conservatee's position would do so." (Murphy v. Murphy (2008) 164 Cal.App.4th 376, 383.)
Appellant filed the instant action – the Petition to Redress - alleging that respondents exercised undue influence on Helen and lacked authority to file the petition for substituted judgment. The Petition to Redress prays for rescission of the 1996 Substituted Judgment and reinstatement of a 1992 power of appointment by which appellant was to receive an inheritance. The trial court, in sustaining respondents' demurrer, correctly found that the doctrine of res judicata bars relitigation of matters that were raised or could have been raised in the 1996 substituted judgment proceeding and in the 2005 quiet title action. (Busick v. Workmen's Comp. Appeals Bd. (1972) 7 Cal.3d 967, 975.)
Facts and Procedural History
Appellant is the adopted son of Chris Marinos and Helen Marinos. They died in 1987 and 2002 respectively. In 1986, Chris Marinos and Helen Marinos created the Chris Marinos Family Trust (Family Trust), the principal asset of which was a 45 percent ownership interest in the Chart House Restaurant in Malibu.
In 1993, Brown was appointed conservator of Helen's person and trustee of the Family Trust. Santa Barbara Bank and Trust was conservator of Helen's estate. On September 28, 1995, Helen petitioned the Ventura County Superior Court for a substituted judgment order authorizing bank, as conservator of Helen's estate, to execute certain estate planning documents including an exercise of power of appointment and a trust agreement to create the Chris and Helen W. Marinos Charitable Foundation (Charitable Foundation). (Ventura County
Respondent, Perrett and the law firm of Hathaway, Perrett, Webster, Powers, Chrisman & Gutierrez represented Helen and Brown in the Substituted Judgment proceeding and Brown in the Quiet Title action.
Super. Ct. Case No. P68807.) The new power of appointment revoked prior powers of appointment exercised by Helen and transferred the Family Trust assets to the Charitable Foundation. The petition for substituted judgment also sought approval of the Charitable Foundation as the residuary beneficiary of Helen's estate.
Respondents served the notice of hearing on appellant by mailing it to the Ventura County Jail where appellant was incarcerated.
Five days later, appellant wrote to the probate court, objecting to the petition for substituted judgment. The letter made specific reference to the hearing date and stated that Brown "will attempt to be placed as chairman of the Chairety [sic] Foundation only to pay himself a fat salary annuly [sic]. I do not trust this man for a second. My dad worked his entire life to make his fortune and this man has no intention to maintain the assests [sic] for the children or grandchildren. He is a thief with a license to steal."
Before the hearing, a summary of the estate planning documents was mailed to appellant. The summary included copies of the Family Trust, a 1992 exercise of power of appointment, and described the dispositive provisions of the estate planning documents.
Appellant did not attend the hearing.
1996 Substituted Judgment
On January 12, 1996, the probate court found that "all notices have been duly given as required by law" and entered a Substituted Judgment order. Pursuant to the order, a new power of appointment was exercised and the Family Trust assets, including the Chart House property, were transferred to the Charitable Foundation. The new power of appointment revoked a 1992 power of appointment by which Family Trust assets (held in a Decedent's Trust and a Survivor's Trust) were to pass to a Charitable Remainder Unitrust (Unitrust) on Helen's death and be partially distributed to appellant and his brother (Daniel).
Although the 1996 testamentary dispositions effectively set aside the Unitrust, Helen executed a last will and testament in 1994 that accomplished the same result. The will stated that Helen had already provided for appellant and Daniel by naming them as beneficiaries of an irrevocable insurance trust.
2005 Quiet Title Action
In June 2005, Brown, as trustee of the Charitable Foundation, filed an action in Los Angeles County Superior Court to quiet title to the Chart House property. (Super. Ct., Los Angeles County, Case No. SC085730.) Paul Marinos and Mary Naegeli claimed ownership interests in the property as successors in interest to Harry Marinos, the deceased brother of Chris Marinos. After a trial, the Los Angeles County Superior Court found 45 percent of the Chart House property was owned by the Harry Marinos Family Trust, 45 percent by the Chris Marinos Family Trust, and 10 percent by Mary Naegeli.
Appellant, a defendant in the quiet title action, filed a cross-complaint to impose a constructive trust and quiet title to the Unitrust benefits he would have received under the 1992 power of appointment. The cross-complaint alleged that Brown fraudulently obtained the 1996 Substituted Judgment and exercised undue influence on Helen to channel family assets to the Charitable Foundation.
Brown demurred on the ground that no facts were alleged to set aside the Substituted Judgment on equitable grounds and that such an action, if pled, was barred by the three year statute of limitations. (Code Civ. Proc., § 338, subd. (d).)
Brown I
The Los Angeles County Superior Court sustained the demurrer without leave to amend. Appellant appealed. The Court of Appeal, in an unpublished opinion, held the trial court properly sustained the demurrer but erred in not granting appellant leave to amend the cross-complaint to allege the Substituted Judgment was procured by extrinsic fraud. (B194647.)
On remand, appellant filed a first amended cross-complaint devoid of any facts to set aside the substituted judgment on equitable grounds. The Los Angeles County Superior Court sustained a demurrer without leave to amend and awarded sanctions (Code Civ. Proc., § 128.7). It found that BrownI "laid out a very narrow road map by which [appellant] could successfully state a claim for equitable relief from the 1996 Substituted Judgment.... [¶]... [¶] [T]he Court of Appeal recognized that this independent action was a direct attack on the 1996 Substitute[d] Judgment based upon extrinsic fraud.... As such, whether the Probate Court [in the Substituted Judgment proceeding] correctly applied or interpreted the underlying trust instruments cannot be reached until [appellant] can allege extrinsic fraud."
Brown II
Appellant appealed. The Court of Appeal, in an unpublished opinion, concluded that no facts were alleged that the Substituted Judgment was procured by extrinsic fraud or mistake. (B207361.) The court stated: "None of these allegations come close to stating that appellant was fraudulently, or as a result of excusable neglect, prevented from participating in the substituted judgment proceedings." Construing the first amended cross-complaint most favorably to appellant, the Court of Appeal held that the allegations, at most, "amount to the claim that the [probate] court erred as a matter of law in entertaining the petition for a substituted judgment. But, as we pointed out in Brown I, the substituted judgment is not subject to collateral attack on the ground that it is legally erroneous."
The Instant Action: Petition to Redress
In 2008, while the second appeal was pending, appellant filed a "Petition to Redress a Breach of Trust Against Jeffrey C. Brown – Trustee To The Chris Marinos Family Trust And The 1992 Exercise of Power of Appointment" (Petition to Redress) in the Ventura County Superior Court (Case No. P72122). The Petition to Redress alleged that respondents had a conflict of interest and committed a breach of trust in obtaining the Substituted Judgment and transferring the Family Trust assets to the Charitable Foundation.
On January 23, 2009, appellant filed a Request for Preservation of Evidence (Ventura County Super. Ct. No. 56-2009-00335998-CU-PT-VTA) which was consolidated with the Petition to Redress. A year later, the trial court sustained respondents' demurrer without leave to amend and denied the Request for Preservation of Evidence.
Res Judicata
On review, we treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Dismissal on res judicata and collateral estoppel grounds presents a question of law that is subject to de novo review. (Noble v. Draper (2008) 160 Cal.App.4th 1, 10.)
The threshold issue is whether the doctrine of res judicata bars appellant from bringing serial actions to set aside the Substitute Judgment. The issue was addressed in the quiet title action and the first and second appeals. The Court of Appeal in Brown I held that the cross-complaint "is a direct, and not a collateral, attack on the [1966 Substitute[d] Judgment. The issue... is whether the judgment is tainted by extrinsic fraud or mistake, not whether it was correctly decided, or whether it is tainted by errors of fact or law. A contrary rule would open up judgments to repeated attacks and review for correctness, long after the judgment has become final."
In Murphy v. Murphy, supra, 164 Cal.App.4th 376, the Court of Appeal concluded that collateral estoppel barred a son from relitigating issues decided in an earlier substituted judgment proceeding that concerned his father's (William) estate. In Murphy, the father's conservator petitioned for a substituted judgment to execute a living trust and pour-over will that disinherited the son. (Id., at p. 383.) The son did not file objections or appeal from the substituted judgment order. (Id., at p. 391.)
After father died, the son sued his sister, individually and as trustee of father's revocable living trust, for undue influence and "wrongful disinheritance, " challenging the testamentary dispositions encompassed by the substituted judgment order. (Id., at p. 392.)
The Court of Appeal held that son was collaterally estopped because he had a full and fair opportunity to litigate the claim in the substituted judgment proceeding. Implicit in the probate court's decision to grant the petition for substituted judgment was the finding "that it had not been proved that these entrustments were the result of [the conservator's] fraud and undue influence on William." (Id., at p. 403.)
The Murphy court held that "collateral estoppel may apply even where the issue was wrongly decided in the first action.... Application of collateral estoppel in this case would give credit to the implied findings made by the probate court, acting within the scope of its jurisdiction, and in a forum where the parties were afforded a fair and full opportunity to present their evidence and arguments, and where appellate review of adverse rulings was available. [Citation.]" (Id., at p. 407.)
Murphy stands for the well established rule that a primary right (i.e., the claim that son was wrongfully disinherited) may not be split and litigated in different actions. "If the matter was within the scope of the action, related to the subject-matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged. The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or should have been raised, on matters litigated or litigable...." (Id., at p. 401.)
The same res judicata/collateral estoppel principle bars appellant from claiming that the 1996 Substituted Judgment was wrongly decided. In Brown I and Brown II, the Court of Appeal held that the 1996 Substituted Judgment could not be collaterally attacked on the ground that it "is legally erroneous." Appellant argues there is no collateral estoppel bar because the Petition to Redress addresses the internal affairs of the Family Trust, i.e., respondents' undue influence, breach of trust, and mismanagement of trust assets. (Prob. Code, § 17200.) But that was implicitly rejected by the probate court in 1996 when appellant wrote to the court and objected to the proposed Order for Substituted Judgment. (See Murphy v. Murphy, supra, 164 Cal.App.4th at pp. 402-403.)
Regardless of whether the petition for substituted judgment was correctly decided, appellant is bound by the 1996 judgment. That was the holding in Brown I and II.
The instant action, styled as a Petition to Redress, alleges violation of the same primary right – a wrongful disinheritance. The trial court, in sustaining the demurrer, correctly found that appellant could not do an end run around the 1996 Substituted Judgment, the quiet title judgment, and Brown I and II. Res judicata precludes piecemeal litigation by splitting a single cause of action or relitigating the same primary right on a different legal theory. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897.) "Somewhere along the line, litigation must cease." (In re Marriage of Crook (1992) 2 Cal.App.4th 1606, 1613.)
Appellant has not demonstrated that the Petition to Redress can be amended to state a cause of action. (Hendy v. Losse (1991) 54 Cal.3d 723, 742.) The Court of Appeal in Brown II concluded that "appellant received notice of the substituted judgment proceedings and that it was appellant's decision not to participate in those proceedings. It also appears that appellant was unable to allege that his participation in the substituted judgment proceedings would have made a difference. This is not surprising as Helen had substantially restructured her estate and testamentary disposition in 1994, prior to the substituted judgment proceedings. Finally, the theory that the 1992 testamentary dispositions [i.e., the 1992 exercise of power of appointment] deprived Helen of the power to make changes in those disposition at a later time, i.e., in 1994/1995, is simply untenable."
Determination on the Merits
Appellant argues that the Brown I and II dismissal on demurrer is not a determination on the merits for res judicata purposes. (See Maddern v. Superior Court (1972) 22 Cal.App.3d 998, 1004 ["Res judicata applies only if there is a decision on the merits."].) The law is to the contrary. A demurrer is "a method of deciding the merits of the cause of action on assumed facts without a trial. [Citation.]" (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 437, fn. 4; see Keidatz v. Albany (1952) 39 Cal.2d 826, 828.) "[A] judgment on a general demurrer will have the effect of a bar in a new action in which the complaint states the same facts which were held not to constitute a cause of action on the former demurrer or, notwithstanding differences in the facts alleged, when the ground on which the demurrer in the former action was sustained is equally applicable to the second one. [Citations.]" (McKinney v. County of Santa Clara (1980) 110 Cal.App.3d 787, 794.) Appellant contends that he was unable to litigate the undue influence and disinheritance claim in 1995 and 1996 because he was incarcerated. Appellant however, wrote to the probate court, made specific reference to the hearing date, and objected to the petition for substituted judgment on the ground that it was contrary to his parent's testamentary wishes. The letter stated that Helen "has been brainwashed by these sharks" and that respondents "have destroyed two parts of the [Family] trust only to benefit their [sic] selves. Their primary target is the Chart House in Santa Monica. They want it for their own." The probate court, in granting the petition for substituted judgment, implicitly rejected the undue influence and fraud claim. (Murphy v. Murphy, supra, 164 Cal.App.4th at p. 403.)
In 2006, appellant hired an attorney and filed a cross-complaint in the quiet title action, again claiming that he was wrongfully disinherited. Appellant now asserts that the Los Angeles County Superior Court lacked jurisdiction to rule on whether the 1966 Substituted Judgment for the transfer of Family Trust assets (i.e., the Chart House property) was procured by extrinsic fraud or mistake. The court, however, had exclusive jurisdiction to hear the quiet title matter because the Chart House property is located in Los Angeles County. (Code Civ. Proc., § 392, subd. (a)(1); Deas v. Lido Lumber Co, (1955) 132 Cal.App.2d 402, 406.) In Brown I, appellant conceded the quiet title judgment "mooted" his claim that he had an ownership interest in the Chart House property.
The second cause of action in the cross-complaint prayed for an order quieting title to the Unitrust's interest in the Chart house property based on the 1992 power of appointment. But that too was mooted by the quiet title judgment. A quiet title judgment is binding and conclusive on "[a]ll persons known and unknown who were parties to the action who have any claim to the property, whether present or future, vested or contingent, legal or equitable, several or undivided." (Code Civ. Proc., § 764.030, subd. (a).)
We reject the argument that the Los Angeles County Superior Court lacked subject matter jurisdiction to determine whether the Substituted Judgment should be set aside on equitable grounds. " 'The fact that a fraudulent judgment was obtained in one court does not deprive other courts of general and equal jurisdiction from exercising their equity powers to annul it. [Citations.]' " (Deas v. Lido Lumber Co., supra, 132 Cal.App.2d at p. 406.)
The controlling factor in any res judicata analysis is the primary right asserted -- here the claim that respondents exercised undue influence to change Helen's testamentary plan and disinherit appellant. (See e.g., Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.) The matter was raised in appellant's 1995 letter opposing the petition for substituted judgment and implicitly rejected by the probate court. Appellant attempted to relitigate the disinheritance claim 10 years later in the quiet title action and lost. He is not entitled to a third bite at the apple.
Consolidation of Petition to Redress and Discovery Request
Appellant contends that his due process rights were violated when the trial court ordered the Petition to Redress off calendar for lack of service, granted respondents' motion to consolidate the Petition To Redress and Request for Preservation of Evidence, and ruled on the demurrer without first considering appellant's motion to restore the Petitioner to Redress to the trial calendar.
Appellant filed opposition to the demurrer, submitted a supplemental brief on Murphy, objected to the proposed order sustaining the demurrer, and filed a motion for reconsideration. Appellant received a fair hearing. Every court has the inherent power to regulate the proceedings and to effect an orderly disposition of the issues presented. (Code Civ. Proc., § 128; Santandrea v. Siltec Corp. (1976) 56 Cal.App.3d 525, 529.) The trial court did not abuse its discretion in hearing the demurrer first. (Id., at pp. 529-530.)
Request for Preservation of Evidence
Appellant finally asserts that the trial court erred in denying his Request For Preservation of Evidence. Such a discovery request requires a showing that appellant lacked the ability to bring the contemplated action. (Code Civ. Proc., § 2035.030, subd. (b); Weil & Brown, Cal. Practice Guide (Rutter 2010) Civil Procedure Before Trial ¶ 8:426, p. 8E-6.) A request to preserve evidence does not lie if the lawsuit is pending and traditional discovery methods are available. (Orr v. City of Stockton (2007) 150 Cal.App.4th 622, 634.)
Appellant filed the Petition to Redress on July 11, 2008, a year before the Request For Preservation of Evidence, and was afforded the opportunity to conduct discovery. The trial court did not err in denying the Request For Preservation of Evidence.
The judgment is affirmed. Respondents are awarded costs on appeal.
We concur: GILBERT, P.J., COFFEE, J.