Opinion
NOT TO BE PUBLISHED
Santa Cruz County Super. Ct. No. PR044213.
ELIA, J.
Appellant Dennis McBride, beneficiary of a trust set up by his mother before her death, has been representing himself in protracted litigation over the appointment of a trustee to succeed respondent Michael Hall. In an earlier appeal (H034980) he attempted to contest an interlocutory order made to facilitate the resolution of the dispute between him and respondent. In this appeal he seeks review of two subsequent superior court orders: one on March 9, 2010, finding respondent to have met his fiduciary duties as trustee and directing the payment of costs and attorney fees from appellant's trust account; and the second, on May 20, 2010, granting respondent's petition to provide for attorney fees to defend both H034980 and the March 9 order on appeal. We will affirm both orders.
Background
After respondent indicated an intent to resign as trustee of the Josephine Bell Living Trust, appellant attempted to be named the successor trustee. Recognizing that appellant was a 50 percent beneficiary and that his share was to be held in a separate subtrust under carefully delineated terms, in October and November of 2009 the Honorable Paul P. Burdick declined to approve the appointment of appellant as trustee and ordered a further hearing to address appellant's allegations that respondent had mishandled trust funds. That hearing, originally scheduled for December 3, 2009, was continued again to January 12, 2010, to allow appellant further time to file written objections to respondent's accounting. On January 12, 2010, a different judge, the Honorable Timothy Volkmann, set the matter for an evidentiary hearing on February 19, 2010, to allow appellant a full opportunity to air his concerns. Each party was allowed until February 16 to submit briefs to the court pertaining to respondent's expenditures as trustee.
At the February 19 hearing, the court first denied appellant's motion for a continuance based on his improper and untimely discovery requests. Taking the stand, appellant then attempted to show that respondent had failed to account for certain withdrawals from the trust account and had understated the amount of interest and dividends earned on certain investment accounts. He also contested the legal fees claimed by Dennis Lippitt, the attorney representing respondent as trustee. Appellant did not want to pay for the "illegal acts" of Lippitt. He specifically argued that the fees arising from a hearing conducted by Judge Burdick on October 6, 2009 were inflated because of a "setup" and "fabrication" of the record on that occasion.
The court continually redirected appellant's argument in an effort to keep him focused on his complaints against respondent as fiduciary. Appellant continued with the assertion that respondent had generated excessive fees in relation to some property his mother had owned in New Mexico. Finally, again resurrecting his assertion from the 2009 proceedings before Judge Burdick, appellant tried to convince the court that he himself was the appropriate person to serve as trustee; but the court disagreed and reminded appellant that Judge Burdick had already determined that appellant should not be the one managing his own account.
The court then gave respondent and his counsel an opportunity to answer appellant's allegations through testimony and argument, followed by appellant's rebuttal. After more than three hours occupied by the hearing, the court began to announce its findings. During delivery of the ruling, however, the court reporter interrupted: "I'm sorry, Your Honor, I can't hear you. [¶] THE COURT: Mr. McBride be quiet." Appellant then began interrupting the judge, who noted that appellant was being "verbally abusive to the Court." The court expressed its agreement with Judge Burdick that appellant should not serve as trustee of his own trust. After continuing to interrupt the judge in his ruling, appellant left the courtroom "instead of staying... and being insulted." The court continued with its findings: having reviewed the entire file and having heard testimony from both parties, the court found that respondent had satisfied his fiduciary duty "of utmost care." The legal and accounting fees were "reasonable and appropriate, " though it declined a request for compensation for respondent's services as trustee because no invoice had been submitted. At the conclusion of the hearing, the court ordered respondent's counsel to prepare the written order and continued the matter to March 25, 2010 for a status review.
Respondent had indicated his intent to donate his compensation to charity.
Appellant objected to the proposed order. On March 9, 2010, however, the court signed and filed the order, finding no breach of fiduciary duty by respondent and approving the statements made in respondent's accounts and reports, including the amounts claimed as unpaid costs and attorney fees. Appellant's first notice of appeal followed 10 days thereafter.
The amounts ordered by the court were not exorbitant. They consisted of $583.90 in unpaid fees listed in a November 2009 report; $6,890 for compensation of trustee and attorney listed in a February 3, 2010 supplement; unreimbursed expenses of $360.85; and $950 for unpaid tax return preparation.
In preparation for the March 25 hearing, respondent filed a status report, which he combined with an opposition to appellant's newly filed petition to remove respondent as trustee. The court addressed both the petition and the opposition and expressly found no foundation for appellant's view that there was a conspiracy between Lippit and the court and court employees. The court also rejected appellant's suggestion that he be named as co-trustee with the other prospective trustee, his sister Antoinette Caraway. Appellant and Renee Hall both questioned the court's inclination to appoint Caraway successor trustee; and after further discussion, the court appointed Renee Hall as trustee. In its written order on April 2, 2010, the court overruled all of appellant's objections to the March 9 order, confirmed that respondent had satisfied all of his fiduciary duties, and awarded additional attorney fees to the trustee's attorneys, payable from appellant's trust.
A different spelling of this name was given by the court at the March 25 hearing. We will, however, use the name as set forth in the decedent's trust.
A further hearing had already been scheduled for April 12, 2010 on appellant's petition to remove respondent as trustee. That issue being moot, appellant took the opportunity to request an increase in his allotment from the trust. He also asked the court to sanction both respondent and Lippitt "for forcing this hearing to come about." The court denied both motions.
Appellant objected to the proposed order for this brief hearing as well. He not only accused Lippitt of "wanton use of deliberate falsehoods, " but charged the court with having "ignored the evidence" of Lippitt's "fraudulent acts" of improper billing. After objecting to every detail of the court's oral ruling, including the directive to prepare a written order, appellant submitted written objections which "informed" the "reader" that he had been subjected to a "beating, " a "robbery, " a "theft, " and a "shame on every civil Court of justice." He did not, however, appeal from any order resulting from the April 12 hearing.
The appellate record contains no written order from these proceedings.
On May 20, 2010, the parties again appeared in court, this time on respondent's April 20 petition for advance approval of his costs and legal fees, which he expected to incur to respond to this appeal and to the prior appeal in H034980. Respondent was concerned that Renee Hall would not contest these appeals, inasmuch as she provided a residence for appellant, she had been supporting him throughout the proceedings, and she was in the process of a contentious dissolution of her marriage to respondent. If Renee Hall failed to resist the appeals, the court's orders could be overturned; consequently, respondent felt it necessary to undertake the defense himself. Respondent expected the appeals to cost at least $7,500, and he asked for approval of a retainer in that amount as well as future payments as necessary, to be made by Renee Hall as trustee.
Appellant opposed the petition. Renee Hall, he pointed out, had indicated an intent to defend against the appeals. Her declaration to that effect, however, was qualified by her averments that she had insufficient familiarity with the accounts and had no legal assistance or training to enable her to review these matters and prepare for further hearing. She also expressed concern that Judge Volkmann seemed to be harboring "resentment or prejudice" against appellant, which might infect her role and prevent judicial impartiality in further hearings.
The matter was not heard by Judge Volkmann, however. The hearing on the April 20 petition was before the Honorable Jeff Almquist on May 20, 2010. Judge Almquist listened to appellant's objections and then granted respondent's petition. The written order was signed and filed that day. Renee Hall was directed to pay respondent's counsel $7,500, to replenish the retainer monthly to maintain it at the $7,500 level, and to pay any increase in the minimum retainer should it become necessary in the "reasonable and good faith judgment" of respondent's counsel. Shortly thereafter, appellant filed a notice of appeal from this order.
Discussion
1. The March 9, 2010 Order
Appellant contends that he was "mauled" by the procedure leading to the March 9, 2010 order. The "Argument" section of his opening brief, however, consists in a skewed account of the proceedings going back to Judge Burdick's rulings, together with a reiteration of his persistent claim that he is the only official trustee. His position is premised on the inaccurate assumption that Judge Burdick "appointed [him] successor Trustee" on October 6, 2009. Appellant does not want to accept the explanation of two judges that he was in fact not appointed successor trustee. On October 6, 2009 Judge Burdick only conditionally appointed him in that role -- "conditionally, " meaning that the order of appointment would be signed if no objection was made by respondent within five days. Respondent immediately objected; consequently, the appointment never took effect. Appellant can continue arguing that he is still or should have been the trustee, but the fact is, his sought-after appointment never materialized. Furthermore, both Judge Burdick and Judge Volkmann independently realized that appellant was not a suitable trustee for his own trust. That issue should be put to rest. None of the sarcasm appellant has displayed, nor the conspiracy allegations he advances, will alter these findings. The record simply does not support any determination that Judge Burdick "ensnare[d]" him or that Judge Volkmann "did what he could to obstruct justice."
It should not escape notice that appellant did not oppose -- and indeed, supported -- the eventual appointment of his sister, Renee Hall.
Appellant's attempt to revisit the allegations of missing funds fares no better. Judge Volkmann listened to more than two hours of appellant's testimony and argument regarding the allegations of mishandling trust funds. He also questioned respondent in an effort to ascertain any factual basis for appellant's complaints. The judge found no evidence to support appellant's charge. It is not this court's role to reweigh this evidence or judge the credibility of witnesses "unless it is physically impossible... [or] inherently implausible." (State Farm Fire & Casualty Co. v. Jioras (1994) 24 Cal.App.4th 1619, 1626, fn. 5.) The lower court simply was not convinced by the evidence offered by appellant, and appellant has failed to show an absence of substantial evidence to support the court's findings and conclusion.
Although we agree with respondent that the court gave appellant "a wide degree of latitude" in making his argument, we find it highly unlikely that the court "literally bent over backwards" in doing so.
2. The May 20, 2010 Order
Appellant's challenge of the May 20, 2010 order appears to be based on the same inaccurate view of the facts. He appears to be arguing that respondent's improper retention as trustee during the 2009 proceedings enabled respondent and his attorney to generate excessive fees. Appellant is upset that he was not permitted to reopen the issue of who was the rightful trustee. Notwithstanding his unsuccessful argument before both Judge Burdick and Judge Volkmann, appellant continues to assert that the only valid order taking place on October 6, 2009, was the appointment of him as successor trustee. In his view, respondent's role ended 30 days after he expressed the intent to resign. (See H034980.)
The focus of the May 20, 2010 hearing, however, was limited to whether respondent should be permitted to draw funds from appellant's trust to pay for respondent's representation on appeal. In advancing his argument that respondent was not entitled to such a "benefit, " appellant does cite judicial precedent, some of which pertains to attorney fees granted to trustees. Missing from his analysis, however, is a recognition that an award of reasonable attorney fees to a trustee for defending the integrity of the trust is a matter within the sound discretion of the court. An abuse of discretion occurs only if the reviewing court, considering the applicable law and all of the relevant circumstances, concludes that the trial court's decision exceeded the bounds of reason and resulted in a miscarriage of justice. (Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 911.) The court also has discretion to charge the trust with the legal expenses incurred in defending against a challenge to the trustee's accounting, and the exercise of that discretion will not be overturned on appeal absent a manifest abuse—that is, unless the fees appear "clearly out of proportion" to the legal services provided. (Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1461; Estate of Cassity (1980) 106 Cal.App.3d 569, 572.) "Attorneys hired by a trustee to aid in administering the trust are entitled to reasonable fees paid from trust assets. Preparing the accounting and responding to the beneficiaries' objections to that accounting are aspects of trust administration." (Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 235; accord, Donahue v. Donahue (2010) 182 Cal.App.4th 259, 268.)
Appellant offers no authority or rationale to explain why our review should be different when the award takes the form of a retainer. Nor is there any showing on appeal that the lower court's exercise of discretion exceeded the bounds of reason. Respondent satisfied his burden to demonstrate that an advance award of legal fees was necessary because the current trustee was unlikely to defend the consistent rulings of Judge Burdick and Judge Volkmann. No abuse of discretion is shown.
Disposition
The orders of March 9 and May 20, 2010 are affirmed. To obviate any incipient doubt, costs are awarded to respondent.
WE CONCUR: RUSHING, P. J., PREMO, J.