Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Super. Ct. No. 136060, Super. Ct. No. PR37729
SIMS, Acting P. J.
Following the death of Maxine Harrington, the parties are contesting rights to property initially placed in a revocable trust, which was assertedly modified by a subsequent last will and testament leaving property to one of Maxine’s children, defendant Mark E. Orbea (Marcel).
We shall refer to the various Harringtons and Orbeas (Maxine’s children by a previous marriage) by their first names, for clarity and simplicity, with no disrespect intended.
In separate appeals which we ordered consolidated, Marc R. McDaniel (McDaniel), as Trustee for the Harrington Family Trust (the Trust), appeals from (1) a judgment favoring Marcel in McDaniel’s suit for ejectment and related counts (the civil action), (2) an order granting Marcel’s petition to determine the Trust was amended by a holographic will (the trust action) (Prob. Code, §§ 17200, 17207 [order appealable]; undesignated statutory references are to the Probate Code) and (3) denial of costs. (§ 15401.)
McDaniel contends the trial court erred in (1) concluding the holographic will amended the Trust, (2) concluding title to the property had to be quieted in a future probate proceeding, and (3) refusing to eject Marcel and to award McDaniel damages and costs.
We shall conclude the holographic will amended the Trust, entitling Marcel to the disputed property as a Trust beneficiary without the need for probate. We shall therefore reverse the judgment in the civil action (No. C058298) insofar as the trial court declined to quiet title in Marcel, but we otherwise affirm the judgment in the civil action. We shall affirm the order in the trust action (No. C058397). We shall conclude neither party deserves an award of costs in the trial court or on appeal.
FACTUAL AND PROCEDURAL BACKGROUND
In August 1990, Wayne and Maxine Harrington, husband and wife, established the Trust, naming Maxine as Trustee and their daughter Monique Harrington as alternate trustee. The Trust property consisted of (1) their Paradise home, (2) a Great Western Bank Savings Account, (3) an American Savings Account, and (4) “Personal Property.” The property was transferred to the Trust by a Declaration of Trust and an Individual Grant Deed (the Harrington Trust Deed) to Maxine as Trustee. Maxine and Wayne were to receive the net income and could invade the corpus, at the Trustee’s (Maxine’s) discretion, for their own support.
The original Trust contained separate declarations regarding revocation and modification. Although appellant claims this appeal involves an invalid revocation, we shall explain, post, this case qualifies as a modification of the trust because the holographic will addressed only some of the trust property. The declarations stated:
“1.7.Revocation of Trust. At any time and from time to time during the joint lives of the trustors, the trustors jointly as to community property, and either trustor as to his or her separate property, may by serving written notice on the trustee [i.e., Maxine], revoke the trust created by this declaration in whole or in part. Any property withdrawn from the trust estate by reason of any such revocation shall be delivered by the trustee to the trustor(s) revoking the trust.
“1.8.Modification of Trust. At any time and from time to time during the lives of the trustors, the trustors jointly as to community property and either trustor as to his or her separate property may, by serving written notice on the trustee, alter, modify, or amend the trust created by this declaration in any respect.
Section 1.6 of the Trust stated that property transferred to the Trust as community property, quasi-community property, or separate property, shall remain community property, quasi-community property, or separate property.
“1.9.Trust Irrevocable on Death of Both Trustors. Except as otherwise expressly provided in this declaration, on the death of both trustors, the trust created by this declaration shall become irrevocable and not subject to amendment or modification. On the death of wife, the trust shall not be revocable or amendable as to her assets.” (Italics added.)
The original Trust, under the heading “DISTRIBUTIONS DURING JOINT LIVES OF TRUSTORS,” said, “During the lives of the trustors, and either of them, the trustee shall at least quarterly... pay to or apply for the benefit of husband and wife all of the net income from the trust estate in the same proportion as each of the respective interests in the trust estate.” Should the net income of the trust estate be insufficient, the trustee could, in her absolute discretion, invade the corpus for the “care, maintenance or support” of the trustors.
The original Trust, as created in 1990, stated in part, under the heading of “DISTRIBUTION,” as follows:
“3.2. Should wife predecease husband [which did not occur], the trustee shall distribute one-half the community property allocable to wife and all her separate property, if any, [to three of her children] pursuant to subparagraph 3.2.1. This distribution and provision of the trust is made not because wife does not love or desire to provide for husband, but because husband’s health is poor and there are sufficient assets remaining in the trust to care for husband should he survive wife.
“3.2.1. All of the wife’s interest in the trust to her children, Mark Orbea, Timothy J. Orbea, and Monique M. Harrington or their issue by right of representation. Wife specifically declines to provide in this trust for her husband’s son, Wayne C. Harrington, Jr., or his issue, or her son, John R. Orbea [Dick] and his issue.
“3.3. If wife survives husband for thirty (30) days [which did occur], the entire principal and interest of the trust estate shall be allocated to wife, subject to her general power of appointment during her life by specific reference to such power in her last will and testament. If she does not so appoint, the remainder of the trust shall be distributed on her death as provided in Paragraph 3.2.1.”
The parties do not address the meaning of “allocated” in this context but appear to interpret it to mean that Wayne’s property, if any, would become Maxine’s property upon Wayne’s death.
Section 632 provides, “If the creating instrument expressly directs that a power of appointment be exercised by an instrument that makes a specific reference to the power or to the instrument that created the power, the power can be exercised only by an instrument containing the required reference.”
“A power of appointment is ‘testamentary’ if it is exercisable only by a will.” (§ 612, subd. (a).)
Section 3.4 said that if wife did not survive husband for 30 days, the (alternate) trustee was to distribute the remainder of the trust estate -- half to Wayne Jr. and half to Monique.
Thus, the Trust provided that if Maxine survived her husband by 30 days (as she ultimately did), the entire Trust estate went to her, “subject to her general power of appointment during her life by specific reference to such power in her last will and testament.” If she did not exercise that power, then upon her death the Trust estate would be distributed equally to Monique and two of Maxine’s sons by a previous marriage -- Marcel and Timothy Orbea. The Trust expressly stated Maxine declined to provide for her other son, John R. (also known as Dick) Orbea, or Wayne’s son by a previous marriage (Wayne Jr.).
Attorney John Schaller, who represented McDaniel in the trial court, testified at trial that he prepared the trust documents for Wayne and Maxine. Wayne suffered from Alzheimer’s disease, and the couple wanted to make sure he would qualify for Medi-Cal, so they wanted provisions allowing them to allocate assets between the two of them and to others by gifting.
Schaller testified that, in 1992, when Wayne was about to enter a nursing home, they modified the Trust, in that they “gifted all of the effective assets, including the house and everything, to Maxine.” According to Schaller, title was not transferred: “It just internally shifted ownership. She was already trustee on the trust. It shifted ownership within the trust making it her separate property.” The exhibit, labeled “GIFT AND ALLOCATION OF PROPERTY” and signed by Maxine only (as trustee and individually), said, “Pursuant to the power to gift contained in paragraph 4.9 of the Declaration of Trust dated August 16, 1990, the undersigned gifts and allocates all assets of the trust including but not limited to the following, to MAXINE M. HARRINGTON, as her sole and separate property; [home, bank accounts, and personal property].” (The parties do not mention this 1992 activity.)
Paragraph 4.9, labeled “Power to Gift,” stated, “The Trustee shall have the power to gift assets for estate planning and government social program planning purposes and may make such gifts to any of the beneficiaries of the trust including the trustee and may allocate assets in the trust for such purposes.”
In June 1994, the real property was transferred out of, and then back into, the Trust in order for Maxine to refinance the house and give $43,000 to Monique to help her and her new husband (McDaniel), buy a house. Maxine planned to live with her daughter and son-in-law and contribute to their household expenses, but the situation did not work out, and Maxine moved back to the Paradise home. The deeds show (1) an Individual Grant Deed from Maxine as Trustee to Maxine individually “AS HER SOLE AND SEPARATE PROPERTY;” (2) a Deed of Trust between Maxine “AS HER SOLE AND SEPARATE PROPERTY” and the Bank; and (3) an Individual Grant Deed from Maxine individually “AS TO HER SOLE AND SEPARATE PROPERTY” to Maxine as Trustee.
In 1995, Wayne Harrington died.
On June 19, 1996, after Wayne’s death in 1995, Maxine signed a notarized “AMENDMENT TO TRUST,” leaving the Trust property to Marcel and Timothy, 50 percent each, and explaining that Monique had been “gifted” $43,000 and that was enough, as follows:
“3.2 Wayne C. Harrington is deceased. Trustor, Maxine M. Harrington has gifted Monique M. Harrington over $43,000.00 and considers that she has received adequate amounts from such Trustor’s estate and therefore declines to provide anything further for her. Should Mark (‘Marcel’) Orbea and Timothy J. Orbea survive Trustor, the Trustee shall distribute on the death of Maxine M. Harrington all of the balance of the trust estate in equal shares to her children, Mark (‘Marcel’) Orbea and Timothy J. Orbea, or the survivor of them. If neither of them survive such Trustor, the Trustee shall distribute the balance of the trust estate in equal shares to Monique M. Harrington, or her issue by right of representation and John R. Orbea, or his issue by right of representation.”
Schaller testified that in 2004, Maxine said Marcel was living in the guest cottage on her property, and she was afraid of his violent temper.
On May 13, 2004, Maxine executed a notarized “SECOND AMENDMENT TO HARRINGTON FAMILY TRUST,” which “revoked” paragraph 3.2 above, regarding distributions and replaced it with the following:
“3.2 Wayne C. Harrington is deceased. Upon the death of Trustor [Maxine], if Trustor’s home is an asset of the trust estate, the trustee shall distribute the home and, in any case, Trustor’s furniture, furnishings and articles of a personal nature, to Monique M. McDaniel if she survives Trustor for thirty days. If she does not survive Trustor for thirty days, such assets shall be part of the residue of the trust estate.
“The Trustee shall distribute the balance of the trust estate as follows:
“A. 70% to Monique M. McDaniel or her issue, by right of representation.
“B. 12.5% to John R. Orbea, if he survives Trustor for thirty days, or his issue by right of representation.
“C. 12.5% to Timothy J. Orbea if he survives Trustor for thirty days and if he does not survive for that period, this distribution shall lapse.
“D. 5% to Mark (‘Marcel’) Orbea, if he survives Trustor for thirty days, and if he does not survive for that period, this distribution shall lapse.
“Trustee shall distribute any lapsed distributions prorata among the residuary beneficiaries.”
On May 14, 2004, the day after the second trust amendment, Maxine executed a notarized, typewritten “LAST WILL AND TESTAMENT” (the 2004 Will), making the same distribution as the second trust amendment.
Nine months after making the 2004 Will, Maxine (without consulting Attorney Schaller) signed a handwritten Will (the holographic will) on February 18, 2005, stating:
“This is my last Will and Testament - My wish is for Marcel Orbea to be the beneficiary of my property - my home at 3898 Neal Rd. and all the contents therein. He has cared for me in my old age, and done it with loving care. I am under no stress or strain - I just want to show my appreciation to him, in hopes he will find as much happiness in my home, as I have, after I’ve gone. I ask my other children to understand how I feel and to be happy in my decision. I love all of you equally, but I feel you are all cared for, and have partners to help you.
“With Love. Maxine Harrington.”
In September 2005, Maxine was admitted to the hospital. While in the hospital, without consulting Schaller, she signed a typewritten form Last Will and Testament (the Form Will), appointing Marcel as Executor and leaving all property to “my son.” She also signed a notarized “QUITCLAIM DEED,” deeding the real property from herself as an individual (though the title was in her as Trustee) to Marcel.
On September 18, 2005, Maxine died in the hospital. She never recorded any deed transferring the property out of the Trust.
On September 19, 2005, Marcel recorded the Quitclaim Deed.
Competing deeds were later recorded by Attorney Schaller, on behalf of Monique. Thus, on December 14, 2005, Monique recorded a grant deed, deeding the real property from herself as trustee of the Harrington Trust, to herself individually, as her sole and separate property. On November 26, 2006, a Grant Deed was recorded, deeding the real property from Monique individually to Monique and her husband (McDaniel) as trustees of a McDaniel Family Trust.
On November 10, 2005, Monique, acting individually and as Trustee, filed a complaint against Marcel for ejectment, damages, cancellation of deed, possession of real property, and to quiet title.
Upon Monique’s subsequent death, the trial court in January 2007 allowed her husband (McDaniel), as successor trustee of a McDaniel Family Trust and successor in interest to Monique’s rights with respect to the Harrington property, to substitute into the case as plaintiff. This lawsuit, which is the subject of this appeal and which appellant references as “the civil action,” went to a court trial on a third amended complaint for “Ejectment, Damages, Cancellation of Deed to Real Property, Possession of Personal Property, and Quiet Title.”
The first count of the pleading, labeled “Cancellation of Deed,” alleged Marcel obtained the quitclaim deed from Maxine through undue influence, threats and intimidation, at a time when she had dementia and was under the influence of drugs in the hospital awaiting surgery. The complaint alleged that Marcel’s claim of title to the real property after Maxine’s death (September 18, 2005) had dispossessed plaintiff of the property and deprived plaintiff of the rental value of the premises at a rate of $1,800 per month.
The second count for “Quiet Title” alleged that plaintiff owns the real property in fee simple (subject to a deed of trust to a bank), based on the deeds transferring the property to Monique as an individual (Trust beneficiary), and then to Monique and her husband (plaintiff) as trustees of the McDaniel Family Trust. Marcel’s claim is allegedly without right, and plaintiff sought to quiet title.
The third count for “Conversation” (sic: Conversion) alleged plaintiff owns the furniture and personal property in the house, valued at $20,000, which Marcel has converted to his own use since Maxine’s death, with malice justifying punitive damages.
The fourth count for “Ejectment” alleged Marcel refused to vacate the premises, damaging plaintiff at the rate of $1,800 per month.
The complaint prayed for (1) a declaration that the Quitclaim Deed was void and cancelled, (2) judgment that plaintiff individually is the owner in fee simple of the real property subject to the bank’s deed of trust, (3) restitution of the premises, (4) the value of property converted, (5) damages for unlawful detention/possession of the property, (6) punitive damages, and (7) costs.
While this “civil action” was still in the pretrial stage, on January 25, 2006 (months after Maxine’s September 2005 death), Marcel filed a “PETITION TO DETERMINE CONSTRUCTION OF TRUST TERMS AND/OR TRUST REVOCATION OR AMENDMENT” (trial court case number PR37729, which appellant references as “the trust action”) under section 17200. Marcel’s Petition sought to reform the Quitclaim Deed to create a transfer from the Harrington Trust to Marcel and to determine the Trust was amended or revoked. Marcel sought a declaration that the property is owned by him, or should be distributed to him as beneficiary under the holographic will or the Form Will. A different Butte County judge abated the “trust action” pending the outcome of the “civil action,” pursuant to a request by Monique, citing section 854. However, the abatement order was later vacated pursuant to the parties’ stipulation, and both cases were tried together.
Section 17200 provides in part: “(a) Except as provided in Section 15800 [beneficiary’s rights restricted where settlor retains revocation rights], a trustee or beneficiary of a trust may petition the court under this chapter [Chapter 3, Proceedings Concerning Trusts] concerning the internal affairs of the trust.... [¶]... [¶] [Including (b)](2) Determining the existence or nonexistence of any immunity, power, privilege, duty, or right. [¶]... [¶] [And] (13) Approving or directing the modification or termination of the trust.”
Section 854 provides: “If a civil action is pending with respect to the subject matter of a petition filed pursuant to this chapter and jurisdiction has been obtained in the court where the civil action is pending prior to the filing of the petition, upon request of any party to the civil action, the court shall abate the petition until the conclusion of the civil action. This section shall not apply if the court finds that the civil action was filed for the purpose of delay.”
Following a bench trial, the trial court issued a statement of decision. (It is of no consequence that the trial court reached a different tentative “intended” decision.) The court determined the Quitclaim Deed and Form Will were void and invalid -- issues we need not address because the parties do not argue them on appeal (though we address a point made in the reply brief using the Form Will).
The statement of decision further stated the court must determine if and how Maxine could modify the Trust or otherwise legally transfer trust assets. The court rejected McDaniel’s argument that the Trust authorized modification/revocation only during the “joint lives” of the trustors. The court observed the Trust continued on to say that either trustor could revoke as to his or her separate property, and that the Trust became irrevocable “upon the death of both trustors” and irrevocable as to Maxine’s assets upon her death. These provisions implied the Trust was modifiable before Maxine’s death.
Since the Trust provided it could be altered by the trustor (Maxine) giving written notice to the trustee (Maxine), the trial court concluded Maxine could amend/revoke the Trust by giving herself written notice -- including a Last Will and Testament -- though the court observed the split of authority as to whether a Will can be used to amend a Trust (which we discuss post). The court said the Trust “most probably” was prepared for the “usual purpose” of avoiding probate.
The trial court next found the holographic will satisfied all legal requirements of a valid will and showed her intent to change the disposition of the property. Mental competence is presumed, and McDaniel failed to meet his burden to show incompetence.
The court rejected McDaniel’s argument that Marcel exerted undue influence over Maxine to sign the holographic will. Although Marcel was in a confidential relationship with Maxine and benefited from the holographic will, the court found Marcel did not exert influence or pressure over Maxine. “She had previously named different children and different allocations to her children, including Marcel, at various times. She was known to have changed her mind about who should receive her property on a number of occasions. Marcel, as her son, was the natural object of Maxine’s bounty as he cared for her in her last years and she wanted him to have the home. She stated in her will that her other children had homes and partners and thus Marcel should be provided for.” There was no showing the disposition was not in accordance with her true wishes.
As to the later Form Will, the trial court said it was signed right before Maxine’s final hospitalization, when she was in severe decline physically and mentally. Moreover, the Form Will was incomprehensible and clearly not understood by the person filling it out. The trial court found Maxine did not have the capacity to understand the nature of her bounty or effectuate any estate planning, and consequently the court found the Form Will invalid and of no legal consequence.
The court concluded the holographic will modified the Trust, as least to the extent of the real property and its contents, and the Holograph Will must be probated in a separate probate case.
As to McDaniel’s claims for ejectment, quiet title, and damages, the trial court said that Marcel lived on the premises rent free in exchange for helping to care for Maxine, and after her death he claimed possession as a beneficial owner under the quitclaim deed or either of the wills. “The court hereby declares the [quitclaim] deed to be void, the demand for ejectment from the real property is denied, the title to the real property will be quieted through a subsequent probate of the holographic will and the issues of conversion of personal property and rental value will likewise be determined in the probate of the holographic will.”
On January 25, 2008, the trial court issued a JUDGMENT AFTER TRIAL BY COURT, decreeing that: “1. The quitclaim deed signed September 15, 2005 by Maxine M. Harrington and recorded on September 19, 2005 in the Recorder’s Office of Butte County as document number 2005-0056470 be ordered stricken from the record. Such deed is a void deed and is cancelled. [¶] 2. The causes of action for quiet title, conversion and ejectment are denied.”
Also on January 25, 2008, the trial court issued an “ORDER RE REFORMATION OF DEED, REVOCATION OF TRUST, AMENDMENT OF TRUST,” stating, “it is ordered that the petition of [Marcel] be granted. The Harrington Family Trust was amended by the [holographic] will dated Feb. 18 - ’05, thereby leaving the home at 3898 Neal Rd. and all the contents therein to Marcel Orbea.”
McDaniel filed a cost memorandum, but on April 4, 2008, the trial court issued an order granting Marcel’s motion to strike the cost bill on the ground McDaniel was not the prevailing party.
McDaniel filed notices of appeal from the judgment in the civil action, the order in the trust action, and the trial court’s denial of costs. We consolidated the appeals.
DISCUSSION
I. Standard of Review
“‘In construing trust instruments, as in the construction and interpretation of all documents, the duty of the court is to first ascertain and then, if possible, give effect to the intent of the maker.’ [Citations.]... ‘The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted cannons of interpretation so that the purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is “admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible’ [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.... “An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence [citations], where there is no conflict in the evidence [citations], or a determination has been made upon incompetent evidence [citation].”’” (Gardenhire v. Superior Court (2005) 127 Cal.App.4th 882, 888.)
Marcel responds, without any supporting authority, that the standard of review is abuse of discretion with respect to the trial court’s factual findings regarding Maxine’s intent. While the trial court did make such factual findings, McDaniel does not present any appellate argument that the evidence was insufficient to support the findings. We therefore need not review the factual findings, and we apply de novo review to the legal questions presented.
II. Power of Appointment
We first dispose of a point which McDaniel unfairly withheld until his reply brief -- that the holographic will was ineffective to amend the Trust because paragraph 3.3 of the Trust required that the will make specific reference to the Trust, and Maxine’s will made no such reference. We will disregard this point raised improperly for the first time in appellant’s reply brief. (Garcia v. McCutchen (1997) 16 Cal.4th 469, 482, fn. 10; Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11 [“Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant”].)
III. Revocation Versus Modification
McDaniel insists that this case is about revocation, not modification, and the Trust allowed revocation only during the “joint lives” of the trustors, and therefore the Trust could not be revoked after Wayne died. McDaniel cites the reporter’s transcript where Marcel’s lawyer referred to “revocation” in the trial court. McDaniel says Marcel’s petition urged only revocation by the holographic will. This is incorrect. Marcel’s petition alternatively argued the holographic will revoked or amended the Trust.
McDaniel offers no reason as to why this case could not be viewed as a modification of the Trust. It is reasonable to view this case as a modification of the Trust, because the holographic will addressed only two of the four items of Trust property, i.e., the house and contents. The will said nothing about the two bank accounts that were also Trust property. Nor did the will withdraw any property from the Trust, which might arguably support characterization as a partial revocation (because the revocation clause calls for delivery of withdrawn property to the trustor, whereas the modification clause says nothing about withdrawn property). McDaniel cites no authority compelling us to view this as a revocation, not a modification. The trial court used both words -- modification and revocation -- in its statement of decision.
We conclude this case involves a modification of the Trust, and we therefore reject McDaniel’s argument that the change was invalid as occurring after Wayne’s death in contravention of the Trust’s provision limiting the time for revocation to the trustors’ “joint lives.”
Additionally, the Trust’s modification provision (¶ 1.8) said that, “during the lives of the trustors, the trustors jointly as to community property and either trustor as to his or her separate property may, by serving written notice on the trustee, alter, modify, or amend the trust created by this declaration in any respect.” By the time she wrote the holographic will, Maxine viewed the Trust property as her separate property under the 1992 modification which, according to Attorney Schaller, altered the community/separate property status (and thereby altered the original Trust provision that property would retain its status as community or separate property). McDaniel makes no issue of this point in his opening brief, and we therefore need not pursue it further.
IV. The Holographic Will Modified the Trust
McDaniel does not dispute that it was Maxine’s intent to give the house to Marcel (though he indulges in speculation that maybe Maxine wrote the holographic will to appease Marcel, believing it would be invalid). McDaniel’s focus on appeal is the importance of demanding compliance with legal rules. However, we see no violation of legal rules in this case.
McDaniel contends the Trust could not be modified by a last will and testament. We shall conclude that this particular Trust -- by providing a specific method of modification (written notice to trustee) which did not exclude wills -- allowed modification of the Trust by a last will and testament, which constituted written notice from the trustor (Maxine) to herself as trustee.
Section 15401 provides in part:
“(a) A trust that is revocable by the settlor may be revoked in whole or in part by any of the following methods:
We reject McDaniel’s argument that section 15401 applies only to revocation, not modification. The right to revoke under the statute includes the right to modify. (See Masry v. Masry (2008) 166 Cal.App.4th 738, 741; 13 Witkin, Summary of Cal. Law (10th ed. 2005) Trusts, § 197, p. 782.)
“(1) By compliance with any method of revocation provided in the trust instrument.
“(2) By a writing (other than a will) [italics added] signed by the settlor and delivered to the trustee during the lifetime of the settlor. If the trust instrument explicitly makes the method of revocation provided in the trust instrument the exclusive method of revocation, the trust may not be revoked pursuant to this paragraph.”
Section 15402 says, “Unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation.” Here, the Trust contained a separate provision for modification, and therefore changes were not limited to the procedure set forth in the revocation provision.
Gardenhire v. Superior Court, supra, 127 Cal.App.4th 882, held that the statutory prohibition against use of a will to revoke a trust (§ 15401, subd. (a)(2)) does not apply where, pursuant to subdivision (a)(1) of the statute, the trust specifies a method of revocation, and the specified method does not exclude a will.
McDaniel argues Gardenhire was wrongly decided and in any event is materially distinguishable from our case. We disagree.
Gardenhire, supra, 127 Cal.App.4th 882, was a probate action involving competing claims by the beneficiaries of a living trust and the beneficiaries of a will to a parcel of real property. The trust expressly allowed the trustor to revoke the trust by “written notice” signed by the trustor and delivered to the trustee. (Id. at p. 887.) The trustor and trustee were the same person. (Id. at p. 887.) Years after creating the trust, the trustor executed a will which expressly revoked all prior wills and, without mentioning the trust, stated her intent “to dispose of all real and personal property which I have the right to dispose of by Will....” (Id. at p. 886.) She bequeathed some property and created a testamentary trust for the residue. (Ibid.) Upon her death, beneficiaries battled about whether the original trust was revoked. An alternate trustee (Gardenhire) filed a summary judgment motion seeking a determination that the trustor could not have revoked the trust by a will. The trial court denied the motion, and Gardenhire sought a writ of mandate. (Ibid.)
The Sixth District denied the writ, holding that “written notice” to revoke the trust meant any writing, including a will, that unambiguously manifested an intent to revoke. (Gardenhire, supra, 127 Cal.App.4th 882, 888.) The trustor named herself as trustee and could revoke by simply giving herself written notice of her intent to do so. (Ibid.)
Gardenhire disagreed with a comment in a former edition of the Restatement, i.e., the Restatement Second of Trusts, section 330, comment (j), p. 139, that “[i]f the settlor reserves a power to revoke the trust by transaction inter vivos, as for example, by a notice to the trustee, he cannot revoke the trust by his will.” (Gardenhire, supra, 127 Cal.App.4th at p. 891.)
We observe that the Restatement comment cited in Gardenhire no longer appears in the new Restatement Third of Trusts, which says that “[i]f the settlor reserves the power to revoke or modify the trust but does not specify the manner or form in which the power is to be exercised, the power can be exercised in any way that provides clear and convincing evidence of the settlor’s intention to do so. Thus, the power can be exercised by a will or codicil that is executed after the creation of the trust and remains unrevoked at the settlor’s death, and that refers expressly to the trust or the power or that otherwise clearly manifests the settlor-testator’s intent to exercise the power.” (Rest.3d Trusts (2003) § 63 (Power of Settlor to Revoke or Modify), comment (h), p. 447.)
The new Restatement Third of Trusts further states in comments h and i to section 63, that the Uniform Trust Code “eliminates another trap that has arisen for lay persons, in relations between the revocable trust and any subsequent will. When a testator attempts to revoke some or all of the trust by a later will, courts have often refused to enforce the attempted revocation. The reasoning has been that since the revocable trust is a lifetime transfer, the assets subject to the trust pass inter vivos, hence do not enter the estate, and thus cannot be subject to the decedent’s will. The Code reverses this intent-defeating rule and permits a trust to be amended or revoked by “a later will or codicil that expressly refers to the trust or specifically devises property that would have otherwise passed according to the terms of the trust.” This measure accords with the new Restatements Third both of Trusts and of Property...; the latter... allows the will to amend all manner of will substitutes.’ J. Langbein, ‘The Uniform Trust Code: Codification of the Law of Trusts in the United States,’ 15 Trust Law International 66,71 (no. 2, 2001.” (Rest.3d Trusts, supra, at p. 460.)
Even under the old Restatement, we would agree with Gardenhire which, while acknowledging wide acceptance of the Restatement comment, said, “Implicit in that statement [that a will cannot revoke a trust] is the notion that because a will has no effect during the testator’s lifetime, it cannot provide inter vivos notice of revocation. Comment (j) [of Restatement Second of Trusts] reflects a policy of requiring certain formalities because they help to minimize ambiguity and thus ensure the proper and appropriate administration of trusts. However, that policy does not logically explain why a will, upon delivery, cannot provide effective and immediate notice of a trustor’s intent to revoke. Moreover, although the dispositional provisions of a will remain inoperative until the trustor’s death, it does not necessarily follow that the will cannot separately and effectively have a present and immediate effect upon delivery, such as notice of intent to revoke.” (Id. at p. 891.)
Gardenhire, supra, 127 Cal.App.4th 882, “[l]ast[ly]” declined to adopt the Restatement comment because section 15401, subdivision (a)(1), permits revocation by any method provided in the trust. (Gardenhire at p. 892.) As indicated, section 15401, subdivision (a)(1), states a trust may be revoked “[b]y compliance with any method of revocation provided in the trust instrument.” Gardenhire rejected an argument that a trust is revocable by a will only if the trust expressly so states. (Gardenhire at p. 894.) The plain language of section 15401, subdivision (a)(1), contains no such requirement. Nor would the court infer such a requirement from subdivision (a)(2), which allows revocation by a writing “other than a will” if the trust is silent regarding method of revocation. (Gardenhire at p. 894.) Gardenhire said subdivision (a)(2) does not “represent a proviso to subdivision (a)(1) to the effect that although a trust may provide any method of revocation, if the trustor wants to allow revocation by will, then he or she may not use general language, such as written notice, that would necessarily encompass[] a will; rather the trustor must instead expressly specify that a will can constitute written notice. [Fn. omitted.]” (Gardenhire at p. 894.) A Law Revision Comment stating that a trustor must provide in the trust for revocation by will did not prohibit the trustor from using general language that would necessarily encompass a will. (Id. at p. 895.)
We agree with Gardenhire and the Third Restatement of Trusts, that Maxine could modify the Trust by a last will and testament. We see no problem with a will constituting written notice modifying the distribution provision of a trust, even though the will’s bequests do not take effect until the person dies.
McDaniel complains the result will be that a trust might by modified by a settlor writing in her diary, “I wish I’d never created that stupid trust.” We have no need to address this hypothetical.
McDaniel cites Heaps v. Heaps (2004) 124 Cal.App.4th 286, which held a man’s second wife was not entitled to assets from a family trust after her husband died, where the assets had previously been placed in a revocable living trust by the man and his first wife, and the attempted withdrawal of assets from that first trust -- by taking title in a form other than the trust’s name, without mentioning the trust -- was ineffective. Something else was required, because the first trust contained provisions (1) requiring a “duly executed instrument” to amend or revoke the trust, and (2) allowing trust assets to be held “in any way” and still be trust assets, i.e., the trustee could hold assets in the trustee’s name “without a designation showing it to be Trustee....” (Id. at pp. 289-292.) By its own terms, the first trust became irrevocable upon the death of the first wife. (Ibid.)
McDaniel argues that, like Heaps, the writing here (the holographic will) that did not even mention the trust, but which purported to change title to trust property, was ineffective to modify or revoke the trust. However, Heaps is inapposite. Unlike the trust in Heaps, here the trust contained no provision that trust property could be held in any name and still be trust property.
McDaniel’s reply brief cites Reed v. Hayward (1943) 23 Cal.2d 336 at page 339, as supposed support for his argument that an unprobated will cannot be used as evidence of a testator’s intent. However, Reed does not help here. It held that, although the plaintiff in a quiet title action claimed title through an unprobated will -- which could not be used as evidence of title until it was established in the probate court -- the complaint was not vulnerable to demurrer, since the will may be admitted to probate before the quiet title action came to trial. Unlike Reed, where the will was the sole source for the claim of title, here Marcel claims entitlement under the Trust.
McDaniel’s reply brief argues that, if a will can be evidence of intent to modify a trust even without the will being validated in probate court, then the invalid Form Will which Maxine signed in the hospital shortly before her death, by revoking prior wills, had the effect of reinstating the trust as it was before the prior will. We disagree. The issue is whether she expressed an intent to change the Trust distribution. Though the Form Will ambiguously referred to Maxine’s “son,” it appears both the holographic will and the Form Will expressed Maxine’s intent that her son Marcel have the property.
“[T]he primary rule in construction of trusts is that the court must, if possible, ascertain and effectuate the intention of the trustor or settlor.” (Ephraim v. Metropolitan Trust Co. (1946) 28 Cal.2d 824, 834; Crook v. Contreras (2002) 95 Cal.App.4th 1194, 1206.) The holographic will shows that the intent of the testator, Maxine, was to leave her home and its contents to Marcel. The trial court found this will to be valid, and we have no reason to dispute the trial court’s finding and conclusion on this point. We conclude Maxine’s holographic will constituted written notice from herself as Trustor, to herself as Trustee, effecting a modification of the Trust. The holographic will of February 18, 2005, modified paragraph 3.2 of the trust, as amended earlier on May 13, 2004 (see pp. 8-9, ante), so that paragraph 3.2 provides in pertinent part: “Upon the death of Trustor [Maxine], if Trustor’s home is an asset of the trust estate, the trustee shall distribute the home and Trustor’s furniture, furnishings, and articles of a personal nature, to Mark (‘Marcel’) Orbea if he survives Trustor by thirty days.” Title to the house and its contents passed to Marcel upon Maxine’s death without probate.
The remainder of paragraph 3.2 remains intact.
V. Quiet Title/Ejectment/Damages
McDaniel argues the trial court’s statement of decision is internally inconsistent and conflicts with the court’s order in the trust action. The trial court did not quiet title in Marcel as Trust beneficiary, but rather held that the holographic will would have to be probated, and title to the property would have to be quieted in the probate case. McDaniel wants us to remand with directions to quiet title in him.
Though McDaniel cites no legal authority, we believe the trial court did have authority to quiet title without probate proceedings. Thus, Marcel filed his petition under section 17200, which authorizes trust beneficiaries to petition the court concerning the internal affairs of a trust. Section 17200.1 states, “All proceedings concerning the transfer of property of the trust shall be concluded pursuant to the provisions of Part 19 (commencing with Section 850) of Division 2.” Section 856 provides that, except as otherwise provided in other statutes, “if the court is satisfied that a conveyance, transfer, or other order should be made, the court shall make an order authorizing and directing the personal representative or other fiduciary, or the person having title to or possession of the property, to execute a conveyance or transfer to the person entitled thereto, or granting other appropriate relief.” (Italics added.) The exceptions are where the petition was filed in the wrong court (§ 853) or the petition is abated (§ 854). Here, the petition was originally abated but the abatement was vacated by stipulation of the parties. A revocable inter vivos trust is a device to avoid probate. (Zanelli v. McGrath (2008) 166 Cal.App.4th 615, 633.)
We conclude the trial court had authority to quiet title as “other appropriate relief” under section 856. However, instead of the remedy sought by McDaniel (remand with directions to quiet title in McDaniel), we shall direct the trial court to quiet title in Marcel.
In light of our conclusion that Marcel was entitled to the property upon Maxine’s death, we reject McDaniel’s arguments that he is entitled to an order for ejectment of Marcel and for damages for the mortgage, tax, and insurance payments made by McDaniel while Marcel lived in the house after Maxine’s death.
VI. Costs
Finally, McDaniel claims he was entitled to a cost award as the prevailing party in the trial court, because he prevailed in having the quitclaim deed and Form Will invalidated. Marcel, in turn, seeks a cost award for this appeal. We reject both.
As McDaniel concedes, a cost award in the trial court was discretionary. (Code Civ. Proc., § 1032.) Although he succeeded in getting the quitclaim deed and Form Will invalidated, those were hollow victories, because plaintiff did not get what he really wanted -- a declaration that the property belongs to him. McDaniel fails to show abuse of discretion in the trial court’s denial of his request for costs.
As to Marcel’s request for costs on appeal, we deny the request pursuant to our discretion to deny costs. (Cal. Rules of Court, rule 8.278(a)(5).)
DISPOSITION
In appeal No. C058298, the judgment entered January 25, 2008 (invalidating the quitclaim deed and dismissing the claims for quiet title, conversion and ejectment), is reversed as to the quiet title count only, and the case is remanded to the trial court with directions to the trial court to enter a judgment quieting title to Maxine’s home in Marcel. The judgment is otherwise affirmed.
In appeal No. C058397, the order granting Marcel’s petition and ruling the Trust was amended, is affirmed.
As to both appeals, the parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
We concur: ROBIE, J., BUTZ, J.
Section 854’s reference to “this chapter” is outdated because there is no chapter, as there was in a former version of the statute before overhaul of the Probate Code (Stats. 1987, ch. 923, § 93, pp. 3045-3046, former § 9865). The title of the former chapter -- Conveyance or Transfer of Property Claimed to Belong to Decedent or Other Person -- is now found in Part 19, which encompasses sections 850-859.