Opinion
D058631
12-23-2011
Conservatorship of the Person and Estate of JEAN L. MORSE. NORTHERN TRUST, N.A., as Conservator, etc., Petitioner and Respondent, v. STEVEN MORSE et al., Objectors and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. P191462)
APPEAL from an order of the Superior Court of San Diego County, Gerald C. Jessop, Judge. Appeal dismissed.
In this substituted judgment proceeding, conservator Northern Trust, N.A., (Northern) sought to execute a proposed living trust for conservatee Jean L. Morse. Steven Morse and David Morse (Appellants) are Jean's stepsons. They appeal from an order sealing a page of the proposed trust containing the identity of the trust beneficiaries. They contend the trial court erred in sealing the page because it deprived individuals entitled by law to participate in the proceedings with the information most material to a determination of the conservator's petition for substituted judgment. Northern contends the appeal should be dismissed because the order is not appealable. Assuming we reject this argument, Northern also asserts dismissal is warranted because Appellants lack standing to appeal. We find that the order sealing the page is appealable, but conclude that Appellants lack standing to appeal, and thus, dismiss the appeal.
FACTUAL AND PROCEDURAL BACKGROUND
Jean and her late husband had a living trust prepared for them. Upon her husband's death, the trust estate was divided between a revocable "Survivor's Trust" and an irrevocable "Exemption Trust." Appellants were the named residual beneficiaries of the Exemption Trust. Jean later obtained a court order modifying the original trust to correct some ambiguities. Appellants consented to the modifications. Jean also named Northern the successor trustee. Because Jean did not want to disclose her estate plans in a public court proceeding, she did not name beneficiaries to the Survivor's Trust at that time.
Through an attorney, Jean later sought to revoke the Survivor's Trust and drafted the Jean Morse Trust with Northern as the trustee. Jean suffered a debilitating stroke before she had the opportunity to revoke the Survivor's Trust and to finalize and execute her trust. The trial court appointed Northern as the conservator of Jean's person and estate. Northern then learned about the unfinished status of Jean's estate plan from Jean's attorney, including Jean's desire to change the dispository provisions of the Survivor's Trust.
Northern filed a petition for substituted judgment to, among other things, revoke the Survivor's Trust and execute the proposed new trust. Because the Survivor's Trust lacked dispository provisions, Northern sought to enact Jean's proposed estate plan to avoid intestate distribution upon Jean's death. Northern represented to the court that Jean would have executed the Jean Morse Trust before her incapacity. Based on discussions with Jean's attorney, Northern proposed that the trust estate be divided equally between all of Jean's proposed beneficiaries.
Northern lodged a copy of the proposed Jean Morse Trust with the court. However, to preserve Jean's privacy, it separately filed page five of the proposed trust as a confidential document because it contained the dispository provisions of the trust. Appellants responded and objected to the petition. They argued that the petition should be denied because Northern's failure to disclose the dispository provisions of the trust denied them information necessary to determining the merits of the proposed action. Specifically, Appellants claimed that they needed access to the proposed trust beneficiaries to determine whether Jean had been unduly influenced.
The trial court directed Northern to file a motion detailing the court's authority to seal the page of the proposed trust naming the trust beneficiaries. Northern filed the motion, requested that Appellants' opposition be struck for lack of standing and that a protective order be issued to prevent the later disclosure of the single page in discovery. Appellants opposed the motion. After hearing argument, the trial court issued an order sealing the page submitted to it confidentially to protect Jean's right to privacy. The trial court, however, deferred its ruling on whether Appellants lacked standing. Appellants appeal from the order sealing the page.
DISCUSSION
I. Appealability
"A reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment." (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.) "The appealability of the judgment or order is jurisdictional and an attempt to appeal from a nonappealable judgment or order will ordinarily be dismissed." (Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 297 (Marsh).)
Under the one final judgment rule, "an appeal may be taken only from the final judgment in an entire action." (Tenhet v. Boswell (1976) 18 Cal.3d 150, 153.) Code of Civil Procedure section 904.1 codifies the common law one final judgment rule. (Kinoshita v. Horio (1986) 186 Cal.App.3d 959, 962-963.) Subdivision (a)(10) of Code of Civil Procedure section 904.1 provides that an appeal may be taken from an order made appealable by the provisions of the Probate Code. In turn, Probate Code section 1301 provides the list of appealable orders in a conservatorship proceeding and does not include an order sealing a document. (Undesignated statutory references are to the Probate Code.)
Nonetheless, an interim judgment or order may be appealable under the collateral order doctrine, which operates as an exception to the one final judgment rule. Under this doctrine "an interim order is appealable if: [¶] 1. The order is collateral to the subject matter of the litigation, [¶] 2. The order is final as to the collateral matter, and [¶] 3. The order directs the payment of money by the appellant or the performance of an act by or against appellant. [Citations.]" (Marsh, supra, 43 Cal.App.4th at pp. 297-298.) Although some appellate decisions have not mandated compliance with the third element, the majority view requires all three elements. (See Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2010) ¶¶ 2:78 to 2:80a, pp. 2-45 to 2-49.) As explained below, we need not address this split of authority as we find all three elements are satisfied.
Here, the order sealing the page is collateral to the subject matter of the litigation and is a final order as to this collateral matter. Additionally, numerous courts have concluded that an order sealing or unsealing a document is considered the performance of an act against the appellant. (Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 75-77, and cases cited therein.) Thus, we conclude that the order sealing the page is appealable.
II. Standing
Every action must be prosecuted in the name of the real party in interest. (Code Civ. Proc., § 367.) Standing may be challenged at any time, even, in the first instance, on appeal. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1345.) "Standing to appeal is jurisdictional [citation] and the issue of whether a party has standing is a question of law [citation]." (People v. Hernandez (2009) 172 Cal.App.4th 715, 719-720.)
In matters governed by the Probate Code, "interested person[s]" are entitled to appear or object in writing at or before a hearing. (§ 1043, subd. (a).) The Probate Code defines an "interested person" as an "heir, devisee, child, spouse, creditor, beneficiary, and any other person having a property right in or claim against a trust estate or the estate of a decedent which may be affected by the proceeding." (§ 48, subd. (a)(1).) Appellants admitted below that they did not qualify as interested persons as this term is defined by subdivision (a) of section 48. Nonetheless, they pointed out that under the Probate Code "[t]he meaning of 'interested person' as it relates to particular persons may vary from time to time and shall be determined according to the particular purposes of, and matter involved in, any proceeding." (§ 48, subd. (b).) Specifically, Appellants relied on Estate of Davis (1990) 219 Cal.App.3d 663 (Davis) to assert that they qualified as interested persons because Northern was required to give them notice of the hearing.
"[S]ubdivision (b) [of section 48] requires [the court] to evaluate the underlying policy considerations regarding a specific probate proceeding in determining whether the person or party is sufficiently interested to intervene." (Estate of Maniscalco (1992) 9 Cal.App.4th 520, 524.) " 'Thus, a party may qualify as an interested person entitled to participate for purposes of one proceeding but not for another.' [Citation.] Thus, section 48 is designed to provide the probate court with flexibility to control its proceedings to both further the best interests of the estate and to protect the rights of interested persons to those proceedings." (Id. at pp. 523-524.)
Accordingly, to resolve the issue of standing we must address the nature of a substituted judgment proceeding and the type of action proposed to be made on behalf of the conservatee. The Probate Code allows the court to substitute its judgment for that of a conservatee upon the petition of any interested person and after consideration of all relevant circumstances. (§§ 2580-2586; Conservatorship of Hart (1991) 228 Cal.App.3d 1244, 1250.) The proposed action may include, among other things, "[m]aking gifts of principal or income, or both, of the estate, outright or in trust." (§ 2580, subd. (b)(1).) "[B]efore it makes its decision the superior court must (1) provide for notice to various classes of persons (id. § 2581, subd. (c)), (2) determine (a) that the conservatee is not opposed to the action, or if opposed lacks legal capacity for the action, and (b) that the action either will have no adverse effect on the estate or will leave the estate adequate to provide for the conservatee and for the support of those the conservatee is legally obliged to support, taking all circumstances into account (id. § 2582), and (3) '[T]ake into consideration all the relevant circumstances, including but not limited to' specific circumstances enumerated in 11 categories (id. § 2583) recapitulated in a requirement that the court consider '[t]he likelihood from all the circumstances that the conservatee as a reasonably prudent person would take the proposed action if the conservatee had the capacity to do so.' (Id. subd. (k).)" (Conservatorship of Hart, supra, 228 Cal.App.3d at pp. 1252-1253.)
Here, the trial court had before it a request to revoke the Survivor's Trust and execute the revocable Jean Morse Trust. Jean has a privacy interest in her trust documents. Importantly, a trustee is not required to provide the terms of a revocable trust to a beneficiary. (§ 16069, subd. (a).) Rather, during the time that a revocable trust can be revoked, the duty to report is not owed to the beneficiaries, but to the settlor or other person having the power to revoke. (§ 15800; see also Cal. Law Revision Com. com., 54A Pt. 1 West's Ann. Prob. Code (2011 ed.) foll. § 16061, p. 75.) Moreover, Jean's attorney stated in a sworn declaration that the Survivor's Trust is devoid of dispositive provisions "because [Jean] did not wish to disclose her estate plans in a public court proceeding." Jean's attorney also indicated that he drafted the estate planning documents based on Jean's instructions, that she was "unwavering with her choice of the beneficiaries," and that prior to her stroke, Jean had indicated a desire to divide the trust estate equally among the beneficiaries. Thus, the court had before it strong evidence that Jean wanted to keep her estate planning documents private, that she would not have been opposed to the proposed action, and that she would have taken the proposed action if she had the capacity to do so. (§ 2583, subd. (e) & (k).)
Appellants argue that the court required full knowledge of the proposed beneficiaries to address the merits of the petition. Here, the trial court had this information, along with evidence that Jean named the beneficiaries while she was competent to do so. Accordingly, we reject Appellants' argument that disclosure of the named trust beneficiaries to them was required to protect Jean's interests. Although Appellants claim they are acting in accordance with the instructions of their deceased father to take care of Jean, they provided no authority that their deceased father had the legal right to direct Jean's affairs, including the distribution of her share of the community estate. Appellants similarly provided no authority to support their assertion that the mere right to notice of a proceeding automatically makes noticed individuals "interested person[s]" to the proceeding within the meaning of section 48. Their reliance on Davis for this proposition is misplaced. The Davis court agreed that a surety had standing to appear, not because notice was required to be given to it, but because it had a sufficient interest to qualify it as an interested person. (Davis, supra, 219 Cal.App.3d at p. 669.)
Based on the type of action proposed to be made on behalf of Jean in this substituted judgment proceeding, we conclude that Appellants are not interested persons within the meaning of subdivision (b) of section 48 so as to allow their intervention. Accordingly, we conclude they lack standing to appeal and dismiss the appeal.
DISPOSITION
The appeal is dismissed. Respondent is entitled to its costs on appeal.
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MCINTYRE, J.
WE CONCUR:
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NARES, Acting P. J.
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HALLER, J.