Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. PR056780
Mihara, J.
The beneficiary of a trust filed a petition seeking to vacate a prior order terminating the trust. The beneficiary asserted that the trustee had committed fraud. After the beneficiary’s petition was taken off calendar, the trustee filed a petition seeking discharge. The trustee’s petition was granted, and the beneficiary’s estate appeals. The estate claims that the court erred in discharging the trustee without holding an evidentiary hearing on the beneficiary’s petition. We find that there is no appealable order before us regarding the beneficiary’s petition and reject the estate’s remaining challenges to the court’s order discharging the trustee.
I. Background
In 1987, Mark R. Tuban (Tuban) created a living trust. The purpose of the trust was to “retain the family businesses . . . and eventually provide enduring principal assets for my grandchildren” Trudi Tuban (Trudi), Susan Tuban (Susan), and Mark R. Tuban II (Mark). The trust provided that it was Tuban’s desire that Robert Bly, then Trudi’s husband, continue to manage all of the businesses, and Tuban gave Bly an option to purchase portions of two of the businesses. Tuban directed the trustees to “retain all of the real property without selling same, for as long as possible.” The trust provided for the trust assets to be divided into three equal shares at the time of Tuban’s death. “Ten years from my death or at such time as the death tax liability is paid in full, whichever last occurs, this Trust shall terminate and TRUDI’s share of the Trust shall be distributed free of Trust.” The trust shares of Susan and Mark were to be placed in separate trusts for each of them and were to be distributed to them when they reached the age of 50.
The record does not disclose the ages of Susan and Mark. Tuban died in 1991. The corporate trustee resigned in December 1993, and Trudi served as the sole trustee thereafter.
In September 2003, Trudi filed a verified petition for termination of the trust. The exhibits to her petition identified the assets and liabilities of the trust. In her petition, she proposed that the trust’s assets be transferred into a limited liability corporation called the Tuban Family LLC, which would be owned equally by Trudi, Susan and Mark, and managed by Trudi. Her petition was supported by consents to termination of the trust and waivers of their right to an accounting signed by Trudi, Susan and Mark. Trudi asked the court to confirm and approve her acts as trustee, order the distribution of the trust’s assets to the LLC, and discharge her as trustee upon the distribution of the assets to the LLC.
In November 2003, the court issued an order terminating the trust and providing that the trust’s assets were to be transferred into the LLC, which would be owned equally by Trudi, Susan and Mark, and managed by Trudi. The order provided that “Trudi Tuban Bly is discharged as Trustee on distribution of the assets of the trust as set forth above.”
On April 7, 2005, Susan filed a verified petition in which she asked the probate court to (1) set aside the order terminating the trust, (2) remove Trudi as trustee, (3) appoint a successor trustee, and (4) order an accounting. Susan claimed that the November 2003 order terminating the trust had been obtained by Trudi through a “fraud on the Court.”
Susan filed a declaration in support of her petition. She described how Trudi and Bly had discouraged her from inquiring about the administration of the trust by threatening her with the loss of her inheritance if she “dared to raise any questions.” Susan claimed that Trudi had engaged in “a long series of self-dealing transactions” involving trust assets to Susan’s detriment. In September 2003, Trudi had told Susan and Mark that they “had to sign” documents waiving an accounting and agreeing to termination of the trust “in order to receive [their] inheritance[s].” Susan was unaware that she had a right to an accounting, and she signed the papers.
After the court issued its November 2003 order terminating the trust, Trudi admitted to Susan and Mark that she had been “lying to us” throughout her administration of the trust. Trudi told them that Bly had been in control of the trust and that the trust’s books “are all messed up.” In March 2005, Trudi informed Susan that one of the family businesses was in dire straits, and it would be necessary for it to seek Chapter 7 bankruptcy protection. Trudi admitted mismanaging the trust’s assets. Susan declared that she would never have signed the papers agreeing to waive an accounting and agreeing to the termination of the trust if she had known of Trudi’s mismanagement of the trust’s assets. She claimed that Trudi had deliberately and fraudulently induced her to sign those documents.
In May 2005, Trudi filed an unverified opposition to Susan’s petition. She asserted that she should remain trustee because both she and Mark wanted her to remain trustee, which was the requisite majority under the trust. Trudi claimed that she had distributed over $840,000 from the trust to Susan and that she had provided an accounting of trust assets through 2002. Trudi’s opposition was supported by Trudi’s and Mark’s declarations. Mark declared that he was pleased with the job that Trudi had done as trustee, had confidence in her, and wished her to continue to be trustee. He also stated that he had been provided with an accounting by Trudi of trust assets through 2002. Trudi declared that she had competently administered the trust, had provided an accounting through 2002, and was working on an accounting for 2003 and 2004.
At the May 19, 2005 hearing on Susan’s petition, Trudi’s trial counsel asserted that Trudi was “on the verge of fully terminating the trust.” Susan suggested that Christine Backhouse be appointed the successor trustee of the trust. The following colloquy occurred at the hearing. “THE COURT: Sounds like the case is either ripe for mediation or reference at this point, because [it] doesn’t sound like you’re going to agree on the accounting issue and the selection of a corporate trustee. [¶] MR. DWYER [Trudi’s trial counsel]: I’ll agree to mediation. [¶] THE COURT: You want to see if you can pick one off the list downstairs? [¶] MR. DWYER: Sure. [¶] MR. HETTIG [Susan’s trial counsel]: The only question is, I’m not sure what there is to mediate. [¶] THE COURT: Winding up this trust and seeing if you can cut through all these issues, the he said she said situation and get down to what actually has been done and what needs to be done in the future in order to get this trust terminated. [¶] MR. HETTIG: I want to remind the Court that the first issue that we have requested the Court to do this morning is to set aside the order terminating the trust from December 2, 2003. We can’t proceed unless the Court vacates that order in order for us to proceed to anything, mediation, accounting and so forth. [¶] MR. DWYER: I would strongly disagree with that, Your Honor. That was stipulated to by all three parties. [¶] THE COURT: I can stay everything pending mediation if you would like to go to meditation. I can’t force you to. [¶] MR. DWYER: We’re willing. [¶] THE COURT: If that doesn’t work, we’re back to a 638 reference or setting the matter for contested hearing, and then I’ll have to find out what your time estimates are and see if I have time. If not, we will send you to the master calendar. [¶] MR. DWYER: We ask this be stayed, referred to mediation. If there is uncertainty as to whether the other side wants mediation, we ask this be stayed thirty days so we can come back here and further discuss it. [¶] THE COURT: Assuming everybody is acting in good faith and you can agree upon a mediator you are both happy with. We have a list. Maybe we should go out about forty-five days for status and see where you are. Even if you can narrow some of these issues and remove them from contention, that would certainly be worth the effort. [¶] MR. DWYER: Thank you, Your Honor. [¶] MR. HETTIG: We’re happy to do that.” The court set the matter for a “status” hearing on July 14, 2005.
Susan’s trial counsel thereafter made timely and repeated attempts to arrange for mediation, but Trudi’s trial counsel was unresponsive. In July 2005, Trudi’s trial counsel notified Susan’s trial counsel that all of the trust’s assets except for one item of real property had been transferred to the Tuban Family LLC, and that the remaining item would be transferred soon. Trudi’s trial counsel expressed the belief that this transfer rendered Susan’s petition “moot.” Susan’s trial counsel, on the other hand, believed that the transfer of the trust assets violated what he understood to be the court’s May 2005 “stay” of all actions in connection with the trust.
In July 2005, Susan filed a request for a decision on her petition. At the July 14, 2005 status hearing, Susan’s trial counsel argued that Trudi had violated the court’s “stay” order, but the court questioned whether any stay had been ordered. “Do we have an order staying? I don’t recall that specifically.” “I’ll have to pull the file and see if we have a minute order.” The court set an evidentiary hearing on Susan’s petition for October 2005.
Susan died in September 2005, and the October 2005 hearing was taken off calendar. In May 2006, Trudi filed a verified petition seeking a court order discharging her as trustee. She asserted that all of the trust’s assets had been transferred to the Tuban Family LLC. In August 2006, Susan’s estate filed a verified opposition to Trudi’s petition. It asserted that Trudi and her trial counsel were in contempt of the court’s May 2005 “Stay of further actions.” Susan’s estate asked the court to deny Trudi’s petition, hold Trudi in contempt, sanction Trudi and her attorney, and set a trial date on Susan’s petition.
At the August 2006 hearing on Trudi’s petition, Susan’s estate’s trial counsel asked the court to set a trial date on Susan’s petition. He asserted that the LLC had never been properly established because there was “no organizing agreement,” although the LLC had been registered with the Secretary of State. Trudi’s trial counsel asserted that the “proper forum for any claim against the LLC would be in civil court, not here.”
Susan’s estate’s trial counsel argued that Trudi had violated the stay, but the court reviewed the minutes from the May 2005 hearing and found no record of a stay. Susan’s estate’s trial counsel conceded that the court’s minutes controlled over the transcript, and the court concluded that there was no stay because none was reflected in the minutes.
Susan’s estate’s trial counsel continued to assert that Susan’s September 2003 waiver of an accounting had been “fraudulently obtained,” and sought a trial on that issue. The court granted Trudi’s petition and ordered Trudi discharged as the trustee of the trust. The court’s October 2006 order said nothing about Susan’s petition. On December 6, 2006, Susan’s estate filed a notice of appeal from “the Court’s Order in this matter granting the Petition of Trustee Trudi Tuban’s . . . filed on October 5, 2006 . . . .” The notice of appeal said nothing about any ruling on Susan’s petition.
II. Discussion
Susan’s estate contends that the court erred in (1) concluding that Susan’s petition to discharge Trudi as trustee and obtain an accounting was moot due to the transfer of the trust’s assets to the LLC, (2) failing to vacate the November 2003 order, as sought in Susan’s petition, on the ground that Trudi obtained it through fraud, and (3) failing to find that Trudi’s conduct in transferring the trust’s assets to the LLC violated the court’s alleged May 2005 stay order. Susan’s estate seeks a remand for an evidentiary hearing on Trudi’s fraud and an accounting.
At the outset, we must separate those issues that Susan’s estate may raise in this appeal from those issues which are not before us because they relate to Susan’s petition, which the court has never ruled upon, and which goes unmentioned in Susan’s estate’s notice of appeal.
“It is elementary that an appeal from a portion of a judgment brings up for review only that portion designated in the notice of appeal.” (Glassco v. El Sereno Country Club, Inc. (1932) 217 Cal. 90, 92.) “Our jurisdiction on appeal is limited in scope to the notice of appeal and the judgment or order appealed from.” (Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 436.)
The superior court has never made any appealable ruling on Susan’s petition. (Prob. Code, §§ 1300, 1304.) It did not grant, deny, dismiss, or strike her petition. Her petition has never even been heard. It was set for hearing in October 2005, but that hearing was taken off calendar by Susan’s trial counsel after Susan’s death. Susan’s petition was never again set for hearing. Indeed, at the August 2006 hearing that resulted in the October 2006 order, Susan’s estate’s trial counsel asked the court to put Susan’s petition “back on calendar.” “[W]e would still like to have [Susan’s petition] set for trial. Nothing has been resolved.” “That issue has not been tried or resolved.” The court never ruled on this request.
The court’s October order resolved only Trudi’s petition and the issue of whether there had been a stay in May 2005. The only order mentioned in Susan’s estate’s notice of appeal was the court’s ruling on Trudi’s petition. Consequently, the only issues that we may address in this appeal are contentions regarding the court’s ruling on Trudi’s petition. This means that we cannot address the primary contentions in Susan’s estate’s appellate brief regarding both the merits of Susan’s petition and the question of whether her petition was moot. Those issues were not the subject of the only appealable order that is before us in this appeal.
Susan’s estate contends that Susan’s consent to termination of the trust and her waiver of an accounting were obtained by Trudi through fraud. It claims that the evidence of Trudi’s fraud was undisputed because Trudi’s opposition to Susan’s petition was unverified. Probate Code section 1021 requires a response to a petition to be verified, and the record does not reflect that Trudi’s opposition was verified. However, an objection to the absence of a verification is forfeited if it is not raised below. (Zavala v. Board of Trustees (1993) 16 Cal.App.4th 1755, 1760-1761.) The record does not reflect that Susan challenged Trudi’s opposition on this ground below. Hence, it would appear that the question of whether the consent and waiver were obtained by fraud was not undisputed. Susan’s estate asserts that the court erred in failing to hold an evidentiary hearing on Susan’s petition. A court may set aside a final probate order only upon a showing of extrinsic fraud or extrinsic mistake. (Estate of Sanders (1985) 40 Cal.3d 607, 614 (Sanders).) Fraud and concealment by a fiduciary may constitute extrinsic fraud. (Sanders, at pp. 615-618.) The only order that is before us in this appeal does not resolve whether Susan’s petition should be set for an evidentiary hearing. Therefore, we express no opinion on this contention.
Susan’s estate claims that the issues raised in Susan’s petition were before the court at the August 2006 hearing on Trudi’s petition because the estate raised these issues in its opposition to Trudi’s petition. Not so. Susan’s estate’s three-page opposition to Trudi’s petition did not restate Susan’s petition but merely asked the court to set a trial date on Susan’s petition. The opposition was accompanied by no declarations, and it contained no allegations about Trudi’s alleged fraud. It simply asked the court to “now set a new date for that trial [on Susan’s petition].” The inclusion of this request in Susan’s estate’s opposition to Trudi’s petition did not transform the court’s order granting Trudi’s petition into an appealable ruling on Susan’s petition. The fact that Susan’s estate never obtained any ruling by the court on this request precludes the estate from pursuing appellate relief.
A couple of Susan’s estate’s contentions are before us in this appeal. Susan’s estate claims that the court erred in allowing the transfer of the assets to the LLC. While this issue could have been raised in an appeal from the November 2003 order, which directed the transfer to the LLC, it cannot be raised in this appeal. The court’s October 2006 order made no ruling on the validity of the transfer of the assets to the LLC. Moreover, although Susan’s estate argues that this transfer violated the trust by “depriv[ing] or delay[ing] distribution” of the trust’s assets to the beneficiaries, it plainly did not. Each of the beneficiaries owned an equal share of the LLC, so the transfer of the assets to the LLC was a distribution of all of the trust’s assets to the beneficiaries.
Susan’s estate’s only other contention that concerns the court’s ruling on Trudi’s petition is her claim that the court erroneously concluded that there had been no stay in May 2005. Although the court said at the May 2005 hearing that it “can stay everything pending mediation if you would like to go to meditation,” and the parties agreed to go to mediation, the court never actually imposed a stay either orally or in writing. (Italics added.) Neither the clerk’s minutes of the hearing nor the reporter’s transcript of the hearing show that a stay was ordered. Hence, the record supports the court’s finding that no stay was ever in effect.
As Susan’s estate makes no other contentions regarding the court’s October 2006 order granting Trudi’s petition, the only order which is before us in this appeal, the court’s order must be affirmed.
III. Disposition
The order is affirmed.
WE CONCUR: Bamattre-Manoukian, Acting P.J. Duffy, J.