Opinion
F082860
01-18-2023
ALEXIS M. ARSENIO, as Trustee, etc., Plaintiff and Respondent, v. LORRAINE SERPA, Defendant and Appellant.
Law Office of Anthony T. Salazar and Anthony T. Salazar for Defendant and Appellant. Broderick Legal Group and William Broderick-Villa for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Stanislaus County, No. PR-20-000177 John D. Freeland, Judge.
Law Office of Anthony T. Salazar and Anthony T. Salazar for Defendant and Appellant.
Broderick Legal Group and William Broderick-Villa for Plaintiff and Respondent.
OPINION
DE SANTOS, J.
Alexis M. Arsenio, in her capacity as trustee of a family trust (Plaintiff), filed a petition in probate court to invalidate a 10-year lease on residential property held in the trust. Plaintiff alleged the lease, which was signed by her now deceased grandfather and required no cash rent, was obtained by undue influence. After a court trial, the trial court entered a judgment invalidating the lease, awarding damages to the trust based on the property's rental value, and awarding attorney fees and costs.
The lease's tenant, Lorraine Serpa (Lorraine), appealed. She contends the trial court erred (1) in its discovery rulings, (2) by failing to consider her evidence, (3) by failing to make factual findings, (4) by concluding the lease was a donative transfer subject to invalidation under Probate Code section 21380, (5) by concluding elder financial abuse had occurred, (6) in awarding attorney fees and costs, and (7) by failing to apply the same standards to her, a self-represented litigant, as applied to other litigants.
Undesignated statutory references are to the Probate Code.
As explained below, the record designated in this appeal is inadequate to affirmatively demonstrate the discovery rulings were erroneous, the trial court failed to consider Lorraine's evidence, or the court failed to make factual findings. Based on the record presented, we conclude the trial court did not err when it determined Lorraine drafted the lease, the lease made a donative transfer, the lease was invalid pursuant to the conclusive presumption created by section 21380, and the lease constituted a wrongful taking for purposes of the penalty and attorney fees provisions in section 859. On the issue of damages, we conclude that Plaintiff opinion testimony as to the property's fair market rental value, while admissible under Evidence Code section 813, subdivision (a), does not constitute substantial evidence supporting the trial court's finding that the property's monthly rental value was $1,500.
We therefore modify the judgment to vacate the award of damages and affirm the judgment as modified.
FACTS
Frank Sherman Arsenio (Decedent) was born in June 1926. He and his wife, Ottillia Arsenio, had one child, Jim Arsenio. Jim had two children, Plaintiff Alexis M. Arsenio and William Sherman Arsenio.
Decedent and Ottillia established the Arsenio Family Trust u/a/d May 11, 1981. Ottillia died in 1996. Decedent died in November 2019 at the age of 93. Plaintiff became the successor trustee of the Arsenio Family Trust upon her grandfather's death.
Plaintiff has a bachelor's degree in business administration and has worked at an accounting firm in Turlock for nine years. Her main responsibilities are processing and proofing tax returns and acting as a personal assistant to one of the firm's owners. Decedent's income tax returns were prepared by that firm for roughly 15 years preceding his death.
The property held in the Arsenio Family Trust includes a 28.8-acre parcel on South Moffett Road that consists of 25 acres of almond trees and 3.8 acres where a house, barn, corral, two storage containers, an old train car, and small shop are located. Decedent lived across the road from the 28.8-acre parcel in a home owned by his son, Jim.
Jim and his wife lived in a house bought by Decedent in Snelling.
In 2018, Lorraine and her husband, Helio Serpa, had been living with Lorraine's mother but issues arose that resulted in them having to find another place to live. They went to visit Decedent and told him they were looking for a place to stay where they could keep their animals. Lorraine testified that Decedent said they could stay at the 3.8 acres, it had been vacant for five and a half years, and they should take a look at it. Lorraine testified they went to the property, saw it was in very bad condition, and saw the house was unlivable.
Lorraine and her husband were not related to Decedent. Lorraine had known Decedent and his wife since she was 12 years old, was very close to him, and had worked at his ranch in Snelling. Lorraine stated Decedent was a dear friend and father figure to her.
After moving onto the property, Lorraine and Helio lived in their motor home toy hauler for the first six months. Many photographs of the property showing its condition and the inside of the house were admitted into evidence at the trial. Prior to 2018, the house had been broken into and ransacked.
The focus of this litigation is a 10-year lease covering the 3.8 acres (Lease) that was signed by Decedent, Lorraine and Helio. It listed Decedent as the landlord, Lorraine and Helio as the tenants, and stated its term commenced on September 11, 2018, and ended on September 30, 2028. The tenants, Lorraine and Helio, were not required to pay cash rent, but agreed to maintain the property with the landlord paying for all materials needed to maintain the property and all electricity. The Lease was signed by the parties on October 3, 2018, and their signatures were acknowledged by a notary public.
Lorraine testified that Decedent dictated the terms of the Lease to her, she typed it into a computer at Decedent's house, and she printed out copies later at the 3.8 acres or her office (she is a licensed real estate agent). Lorraine also testified that Decedent asked to go to a notary, saying to choose whichever was closest to his home. North American Title was the closest, so Lorraine and Helio drove Decedent to a notary there.
The evidence about Decedent's failing memory, dementia, the control he exercised over his financial affairs, and the gift of a pickup truck to a caregiver are not described in this opinion because that evidence is not relevant to the application of the conclusive presumption in section 21380 to the facts of this case. Also, evidence relating to the rental value of the 3.8 acres is set forth in part V of the opinion.
PROCEEDINGS
In February 2020, about two and a half months after Decedent's death, Plaintiff filed a petition for cancellation of instrument and for the return of property to the Arsenio Family Trust. The petition named Lorraine and Helio as respondents. A copy of the petition was not included in the record on appeal designated by Lorraine.
In March 2020, Lorraine and Helio filed an opposition to the petition. In July 2020, they filed a verified amended response to the petition, which is included in the record on appeal.
On October 29, 2020, Plaintiff filed a request for dismissal of Helio. At the trial, plaintiff's counsel asserted that Helio had been dismissed because he had not attended a scheduled deposition and had stated he could not participate in a trial due to ill health.
On November 17, 2020, a one-day trial was held. Plaintiff, Lorraine, and Helio testified at the trial. Plaintiff filed a posttrial brief on November 30, 2020, and Lorraine filed a posttrial brief on December 21, 2020.
The superior court's case docket included in the clerk's transcript (Docket) contains a January 6, 2021 entry for a "Tentative Decision"; a January 15, 2021 entry for an "Objection" filed by Lorraine; and a January 28, 2021 entry for an "Objection" that is not attributed to either party. None of these documents were included in the record on appeal. The statements of decision listed in the Docket are described in part III.A. of this opinion.
Tentative decisions after a court trial are mentioned in California Rules of Court, rules 3.1590(a) and (b).
On February 22, 2021, the trial court signed and filed a "JUDGMENT FOLLOWING COURT TRIAL" that included 15 numbered paragraphs under the heading "COURT FINDINGS." The court found Lorraine drafted the Lease and stated the Lease was invalid under section 21380 as an impermissible donative instrument. The court determined that, for purposes of section 850, Lorraine had wrongfully taken property from the Arsenio Family Trust, was required to return $37,500 ($1,500 per month times 25 months) and, pursuant to section 859, was liable for twice the value of the property taken. As a result, Lorraine's liability totaled $112,500. The judgment also awarded Plaintiff her costs and attorney fees pursuant to section 859 and Welfare and Institutions Code section 15657.5.
In March 2021, Lorraine filed a notice of her intent to move for a new trial. Aside from the notice, no other documents pertaining to the motion for new trial were included in the record on appeal.
The Docket shows a substitution of attorney was filed on April 19, 2021. Presumably, the attorney appearing in the case was retained by Lorraine and, after the substitution, she was no longer a self-represented litigant.
On April 30, 2021, a hearing was held on Lorraine's motion for new trial. The minute order stated the trial court found Lorraine had not met her burden and, as a result, the motion was denied. In May 2021, Lorraine filed a timely appeal.
DISCUSSION
I. CLAIM OF DISCOVERY ERROR
A. The Parties' Appellate Briefs
Lorraine's opening brief contends the trial court made discovery errors. Lorraine asserts that on October 10, 2020, she and her husband propounded discovery requests to Plaintiff and on October 26, 2020, she received an e-mail from Plaintiff's attorney stating that he did not intend to answer the discovery requests. Lorraine also asserts that she filed a motion to compel and asked that the trial be continued, but the trial went forward on November 17, 2020, which rendered her motion to compel moot.
The portions of Lorraine's opening brief addressing discovery include no references to the clerk's transcript or the reporter's transcript and the only legal authority referred to is Code of Civil Procedure section 2024.020, subdivision (a). Omissions of references to the record are explained in part by the contents of the clerk's transcript filed in this appeal. It does not contain Lorraine's motion to compel, which presumably would have included a declaration with the copy of the discovery requests and Plaintiff's responses attached.
Plaintiff's appellate brief sets forth some of the fundamental principles of appellate procedure, including the principles that an appellant has the burden of demonstrating reversible error and, as a necessary corollary, must submit an adequate record. Plaintiff contends Lorraine had at least five months from the filing of the petition to the original trial date in September 2020 to conduct discovery, but did not propound any until October 2020, after the trial court granted a continuance and reopened discovery for 15 days with five days for mailing. Plaintiff contends the trial court correctly resolved all discovery disputes before the court trial, a further continuance was not warranted, and Plaintiff actually responded to Lorraine's untimely discovery.
Lorraine's reply brief reiterates her contention that the trial court made discovery errors. Specifically, the reply brief states "[t]he trial court erred in giving 15 days instead of 30 days to answer discovery. There were special interrogatories among other discovery requests that were not answered by [Plaintiff] that may have changed the outcome of the trial (AOB 9, AOB 12)." In addition, the reply brief asserts that Lorraine "filed a Motion to Compel further answers which was denied. Other than that, no motions were filed to extend or shorten the time for discovery responses. The trial court erred in not ordering [Plaintiff] to answer [Lorraine's] set two discovery requests (AOB 9, AOB 12)." The portions of Lorraine's reply brief asserting discovery errors contain no citations to the clerk's transcript or the reporter's transcript. The only legal authority referred to in the reply brief is Code of Civil Procedure section 2030.260, subdivision (a), which states that responses to interrogatories shall be served within 30 days unless the time for response is shortened or extended by the court.
Lorraine appears to believe the reply brief's references to her opening brief fulfills her responsibility to support her arguments with references to the record. (See Cal. Rules of Court, rule 8.204(a)(1)(C).) Page five of her reply brief includes the following one-sentence paragraph: "On the question whether the trial court erred in denying [Lorraine's] Motion for New Trial, Appellant's Opening Brief provides substantial evidence that it did and that it also made discovery errors." (See Muskan Food & Fuel, Inc. v. City of Fresno (2021) 69 Cal.App.5th 372, 389-390 [statements by an attorney in a brief are not evidence; appellate briefs cites to a brief filed in the superior court did not identify evidence sufficient to support a finding of fact].)
B. Lorraine Failed to Demonstrate Error
1. Appellant's Burden
Article VI, section 13 of the California Constitution states in relevant part: "No judgment shall be set aside ... in any cause, on the ground ... of the improper admission or rejection of evidence, or for any error as to any matter of pleading, or for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice." Case law refers to this provision as creating" 'the constitutional doctrine of reversible error.'" (Jameson v. Desta (2018) 5 Cal.5th 594, 609 (Jameson).)
"Under well-established principles of California's constitutional doctrine of reversible error, an order of the lower court is presumed correct-that is, all intendments and presumptions are indulged to support it on matters as to which the record is silent- and the appellant must affirmatively demonstrate prejudicial error. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Appellants fail to carry the burden of affirmatively demonstrating error if they, among other things, do not provide an adequate record on appeal or do not comply with certain briefing requirements in California Rules of Court, rule 8.204." (Herrera v. Doctors Medical Center of Modesto (2021) 67 Cal.App.5th 538, 546 (Herrera).) One such briefing requirement is "citations to facts in the record that support the claim of error." (In re S.C. (2006) 138 Cal.App.4th 396, 408.)
2. Analysis
Lorraine has not affirmatively demonstrated the trial court erred in its discovery rulings because (1) the assertions of historical and procedural fact in her appellate briefs are not supported by citations to the record and (2) the record designated by Lorraine does not include her motion to compel discovery, a copy of the discovery propounded to Plaintiff, or a copy of the written responses provided by Plaintiff. Without those documents, we cannot evaluate, much less determine, whether the responses were inadequate and, if an error occurred, whether it was prejudicial. As a result, Lorraine has not affirmatively demonstrated the trial court's discovery rulings were both erroneous and prejudicial. (See Herrera, supra, 67 Cal.App.5th at pp. 546-547 ["the lack of an adequate record compels us to conclude appellant failed to carry its burden of affirmatively demonstrating such an error occurred"].)
II. FAILURE TO CONSIDER EVIDENCE
The appellant's reply brief filed by Lorraine contends the trial court erred because it failed to consider evidence submitted by her. We recognize that in certain situations a trial court's failure to consider evidence may constitute reversible error. (E.g., Ritchie v. Konrad (2004) 115 Cal.App.4th 1275, 1282 [trial court "should have considered evidence tendered by both sides"].)
Appellants can easily claim a trial court did not consider relevant evidence, but it is difficult for the appellant to affirmatively demonstrate that the court's thought process excluded evidence from consideration. This difficulty arises from the fundamental principles of appellate review that require an appellate court to (1) presume the judgment is correct unless the appellant affirmatively demonstrates otherwise and (2) indulge all intendments and presumptions that support the judgment on matters as to which the record is silent. (Herrera, supra, 67 Cal.App.5th at p. 546.) Here, Lorraine has cited nothing in the clerk's transcript or the reporter's transcript affirmatively showing the trial court's thought process failed to consider (i.e., weigh) any of her evidence. Because the record is silent on the point, we are required by the fundamental principles of appellate review to presume the trial court considered Lorraine's evidence. Thus, Lorraine has failed to establish this claim of trial court error.
III. FAILURE TO MAKE FINDINGS
Lorraine also contends the trial court made no factual findings. In particular, she asserts: "The trial court made no factual findings, only presumptive findings and opinion. Instead, it ruled as a matter of law based on Probate Code section 21380 that is not relevant to this case. The trial court's decision cannot be upheld based on factual findings it never made. The trial court simply parroted the argument of opposing counsel."
A. Statement of Decision
The subject of findings after a court trial is addressed in Code of Civil Procedure section 632, which provides that a party to a court trial may obtain "a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial" by making a request that complies with specified requirements. (See Cal. Rules of Court, rule 3.1590(d) [request for statement of decision].) In this case, the trial court issued a statement of decision. The Docket contains a February 4, 2021 entry for a "Statement of Decision"; a February 11, 2021 entry for an "Objection" filed by Lorraine; and a February 22, 2021 entry for a "Statement of Decision." None of these documents are included in the clerk's transcript.
Despite the omission of the statement of decision from the appellate record, Lorraine's opening brief asserts "[t]he Trial Court mis-stated the facts when it writes in its Statement of Decision Following Court Trial that 'The Court finds it incredulous that a 92 year old man, likely suffering from some level of dementia could state the terms of a lease word for word, as described by [Lorraine].'" This assertion is, of course, not supported by a citation to the record. Following Lorraine's lead, Plaintiff's appellate brief refers to a statement of decision, describes parts in detail, and provides references to the page and line numbers of the statement of decision, all of which are not supported by a citation to the appellate record.
Because the statement of decision is not included in the appellate record, this court cannot check the accuracy of the parties' description of its contents. Consequently, we have ignored those descriptions. To conserve judicial resources, we have not gone through the formal procedure of striking those portions of the briefs.
B. Explicit and Implied Findings
The appellate record does contain a document that refers to findings made by the trial court. The judgment itself includes 15 numbered paragraphs under the heading "COURT FINDINGS." The contents of those paragraphs, some of which are described later in this opinion, contradict Lorraine's contention that the trial court did not make any findings.
Furthermore, Lorraine's contention about the failure to make findings ignores the doctrine of implied findings. In Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42 (Fladeboe), the court addressed the following question: "In a bench trial, how does an appellant obtain a record affirmatively proving the trial court erred by failing to make factual findings on an issue?" (Id. at p. 58.) This question can be rephrased as follows: What steps must an appellant take to avoid the application of the doctrine of implied findings? That doctrine "requires the appellate court to infer the trial court made all factual findings necessary to support the judgment." (Ibid.) There are two procedural steps an appellant must take to avoid application of the doctrine. She "must secure a statement of decision under Code of Civil Procedure section 632 and, pursuant to Code of Civil Procedure section 634, bring any ambiguities and omissions in the statement of decision to the trial court's attention." (Fladeboe, at p. 58.)
Lorraine has not demonstrated that, pursuant to Code of Civil Procedure section 634, she brought any purported failure of the statement of decision to make essential findings of fact to the trial court's attention. The Docket shows objections were filed in February 2021, but those objections are not included in the record on appeal. As a result, applicable law requires us to apply the doctrine of implied finding. Thus, we infer the trial court made all factual findings necessary to support the judgment so long as the implied finding is supported by substantial evidence. (Fladeboe, supra, 150 Cal.App.4th at p. 58; see In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)
To summarize, Lorraine has failed to carry her burden of affirmatively demonstrating the trial court failed to make factual findings. Express findings were included in the judgment itself and, as to factual disputes not addressed by those express findings, we resolve those disputes by applying the doctrine of implied findings.
IV. APPLICATION OF SECTION 21380
A. Standards of Review
1. Questions of Law and Fact
After a court trial, appellate courts independently review the trial court's determination of questions of law, which include questions of statutory construction. (Coburn v. Sievert (2005) 133 Cal.App.4th 1483, 1492.) In comparison, the court's express and implied findings of fact are reviewed under the substantial evidence standard. (Brewer v. Murphy (2008) 161 Cal.App.4th 928, 935.) When applying the substantial evidence standard, appellate courts view the evidence in the light most favorable to the prevailing party, drawing every reasonable inference and resolving all conflicts in the evidence in support of the judgment. (Ibid.) Evidence is "substantial" for purposes of this standard of review if it is of ponderable legal significance, reasonable in nature, credible, and of solid value. (Ibid.)
2. Credibility Findings
The specific standards of review applied to a trial court's credibility findings are significant to the outcome of this appeal and are not explicitly addressed in the appellate briefing. Findings that testimony is credible are subject to a different standard than findings that testimony is not credible.
When a trial court expressly or impliedly finds some or all of a witness's testimony is credible, the appellate court must accept that credibility finding unless the testimony is incredible on its face, inherently improbable, or wholly unacceptable to reasonable minds. (Nevarez v. Tonna (2014) 227 Cal.App.4th 774, 786; see Consolidated Irrigation Dist. v. City of Selma (2012) 204 Cal.App.4th 187, 201 [trial court's credibility findings cannot be reversed on appeal unless the testimony is incredible on its face or inherently improbable].)
In comparison, when a trial court expressly or impliedly finds all or part of a witness's testimony is not credible, appellate courts must accept that finding "if there [wa]s any rational ground for" the trial court to disbelieve the witness. (In re Jessica C. (2001) 93 Cal.App.4th 1027, 1043.) Rational grounds for disbelieving a witness include the factors listed in Evidence Code section 780, such as the witness's interest in the matter. (Evid. Code, § 780, subd. (f); see Pierce v. Wright (1953) 117 Cal.App.2d 718, 723.)
B. Conclusive Statutory Presumption of Undue Influence
Subdivision (a) of section 21380 enumerates "categories of transferees who are presumed to have procured a donative transfer through fraud by reason of the transferee's close relationship with the transferor." (Weisbord &Horton, Inheritance Forgery (2020) 69 Duke L.J. 855, 901, fn. 267; see § 21380, subd. (a)(1)-(7).) This appeal involves the first category and the relevant text provides:
"A provision of an instrument making a donative transfer to any of the following persons is presumed to be the product of fraud or undue influence: [¶] (1) The person who drafted the instrument." (§ 21380, subd. (a).)
Depending on the circumstances, the presumption created by section 21380 is either rebuttable or conclusive, depending on the circumstances. "[W]ith respect to a donative transfer to the person who drafted the donative instrument, ... the presumption created by this section is conclusive." (§ 21380, subd. (c), italics added.) In situations not covered by subdivision (c), the presumption affects the burden of proof and is "rebutted by proving, by clear and convincing evidence, that the donative transfer was not the product of fraud or undue influence." (§ 21380, subd. (b).)
The classification of presumptions is addressed in Evidence Code section 601, which states: "A presumption is either conclusive or rebuttable. Every rebuttable presumption is either (a) a presumption affecting the burden of producing evidence or (b) a presumption affecting the burden of proof.” We note that a “ ‘so-called conclusive presumption is really not a presumption but rather a rule of substantive law.' ” (People v. Dillon (1983) 34 Cal.3d 441, 474; Butler v. LeBouef (2016) 248 Cal.App.4th 198, 211 [conclusive presumption is actually a substantive rule of law].)
C. Trial Court's Decision
Under the judgment's heading "COURT FINDINGS," the trial court stated that (1) Lorraine "drafted the instrument (Exhibit 1) purportedly naming her and her husband as beneficiaries under a ten year lease ('Lease') of the Property"; (2) Lorraine "participated in a scheme to defraud Decedent in that she secured a notary to witness the signing of the Lease prepared by [her]"; (3) "at the time of its signing, the Decedent was subject to the undue influence exerted by [Lorraine]"; and (4) "the Lease fails under Probate Code section 21380, which states: (a) A provision of an instrument making a donative transfer to any of the following persons is presumed to be the product of fraud and undue influence: (1) The person who drafted the instrument." After the findings, the judgment decreed that "[t]he Lease . is an impermissible donative instrument, void ab initio, and of no force or effect."
The trial court's statement that the Lease fails under section 21380, subdivision (a)(1) is the equivalent of stating that the conclusive presumption of fraud and undue influence created by that provision applies to the Lease and renders it invalid. Accordingly, we consider whether the trial court erred in determining that section 21380, subdivision (a)(1) applied to the circumstances of this case.
D. Finding About Who Drafted the Lease
Lorraine contends the trial court erred in its opinion that she must have drafted the Lease. In her view, the evidence clearly shows that she "was only the transcriptionist of the lease[,] by typing it into her computer while it was being dictated to her by the Decedent."
At trial, Lorraine testified that she typed the lease and Decedent dictated it. She stated that everything in the Lease was said by Decedent verbatim, except he said "and" instead of the ampersand that appeared in the line identifying the tenants as "Helio/LU &Lorraine Serpa."
In finding that Lorraine drafted the Lease, the trial court impliedly found (1) Lorraine's testimony that she typed the Lease into her laptop computer and printed out copies was credible, (2) her testimony that Decedent dictated the contents of the Lease was not credible, and (3) Lorraine proposed (i.e., was the source of) terms included in the Lease.
The trial court's finding that Lorraine's testimony about Decedent dictating the terms of the Lease was not credible withstands scrutiny under the standard of review applied to such a credibility finding. In other words, there were rational grounds for the trial court to disbelieve that testimony, including Lorraine's interest in the matter. (See In re Jessica C., supra, 93 Cal.App.4th at p. 1043; Evid. Code, § 780, subd. (f).)
As to the finding that Lorraine proposed terms included in the Lease, the circumstantial evidence surrounding its preparation provides a reasonable basis for inferring that terms of the Lease were proposed by Lorraine. We recognized that other reasonable inferences could have been drawn from the circumstances. This court cannot adopt those inferences because the applicable standard of review requires us to accept all reasonable inferences that favor the judgment. (See Brewer v. Murphy, supra, 161 Cal.App.4th at p. 935 [when viewing the evidence in the light most favorable to the judgment, appellate courts draw every reasonable inference and resolve all conflicts in the evidence to support the judgment].)
Consequently, we conclude Lorraine has not demonstrated the trial court erred in finding that she drafted (i.e., proposed) terms included in the Lease.
E. A Lease Can Qualify as an Instrument
Lorraine contends section 21380 does not apply because Plaintiff offered no evidence that the Lease was an "instrument" for purposes of section 21382. Lorraine contends that the term "instrument" is limited to a will, trust, deed, or other writing that designates a beneficiary or makes a donative transfer of property.
First, we consider Lorraine's argument about section 21382, which provides in part: "Section 21380 does not apply to any of the following instruments or transfers." (§ 21382.) Leases are not among the instruments or transfers mentioned in section 21382 and, therefore, section 21382 did not preclude the trial court from determining that the Lease was an "instrument" for purposes of section 21380. In other words, the text of section 21382 does not support Lorraine's argument that the Lease is not an "instrument."
Second, we consider the Probate Code's definition of the term:" 'Instrument' means a will, a document establishing or modifying a trust, a deed, or any other writing that designates a beneficiary or makes a donative transfer of property." (§ 45.) This definition applies to section 21380 and throughout the Probate Code because section 20 states: "Unless the provision or context otherwise requires, the definitions in this part govern the construction of this code." The parties have not addressed, and therefore have not shown, that the provision or context otherwise requires a different definition of instrument be used when applying section 21380. Accordingly, we conclude the Lease will qualify as an "instrument" for purposes of section 21380 if it is a "writing" and either "designates a beneficiary or makes a donative transfer of property." (§ 45, italics added.)
The one-page Lease is a written document and, therefore, is a "writing" for purposes of section 45. The term "beneficiary" is defined in section 24 as "a person to whom a donative transfer of property is made or that person's successor in interest." Because the definitions of "instrument" and "beneficiary" both refer to the making of "a donative transfer of property" (§§ 24, 45) and because section 21380, subdivision (a) also uses the term "donative transfer," we next consider the meaning of that term.
F. Donative Transfers and Adequate Consideration
The Probate Code does not define "donative transfer." A legal dictionary states the word "transfer" means "[a]ny mode of disposing of or parting with an asset or an interest in an asset, including a gift, the payment of money, release, lease, or creation of a lien or other encumbrance. • The term embraces every method - direct or indirect, absolute or conditional, voluntary or involuntary - of disposing of or parting with property or with an interest in property." (Black's Law Dict. (11th ed. 2019).)Accordingly, we conclude the Lease qualifies as a "transfer" because it disposed of an interest in real property.
"The process of statutory construction begins with the words of the statute itself, giving them their usual and ordinary meaning." (Cavey v. Tualla (2021) 69 Cal.App.5th 310, 336.) Courts appropriately refer to dictionary definitions "to ascertain the ordinary, usual meaning of a word." (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122.)
The meaning of the term "donative transfer" as used in section 21380's predecessor (former section 21350) was addressed by the court in Jenkins v. Teegarden (2014) 230 Cal.App.4th 1128. The court stated it "includes not only a transfer for zero consideration, but also a transfer for unfair or inadequate consideration." (Id. at p. 1142.) The test for the adequacy of the consideration is whether the amount received was fair and reasonable under the circumstances. (Ibid.) In Jenkins, the court stated that "$45,000 plus $100,000 still was not adequate consideration for a $480,000 house." (Id. at p. 1143.)
To properly apply this test, we must determine whether it presents a question of law or a question of fact. Based on cases addressing similar questions, we conclude that whether consideration is fair and reasonable under the circumstances is a question of fact. For instance, a buyer seeking specific performance of contract for sale of real property must prove the consideration is adequate and, in that context, the adequacy of the consideration is a question of fact. (Paratore v. Perry (1966) 239 Cal.App.2d 384, 387.) Similarly, in a personal injury case, "[w]hat constitutes fair and reasonable compensation in a particular case is a question of fact, and no precise mathematical formula exists." (Abbott v. Taz Express (1998) 67 Cal.App.4th 853, 855 [jury's award of economic damages to injured plaintiff upheld].) These cases support the conclusion that whether a transfer was for fair and adequate consideration or, alternatively, was donative, constitutes a question of fact.
Here, the trial court's judgment referred to the Lease as "an impermissible donative instrument" and, as a result, we infer the trial court found that the consideration received in exchange for the Lease was unfair and inadequate under the circumstances. Consequently, we address whether that finding of fact is supported by substantial evidence.
G. Consideration Given for the Lease
The Lease included a paragraph labeled "Rent" that stated: "Tenants to maintain property clean up, mowing, and watering, weeding, and general maintenance. Installation and labor for all improvements to both properties." "[B]oth properties" refers to the 28.8 acres and the place across Moffett Road where Decedent lived. This maintenance obligation was further defined by a paragraph stating:
"Tenant's improvements to Septic System including leach line, clean out, clean up around property, going to dump. Bathroom shower and flooring, fans, light fixtures. Tenants to box up all items that are in the home like dishes, cookbooks, pots pans, books, picture frames, furniture and misc. items to be place in other bedroom/back of container for Sherman to go thru."
The Lease also stated the landlord was "to pay for all materials needed to maintain the property also all electricity."
In exchange for performing the specified tasks, Lorraine and her husband (1) received a lease with a term from September 11, 2018, to September 30, 2028, (2) were allowed "use of all out buildings including barn, corrals, train house, and two containers" and "access to all roads around property," and (3) were given "permission for dogs &cat to be inside the home." The Lease identified the animals of Lorraine and her husband as "3 dogs, 1 horse, 2 chickens, 1 cat."
1. $10,000 Cash
Lorraine contends that part of the consideration for the Lease was $10,000 in cash that her husband paid Decedent. She asserts receipts were given to Plaintiff's attorney during discovery, but the receipts were not introduced at trial. Lorraine testified her husband gave the cash to Decedent and she was not present when it happened.
The express findings in the judgment do not address whether or not Decedent was paid $10,000 in cash as rent. Consequently, under the applicable principles of appellate procedure, this court must infer that the trial court impliedly found no such payments had been made and the testimony about the cash payments was not credible.
As with the trial court's implied finding that Lorraine's testimony about Decedent dictating the terms of the Lease was not credible, we conclude the implied finding that the testimony of Lorraine and Helio about the payment of $10,000 in cash to Decedent was not credible. The applicable standard of review asks whether there were rational grounds for the trial court to disbelieve that testimony and the interest of Lorraine and her husband in the Lease is a rational ground for disbelieving the testimony. (See In re Jessica C., supra, 93 Cal.App.4th at p. 1043; Evid. Code, § 780, subd. (f).)
2. Obligation to Maintain
Absent the $10,000 payment of cash, the remaining consideration received by Decedent for the leased property was the obligations undertaken by Lorraine and her husband to maintain the properties. If those obligations are fair and adequate consideration, the Lease will not have made a donative transfer of property for purposes of sections 24, 45 and 21380, subdivision (a).
As background for this discussion, we note that the consideration required to form a valid contract under California law is not required to be "fair and adequate." An essential element to the formation of a contract is "sufficient cause or consideration." (Civ. Code, § 1550 [essential elements of a contract].) Civil Code sections 1605 through 1615 address consideration. In particular, Civil Code section 1605 states that "[a]ny benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, ... as an inducement to the promisor, is a good consideration for a promise." Civil Code section 1614 states that "[a] written instrument is presumptive evidence of a consideration." Under these provisions, California courts recognize that all the law requires for sufficient consideration to form a contract is the proverbial peppercorn. (E.g., Eleanor Licensing LLC v. Classic Recreations LLC (2018) 21 Cal.App.5th 599, 610.) Consequently, we conclude the agreement to provide maintenance of the properties constitutes a "benefit ... agreed to be conferred" upon Decedent and, thus, qualifies as "good" consideration for the Lease. (Civ. Code, § 1550.) As a result, the essential element of sufficient consideration for the Lease is satisfied.
While the consideration the tenants provided the landlord was sufficient for purposes of forming an enforceable contract, the test requiring fair and adequate consideration imposes a more stringent test. Here, the Lease itself and the trial court's credibility determinations support a finding that the tenants were not required to make any monetary payments as rent for the property. Consequently, from the landlord's perspective, the leased property would have a negative cash flow because the landlord was obligated to pay for all materials used to maintain the property and for all electricity. This negative cash flow and the surrounding circumstances adequately support the trial court's implied finding that the consideration received by the landlord was not fair and adequate for a 10-year lease of the 3.8 acres. (Cf. Cornblith v. Valentine (1930) 211 Cal. 243, 246 [exchange of equity with a net value of $4,100 for a net value of $6,200; finding of inadequate consideration upheld].) As a result, the Lease made a "donative transfer" to the tenants, Lorraine and Helio.
During closing argument, Lorraine stated Decedent "wanted us to stay ten years. He wanted it because he knew it was going to make them angry.... He wanted it. He wanted to make them angry, because he was angry with them at the time." This argument suggests that Lorraine recognized that the terms of the Lease were very favorable to the tenants and would annoy Decedent's family because the tenants would not be paying any money to stay on the property and the trust would be required to pay for materials and electricity.
In summary, the absence of fair and adequate consideration leads to the conclusion that the Lease made a "donative transfer" for purposes of section 21380, subdivision (a) and, as a result of the statute's conclusive presumption of undue influence, the Lease was invalid from its inception.
V. VALUE OF PROPERTY TAKEN
A. Background
Section 859 provides that where the trial court "finds that a person has in bad faith wrongfully taken . . . property belonging to . . . an elder, . . . the person shall be liable for twice the value of the property recovered by an action under this part." Section 859 also states that, "except as otherwise required by law, .. . the person may, in the court's discretion, be liable for reasonable attorney's fees and costs."
Here, the judgment stated that Lorraine "shall return wrongfully taken property pursuant to ... section 850, in the sum of $1,500.00, over 25 months, in the amount of $37,500.00" and imposed a penalty of twice that amount, which made Lorraine's liability total $112,500. The judgment also awarded Plaintiff attorney fees and costs under section 859.
Lorraine's opening brief challenges the trial court's finding as to value, asserting no evidence was "presented at Trial that proved the property was worth $1,500 per month in rent." Similarly, her reply brief states the "evidence at trial proved the property was not worth $1,500.00 rental value per month."
Plaintiff's appellate brief contends the "fair market rental value of the residence and 3.8 acres alone is at least $1,500.00 per month, as testified to at trial." Plaintiff also contends: "No admissible evidence contradicted the $1,500.00 per month fair market rental figure established by [Plaintiff] at trial." Addressing Lorraine's contention about the absence of evidence, Plaintiff asserts the trial court heard her testimony that the property could be rented for $1,500 per month. Plaintiff also notes that Lorraine did not object to Plaintiff's testimony regarding value.
The absence of an objection has no effect on whether the testimony presented satisfies the substantial evidence standard. "If the evidence has . . . insufficient probative value to sustain the proposition for which it is offered, the want of objection adds nothing to its worth and will not support a finding." (Kitchel v. Acree (1963) 216 Cal.App.2d 119, 124.)
B. Testimony of Fair Rental Value
During direct examination by her attorney, Plaintiff's testimony about the rental value of the 3.8 acres was presented in the following exchange:
"Q. So 28 and change is the whole thing, and 25 [acres] is just the almond orchard part.
"A. Correct.
"Q. But the part where the Serpas were residing, is that about 3.8 acres, is what you said?
"A. Approximately. Because there is a large yard. She has access to roads that surround the property."
"Q. And as to that 3.8 acres, have you developed an opinion as to a fair market value monthly rental?
"A. Yes.
"Q. And what is that?
"A. Approximately $1,500 per month.
"Q. Have the Serpas been paying - since you became trustee, have they been paying that 1,500 per month?
"A. No.
"Q. Have they paid any amount?
"A. No.
"Q. Now, they're not paying anything. Are you incurring expenses?
"A. Yes.
"Q. What - what expenses are you incurring as a result of the Serpas residing there?
"A. The electricity bill for the home that they are residing in." (Italics added.)
During Lorraine's cross-examination of Plaintiff, Lorraine attempted, with little success, to elicit the basis for Plaintiff's opinion as to rental value. Lorraine asked when Plaintiff last "walked into the property and noticed its condition." Plaintiff stated that she did not remember. Plaintiff acknowledged that, based on conversations with Decedent, she was aware Decedent was not living on the 3.8 acres because the house was in a disarray, had been ransacked, and had rodents and insects. Lorraine then referred to Plaintiff's testimony that the property would rent for $1,500 per month and asked if Plaintiff included the trees in that amount and Plaintiff replied, "No." The cross-examination then proceeded as follows:
"Q So since you just said you did not know what the house was like and it wasn't inhabitable, the bathroom wasn't working - obviously, he told you that. So you're thinking that it could still rent for $1,500 a month?
"A Correct.
"Q Where did you get that from; just a number out of the top of your head?
"A It's an amount that I was able to estimate.
"Q But you can't rent something that is not livable. We lived - did you not know that we lived
"[Plaintiff's Counsel]: Objection. That's not a correct statement of law. People rent properties without being able to live there all the time.
"THE COURT: I'm not hearing the question.
"[LORRAINE]: I'm just asking where she came up with $1,500 if she has not been on the property. She hasn't visited
"THE COURT: So, ma'am, you need to direct your questions to her.
"BY [LORRAINE]: Q. So I was just asking that. You haven't been on the property. How do you know that it would go for 1,500? You can take - drive by, and you can do an estimate of what properties may rent for; is that correct?
"A Yes.
"Q Okay. So just because we're living there now, you want to get $1,500 per month out of us; is that correct?
"A I'm not looking to get money out of you guys at this time."
At that point, Lorraine shifted her cross-examination of Plaintiff to questions about what occurred during Lorraine's deposition. The foregoing questions and answers are all of the testimony Plaintiff presented about the rental value of the property.
During Lorraine's examination of her husband, she asked about the condition of the property, referred to Plaintiff's opinion that the property was worth $1,500 per month and asked his opinion of its worth. He stated: "The whole 28 acres isn't worth $1,500, m[uch] less the house." He stated the house probably would have been condemned at that time and listed its problems as including floors that squeaked and were spongy, rats everywhere, roof leaks, only a half dozen electrical plugs that worked, and shorts in the electrical system when it rained. Earlier, he had testified to three foot tall weeds in the bathroom, grapevines growing in the pipes which resulted in his replacement of the pipes, an infestation of fleas, and dog urine on the carpet.
C. Plaintiff's Opinion Testimony About Value
1. Evidence Code
The Evidence Code specifically addresses who may give opinion testimony about the value of property. Evidence Code section 813 provides in part:
"(a) The value of property may be shown only by the opinions of any of the following: [¶] (1) Witnesses qualified to express such opinions. [¶] (2) The owner ... of the property or property interest being valued. [¶] .. . [¶]
"(c) For purposes of subdivision (a), 'owner of the property or property interest being valued' includes, but is not limited to, the following persons: [¶] (1) A person entitled to possession of the property. [¶] (2) Either party in an action or proceeding to determine the ownership of the property between the parties . . .."
In Mammoth Lakes Land Acquisition, LCC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435, the court cited Evidence Code section 813 and stated: "An owner of property is generally considered competent to estimate or offer a lay opinion of the property's value. [Citations.] 'In stating an opinion as to the value of his property, an owner is bound by the same rules of admissibility as is any other witness.'" (Mammoth Lakes, at pp. 475-476.)
The parties' appellate briefing did not address Evidence Code section 813 and this court asked for supplemental briefing on issues relating to its application. Plaintiff argued that a trustee of a family trust qualifies as an "owner" of the property for purposes of Evidence Code section 813 and cited Crail v. Blakely (1973) 8 Cal.3d 744-a case in which an administrator of an estate was allowed to testify as to the value of property. The court stated it thought "the administrator of an estate, having testified that he made an estimate of the value thereof, should be allowed to testify thereto" and the defendant's objection to the testimony went to its weight and not its admissibility. (Id. at pp. 754755.) The court explained its conclusion by referring to the rule "that the owner of property may testify to its value without showing any special qualifications" and stating an "administrator of an estate, being charged with responsibility for, and the right to take and retain possession of, estate property would seemingly fall into an analogous category" and the responsibilities imposed on an administrator seemingly would result in personal knowledge forming the basis for the opinion as to value. (Id. at pp. 754-755, fn. 7.)
Here, Plaintiff succeeded her grandfather as trustee and, as a result, stepped into his shoes as the landlord under the lease. We conclude a trustee under a family trust qualifies as an "owner" of leased property held in trust. Therefore, Plaintiff's opinion testimony as to value was admissible under Evidence Code section 813, subdivision (a)(2).
2. Substantial Evidence Review
While Evidence Code section 813 required the admission of Plaintiff's opinion as to the value of the leasehold interest in the 3.8 acres, it does not establish that the opinion satisfied the substantial evidence standard of review. When appellate courts review the sufficiency of the evidence supporting a trial court's factual findings, they recognize that substantial evidence is not synonymous with any evidence. (Oregel v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094, 1100.) Instead, the evidence must be substantial proof of the essentials that the law requires. (Ibid.) The focus is on the quality, rather than the quantity, of the evidence. (Ibid.) For instance, circumstantial evidence may constitute substantial evidence as long as the inferences drawn from the evidence are the product of logic and reason rather than speculation or conjecture. (Id. at p. 1101.)
"Opinion testimony which is conjectural or speculative 'cannot rise to the dignity of substantial evidence.'" (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) For instance, when an expert's opinion is based on assumptions of fact without evidentiary support, it has no evidentiary value. (Jennings v. Palomar Pomerado Health Systems, Inc. (2003) 114 Cal.App.4th 1108, 1117.)" 'If [the expert's] opinion is not based upon facts otherwise proved, or assumes facts contrary to the only proof, it cannot rise to the dignity of substantial evidence.'" (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51, 83; see Leslie G. v. Perry &Associates (1996) 43 Cal.App.4th 472, 484 [expert's opinion that a broken security gate was a substantial factor in bringing about a rape did not create a triable issue of fact as to causation because there was no evidence that the rapist entered through the gate].)
"Although our review for substantial evidence requires us to view the evidence in the light most favorable to the prevailing party [citation], it does not require blind acceptance of anything uttered during trial. We must still assess whether the evidence is 'substantial'-that is, whether it is 'reasonable, credible and of solid value' [citation]- and an opinion that' "does not rest upon relevant facts or which assumes an incorrect legal theory cannot constitute substantial evidence." '" (Shoen v. Zacarias (2019) 33 Cal.App.5th 1112, 1122.) Accordingly, opinions, even though uncontradicted, are worth no more than the facts upon which they are based. (Griffith v. County of Los Angeles (1968) 267 Cal.App.2d 837, 847, cert. den. 395 U.S. 945.)
3. Plaintiff's Opinion Does Not Constitute Substantial Evidence
Plaintiff had the burden of proving the value of the leasehold interest for the purpose of obtaining damages. (See Evid. Code, §§ 115 [burden of proof], 500 ["a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim ... that he is asserting"].) Plaintiff presented her opinion testimony that the 3.8 acres had a fair market rental value of $1,500 per month. During her direct examination, she did not identify the facts upon which this opinion was based and did not identify when, in her opinion, the leasehold interest had that value. For instance, there is no logical basis for this court or anyone to determine whether Plaintiff was of the opinion that the 3.8 acres had a steady value of $1,500 per month for every month that Lorraine occupied it or whether that value was based on its condition at the time of trial.
When Plaintiff was asked during cross-examination where she got that number and whether it was "just a number out of the top of your head," Plaintiff answered: "It's an amount that I was able to estimate." This response is not evidence of any useful fact. Saying one is able to form an opinion or make an estimate does not identify the factual basis for the opinion and does nothing to show the opinion is reasonable and solid, rather than a matter of speculation or conjecture. (See Shoen v. Zacarias, supra, 33 Cal.App.5th at p. 1122 [evidence is substantial when it is reasonable and of solid value]; Roddenberry v. Roddenberry, supra, 44 Cal.App.4th at p. 651 [opinion testimony that is conjectural or speculative is not substantial evidence].) The conclusion that Plaintiff's opinion as to value was speculative (i.e., not substantial) is supported by her testimony that she could not remember the last time they walked on the property and, based on conversations with her grandfather, knew the property was not habitable, had rodents, had insects, had been ransacked, and was in a disarray. Furthermore, the fact that Plaintiff had a business degree, worked at an accounting firm, and was familiar with her grandfather's tax returns is insufficient to show a familiarity with the rental market for residential acreages that were comparable to the 3.8 acres.
Accordingly, we conclude substantial evidence does not support the trial court's finding that the rental value of the 3.8 acres was $1,500 per month. As a result of this failure of proof, the award of damages of $37,500 and twofold penalty of $75,000 must be vacated.
VI. WRONGFUL TAKING UNDER SECTION 859
The trial court determined Lorraine participated in a scheme to defraud Decedent, which included preparing the Lease and securing a notary to witness the signing of that document. The court also determined Lorraine's acquisition of a leasehold interest in the 3.8 acres by this fraudulent scheme constituted a wrongful taking for purposes of section 859 and, as a result, she was liable for attorney fees and costs.
Lorraine's opening brief contends the plain language of the law proves that she did nothing wrong. Among other things, she asserts there was no evidence (1) she was the drafter of the Lease, (2) the Lease was an "instrument" for purposes of the Probate Code, (3) she was a "beneficiary" under the Lease, or (4) she had a fiduciary relationship with Decedent. Based on our earlier conclusion that substantial evidence supports the trial court's findings that Lorraine drafted the Lease and the Lease made a donative transfer, we reject the first three of these points. Furthermore, the trial court's finding that Lorraine participated in a scheme to defraud Decedent is the equivalent for finding that Lorraine engaged in wrongful conduct. This finding is adequately supported by circumstantial evidence and the finding that Lorraine's testimony to the contrary was not credible. (See pt. IV.A.2., ante [finding that some of Lorraine's testimony was not credible].)
In addition, Lorraine's reply brief contends "section 859 does not apply in this case as there was no taking of any property." We reject this contention on the ground that a transfer of a leasehold interest in real property constitutes a taking of property for purposes of section 859.
Accordingly, we conclude the trial court did not err when it awarded attorney fees and costs pursuant to section 859.
DISPOSITION
The judgment is modified by vacating paragraph No. 11 on page 2 of the judgment and paragraph No. 3 on page 4 of the judgment (both paragraphs relate to liability for the total sum of $112,500); as so modified, the judgment is affirmed.
Appellant shall recover her costs on appeal.
WE CONCUR: MEEHAN, Acting P. J. SNAUFFER, J.