Opinion
G053950
02-28-2018
MARK R. ESTACION et al., Plaintiffs and Appellants, v. SHARON MORGAN, Defendant; BETTY DEKOVNER, as Trustee etc. Respondent.
Melinda Luthin Law and Melinda M. Luthin for Plaintiffs and Appellants. Murtaugh Meyer Nelson & Treglia, W. Rod Stern and Thomas N. Fay for Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2015-00807011) OPINION Appeal from orders of the Superior Court of Orange County, Thomas H. Schulte, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Motion to dismiss appeal. Request for Judicial Notice. Order on preliminary injunction affirmed in part and reversed and remanded in part. Order allowing receiver to hire counsel affirmed. Motion and request denied. Melinda Luthin Law and Melinda M. Luthin for Plaintiffs and Appellants. Murtaugh Meyer Nelson & Treglia, W. Rod Stern and Thomas N. Fay for Respondent.
* * *
This is a dispute between stepsiblings about the terms of an inter vivos trust established by Dortha L. Lamb (Dortha). Plaintiffs Mark R. Estacion, Richard A. Estacion, and Scott A. Estacion (plaintiffs) obtained a preliminary injunction against defendant Sharon Morgan (Morgan), not a party to this appeal, which appointed respondent Betty DeKovner (DeKovner) as trustee ad litem and receiver. Subsequently DeKovner obtained an order modifying the preliminary injunction nunc pro tunc. Plaintiffs appeal from that order (Operative Injunction Order), claiming a variety of errors. They also appeal from an order (Attorney Order) authorizing DeKovner to retain counsel in her capacity as receiver.
We reverse two portions of the Operative Injunction Order—inclusion of the trustee ad litem's fee schedule and the receiver's bond. Otherwise we affirm the Operative Injunction Order and the Attorney Order.
DeKovner filed a motion to dismiss the appeal of the Attorney Order on the ground it was not an appealable order. In connection with their opposition to the motion, plaintiffs filed a request for judicial notice. We conclude the Attorney Order is appealable and deny the motion to dismiss. We also deny the request for judicial notice because the subject documents are not necessary to our ruling on the motion.
FACTS AND PROCEDURAL HISTORY
Plaintiffs are the children of Abelardo Estacion (Abelardo). Morgan is the daughter of Dortha. Dortha and Abelardo were married to each other for many years. Dortha was the trustor of the Dortha L. Lamb Trust (Trust). After Dortha and Abelardo died plaintiffs filed a petition in the probate court against Morgan. The petition is not included in the record. According to a declaration of plaintiffs' counsel, plaintiffs are beneficiaries of the Trust and allege in the petition Morgan exercised undue influence over Dortha, obtained a conservatorship over her person, and caused her to execute a restatement of the Trust (Restatement). Plaintiffs also alleged Morgan took funds in excess of $600,000 from accounts of Dortha and Abelardo. Allegedly, the Restatement names Morgan as trustee and the sole beneficiary of the Trust.
In connection with the petition plaintiffs filed a motion for preliminary injunction, accounting, and appointment of a receiver and trustee ad litem. On February 29, 2016, the court issued an order re preliminary injunction (First Injunction Order) enjoining Morgan from: 1) transferring any of the Trust property; 2) withdrawing any funds from any account in the name of Dortha or Abelardo naming any of plaintiffs as a payable on death (POD) payee or where the accounts had no survivorship rights; 3) exercising any POD or transfer on death (TOD) rights as to any bank accounts in Dortha's name; and 4) acting as trustee of the Trust.
In addition, Morgan was ordered to provide an accounting of the Trust from February 1, 2015 to the present, including any funds removed by her or at her direction from any account in the name of Dortha and Abelardo without survivorship or POD rights, where any POD payees were named, or from any account in Dortha's name containing a POD payee.
The First Injunction Order further named DeKovner as the trustee ad litem of the Trust and interim receiver for the property and funds in the "Accounts in issue." Morgan was ordered to turn over to the trustee ad litem all of the Trust property and all funds in any of the "above-described Accounts" by March 25, 2016. DeKovner, as the trustee ad litem was ordered to post a $70,000 bond. Plaintiffs were ordered to file a $2,000 undertaking. The court reserved jurisdiction to modify the injunction. The First Injunction Order contained handwritten additions, deletions, and interlineations by the court.
On March 22, 2016, the court issued another order re preliminary injunction (Second Injunction Order; together with First Injunction Order, Inoperative Orders), which essentially restated the First Injunction Order, but had some differences. The beginning date of Morgan's accounting was set as January 1, 2014 instead of February 1, 2015. The property to be turned over by Morgan to DeKovner included the Trust property, all funds and property currently or previously "held in any account in the name of" Abelardo or Dortha, "including, but not limited to" trust and custodial accounts at Bank of America and Wells Fargo Bank. The Second Injunction Order prohibited sale of any Trust property. DeKovner was ordered to post a $70,000 bond, without specification as to whether it was a trustee's bond or a receiver's bond. The word "[proposed]" was deleted in the caption of the order, and there were no interlineations, additions, or deletions in the body of the order.
Neither party can conclusively explain why two separate injunction orders were signed. Plaintiffs suggest it is because the First Injunction Order was submitted as a proposed order in conjunction with an order to show cause seeking a restraining order while the proposed Second Injunction Order was submitted with the motion for preliminary injunction.
After the Inoperative Orders were signed disputes between plaintiffs and DeKovner arose. Plaintiffs did not want DeKovner's attorney to participate in depositions they had noticed and in one instance suspended a deposition to prevent questioning. When DeKovner tried to prepare Dortha's former residence for rental, plaintiffs maintained she had no authority to rent it. There was another disagreement about DeKovner seeking funds to repair real property belonging to the Trust.
In addition, two banks would not turn over the funds that appeared to fall within the scope of the receivership because the Inoperative Orders did not specify the accounts.
DeKovner proposed a stipulation to resolve the issues. Plaintiffs did not agree and replied DeKovner should ask the court for instructions.
In July 2016 DeKovner filed her preliminary report of inventory.
Around the same time DeKovner filed a motion to modify and clarify the Inoperative Orders (Clarification Motion) and for direction. Clarification was necessary because the Inoperative Orders were inconsistent in some respects. In addition, plaintiffs' counsel had engaged in "acrimonious and obstructive behavior" and had tried to prevent DeKovner from conducting her investigation.
DeKovner requested the Inoperative Orders be narrowed because as originally stated, she would have been required to "perform an expansive forensic accounting" going back for an undefined period just to identify assets. She also stated the POD designations were uncertain and needed to be clarified. Further, she needed to know whether the receivership covered the accounts listed in the First Injunction Order or applied to the "broader designation" of accounts in the Second Injunction Order. Additionally she asked that the two banks holding accounts be specified, including the account numbers. Those banks had stated they would comply if specifically named.
DeKovner, as receiver, also filed a petition to hire W. Rod Stern (Stern), an attorney with Murtaugh Meyer Nelson & Treglia (Murtaugh), as her counsel (Appointment Petition). The Appointment Petition explained the duties of the receiver and the trustee ad litem were not clearly defined in the Inoperative Orders, causing confusion, leading to "profound and ever-increasing acrimony." There had been "threats of responsive and retaliatory actions" between plaintiffs and Morgan and between plaintiffs and DeKovner. The Appointment Petition also stated the receiver's ability to perform her duties was being "aggressively challenged, criticized, and ultimately undermined." It further stated appointment of a lawyer would benefit all parties in addition to assisting the receiver to perform her duties.
Plaintiffs opposed both the Clarification Motion and the Appointment Petition. They maintained Stern and Murtaugh had a conflict of interest because Stern's wife was on the docent council for the Orange County Museum of Art (Museum), which was a potential beneficiary of the Trust. Plaintiffs contended Murtaugh "secretly performed its services" for the Museum's benefit. They pointed to questions Stern had asked in depositions about the gift to the Museum as support for their claim.
Plaintiffs also asserted, based on deposition questions, that Murtaugh and DeKovner appeared to be acting on behalf of Morgan and her lawyer.
In a declaration, Stern stated he had never represented Museum in any capacity or communicated or cooperated with anyone at Museum about the case. He spoke to them one time when a Museum lawyer called to say she had seen allegations of Murtaugh's conflict of interest and asked how Stern was going to respond. They did not discuss the substance of the matter. Stern also declared his wife was a volunteer, unpaid docent at Museum and gave tours to school children one or two times a month. She had served as president of the docent council that raises approximately $3,000 annually to fund activities. That was the extent of his connection to Museum.
Before the hearings on the Clarification Motion and the Appointment Petition plaintiffs filed a motion to have DeKovner removed.
The court granted the Clarification Motion and issued the Operative Injunction Order, which struck the Second Injunction Order and clarified and replaced the First Injunction Order, nunc pro tunc.
The Operative Injunction Order suspended Morgan's duties and authority as trustee of the Trust. It also enjoined Morgan and her agents from: 1) distributing any assets held by the Trust; 2) withdrawing funds from any account currently held or which had been held in the name of or for the benefit of Dortha or Abelardo where any of the plaintiffs was shown as a POD beneficiary or where the accounts had no survivorship rights; 3) exercising TOD or POD rights as to any bank accounts under Dortha's name; and 4) acting as trustee of the Trust.
The Operative Injunction Order required Morgan to turn over all "trust assets" to DeKovner by March 26, 2016 and all property held in any account in the name or for the benefit of Dortha or Abelardo, including custodial and trust accounts at Bank of America and Wells Fargo Bank. It also required Morgan to provide an accounting "of the Trust and Accounts in issue" from February 2015 to the present.
The Operative Injunction Order again appointed DeKovner trustee ad litem of the Trust, with compensation to be paid per her schedule of fees. She was also appointed receiver of the property in 12 listed accounts to preserve the property rights of the parties, with compensation to be paid at $250 per hour. She was ordered to post a trustee's bond of $70,000, which was also deemed to satisfy all statutory requirements, if any, for a receiver's bond. No separate receiver's bond was ordered. DeKovner was ordered to file an initial inventory of receivership assets and file monthly reports thereafter.
Finally, the court also granted the Appointment Petition allowing DeKovner to hire Stern as attorney for the receiver. The Attorney Order provided attorney fees were subject to prior court approval.
This approval was also included in the Operative Injunction Order.
DISCUSSION
1. Introduction
Plaintiffs' briefs are confusing and difficult to follow. The bases of many of the arguments are questionable and many issues were better left unraised. Plaintiffs failed to give an adequate explanation of the material facts as to some issues (Cal. Rules of Court, rule 8.204(a)(2)(C) [opening brief must set out summary of significant facts]; all further references to rules are to the California Rules of Court) and sometimes included irrelevant information that confused some issues. Further, many arguments are repetitious.
In addition, many of plaintiffs' claims are conclusory, without reasoned legal argument or applicable authority to support them in violation of rule 8.204(a)(1)(B). While plaintiffs cite plenty of cases, they often fail to explain their applicability. And many of the cases are merely a statement of black letter law that do not apply to the issue being argued. "'"[C]ases are not authority for propositions not considered."'" (Loeffler v. Target Corp. (2014) 58 Cal.4th 1081, 1134.)
In the reply brief plaintiffs improperly raised new issues. We will not consider claims made for the first time in the reply brief because plaintiffs failed to show good cause why they were omitted in the opening brief. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10 (Shade Foods).)
Further, in the reply brief, plaintiffs raised several grievances that appear to have nothing to do with the appeal, including, for example, Morgan's alleged failure to comply with the Operative Injunction Order, and plaintiffs' preference DeKovner be removed. We will not consider any irrelevant arguments.
All of this made our review and analysis much more time consuming than it should have been. And while we could have considered plaintiffs' claims forfeited (e.g., Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289, 1294 (Provost) [arguments unsupported by reasoned legal argument may be deemed forfeited]) except as set out below we will review them on the merits to the extent we can understand them.
Plaintiffs' claims appear to be the court erred by: including certain accounts and excluding other accounts in the Operative Injunction Order; eliminating DeKovner's monthly reporting requirement for several months; preapproving DeKovner's receiver and trustee fees; eliminating the required receiver's bond; and allowing DeKovner as receiver to hire counsel.
If plaintiffs raised any additional arguments they are deemed forfeited for the reasons set out above. 2. Standing
Plaintiffs argue DeKovner, as receiver and trustee ad litem, had no standing to file the Clarification Motion or "otherwise inject herself into the litigation." Plaintiffs are incorrect.
Although Code of Civil Procedure section 568, which sets out the powers of a receiver, does not specifically state he or she may petition the court, it does state a receiver may "generally . . . do such acts respecting the property as the Court may authorize." Further, authority to petition the court for instructions and clarification is supported by case law. (E.g., National Financial Lending, LLC v. Superior Court (2013) 222 Cal.App.4th 262, 269 [receiver filed motion to clarify duties and authority]; Highland Securities Co. v. Superior Court (1931) 119 Cal.App. 107, 114 [receiver may petition court for advice and direction]; see Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017) ¶ 9:771, p. 9(II)-96 ["Receivers may request instructions from the court and frequently do so when powers and duties are vaguely formulated or do not cover a point in issue"].)
Similarly, Probate Code section 17200, subdivision (a) authorizes a trustee to "petition the court" "concerning the internal affairs of a trust," with "internal affairs" defined broadly and widely (Prob. Code, § 17200, subd. (b)).
Contrary to plaintiffs' claim DeKovner's alleged failure to comply with the procedural requirements of Probate Code section 17200 does not mean she did not have standing.
Our de novo review confirms DeKovner had standing to bring the petition in both her position as trustee ad litem and as receiver. (Schoshinski v. City of Los Angeles (2017) 9 Cal.App.5th 780, 790-791.)
Relying on an 1890 Wisconsin Supreme Court case and a 100-plus-year-old California appellate court decision (McKinnon v. Wolfenden (1890) 78 Wis. 237; Edwards v. Western Land & Power Co. (1915) 27 Cal.App. 724), plaintiffs argue DeKovner, as receiver, cannot question court orders. As shown by the authorities cited above, plaintiffs are wrong.
Further, plaintiffs waived any lack of standing or jurisdiction claims. At the hearing on the Clarification Motion in a discussion about how to resolve the differences between the Inoperative Orders, the court inquired, "Can I resolve that problem by just clarifying [the Second Order]?" to which plaintiffs' counsel responded, "Yes."
Many of plaintiffs' claims on this issue are based on false premises. For example, contrary to their argument, DeKovner did not move to strike the Inoperative Orders or seek injunctive relief. Rather, she moved to modify and clarify orders already in existence. Nor did DeKovner seek to "participate in the adjudication of their individual claims." (Estate of Ferrall (1948) 33 Cal.2d 202, 204.)
In addition, some of plaintiffs' arguments fail to take into consideration that the Operative Injunction Order was issued nunc pro tunc. For example, plaintiffs complain the Operative Injunction Order relieved DeKovner from an inventory and preparing monthly reports for nine months. It did no such thing. It was effective as of the date the First Injunction Order was filed, in February 2016. The court specifically made this point at the hearing.
The same is true as to plaintiffs' claims the Operative Injunction Order changed the initial date Morgan was restrained and contains deadlines that lapsed before the date the Operative Injunction Order was issued. Likewise, even though plaintiffs had already posted a bond, there was nothing improper about the Operative Injunction Order requiring a bond as a condition to the Operative Injunction Order becoming effective. A nunc pro tunc order "gives effect to the ruling retroactively from the date cited in the nunc pro tunc order." (Dakota Payphone, LLC v. Alcaraz (2011) 192 Cal.App.4th 493, 501.)
We reject plaintiffs' claims DeKovner lacked standing to: seek orders decreasing her duties or increasing her powers; violate the due process rights of nonparties; or advocate on behalf of a party. These are conclusory claims without discussion of facts, citation to applicable authority, or reasoned legal argument. (E.g., Provost, supra, 201 Cal.App.4th at p. 1294.)
We will not consider plaintiffs' argument improperly raised for the first time in the reply brief that DeKovner lacked standing because a claimed improper receiver's oath did not confer receivership on her or because she had not filed a receiver's bond. (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10.) 3. The Court Had Authority and Jurisdiction to Hear the Clarification Motion.
Plaintiffs argue the court had no authority to modify substantive portions of the Inoperative Orders. After our de novo review (Estate of Kraus (2010) 184 Cal.App.4th 103, 112) we disagree.
First, as DeKovner points out, plaintiffs affirmatively stated in the trial court they did not oppose modification and clarification of the scope of the Inoperative Orders or the duties of the trustee ad litem and receiver. Although they opposed certain of DeKovner's requests the opposition was not based on the court's lack of jurisdiction. Thus, plaintiffs waived this argument. (Telles Transport, Inc. v. Workers' Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, 1167.)
In the reply brief plaintiffs objected to the respondent's brief, claiming DeKovner has no standing to file it, and asked us to strike or ignore the brief. We decline to do so. Plaintiffs argue the order allowing DeKovner to hire counsel is stayed on appeal, and thus DeKovner "has no authorized counsel." Plaintiffs provide no authority that would bar DeKovner from responding to the appeal or employing counsel to do so.
Second, courts have inherent power to modify preliminary injunctions, which are provisional remedies. (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1248-1249.) Moreover jurisdiction was reserved in both Inoperative Orders for the court to modify them.
Lack of a reference in the Operative Injunction Order to this inherent authority or reserved power to modify does not negate the court's power.
We are not persuaded by plaintiffs' cursory claim the court did not follow statutory procedures in modifying the injunction because it did not evaluate DeKovner's probability of prevailing or failed to engage in a balancing test. Without commenting on the soundness, or lack thereof, of the legal argument, plaintiffs supply no record references or sufficient discussion of the factual basis of their argument.
Plaintiffs maintain the Operative Injunction Order substantively modified the Inoperative Orders. They point to Stern's argument at the hearing that the proposed Operative Injunction Order included additional accounts not in the Inoperative Orders and also that DeKovner sought to eliminate a duty to search for accounts other than those specified. But inclusion of those provisions was well within the court's power to modify an injunction.
Relying on the general rule that nunc pro tunc orders may be entered only to correct clerical errors (APRI Ins. Co. v. Superior Court (1999) 76 Cal.App.4th 176, 185), plaintiffs claim the Operative Injunction Order is void because it corrected a judicial error. We disagree.
The Operative Injunction Order did correct clerical errors that arose by virtue of the not entirely consistent Inoperative Orders covering the same subject matter. Further, in signing the Operative Injunction Order, the court found it was "consistent with the letter and intent of the" First Injunction Order.
Additionally, as stated above, the court had the power to modify the Inoperative Orders because they were not final. Thus, the court could have corrected the clerical errors nunc pro tunc and then either modified the corrected order or issued a new order. But issuing the Operative Injunction Order nunc pro tunc protected plaintiffs so the original effective date did not change. While it might not have been the optimum procedural vehicle for the court to use, there was no prejudice or error in issuing the Operative Injunction Order nunc pro tunc.
We reject plaintiff's argument the court had no authority to strike an appealable order. The Operative Injunction Order did not strike the First Injunction Order but only modified it nunc pro tunc, leaving the order in place. Striking the Second Injunction Order would have been proper even without a modification, as there was no basis for having two orders on the same motion. Moreover, the authority for plaintiffs' claim, Greene v. Superior Court (1961) 55 Cal.2d 403, dealt with an attempt to modify a final judgment, not a provisional remedy. (Id. at p. 404.)
Likewise, we reject plaintiffs' claim the only proper procedural method to modify the Inoperative Orders was a motion for reconsideration. As stated above, the court has inherent power to modify a preliminary injunction. 4. The Court Did Not Exceed Its Authority in Substantively Modifying the Inoperative Orders.
Code of Civil Procedure section 533 authorizes a court to modify an injunction on a showing of a material change of facts or to serve the ends of justice. This refutes plaintiffs' claim the Operative Injunction Order was invalid because it contained new provisions that were allegedly not in "conformity with the purpose" of their original motion.
That the Clarification Motion did not specify this section in its notice has no effect on our decision.
Plaintiffs contend the court exceeded its jurisdiction by including in the receivership estate property belonging to two nonparties, i.e., Abelardo's estate and the Estacion Foundation. They assert this puts them at risk of a claim from those nonparties. But this contention is not supported by the record.
First, the Operative Injunction Order, which specifies 12 accounts to be turned over, does not list an account in the name of the Estacion Foundation, and plaintiffs do not direct us to anywhere in the record supporting this assertion. Second, plaintiffs have not shown which, if any accounts, belong to Abelardo's estate.
Third, the Inoperative Orders described accounts to be turned over to the receiver in broad language. For example, the Second Injunction Order required a turnover of "all funds and property that is [sic] currently held, or was [sic] currently held in any account in the name of or for the benefit of Abelardo Estacion or Dortha Lamb, including, but not limited to the custodial and trust accounts held at Wells Fargo Bank and Bank of America." This same language is in the Operative Injunction Order. Thus, as DeKovner points out, even if we reversed the order granting the Clarification Motion, the accounts reasonably could be included within the scope of the Orders.
Fourth, plaintiffs specifically disavowed ownership of these accounts at the hearing. If the accounts were erroneously included in the Operative Injunction Order, which we cannot determine, the owners have the right to petition the court for them to be removed from the receivership.
Plaintiffs also complain that although the Inoperative Orders required Morgan to turn over "certain funds and property to the receiver," the Operative Injunction Order does not include those funds. Plaintiffs claim Morgan testified she had taken "funds in issue." They maintain the court had no jurisdiction to remove the receiver's power over the funds. This argument fails.
As explained above, the court did have jurisdiction to modify the Inoperative Orders, and the factual basis for this claim is unclear. The "certain funds and property" and "funds in issue" are not sufficiently identified. Nor do plaintiffs adequately explain that those funds are not included in accounts set out in the Operative Injunction Order.
Thus we conclude the court did not abuse its discretion in modifying the Inoperative Orders. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51, 132.) 5. Relief Included In Operative Injunction Order
Plaintiffs maintain the court had no authority to modify the Inoperative Orders to include relief not prayed for in their original petition. Specifically, they again point to inclusion of bank accounts allegedly belonging to the Estacion Foundation and Abelardo's estate, and payment to DeKovner. But again, the court has the power to modify an injunction to serve the ends of justice. (Code Civ. Proc., § 533.)
Plaintiffs also challenge the notice of the Clarification Motion, claiming it did not cite facts or law to support the Operative Injunction Order. They also assert the Operative Injunction Order included several terms that were not mentioned in the Clarification Motion or in their original motion for preliminary injunction, including, for example, the Estacion Foundation and Abelardo's estate accounts and exclusion of certain accounts mentioned above. Contrary to their contention, this is not a due process violation. The Operative Injunction Order was within the scope of the Clarification Motion. It did not have to conform to plaintiffs' original motion for preliminary injunction, so the court was within its discretion to include this relief. (People v. ConAgra Grocery Products Co., supra, 17 Cal.App.5th at p. 132.) 6. DeKovner's Fees
Plaintiffs incorrectly assert the court "pre-approv[ed]" DeKovner's fees. The Operative Injunction Order only approved her rates at $250 per hour as receiver and according to her schedule of fees as trustee ad litem. Contrary to plaintiffs' claim, the Operative Injunction Order did not preclude them from challenging DeKovner's fees or seeking to have Morgan pay them.
However, our de novo review confirms (Hartnett v. San Diego County Office of Education (2017) 18 Cal.App.5th 510, 517 [de novo review of statutory interpretation]) that ordering the trustee fees be paid according to DeKovner's fee schedule was error. If a trust sets out the trustee's compensation, that governs payment to the trustee. (Prob. Code, § 15680, subd. (a).) Under certain delineated circumstances, the court may change the trustee's compensation. (Prob. Code, § 15680, subd. (b).) But this may only be done on a "proper showing" and operate prospectively. (Prob. Code, § 15680, subds. (b) & (c).)
Here the Trust provides for a trustee fee of one percent of the value of the trust corpus per year. DeKovner's fee schedule allows trustee fees in excess of that amount. Neither party directs us to any place in the record where DeKovner made a motion, either separately or within the Clarification Motion, to allow her to charge trustee fees based on her fee schedule. Such a motion was required.
Thus, we reverse that portion of the Operative Injunction Order setting out the trustee fee schedule. DeKovner has the right to file a motion to set a fee schedule other than the amount set out in the Trust. We express no opinion as to what a proper trustee fee schedule should be. 7. Receiver's Bond
A receiver must "give an undertaking to the State of California, in such sum as the court or judge may direct, to the effect that the receiver will faithfully discharge the duties of receiver in the action and obey the orders of the court therein." (Code Civ. Proc., § 567, subd. (b).)
In the proposed First Injunction Order plaintiffs failed to include a provision for a receiver's bond. This violated their duty to "propose and state the reasons for the specific amount[] of the undertaking[] required" for the receiver. (Rule 3.1178.) In the First Injunction Order the court added a provision for a $70,000 trustee's bond. This amount was based on a suggestion by plaintiffs' counsel at the hearing on the preliminary injunction. But there was no provision for a receiver's bond.
The Second Injunction Order required DeKovner to post a $70,000 bond, without specifying whether it was a receiver's bond or a trustee's bond. At the hearing on the Clarification Motion, when DeKovner's counsel pointed this out to the court, the court ruled the "receiver having posted a bond as the trustee ad litem is sufficient." The Operative Injunction Order states: "The trustee's bond shall be deemed to satisfy all statutory requirements, if any, applicable to a receiver's bond."
Plaintiffs complain the court erred by waiving the receiver's duty to post a bond and substituting the trustee's bond for the receiver's bond. They also argue the amount of the trustee's bond is insufficient because the receivership estate will be worth almost $700,000. Arguably plaintiffs failed to make a proper record on this issue and we do not agree with some of their arguments. Even so we believe it was error to deem the trustee's bond sufficient to satisfy the receiver's bond.
We understand why the court made this ruling. DeKovner is acting in both positions. Not requiring a second bond will save the parties the cost of the bond.
But we recognize the two bonds protect different interests; the trustee's bond benefits the interested parties (Prob. Code, § 15602, subd. (a)(2)) and the receiver's bond benefits the State of California (Code Civ. Proc., § 567, subd. (b)). In addition, it appears the Trust estate and the receivership estate may be different. Therefore, in order to ensure these different interests are protected, two separate bonds are necessary. We remand to the trial court for it to order a receiver's bond. We express no opinion on the appropriate amount of the receiver's bond. 8. Attorney Order
a. Motion to Dismiss Appeal and Request for Judicial Notice
DeKovner filed a motion to dismiss plaintiffs' appeal of the Attorney Order on the grounds it was not an appealable order. In their opposition, plaintiffs argued neither DeKovner nor her attorneys had standing to file the motion to dismiss and included a request for judicial notice.
We are required to dismiss an appeal from a nonappealable order, even without a motion. (Katzenstein v. Chabad of Poway (2015) 237 Cal.App.4th 759, 771.) Whether or not DeKovner or her attorney has standing to file the motion to dismiss is irrelevant. As a result, we have no need for any of the documents on which plaintiffs rely in their opposition and deny the request for judicial notice.
Plaintiffs also argue the Attorney Order is a final, appealable order. We agree. Probate Code section 1300, subdivision (c) provides that in actions governed by that code, a party may appeal from an order "[a]uthorizing, instructing, or directing a fiduciary." Contrary to DeKovner's claim, a receiver is a fiduciary. (City of Chula Vista v. Gutierrez (2012) 207 Cal.App.4th 681, 685.) The Attorney Order authorized DeKovner in her capacity as receiver to retain counsel, making it appealable. Therefore, the motion to dismiss this part of the appeal is not well taken and is denied.
b. The Court Properly Allowed DeKovner, as Receiver, to Hire Counsel.
A receiver must obtain court approval to retain counsel. (Rule 3.1180.) An application for such approval must state the need for employment, the name of the attorney, and that the attorney is not counsel for, associated with, or employed by any attorney for any party. (Ibid.) Plaintiffs claim the court allowed DeKovner to hire counsel in violation of this rule. We disagree.
Plaintiffs waived the issue of whether DeKovner was entitled to hire counsel. At the hearing on the Appointment Petition, plaintiffs' counsel stated they were not opposed to allowing DeKovner to "hire an attorney for attorney purposes." (Sic.) Thus, they cannot challenge the Attorney Order on the basis DeKovner had no right to hire counsel or that she did not show the necessity of retaining a lawyer.
Plaintiffs' reliance on alleged comments by the court it did not believe DeKovner needed the court's permission to hire counsel is misplaced. First, the court inquired one time whether such permission was needed and accepted the response of counsel that it was. Second, the court did not rule DeKovner did not need court approval. Third, contrary to the over 100-year-old United States Supreme Court cases plaintiffs cite, in California we consider the ruling, not its rationale. (Paniagua v. Orange County Fire Authority (2007) 149 Cal.App.4th 83, 87.)
At the hearing on the Appointment Petition counsel did state plaintiffs opposed DeKovner hiring Murtaugh and for them to have to pay for an attorney to educate DeKovner or "for her to do a lot of things that a receiver does not necessarily do." But these are not grounds to overturn the Attorney Order.
The latter comment about things a receiver does not ordinarily do is unclear. Plus, the Appointment Petition did not state hiring counsel was necessary to educate DeKovner or advise her of the basis duties of a receiver. It stated counsel was requested to "advise" DeKovner as to the "terms and conditions of the Orders" and due to the disharmony between the parties themselves and between DeKovner and plaintiffs. The court was within its discretion to find counsel was necessary.
Plaintiffs additionally complain DeKovner did not identify all of her lawyers and failed to prove there was no conflict of interest. We are not persuaded.
The Appointment Petition states Stern is not an attorney for, associated with, or employed by any party to the action. This satisfied Rule 3.1180. Plaintiffs do not cite any authority stating a declaration must be filed in support of the Appointment Petition.
Plaintiffs also claim the court improperly placed the burden of proving Stern and Murtaugh did not represent another party to the action on them instead of on DeKovner. They point to the statement in the minute order that there were insufficient facts to show Stern would have a conflict. This does not show the court improperly shifted the burden. Rather, it is reasonably understood to mean DeKovner presented evidence there was no conflict and plaintiffs did not refute it.
Plaintiffs' contention Stern or Murtaugh has a conflict of interest is not well taken. Relying only on the register of actions, plaintiffs claim DeKovner, in her position as trustee ad litem, is a party to the action as an objector and as a respondent in a petition Morgan filed. Although unstated, plaintiffs seem to be arguing rule 3.1180 bars Stern from representing DeKovner because she is now a party. This argument lacks merit.
The register of actions does not suffice to support the factual basis of the claim. Likewise, plaintiffs have not presented adequate reasoned legal argument, thereby waiving the contention. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.) Plaintiffs' claim DeKovner may no longer act as a receiver because she is a party is outside the scope of the Operative Injunction Order and the Attorney Order that are the subject of this appeal. In addition, the record does not support plaintiffs' argument Stern has a conflict based on his wife's position as a docent for Museum or for any other reason.
We reject plaintiffs' claim the Attorney Order is improper because it failed to limit the scope of representation. Rule 3.1180 does not contain such a requirement and the cases plaintiffs cited do not support this contention. We are not persuaded that rule 3.1180's provision that a petition to hire counsel must state the need translates into a requirement the Attorney Order must define the scope of employment.
Finally, we decline to consider new arguments improperly raised for the first time in the reply brief as to why Murtaugh and Stern should not be allowed to represent DeKovner. (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10.)
DISPOSITION
Those portions of the Operative Injunction Order setting out the trustee's fee schedule and deeming the trustee's bond as sufficient to serve as the receiver's bond are reversed; the Operative Injunction Order is otherwise affirmed. We remand for the court to order a receiver's bond. The Attorney Order is affirmed. The motion to dismiss a portion of the appeal and the request for judicial notice are denied. The parties shall bear their own costs on appeal.
THOMPSON, J. WE CONCUR: BEDSWORTH, ACTING P. J. IKOLA, J.