Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County, No. INP017233, Harold Franklin Bradford, Judge. (Retired judge of the Alpine Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.)
Schlecht, Shevlin & Shoenberger and John C. Shevlin for Petitioner and Appellant.
Ackerman, Cowles & Associates, Richard D. Ackerman and Michael W. Sands, Jr., for Objector and Respondent.
OPINION
HOLLENHORST, Acting P. J.
I. INTRODUCTION
Petitioner and Appellant Orville K. Doyle, Jr., (Doyle) appeals from an order removing him as the executor of the estate of Orville K. Doyle, Sr., (decedent). Doyle contends the evidence was insufficient to support the trial court’s factual findings, and those factual findings, in turn, did not establish that he breached his fiduciary duties. We reject Doyle’s contentions, and we affirm.
II. FACTS AND PROCEDURAL BACKGROUND
Decedent died on September 8, 2000, and his will was admitted to probate on October 25, 2000. Decedent had been under conservatorship from October 1997 until his death; Doyle and Enzo G. Provenza were co-conservators. Under decedent’s will, Doyle, decedent’s surviving son, and Carolyn K. Steinke (Steinke), decedent’s surviving daughter, are co-beneficiaries of the estate in equal shares. Doyle was appointed executor of the estate.
The principal assets of the estate consisted of homes in Oregon and in Big Bear and Palm Desert, California, fractional interests in numerous parcels of real property, and personal property. Doyle and decedent had been in business together before decedent’s death, and their respective percentage ownership interests varied from property to property. Third party investors also had interests in many of the properties.
Doyle filed an accounting for September 8, 2000, through December 31, 2005 (hereafter, the accounting). The accounting showed property on hand at the beginning of that period in the amount of $1,210.449.84 and income, receipts, and gains on sale during the accounting period of approximately $902,000. The accounting also showed disbursements of $931,489.03. The property on hand at the end of the accounting period was stated to be $1,173,644.57. It appears that at the beginning of the accounting period, the estate owned interests in some 432 parcels of real property, although the value ascribed to such individual parcels was often as little as $50 to $100.
The disbursements were purportedly detailed in Schedule H, which was not included in the record on appeal.
On March 21, 2007, Steinke filed a verified petition for removal of Doyle as executor. The petition alleged, among other things, that Doyle had: (1) failed to pay withholding taxes from wages paid to employees of the estate or to prepare W-2 or 1099 Internal Revenue Service (IRS) forms for those employees, thus exposing the estate to potential tax liability; (2) failed to file any petition with the court to continue the business of a partnership between himself and decedent and failed to take any steps to dissolve the partnership; (3) failed to apportion fairly expenses and compensation paid to persons performing services on properties in which both Doyle and the estate held interests; (4) took no steps to sell or rent a residence at Big Bear Lake (the Big Bear Lake house) in which the estate owned an interest; (5) made illegal improvements to a residence on Cholla Way in Palm Desert (the Cholla Way house) which devalued the property and will require expensive corrections; (6) claimed to have buried a valuable diamond ring with decedent and later admitted possessing the ring himself; (7) made illegal improvements to an estate property in Oregon and charged the costs to the estate; (8) used the Cholla Way house as an office for estate purposes and allowed one Michael Aguayo to live there rent free for several years; (9) changed the tax bill addresses for certain properties without notifying third-party investors; (10) made full payment for property taxes from estate funds even though he owned a personal interest in the properties; (11) used estate assets or commingled funds to pay for personal expenses; and (12) purchased two Cadillacs from estate assets.
Doyle filed an answer denying the material allegations of the petition. Following trial, the court announced its decision to remove Doyle as executor. The trial court’s order stated that all the material factual allegations of the petition were true. A statement of decision was thereafter filed, in which the trial court made detailed findings as to some of the allegations of the petition.
Additional facts are set forth in the discussion of the issues to which they pertain.
III. DISCUSSION
A. Standard of Review
We review the trial court’s findings of fact under the substantial evidence standard: “When a trial court’s factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. If such substantial evidence be found, it is of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion. [Citations.]” (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.)
An appellant raising a challenge to the sufficiency of the evidence to support factual findings “has the duty to fairly summarize all of the facts in the light most favorable to the judgment” (Boeken v. Philip Morris Inc. (2005) 127 Cal.App.4th 1640, 1658), and “‘[u]nless this is done the error is deemed to be waived.’” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.)
We review the trial court’s decision to remove the executor under the deferential abuse of discretion standard, and we do not interfere with that decision unless the trial court has clearly abused its discretion. (Estate of Effron (1981) 117 Cal.App.3d 915, 930.)
B. Failure to Petition Court for Approval of Continuation of Decedent’s Business
Doyle contends the trial court erred in finding that he had been in business with decedent and was required to obtain approval from the probate court for continuation of that business.
Probate Code section 9760 requires the representative of an estate to file a petition to continue the operation of the decedent’s business. Section 9762 requires the representative of an estate to obtain court approval to continue the operations of a partnership between the representative and the decedent. The trial court found that Doyle failed to obtain court approval for the continuation of decedent’s business.
All statutory references are to the Probate Code unless otherwise noted.
“(a) As used in this section, ‘decedent’s business’ means an unincorporated business or venture in which the decedent was engaged or which was wholly or partly owned by the decedent at the time of the decedent’s death, but does not include a business operated by a partnership in which the decedent was a partner.
“(a) After authorization by order of court upon a showing that it would be to the advantage of the estate and in the best interest of the interested persons, the personal representative may continue as a general or a limited partner in any partnership in which the decedent was a general partner at the time of death. In its order, the court may specify any terms and conditions of the personal representative’s participation as a partner that the court determines are to the advantage of the estate and in the best interest of the interested persons, but any terms and conditions that are inconsistent with the terms of any written partnership agreement are subject to the written consent of all of the surviving partners.
Doyle argues that he was not in a partnership with decedent within the meaning of section 9762 because he and decedent did not participate in any operating business entity, but merely owned properties together. However, in his deposition, Doyle conceded he had been in a business partnership with decedent, they had still been in business together when decedent went into conservatorship, and the assets of the partnership were in the form of real property. Similarly, at trial, Doyle testified that he had had “business partnership interests” with decedent for 45 years, although it had been “nothing formal.” In other deposition testimony, Doyle denied that his business relationship with his father had been a partnership, but the trial court, as finder of fact, was entitled to believe his testimony to the contrary. (Bowers v. Bernards, supra, 150 Cal.App.3d at pp. 873-874.)
Doyle also argues that he was not required to file a petition to continue decedent’s business under section 9760 et seq. because “decedent’s estate contains no operating business entities.” However, section 9760, subdivision (a), defines “decedent’s business” to mean “an unincorporated business or venture in which the decedent was engaged or which was wholly or partly owned by the decedent at the time of the decedent’s death,...” Doyle has failed to explain why this broad definition does not apply.
We conclude substantial evidence supports the trial court finding that Doyle continued decedent’s business, and the trial court did not err in finding that Doyle, as executor, was required to request permission from the court to continue that business. (§§ 9760, 9762.)
C. Actions Relative to Cholla Way House
Doyle next contends that the trial court’s various findings with respect to the Cholla Way house were erroneous.
1. Improvements to the Cholla Way House
Doyle, as an individual, and the estate each purportedly owned a one-half interest in the Cholla Way house. Doyle testified at his deposition on February 28, 2007, that he had improvements made to the Cholla Way house to correct a termite infestation; he had not obtained a permit for the improvements; and he had received a citation from the county as a result. He testified that he had not sought court permission to do the improvements, which had begun in 2003. The improvements included enclosing two existing roofed patios to substantially enlarge the square footage of the house.
Doyle filed a motion, opposed by Steinke, to take additional evidence on appeal. Specifically, Doyle requested this court to consider (1) the County of Riverside’s job card (inspection record) of the repair work done on the Cholla Way property, and (2) the Riverside County Building Department record showing that repairs to the Cholla Way property were done in compliance with applicable county building standards. This court reserved its ruling on the motion for consideration with the merits of the appeal. The request is granted.
The trial court found that it had not been proper to add two additional rooms to the Cholla Way house to cure a termite infestation. The trial court further found that Doyle had failed to obtain prior permits for the renovations to the Cholla Way house, and the renovations had exposed the estate to property tax reassessments.
Doyle correctly contends that no evidence showed he had added two rooms to the Cholla Way house. However, the trial court’s error in so finding was merely technical. Undisputed evidence showed that the “repairs” had added substantially to the square footage of the house. Doyle testified at trial that he felt the best way to deal with the termite problem was to tear down all the exterior wood surfaces and then “[p]ush[] the building up 10 feet to the end of the patio where the existing roof—it was an existing roof so we didn’t have to do anything there. And we didn’t have to do anything on the foundation. It was just a matter of putting new walls up, new electrical, new cable, cat five, new windows, upgrading along with repair. And that was a hard job. It was very difficult but we were able to complete it.”
Earlier in Doyle’s testimony, Steinke’s counsel had asked why improvements to the Cholla Way house had shown up as administrative expenses to the estate. Doyle replied, “The improvements to Cholla were 50 percent, and it was a necessity that we needed to do. This was not a matter of choice, this was a necessity to repair the building.” Steinke’s counsel asked, “You mean increasing the square footage by nearly twice what it was originally is a necessity?” Doyle replied, “It was a necessity due to the fact that we had termites, and the walls were bad, they needed to be replaced, and it was a way of taking advantage of something that needed repair at a very, very reduced cost.”
Trial exhibit 211 is a set of plans submitted to the county for approval; the plans show the existing structure and the repairs to the Cholla Way house. Those plans reflect a considerable addition to the floor space of the house. Finally, at Doyle’s request, we have taken judicial notice of Riverside County’s approval of the repair work done at the Cholla Way house. That document, on its face, describes the work done as “ROOM ADDITION (AS BUILT) 1251.25 SQFT.”
On appeal, Doyle argues that as executor, he had the authority to take affirmative steps to prevent the deterioration in value of the Cholla Way house. (§ 9650, subd. (b) .) While that is true as a general proposition of law, the trial court found that Doyle did more than prevent deterioration; rather, he greatly expanded the house. Substantial evidence, including trial exhibits and Doyle’s own testimony, supports that finding.
“The personal representative shall pay taxes on, and take all steps reasonably necessary for the management, protection, and preservation of, the estate in his or her possession.” (§ 9650, subd. (b).)
2. Personal Occupancy and Use of House as Estate Office
The trial court also found it was an unjustified expense to the estate to use the Cholla Way house as an estate office and for storage of personal property of the estate, and that the personal property of the estate could have been stored more safely and at less cost in a storage facility. The trial court further found that Doyle “stayed in the Cholla property for his own comfort and convenience and for the comfort and convenience of his friends, whom he designated as independent contractors, rather than for the efficiency of the administration of the estate.”
Doyle argues that, as a beneficiary of the estate, he was presumptively entitled to the estate’s interest in the Cholla Way house, and “his possession thereof during the administration of the decedent’s estate was authorized by law and does not constitute a ground for his removal as personal representative of the decedent’s estate.” Doyle’s status as a beneficiary did not give him the right to use estate property without paying rent. (See, e.g., Estate of Pardue (1943) 57 Cal.App.2d 918, 920-921 [administratrix was properly chargeable with rent for the use of estate property even though she was a devisee, because her possession of the property was in her capacity as administratrix, not as a tenant-in-common with her co-devisees, and as administratrix, she had the duty to try to rent or sell the premises to obtain funds with which to liquidate debts of the estate]; see also Estate of Bonaccorsi (1999) 69 Cal.App.4th 462, 472 [executor was properly surcharged for allowing a sister of one of the beneficiaries to occupy estate property rent free, thus depriving the estate of rental income that could have been used to offset expenses, even through the sister acted as a caretaker for the property].) Here, as in Estate of Pardue and Estate of Bonaccorsi, decedent’s estate had unliquidated debts that could have been offset by an income stream from rental of the property.
Doyle further argues that as co-owner of the house as an individual, he had the right to possession and enjoyment of the house. That argument makes manifest the inherent conflict in his roles as co-owner and executor. Although he may have had a legal right as an individual co-owner to possess and occupy the house, his exercise of that right indisputably deprived the estate of rental income that otherwise would have accrued.
D. Actions Relative to Big Bear Lake House
The trial court found that “the Big Bear residence could have and should have been rented or sold,” and that “if an office was required in that area, one could have been rented for far less cost to the estate than retention and maintenance of the property.” The court further found that personal property at the Big Bear house “could and should have been placed in a bonded storage facility.” Finally, the court found that Doyle “again opted to retain the Big Bear property and use both properties for his personal use, comfort and convenience, rather than for the best interests of the estate.”
Doyle argues that as a beneficiary and co-owner, he was entitled to rent-free use of the house. We have already addressed that argument in connection with the Cholla Way house. Defendant further argues that his duty as executor was to preserve the Big Bear Lake house, and he had no affirmative duty to sell that or any other estate asset. Here, however, the administration of the estate was unduly prolonged—the trial took place seven years after decedent’s death, and the affairs of the estate do not appear to be even close to final settlement. And, even if we accept, for purposes of argument, that it was prudent not to sell the Big Bear Lake house until completion of the IRS audit of the estate tax return, it is indisputable that the estate was deprived for years of any rental income from a valuable asset of the estate.
As noted, the estate included property interests in some 432 properties when decedent died in 1999. The schedule of gains on sales attached to the accounting listed two sales of real property in 2000, one sale in 2001, four sales in 2002, no sales in 2003 or 2004, and nine sales in 2005. In addition, two properties were listed as having been under unrecorded agreements for sale before decedent’s death, and the sale of another property was apparently pending. At trial, Doyle testified he had sold the estate’s interest in 75 or 100 properties.
E. Administration of Ancillary Probate Proceedings
The trial court found that in connection with property the estate owned in Oregon (the Arch Cove property), as to which ancillary probate proceedings had taken place, Doyle had hired his son to perform some of the work but had not disclosed that relationship and had not obtained court approval prior to commencing the work. The court further found that unpermitted maintenance work on the Arch Cove property had cost the estate a favorable sale “and may even have permanently jeopardized the profitable use of that property by the estate. Again, the court finds that work was performed on this property by [Doyle], without prior permit or approval of the local authorities, which, if said permitting was obtained prior to commencement of the work, might have avoided the loss of land stability and other problems. Specifically, doing work to replace a septic tank without prior permitting was a very hazardous job and a very, very unwise act on the part of [Doyle]. The court finds it would have been much better, and an appropriate practice, to simply inquire of the county whether the land would percolate for use of a septic system, and if not, then to make other plans appropriately. The court concludes that not seeking the appropriate permitting before commencing work, violated local ordinances and state law.”
Doyle does not dispute the trial court’s findings of fact; however, Doyle argues that his actions took place before the termination of the ancillary proceedings by a general judgment in March 2004, and therefore the trial court was precluded from reviewing those actions in the current action. Steinke did not respond to this argument and does not argue on appeal that the trial court’s findings with respect to the ancillary proceedings constituted substantial evidence on which to base the removal of Doyle as executor. We therefore will not further address the issue.
F. Commingling Funds
Doyle testified at his deposition that he had loaned the estate $174,000 for tax obligations. He further testified that when it appeared that the IRS might audit the estate, he had taken $50,000 in cash from one of the estate bank accounts and kept it in his safe at his home to keep it from the IRS. The trial court found that Doyle had not obtained court approval for making those loans. However, at trial, Doyle’s counsel represented to the court that the probate court had authorized a loan to pay state and federal estate taxes, and a minute order of the probate court dated April 11, 2005, indicates that such authorization had been granted.
An executor must act in the best interests of the estate, and may not occupy different roles that conflict with the interests of the estate or that even potentially conflict with the interests of the estate. (Estate of Bonaccorsi, supra, 69 Cal.App.4th at p. 470.) An executor acting as a creditor may occupy such a conflicting role. (Ibid.) However, it does appear that court approval was obtained prior to making the loans. We therefore conclude that substantial evidence does not support the trial court’s finding that no prior approval was obtained before Doyle loaned money to the estate to pay estate taxes.
G. Purchase of Cadillac Escalade
The trial court found that Doyle’s purchase of a Cadillac Escalade for use in administering the estate was unjustified and that a less expensive automobile would have served the purpose just as well.
Doyle contends that the total cost to the estate from the use of the Escalade was $5,744.80, including $5,000 for one-half the down payment and $774.80 for one monthly payment. However, Schedule A of the accounting showed a loan made by the estate to Doyle in the amount of $26,579.03, described as “[a]dvance of 1/2 the cost of an Escalade used in conduct of the affairs of the estate.” Schedule L of the accounting listed among estate assets an “[u]ndivided one-half interest in a 2003 Escalade used in conduct of the affairs of the estate” with an ascribed value of $26,579.03.
We conclude that substantial evidence supported the trial court’s finding with respect to the Cadillac Escalade.
H. Actions Relative to Diamond Ring
Evidence showed that decedent had given his wife an expensive diamond ring; and the wife had died before decedent. Doyle had the stone taken out of the ring, and he had two similar rings created, one of which contained the diamond, and the other of which contained a zirconium of little value. Doyle claimed he had had the two rings created so decedent could wear the zirconium ring when he left the house.
In his deposition, Doyle testified he had buried the diamond ring with decedent. At trial, however, defendant testified he had taken the zirconium ring to a jeweler to have it examined and appraised, and learned to his surprise that he had in fact retained the diamond ring.
The trial court found that Doyle’s story was “inherently suspect.” The trial court further concluded that “the only person who might confirm or deny the executor’s assertions is the deceased father himself, and absent written record concerning the deceased’s desires, the court concludes that the ring was to be divided half and half between the co-beneficiaries. The court further finds it difficult to believe that the deceased considered the ring to be an investment property as [Doyle] asserts, but rather that the ring was purchased as a gift for the deceased’s wife on their 25th wedding anniversary.” The court found that “while possible, it is highly unlikely, that [decedent] wanted to take back a ring that he had given to his wife of many years, for his own use. The court is very troubled with [Doyle’s] explanation that he was only honoring [decedent’s] desires to put the diamond in a man’s setting so that [decedent] could wear it, being that [decedent] had become mentally frail during this same time period.” The trial court concluded that Doyle had decided to keep the ring for himself.
Ample evidence supports the trial court’s findings. Jeweler’s receipts dated in late July 2000 were admitted into evidence. Doyle testified those were the receipts for having the diamonds reset into a man’s setting and having the cubic zirconium ring made. Thus, the counterfeit ring was made only weeks before decedent’s death, when decedent had been under conservatorship for nearly three years. We agree with the trial court that Doyle’s account of the history of the ring is inherently improbable.
I. Attorney Fees
The accounting reported liabilities of the estate totaling over $500,000 in “court approved fees from prior and current accounting periods.” The trial court found that “the estate has been a cash cow for a number of attorneys. [Doyle’s] counsel alone has a bill pending for $174,000.00 in unpaid fees. Although the executor complains that the fees are the result of the co-beneficiary’s objections to his handling of the estate, the court finds that if [Doyle] had merely informed her of his actions and intended actions, he could have saved the estate countless hours of attorney time both in and out of the courts....”
Although it appears that a substantial portion of the attorney fees relate to services in connection with preparation of decedent’s federal estate tax return and in connection with sales of estate properties, we nonetheless agree with the trial court’s finding that attorney fees in the administration of the estate have been excessive.
J. Personal expenses
The trial court found that “[a]s to expenses of the estate,... [Doyle] used his personal credit cards and his personal cash to pay what are described as estate expenses, thereby mixing those estate expenditures and purchases with purely personal purchases. [Doyle] then sought reimbursement from the estate for its share of the bills. The court finds that those reimbursements involved even purchases of food, beverage, clothing, automobile services, gasoline, tires, etc. The court finds that this practice appears suspect as to the accuracy and completeness of the division of expenses and further finds that [Doyle’s] actions reveal that [Doyle’s] apparent attitude is one of continuing the operation of his father’s business instead of administering a deceased father’s estate to as quick of a conclusion as possible.” The trial court further found that Steinke was “justified in being concerned about the purchases of groceries, alcoholic beverages, personal hygiene items, women’s clothing, and other similar matters in a mixed bag that the executor purports to honestly divide between his own personal needs and those of the estate. The court finds that the practice is further exacerbated by [Doyle’s] provision of meals and housing to his assistants in lieu of fair and adequate salary or wages.” The trial court continued: “Further, the expense claimed of entertainment appears to be a major expense, including the purchase of alcoholic beverages, the maintenance of the Big Bear house, etc. The court does not understand and does not accept that entertainment for the purpose of selling homestead cabins and unimproved real property is justified.” The trial court concluded, “the provision of meals and lodging to [Doyle’s] retainers emphasizes [Doyle’s] failure to seek and obtain the assistance of qualified professionals to provide expert advice and service to the estate. The court finds that [Doyle] has surrounded himself with friends and together they have enjoyed a good life at the Cholla residence and at the Big Bear property, paying no rent, enjoying good food and drink and the occasional party, all in the name of and at the expense of the estate.”
Although Doyle claims there is no evidence to support these findings, in fact, trial exhibits which include five banker’s boxes of expense reports and receipts demonstrate that Doyle sought reimbursement for expenses that appear to be purely personal throughout the accounting period. Even a cursory review of the receipts shows that estate funds were expended for numerous purchases of groceries, including items such as baby food, beer and liquor, and personal items such as an egg poacher, golf balls, and Zig Zag papers.
In May 2007, Doyle did reimburse the estate for more than $14,000 for past expenses based on purported “clerical error.” As the trial court pointed out, however, although Doyle expressed willingness to reimburse the estate when there were errors, “[t]hat can also be interpreted that he will reimburse the estate if errors are discovered. And if they are not uncovered, it simply results in ill-gotten gains to the executor.” We conclude that substantial evidence supports the trial court’s findings relating to personal expenses.
K. Use of Independent Contractors
The trial court stated it was “troubled” by Doyle’s conduct in employing assistants and persons whom he characterized as “independent contractors.” The court pointed out problems that could ensue from the mischaracterization of employees as independent contractors. It was undisputed that Doyle failed to determine the legal consequences of his assumption that those persons were independent contractors instead of employees and that no taxes had been withheld from compensation paid to those persons.. Although it does not appear the estate in fact suffered financial loss from Doyle’s actions in regard to employees, his actions demonstrate a disturbing willingness to overlook legalities.
L. The “Christ Painting”
An asset of the estate was “one fine antique oil on canvas painting framed 18th/19th century.” The painting was listed among “miscellaneous personal property.” No individual value was assigned to the painting; the total value of the miscellaneous personal property was listed as $47,000. An estate planning questionnaire prepared by decedent and Doyle for the attorney who created decedent’s living trust had previously estimated the value of the painting at $800,000. Doyle testified at trial that an appraisal prepared during the conservatorship valued the painting at $15,000 or $18,000. Doyle testified that he had had a photograph taken of the painting, which was then put on canvas (canvas transfer print), and that it was made “for insurance purposes.” Both the painting and the canvas transfer print were kept at the Cholla Way house.
The trial court questioned why the canvas transfer print had been made and concluded that “if safe storage was the goal as testified to by [Doyle], then storage in a bonded vault, specializing in the storage of fine art would have been a much better practice. Based on [Doyle’s] testimony, the court concludes that [Doyle] was planning on exchanging the print for the original at some point, and retaining the original for himself.”
We find no actual evidence to support the trial court’s suspicion that Doyle intended to retain the original oil painting for himself and substitute a canvas transfer. We do agree, however, with the trial court’s conclusion that Doyle failed to take proper steps to preserve and protect the valuable asset of the estate and that keeping the fine art painting at the Cholla Way house rather than in a qualified storage facility was an unwise decision.
Our disagreement with the trial court on this minor point by no means undercuts our conclusion that the trial court properly removed Doyle as executor based on his consistent pattern of failure to fulfill his fiduciary duties.
M. Addresses on Tax Bills
The trial court found that Doyle had changed the address on tax bills sent to the Eckels, third-party investors on certain real property, and that Doyle had had no logical reason for doing so because the Eckels were current on their tax payments. The trial court continued, “The court finds it interesting that one tax-defaulted property involving an outside investor was actually purchased at a tax sale by one of the executor’s assistants, and then conveyed to the estate. The court suspects that changing the mailing of the tax bills might have been engineered in a way to achieve defaulted payments, and then subsequent repurchase on behalf of the executor.”
Neither party has provided citations to any evidence in the record pertinent to the trial court’s finding on the issue of tax bills. We will therefore consider the challenge to the trial court’s factual finding waived. (Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 881.)
N. Cash Remaining in Estate Accounts
The trial court noted that it had asked Doyle how much money was still left in the estate’s bank accounts but did not receive an answer. The trial court continued, “Testimony taken from the executor indicated that more than one and a half million dollars had been generated from the sale of estate properties[;] however, only $275,000.00 in promissory notes had been taken back. The court finds that there should have been a lot of cash in the estate’s accounts[;] however, some creditors still remain unpaid at this time. As an example, the court points to Attorney Kahn’s testimony that he is still owed on his judgment for attorney’s fees rendered in the conservatorship. The court states that this is a very expensive estate to administer with cash expenses of $931,000.00 over the past seven years.”
As Doyle points out, the current proceeding is not a review of the accounting Doyle has filed in the estate. Thus, we will not further address the issue of the amount of specific assets in the estate.
O. Self Dealing
The trial court found that Doyle’s “claimed ownership on approximately 75 of the estate properties[] allows for him to do very well in that he takes the proceeds from the sale of his share of the interest on the title, but does not deduct expenses of sale from his side entirely. This results in Ms. Steinke paying one-half of every expense against the estate.”
At his deposition, Doyle testified that it was none of Steinke’s or the court’s business if Doyle was a partial owner of property affected by the estate. Steinke’s counsel asked Doyle what he had done “to make sure there was a fair allocation of what you were responsible for in terms of paying... employees to maintain the properties versus what the estate paid[.]” Doyle responded, “I have compensated [the employee] for things that I feel that he does for me separate from the estate.” The exchange continued:
“Question: On those properties where you claim a 50 percent interest, did you split the compensation to any of these employees fifty-fifty between yourself and the estate?
“Answer: No.
“Question: The estate picked up the tab, didn’t it.
“Answer: Yes, it did.
“Question: Okay. Where in the accounting can we tell how much was paid for your personal services that were rendered... to you by any of those employees?
“Answer: I was not required to put it in my personal account in the account.”
At trial, Steinke’s attorney continued the line of questioning: “The estate picked up the entire tab of these employees that were helping you out as well, didn’t it?”
“A. Oh, yes, absolutely.”
We conclude Doyle’s testimony constitutes substantial evidence to support the trial court’s finding.
P. Catch-all Finding that All Material Allegations of the Petition Were True
In its June 28, 2007, order removing Doyle as executor, the trial court stated it had found all material allegations of the petition to be true. Doyle contends the trial court’s catch-all finding was not supported by substantial evidence. However, the June 28 order also directed Steinke’s attorney to prepare a statement of decision, and on August 17, 2007, the statement of decision and order thereon was filed. The statement of decision made findings as to specific allegations of the petition but omitted the catch-all finding that all the material allegations of the petition were true.
We note that Steinke does not argue that the catch-all finding should be upheld. Rather, Steinke addresses her arguments to the specific findings set forth in the statement of decision.
We conclude that the formal findings and conclusions, as expressed in the statement of decision, are controlling, and we therefore need not further address Doyle’s challenge to the catch-all finding in the trial court’s earlier order.
Q. Removal of Doyle as Executor
As discussed above, we have concluded that the trial court’s material findings are supported by substantial evidence. We next consider whether those findings supported the trial court’s decision to remove Doyle as executor.
“An executor ‘“is an officer of the court and occupies a fiduciary relation toward all parties having an interest in the estate.’” [Citations.] ‘“Executors occupy trust relations toward the legatees, and are bound to the utmost good faith in their transactions with the beneficiary....’” [Citations.] An executor also bears a ‘duty to disclose all the facts... and to refrain from taking an unfair advantage of [the legatees].’ [Citation.]” (Estate of Sanders (1985) 40 Cal.3d 607, 616.)
An executor’s violation of the Probate Code during the administration of an estate’s affairs constitutes grounds for the executor’s removal as administrator of an estate. (§ 8502.) Thus, an executor may be removed if he has “wasted, embezzled, mismanaged, or committed a fraud on the estate, or is about to do so.” (§ 8502, subd. (a).) An executor may also be removed if he breaches the fiduciary duties owed to the beneficiaries of an estate. (Estate of Hammer (1993) 19 Cal.App.4th 1621, 1637.) As a fiduciary, the executor owes the beneficiaries the duty to act with the utmost good faith, and the executor must refrain from taking unfair advantage of the beneficiaries. (Estate of Sanders, supra,40 Cal.3d at p. 616.)
With respect to Doyle’s continuation of decedent’s business, the court in Estate of Bonaccorsi, supra, 69 Cal.App.4th 462, cautioned, “‘[E]state representatives should never attempt to personally continue decedent’s business if the activity would put them in an actual or potential compromising, conflict of interest position. [¶] For example, serious conflicts of interest are posed where the estate representative is a creditor of the business.... Simply stated, if the representative has any personal interests at stake in the business, he or she should stand aside in favor of other disinterested competent managers.’” (Id. at p. 470, quoting Ross, Cal. Practice Guide: Probate 2 (The Rutter Group 1998), ¶ 14:83, at pp. 14-20, rev. #1, 1998.)
Doyle’s approach on appeal has been to argue that each finding, individually, did not justify his removal. However, we consider Doyle’s conduct cumulatively, and in doing so, we conclude ample justification supported the trial court’s decision to remove him as executor. His pattern of actions demonstrated that he did not act in the “utmost good faith” with respect to Steinke, but instead, breached his fiduciary duty by consistently putting his own interests above those of the estate. (See Estate of Hammer, supra, 19 Cal.App.4th at p. 1637; Estate of Sanders, supra, 40 Cal.3d at p. 616.) There was no abuse of discretion.
IV. DISPOSITION
The order appealed from is affirmed. Costs shall be awarded to respondent.
We concur: MCKINSTER, J., RICHLI, J.
“(b) If it is to the advantage of the estate and in the best interest of the interested persons, the personal representative, with or without court authorization, may continue the operation of the decedent’s business; but the personal representative may not continue the operation of the decedent’s business for a period of more than six months from the date letters are first issued to a personal representative unless a court order has been obtained under this section authorizing the personal representative to continue the operation of the business.
“(c) The personal representative or any interested person may file a petition requesting an order (1) authorizing the personal representative to continue the operation of the decedent’s business or (2) directing the personal representative to discontinue the operation of the decedent’s business. The petition shall show the advantage to the estate and the benefit to the interested persons of the order requested. Notice of the hearing on the petition shall be given as provided in Section 1220.
“(d) If a petition is filed under this section, the court may make an order that either:
“(1) Authorizes the personal representative to continue the operation of the decedent’s business to such an extent and subject to such restrictions as the court determines to be to the advantage of the estate and in the best interest of the interested persons.
“(2) Directs the personal representative to discontinue the operation of the decedent’s business within the time specified in, and in accordance with the provisions of, the order.” (§ 9760.)
“(b) If there is a written partnership agreement permitting the decedent’s personal representative to participate as a partner, the personal representative has all the rights, powers, duties, and obligations provided in the written partnership agreement, except as otherwise ordered by the court pursuant to subdivision (a).
“(c) If there is not a written partnership agreement, the personal representative has the rights, powers, duties, and obligations that the court specifies in its order pursuant to subdivision (a).
“(d) To obtain an order under this section, the personal representative or any interested person shall file a petition showing that the order requested would be to the advantage of the estate and in the best interest of the interested persons. Notice of the hearing on the petition shall be given as provided in Section 1220. In addition, unless the court otherwise orders, the petitioner, not less than 15 days before the hearing, shall cause notice of hearing and a copy of the petition to be mailed to each of the surviving general partners at his or her last known address.” (§ 9762.)