Opinion
A160966
12-29-2021
Estate of NATHAN PAUL HALE III v. KATIE PULLIAM et al., Respondents and Appellants. LUCILLE GEEAR, Petitioner and Respondent,
NOT TO BE PUBLISHED
(Napa County Super. Ct. No. 20PR000060)
MARGULIES, J.
Katie Pulliam and Broc Stober (appellants) appeal from an order granting letters of administration to Lucille Geear, decedent's mother. Appellants contend the trial court prematurely issued the letters of administration without conducting an evidentiary hearing regarding the validity of a trust executed by decedent during his marriage. For reasons discussed below, we affirm. 1
On June 4, 2021, appellants requested this court take judicial notice of trial court minutes staying their "Petition to Determine Existence of Trust," and the fact that appellants filed such a petition after the trial court entered the order at issue in this appeal. We deny the request because the document and related fact are unnecessary to our resolution of the appeal. (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [declining to take judicial notice of materials not "necessary, helpful, or relevant"].) In addition, appellants' reply brief asserts this court should ignore part of the respondent's appendix because it includes letters of administration and an order for probate issued by the trial court after the date of its order that is the subject of this appeal. To the extent appellants wish this court to treat their request as a motion to strike, we deny the request because the documents at issue were not relevant to our resolution of the appeal.
I. BACKGROUND
A. Factual Background
In 1990, the decedent, Nathan Paul Hale III, and his ex-wife married. During their marriage, decedent and his ex-wife executed the Hale Family Trust, dated June 6, 2001 (Trust). The Trust transferred and gave to them "as the 'trustees'" various property identified in the Trust. Appellants, decedent's former stepchildren, were the Trust beneficiaries.
When the Trust was executed, decedent also executed a "Bill of Sale" (Bill of Sale). That document stated decedent and his ex-wife "assign[ed] and transfer[ed]" to themselves as trustees for the Trust "the entire interest in and to the tangible personal property and intangible property owned by the trustors wherever situated and whenever acquired. (Ie. After the execution date herein)." Exhibit A to the Trust then identified in the inventory list "All of the Trustors' Personal Property wherever located. (See Bill of Sale)." The Trust reserved decedent's power to revoke the Trust or to withdraw assets from the Trust.
In 2017, decedent and his ex-wife divorced. In the stipulation of judgment, which formed the basis for the parties' dissolution, both decedent and his ex-wife "disclaim[ed] and waive[d] all rights and interest" in the other person's separate property. The stipulation also "transfer[red] and assign[ed]" certain community property to both decedent and his ex-wife as their "sole and separate property." 2
At the time decedent passed away, he was neither married nor in a registered domestic partnership, and did not have any children.
B. Procedural Background
Geear petitioned the court to appoint her administrator of the estate. The petition asserts decedent died intestate. She submitted a supporting declaration stating in relevant part that the attorney who drafted decedent's estate documents informed Geear that decedent never returned an executed pour-over will to him. The declaration further notes appellants did not find any will in decedent's belongings.
Appellants opposed the petition. They asserted that, at the time of decedent's divorce, the judgment for dissolution only confirmed his one-half interest in certain real property to decedent as his separate property. Appellants argued decedent did not terminate the Trust, decedent never reconveyed ownership of any property to himself individually, and appellants continue to be the sole beneficiaries under the Trust. Appellants argue the Trust continues to be valid and, accordingly, decedent did not die intestate.
At the hearing on Geear's petition, she argued the validity of the Trust was irrelevant as to whether she should be appointed administrator. Geear noted decedent did not have a will and there were assets in his personal name that required appointment of an administrator. In response, appellants argued probate was only necessary if decedent died intestate, and the court should set an evidentiary hearing to determine the validity of the Trust to assess whether decedent died intestate.
The court set the matter for a subsequent hearing because appellants had not submitted a copy of the Trust. The court also asked appellants to identify the issues that would prevent the appointment of an administrator. 3
Prior to the subsequent hearing, appellants filed a document entitled, "Response to Request for Briefing re Appointment of Administrator." Appellants stated they did not object to the appointment of Geear as administrator provided her appointment was" 'with limited authority'" (boldface omitted) such that she cannot" 'take possession of money or any other property without a specific court order.'" Appellants argued that certain real property was deeded to the Trust and thus remained within the Trust. They further asserted the Bill of Sale assigned all of decedent's tangible and intangible personal property to the Trust.
At the subsequent hearing, Geear again argued the existence of assets and accounts in decedent's name and the lack of any will required her appointment as administrator. Appellants countered that the real property was titled in the name of the Trust, so the lack of a will was irrelevant to the issue of that property's distribution. Appellants further asserted the Bill of Sale functioned as a pour-over will, and the court must first determine whether the Trust was valid in order to assess whether decedent died intestate and probate is appropriate. However, appellants also conceded "to the extent that there might be personal property that is not within the trust," such property "might have to be probated by the fact that there's no pour-over will."
After considering the parties' arguments, the court granted Geear's petition. The court concluded appellants' opposition to the petition did not identify any basis for concluding "there is a valid, operative trust" or other grounds on which to deny intestate administration. Appellants timely appealed. 4
II. DISCUSSION
A. Standard of Review
As a preliminary matter, the parties disagree as to the proper standard of review. Appellants contend the applicable standard of review is de novo because the appeal asks this court to construe the Trust and applicable statutes. Geear argues the appeal merely challenges whether the trial court erred by failing to hold an evidentiary hearing, which triggers an abuse of discretion standard.
Here, appellants challenge the probate court's order appointing Geear as administrator. Generally, a trial court's order appointing an administrator is reviewed for abuse of discretion. (See Estate of Lewis (2010) 184 Cal.App.4th 507, 514; Estate of Sapp (2019) 36 Cal.App.5th 86, 103.) "The scope of a court's discretion is 'derived from the common law or statutes under which discretion is conferred'" and "[w]e consider 'whether the grounds given by the court for its [decision] are consistent with the substantive law . . . and, if so, whether their application to the facts of [the] case is within the range of discretion conferred upon the trial courts . . . read in light of the purposes and policy of the statute.'" (Estate of Kerkorian (2018) 19 Cal.App.5th 709, 718.)
We review the trial court's findings of fact underlying its decision for substantial evidence. (Estate of Sapp, supra, 36 Cal.App.5th at p. 104.) Insofar as our review requires us to interpret statutory provisions, "we do so de novo, 'seeking, as always, to ascertain the Legislature's intent so as to give effect to the law's purpose. [Citation.] We begin with the statute's plain language, as the words the Legislature chose to enact are the most reliable indicator of its intent,' and we turn to other sources for assistance, including 5 legislative history, only if the text fails to clearly manifest the Legislature's purpose." (Estate of Kerkorian, supra, 19 Cal.App.5th at p. 718.)
B. Evidentiary Hearing
Appellants argue the trial court erred by failing to hold an evidentiary hearing on the validity of the Trust before finding an intestacy. They assert the trial court erroneously relied on Estate of Coleman (2005) 129 Cal.App.4th 380 (Coleman) to conclude the Trust was revoked by operation of law. We disagree.
Appellants also assert a court should hear a petition on the validity of a trust before ruling on letters of administration. However, the record does not indicate appellants filed a petition challenging the validity of the Trust prior to the court's order at issue in this appeal.
1. Appointment of Geear as Administrator
Appellants argue the trial court's order appointing Geear as administrator should be reversed if there is" 'a reasonable chance, more than an abstract possibility'" that the trial court would have reached a different result had it weighed evidence. In response, Geear argues because decedent died without a will, he was intestate, and the court was required to appoint an administrator.
Appellants pull this standard from cases assessing when trial error is deemed harmless in California. (See College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 715.) Appellants cite no authority to suggest it is applicable in this instance.
Probate Code section 7000 provides, "title to a decedent's property passes on the decedent's death to the person to whom it is devised in the decedent's last will or, in the absence of such a devise, to the decedent's heirs as prescribed in the laws governing intestate succession." (Accord Gold et al., Cal. Civ. Practice: Probate &Trust Proceedings (2021) § 3:41 ["Any part of the estate of a decedent subject to probate that is not effectively disposed of 6 by will passes to the decedent's heirs under the laws governing intestate succession."].)
Here, the issue is whether decedent owned assets that were subject to probate. The parties do not dispute that certain personal property existed in a storage locker. Likewise, the record indicates a bank account may exist in decedent's name.
Appellants have not identified any operable will at the time of decedent's death that would transfer these assets into a trust and out of probate. The record indicates decedent's estate planning attorney prepared a pour-over will in connection with the Trust, but no evidence exists that the will was ever executed. And appellants confirmed no will was located with decedent's belongings. Instead, appellants argue the Bill of Sale executed with the Trust operated as a pour-over will. However, they cite no authority to support such an interpretation. Nor do they argue the Bill of Sale satisfies the statutory requirements for a will. (See, e.g., Prob. Code, § 6110.) Generally, courts reject attempts to transfer property by methods other than wills. For example, in Kelly v. Bank of America National Trust &Savings Assn. (1952) 112 Cal.App.2d 388, 396, the court held a deed designed to serve as a testamentary disposition of property would be "entirely inoperative." It explained, "This may only be done by a will executed as required by law. A deed, the purpose of which is intended to be testamentary, cannot be given effect." (Ibid.) Accordingly, we decline to interpret the Bill of Sale as a will. The trial court thus properly determined probate was necessary, at a minimum, for the disposition of decedent's personal property and bank account, and did not abuse its discretion in appointing Geear as the administrator. 7
2. Status of Marital Trust
As part of its order appointing an administrator, the trial court also noted "[t]he opposition to the instant petition presents no basis for the court to conclude there is a valid, operative trust or any other basis to deny intestate administration." The court, citing Coleman, supra, 129 Cal.App.4th 380, explained "decedent and his ex-wife revoked their prior trust by operation of law when their marital settlement agreement conveyed their interests in the trust property to each other as individuals."
Appellants contend the trial court was required to hold an evidentiary hearing before determining the trust was revoked. They argue the trial court's interpretation of Coleman would improperly extend Probate Code section 6122 (section 6122) from spouses or former spouses to stepchildren and be contrary to California law, which does not contain any presumption that stepchildren should be disinherited upon divorce.
We disagree. In Coleman, Thomas and Jean Coleman established a revocable trust during their marriage. The trust allowed each trustor to revoke their community and separate property interests from the trust. (Coleman, supra, 129 Cal.App.4th at p. 387.) Thomas and Jean later divorced and divided the trust assets as part of a marital settlement agreement. (Id. at p. 384.) The court noted in relevant part, "A revocation occurs where the settlor makes a conveyance of the trust property out of the trust," and found the trustors revoked the trust when they "conveyed their interests in the Trust property to each other individually." (Id. at p. 388.) In addition, the court concluded, "Where the property of the trust ceases to exist, there is nothing to which the trustee may hold legal title, nothing in which the beneficiaries may hold a beneficial interest, and there is no longer a trust. 8 [Citation.] It follows that the complete withdrawal of the trust property terminates the entire trust." (Id. at p. 388, fn. omitted.)
We find the reasoning of Coleman persuasive. Here, as in Coleman, decedent and his ex-wife were entitled to revoke the Trust and transfer property out of the Trust. Likewise, they executed a marital settlement agreement transferring property to each other individually. Accordingly, decedent's marital settlement agreement, which transferred the trust property to decedent and his ex-wife individually, served to terminate the Trust because no trust property remained.
While the parties in Coleman executed quitclaim deeds as to certain real property, we do not find this fact dispositive in the court's holding. The court found all property had been removed from the trust, despite ambiguity about whether other real property was subsequently deeded to the decedent. (Coleman, supra, 129 Cal.App.4th at pp. 384-385.)
Appellants argue in their reply brief that any revocation had to be attached to the Trust to become effective. Appellants waived that argument by their failure to raise it in their opening brief. (Cold Creek Compost, Inc. v. State Farm Fire & Casualty Co. (2007) 156 Cal.App.4th 1469, 1486 ["Arguments cannot properly be raised for the first time in an appellant's reply brief, and accordingly we deem them waived in this instance."].)
Appellants argue such an interpretation would impermissibly extend section 6122 from spouses and former spouses to stepchildren. But Coleman did not rely on section 6122 to reach its holding. Rather, the court only discussed section 6122 in connection with a related will executed by Thomas. (Coleman, supra, 129 Cal.App.4th at p. 385.) Specifically, two of Thomas's daughters challenged the will on the basis that its admission into probate would have the effect of making a disposition of decedent's property to his exwife in violation of section 6122. (Coleman, at p. 385.) The court noted because the will incorporated the terms of the revoked trust, decedent's assets should be distributed according to the trust apart from any 9 distribution to his former spouse, which would be revoked under section 6122. (Coleman, at pp. 388-389.)
Section 6122 does not impact our analysis. The issue is not who should inherit pursuant to the Trust but rather whether the marital settlement agreement revoked the Trust. Moreover, section 6122 expressly applies to wills and, as discussed in part II.B.1., ante, decedent did not execute a will.
Nor does Estate of Jones (2004) 122 Cal.App.4th 326 (Jones) support appellants' position. In that case, a stepdaughter argued she should still inherit as the residual beneficiary of a will and trust despite the decedent's divorce from the stepdaughter's mother. (Id. at p. 331.) The court disagreed. (Id. at pp. 332-333.) The court, quoting Estate of Hermon (1995) 39 Cal.App.4th 1525, explained" 'when a testator provides for his spouse's children, he normally intends to exclude children of an ex-spouse after dissolution, unless a contrary intention is indicated elsewhere in his will.'" (Jones, at p. 334.) The court concluded reference to the stepdaughter by name in the will was insufficient to demonstrate an ongoing intent for her to inherit after the divorce. (Id. at p. 336.) The court also noted it was the stepdaughter's burden to produce evidence regarding the decedent's intent to provide for her, and she failed to do so. (Id. at p. 337.)
Jones does not address whether a decedent dies intestate. Rather, it addresses when a stepchild may inherit under the terms of a valid will. Here, the issue is whether a valid trust existed-not who should inherit pursuant to the terms of that trust. And, as discussed above, the transfer of property to decedent and his ex-wife individually terminated the Trust. Accordingly, no valid trust existed, and appellants thus could not inherit pursuant to its terms. 10
III. DISPOSITION
The trial court's order granting letters of administration to Lucille Geear is affirmed. Lucille Geear may recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).) 11
WE CONCUR: HUMES, P. J., BANKE, J. 12