Opinion
D081452
04-15-2024
DIANE J. PETERS, as Trustee, etc. et al., Respondents, v. ACTIVIST OF SAN DIEGO, Objector and Appellant.
Aguirre & Severson, Michael J. Aguirre, Maria C. Severson, and Elijah T. Gaglio for Objector and Appellant. Law Office of Johanna S. Schiavoni, Johanna S. Schiavoni; Keeney, Waite &Stevens, and Todd Stevens for Respondent Diane J. Peters. Goodwin Brown Gross &Lovelace, and Gina D. Stein for Respondent Irene Hampshire.
NOT TO BE PUBLISHED
APPEAL from orders of the Superior Court of San Diego, Super. Ct. No. 37-2020-00035726-PR-TR-CTL, Julia Kelety, Judge.
Aguirre & Severson, Michael J. Aguirre, Maria C. Severson, and Elijah T. Gaglio for Objector and Appellant.
Law Office of Johanna S. Schiavoni, Johanna S. Schiavoni; Keeney, Waite &Stevens, and Todd Stevens for Respondent Diane J. Peters.
Goodwin Brown Gross &Lovelace, and Gina D. Stein for Respondent Irene Hampshire.
McCONNELL, P. J.
In this probate case, Gerry Hampshire and Irene Hampshire challenged the bequest of their late father, Larry D. Hampshire, in his trust to a non-profit organization, Activist San Diego (ASD). After Gerry and Irene initiated the probate proceeding, they provided notice of the litigation to ASD, which went largely unanswered. The dispute was ordered to a mediation in which ASD did not participate. During the mediation, the parties reached a settlement agreement that did not provide for any gift to ASD.
We refer to the Hampshire family members' first names for clarity, intending no disrespect.
After Irene served ASD with the notice of hearing on the approval of the settlement, ASD finally appeared in the proceeding to oppose the approval. ASD argued that it had not received actual notice of the mediation and that it should be afforded relief under Code of Civil Procedure section 473, subdivision (b). After the probate court held a bench trial on the approval, the court rejected ASD's challenge and approved the settlement.
Further undesignated statutory references are to the Code of Civil Procedure.
On appeal, ASD asserts the probate court's factual finding that it was properly served with the notice of mediation was not supported by the evidence and that the court abused its discretion by denying ASD relief under section 473, subdivision (b). For reasons we shall explain, we reject ASD's arguments and affirm the probate court's orders.
At oral argument, ASD asserted for the first time that we should craft an exception to the rule announced in Breslin v. Breslin (2021) 62 Cal.App.5th 801 (Breslin) that a party who receives notice of court-ordered mediation in a probate proceeding, but fails to participate, is bound by the result. (Id. at p. 803.) Because this argument was not raised by ASD in its briefing, we decline to address it. (See McCarty v. Department of Transportation (2008) 164 Cal.App.4th 955, 986, fn. 11 [" 'We need not consider an argument not mentioned in the briefs and raised for the first time at oral argument.' "].)
FACTUAL AND PROCEDURAL BACKGROUND
Larry created the Larry D. Hampshire 1992 Trust on June 30, 1992 (Trust). On August 11, 2015, Larry executed a restatement of the Trust, which omitted several prior beneficiaries, including ASD. On November 16, 2017, Larry executed another restatement of the Trust-the subject of this litigation-and made several changes, including eliminating Gerry as a beneficiary and reinstating a $100,000 bequest to ASD, an organization that Larry had long supported.
In January 2021, Gerry filed a petition to invalidate Larry's November 16, 2017 amendment to the Trust on the grounds of his alleged incapacity. ASD was properly served with the petition. The same month, the probate court entered a stipulated order appointing Diane Peters as the temporary trustee.
The following month, on February 22, 2021, ASD's executive director Martin Eder sent a letter to all counsel and parties in the probate proceeding stating that ASD was "in receipt of court documents related to the Trustee successor of the Larry D. Hampshire 1992 Trust," and requesting that "[r]ather than use our street address please use:
Activist San Diego
P.O. Box 5631
San Diego, CA 92165
Phone # 619-283-1100
Email - info@ActivistSanDiego.org
Activist San Diego's Executive Director contact info:
Martin Eder
[Street Address]
San Diego, CA [Zip Code]
Phone # [Phone Number]
Email - [E-mail address]"
On March 1, 2021, Gerry served a notice of the hearing set for April 6, 2021 on his petition on all interested parties. He served ASD at the P.O. Box address set forth in Eder's letter and Eder's home address. On March 30, 2021, Irene filed a response to Gerry's petition, which she served on all interested parties, including ASD at the same P.O. Box address. ASD did not file a response to the petition and did not appear at the April 6, 2021 hearing.
At the hearing, the probate court set a case management conference for August 8, 2021. ASD did not attend the Case Management Conference or otherwise appear in court.
Between the hearing on April 6 and the conference on August 8, Larry passed away.
On October 4, 2021, Gerry filed an amended petition to invalidate the restatement to the Trust. On November 1, 2021, he served a notice of hearing on the amended petition, set for December 7, on all interested parties, including ASD. This notice was served both to the P.O. Box and Eder's home address.
On December 1, 2021, Irene filed her response and objection to Gerry's amended petition and served her response on all parties, including ASD at the P.O. Box address. Again, ASD did not file a response to the petition or appear at the hearing.
The Court's minute order from the hearing continued the petition to a case management conference on March 28, 2022. ASD did not appear in court or attend that conference. Following the conference, the court continued the matter to another conference on July 25, 2022. Again, ASD did not attend or appear at that conference. At the hearing, the court ordered all parties and interested persons to participate in mediation pursuant to Breslin, supra, 62 Cal.App.5th 801.
On May 10, 2022, Irene served a notice of mediation on all interested parties, including ASD. According to the proof of service, she served ASD at the P.O. Box address provided in Eder's February 22, 2021 letter. The notice stated the court had ordered the proceeding to mediation regarding "all matters relating to the Larry D. Hampshire 1992 Trust ... including the disputed issues regarding the 'Amended Petition for Order Invalidating the November 16, 2017 Amendment to the Larry D. Hampshire 1992 Trust, etc.' filed by Gerry Hampshire ..., and the 'Objections to Former De Facto Trustee's Accountings, etc.' filed by Irene Hampshire." (Italics omitted.) The notice also stated that the mediation would take place "on June 29, 2022 at 9:30 a.m." It informed interested parties of their option to participate in the mediation in person or virtually, including "[i]nterested persons who do not have counsel," and instructed parties who wished to participate in mediation to contact the persons listed in the notice.
The notice further stated that "[n]on-participating persons or parties who receive notice of the date, time, and place of mediation may be bound by the terms of any settlement reached at the mediation without further action by the Court or further hearing." The notice warned that failure to participate in the mediation could result in beneficiaries losing their rights and stated that if a party claimed "an interest in or money owed from the Trust, you should attend the mediation-or you will waive your right to participate in any settlement reached in this matter and/or waive your right to receive a beneficial interest in or money owed from the Trust.
On June 29, 2022, interested parties, including Gerry and Irene, virtually participated in mediation and settled the matter. ASD did not participate in the mediation and the settlement provided ASD with nothing from the Trust. Peters, the court-appointed trustee, filed a petition to approve the settlement and on July 12, 2022 served a notice of hearing on the petition to approve the settlement on all interested parties. Peters served ASD at the P.O. Box address, Eder's home address, and at ASD's prior business address.
This service finally prompted a response from ASD. On August 5, 2022, it filed an opposition to the petition. ASD also submitted Eder's declaration in support of its opposition, which detailed ASD's long relationship with Larry, addressed the letter sent on February 22, 2021, and stated that Eder did not become aware of the mediation until he received the petition to approve the settlement. ASD appeared at the hearing and argued it had received insufficient notice of the mediation under Probate Code section 1217, in violation of its due process rights, and asked the court for relief pursuant to section 473, subdivision (b). At the conclusion of the hearing, the probate court set the matter for a bench trial on October 27, 2022.
At trial, Peters, Gerry, Irene, and ASD submitted a stipulated statement of facts with supporting exhibits, which the court received and admitted into evidence. The court also heard opening statements for Irene, Gerry, and ASD. Eder; Douglas McCarron, ASD's bookkeeper; and Maria Severson, an attorney for ASD, testified.
ASD also sought to present the testimony of Renee Brown, a paralegal in the office of Irene's counsel, who signed the proof of service for the notice of mediation. The court sustained an objection to this evidence under Evidence Code section 352 because the proffered testimony by Brown was stipulated to by parties. The court also sustained an objection to Brown's testimony based on ASD's failure to subpoena her for trial.
On the stand, Eder testified that he resigned as ASD's Executive Director "[t]he third Monday of September 2021." He was vague about his involvement with ASD in the period following his resignation. Eder recalled receiving between "15 to 20 or more" legal documents related to the trust contest. He also stated that he sent the February 22, 2021 letter to the lawyers involved in the case, specifying that they use the P.O. Box address for legal mailings. Eder testified that he understood the trust contest involved a dispute between siblings but thought it best to "remain neutral" out of "respect" for the Hampshire family. Eder stated he did not understand the impact of the contest on ASD or that ASD's gift could be lost by failing to participate.
The record does not indicate whether Eder held any formal positions at ASD following his resignation.
Eder also explained ASD's process for mail collection and review. He testified that McCarron would retrieve the mail from ASD's P.O. Box weekly and sometimes less frequently. McCarron would handle bills and financial documents, and would call Eder to pick up other documents, including legal documents, "[t]ypically within a week, sometimes longer." In his declaration in support of ASD's opposition to the settlement, Eder said he learned of the petition to approve the settlement upon receiving notice of it through service to ASD. Eder did not clarify in his declaration or trial testimony where he received the notice but did testify that immediately after receiving the documents he went to McCarron's home with ASD's treasurer and reviewed McCarron's files and mail to look for the notice of mediation and did not locate it. Eder confirmed that as of May 10, 2022, the date the notice of mediation was mailed, ASD's mailing address was the P.O. Box set forth in the February 22, 2021 letter.
During his testimony, McCarron stated that he retrieved ASD's mail from the P.O. Box. If mail appeared to be a legal document, he would not open it and would instead call Eder. He stated that he did not recall seeing the notice of mediation in the P.O. Box because he would never open legal documents.
Severson, one of ASD's attorneys, testified that she had not been served with a physical copy of Irene's trial brief, but that it had been e-mailed to her. Severson also testified that Brown signed a proof of service on October 21, 2022, stating that service of the trial brief was made by e-mail to her law partner, Michael J. Aguirre, and by mail to their office, and that she received and opened that proof.
Following the bench trial, the court issued two orders detailing its findings, overruling ASD's objections, and granting the petition to approve the settlement agreement regarding the Trust. First, the probate court found that ASD received the notice of mediation in the ordinary course of mail. On this issue, the court weighed Eder's testimony regarding the notice of mediation against the presumption of receipt created by Evidence Code section 641. The court concluded Eder's testimony was not credible and did not rebut the presumption that ASD had received notice of the mediation. The probate court also rejected ASD's argument that it was entitled to relief under section 473, subdivision (b). The court found that ASD had presented no evidence indicating surprise or excusable neglect, and found that ASD had not acted in a reasonably prudent manner. After rejecting ASD's claims, the probate court approved the petition to approve the settlement. ASD timely appealed from the orders.
DISCUSSION
I
ASD first argues its due process rights were violated because it did not receive actual notice of the mediation. ASD contends that reasonable notice required the parties to the probate proceeding to serve it at both the P.O. Box address it provided in Eder's letter and Eder's home address. ASD also argues that there were problems with service after it became aware of the mediation, which support its claim it did not receive notice of the mediation.
A
Legal Standards
In a probate proceeding, due process requires "reasonable notice of any proceeding adversely affecting a property interest." (Roth v. Jelley (2020) 45 Cal.App.5th 655, 667 (Roth).) The U.S. Supreme Court has succinctly stated the rule: "Notice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party ... if [that party's] name and address are reasonably ascertainable." (Mennonite Board of Missions v. Adams (1983) 462 U.S. 791, 800.) The right to notice is also codified in the Probate Code. (See Prob. Code, § 1215, subd. (a)(1)(A) ["[A] notice ... to a person shall be delivered ... [b]y first-class mail if the person's address is within the United States."].)
The probate court's determination of whether ASD received adequate notice of the mediation is guided by Evidence Code section 641. That statute provides: "[a] letter correctly addressed and properly mailed is presumed to have been received in the ordinary course of mail." (Evid. Code, § 641.) Under this presumption, the trier of fact assumes the existence of the presumed fact "unless and until evidence is introduced which would support a finding of its non-existence, in which case the trier of fact shall determine the existence or non-existence of the presumed fact from the evidence and without regard to the presumption." (Id., § 604)
The presumption of receipt may be rebutted by testimony denying receipt. (Bear Creek Master Assn v. Edwards (2005) 130 Cal.App.4th 1470, 1486.) In such case, the trier of fact must weigh the denial of receipt against the inference arising from proof of mailing and decide whether the letter was received. (Ibid.) Whether the presumption under Evidence Code section 641 is rebutted is a question of fact for the court, and that factual determination will be upheld if supported by substantial evidence in the record. (Glasser v. Glasser (1998) 64 Cal.App.4th 1004, 1010-1011; Craig v. Brown &Root, Inc. (2000) 84 Cal.App.4th 416, 422 (Craig).)
Likewise, where a probate court's order follows a bench trial, we review findings of fact to determine whether they are supported by substantial evidence. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981; Turnbull v. Thomsen (1959) 171 Cal.App.2d 779, 785.) "Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings." (Thompson, at p. 981.) We do not reweigh the evidence or assess witness credibility. (Ibid.) We presume the order of a lower court to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. (Ibid.)
B
Analysis
The probate court found that the P.O. Box was a proper address for service on ASD, that Eder's testimony did not serve to rebut the presumption under Evidence Code section 641, and that even if it did, the evidence established that the notice of mediation was received by ASD in the ordinary course of mail. The court rejected ASD's argument that it should have been served at Eder's home address. These findings of fact were sufficiently supported by the evidence presented at trial.
ASD first contends that the probate court improperly rejected ASD's argument that the notice of mediation should have been sent to Eder's home address in addition to the P.O. Box. We disagree. The court reasonably interpreted the letter as a request for documents regarding the Trust dispute to be mailed to the P.O. Box. Although Eder listed his personal address in the letter, he specifically directed the parties to serve ASD at the P.O. Box. As the probate court noted, ASD has presented "no authority that would require a serving party to separately inquire about the continued viability of an address provided in written instructions, or to follow up service with an inquiry as to its receipt."
Next, ASD argues that the probate court's finding that it failed to rebut the presumption under Evidence Code section 641 was not supported by the evidence. ASD first claims that because Renee Brown, the paralegal who signed the proof of service for the notice of mediation, did not testify at trial "Eder's and Mr. McCarron's testimony that they did not receive actual notice of the mediation is uncontradicted." This argument lacks merit.
The probate court did not permit ASD to call Brown as a trial witness because she was not subpoenaed to testify and because her proffered testimony was contained in the parties' stipulated facts. ASD provides no argument or legal authority to support its assertion that Brown's testimony was improperly excluded. (See § 1985, subd. (a) ["The process by which the attendance of a witness is required is the subpoena."]; see also People v. Crawford (1953) 115 Cal.App.2d 838, 843-844 [where it did not appear from the record that a non-subpoenaed witness would have given evidence that would have been material to defendant's cause, failure to subpoena witness was not error].)
ASD insinuates the proof of service signed by Brown was false based on Severson's testimony that she was not served with the trial brief, despite a proof of service signed by Brown indicating the document was served on both Severson and her law partner, Aguirre, at their business address. We agree with the probate court that Severson's testimony is not relevant to the probate court's finding that the notice of mediation was properly served.
Further, the probate court reasonably determined that Eder's testimony was not credible as to the issue of non-receipt for three reasons. First, as the probate court found, Eder was "specific only as to the non-receipt of the Notice," but was "vague" about what mailings in his possession he had reviewed. Second, Eder testified that on May 10, 2022, the date of service of the notice, he was not ASD's Executive Director and ASD presented no evidence to show in what capacity Eder would have been receiving and reviewing legal documents for ASD at that time. Third, ASD's interrogatory responses admitted that the organization "went through turnover as to persons accessing the [P.O.] Box during that period." Because of this, the court found it likely "that persons other than Mr. Eder were receiving the mail from the Post Office box during the relevant time period."
The probate court also concluded McCarron's testimony was not helpful to ASD. McCarron testified that he did not recall seeing the notice of mediation at the P.O. Box, but this was because he "never opened" mail containing legal documents. Based on Eder's and McCarron's testimony, the probate court reasonably concluded that "ASD has failed to offer sufficient evidence to rebut the presumption [created by Evidence Code section 641] or to support a finding that the [n]otice [of mediation] had not been received at its Post Office Box in the ordinary course of mail." These factual findings are binding on this court, and we will not disturb them unless the appellant has shown they are not supported by sufficient evidence. (Craig, supra, 84 Cal.App.4th at p. 421.) ASD has not met this burden.
Citing Roth, supra, 45 Cal.App.5th 655 and In re Jonathan V. (2018) 19 Cal.App.5th 236, ASD also argues that it was deprived of due process and is thus entitled to de novo review of the probate court's findings. We disagree. While ASD had an underlying right to notice of the mediation, the court's findings that it received that notice are reviewed for substantial evidence. Unlike here, in both Roth and Jonathan V., there was no question that service was not made on the interested parties. (See Roth, at pp. 663-664 [a beneficiary to a trust who received no notice of an adverse proceeding against his interest was deprived of due process]; Jonathan V., supra, at pp. 239-242 [a juvenile court's issuance of a restraining order against a juvenile with no notice to the juvenile or his counsel violated the juvenile's due process rights].)
II
ASD next contends that the probate court abused its discretion by rejecting ASD's challenge under section 473, subdivision (b) to the approval of the settlement. ASD appears to argue that reversal is appropriate under the statute's discretionary and mandatory provisions. Peters, joined by Irene, responds that the court's decision denying ASD's arguments under the provision was well within its discretion. We agree.
A
Legal Standards
We review a lower court's order denying relief under section 473, subdivision (b) for abuse of discretion. (Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003, 1007-1008 (Solv-All).) A lower court's factual findings underlying its decision are entitled to deference and its decision should only be held to be an abuse of discretion if it" 'exceed[s] the bounds of reason.'" (Ibid., citing Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.)
Section 473, subdivision (b)'s discretionary provision states: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect." (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 254 (Zamora).) The court's inquiry is whether" 'a reasonably prudent person under the same or similar circumstances' might have made the same error." (Bettencourt v. Los Rios Community College Dist. (1986) 42 Cal.3d 270, 276.)
Under a separate, mandatory provision of the section, "the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or
(2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect." (§ 473, subd. (b); Gotschall v. Daley (2002) 96 Cal.App.4th 479, 483 (Gotschall); Benedict v. Danner Press (2001) 87 Cal.App.4th 923, 926.) The purpose of this mandatory provision is "to alleviate the hardship on parties who lose their day in court due solely to an inexcusable failure to act on the part of their attorneys." (Huens v. Tatum (1997) 52 Cal.App.4th 259, 264.)
B
Analysis
ASD argues the probate court abused its discretion in denying it relief under section 473, subdivision (b) based on Eder's declaration that he did not receive actual notice of the mediation. The probate court rejected this argument, finding that ASD's neglect in failing to pick up and review its mail from its P.O. Box was not reasonable or excusable. This finding was amply supported by the facts adduced at trial. As the probate court observed, the evidence presented to clarify ASD's mail-handling practices showed that ASD went through turnover regarding persons with access to the P.O. Box, that Eder was not ASD's executive director at the time the notice of mediation was served, and that prior to his resignation he had deliberately chosen not to participate in the probate proceeding. The court was well within its discretion in concluding that ASD's conduct was not reasonably prudent.(See Solv-All, supra, 131 Cal.App.4th at pp. 1006-1008 [denial of relief under section 473, subdivision (b), was not error where a party failed to file an answer per an agreed-upon extension, and where the negligent attorney denied receiving the letter regarding the deadline].)
ASD cites Lipson v. Jordache Enterprises, Inc. (1992) 9 Cal.App.4th 151 and Zamora, supra, 28 Cal.4th at p. 259 in support of its argument. Neither case is helpful to ASD. Lipson involved a due process violation of a party who received little to no notice. (Lipson, at p. 161.) Zamora involved a clerical error where the word "against" was substituted for "in favor of." (Zamora, at p. 259.) As discussed, the probate court found ASD received notice of the mediation, and this case does not involve a clerical error.
For the first time on appeal, ASD argues that it was entitled to relief under the mandatory provision of section 473, subdivision (b). Because this argument was not raised in the trial court, it has been waived. (See American Indian Health &Services Corp. v. Kent (2018) 24 Cal.App.5th 772, 789 ["' "As a general rule, theories not raised in the trial court cannot be asserted for the first time on appeal"' "]; JRS Products, Inc. v. Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168, 178 ["Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunity to consider."].)
Even if we were to reach this issue, however, ASD has not shown relief on this basis is warranted. The mandatory provision of section 473, subdivision (b) applies only to mistakes made by an attorney. (See Gotschall, supra, 96 Cal.App.4th at pp. 482-483 ["In order to vacate a dismissal caused by the mistake of an attorney, the trial court must determine plaintiff is entitled to relief under section 473, subdivision (b)."], italics added.) Nowhere does ASD assert its failure to participate in the mediation was due to an attorney's error. On the contrary, ASD states that "at the June 29, 2022 mediation and before, [ASD] was not represented by counsel." Thus, the mandatory provision of section 473, subdivision (b) is inapplicable here and the trial court did not abuse its discretion in denying relief to ASD on this basis.
DISPOSITION
The orders are affirmed. Respondents are awarded their costs of appeal.
WE CONCUR: BUCHANAN, J., CASTILLO, J.