Pihlajamaa v. Kaihlan , 94 Cal. App. 4th 1122 ( 2001 )

BENKE, Acting, P. J.

I respectfully dissent.

I

Although I agree with my colleagues’ determination that parol evidence was admissible in determining whether Maria’s domestic partnership claim would be a contest within the meaning of the no contest clause in Viljo’s will, I do not adopt the majority’s narrow interpretation of the remedies available under the safe harbor provisions of Probate Code¹ section 21320. As they have interpreted the statute, it does not provide anything close to a safe harbor for beneficiaries of wills and trusts. In fact the majority’s interpretation will simply recreate the “River Boat” gamble the Legislature plainly intended to eliminate.

In recommending enactment of former section 21305, the statutory predecessor to section 21320, the Law Revision Commission stated: “A major concern with the application of existing California law is that a beneficiary cannot predict with any consistency when an activity will be held to fall within the proscription of a particular no contest clause. To increase predictability, the proposed law recognizes that a no contest clause is to be strictly construed in determining the donor’s intent. This is consistent with the public policy to avoid a forfeiture absent the donor’s clear intent. The law also makes clear that a request by a beneficiary for declaratory relief in the form of a petition for construction of the instrument to determine whether a particular activity would violate a no contest clause does not itself trigger operation of the clause.” (Recommendation Relating to No Contest Clauses (Jan. 1989) 20 Cal. Law Revision Com. (1990) p. 12, fns. omitted, italics added.) Thus section 21320, subdivision (a), permits a beneficiary to apply to the probate court “for a determination whether particular motion, petition, or other act by the beneficiary . . . would be a contest within the terms of the no contest clause” and section 21320, subdivision (b), provides that “[a] no contest clause is not enforceable against a beneficiary to the extent an application under subdivision (a) by the beneficiary is limited to the procedure and purpose described in subdivision (a).”

Importantly, the relief permitted by section 21320, subdivision (a), does not permit a beneficiary to obtain a ruling on the merits of his or her claim. (§ 21320, subd. (b).) As the court in Estate of Ferber (1998) 66 Cal.App.4th 244, 251 [77 Cal.Rptr.2d 774], stated: “A ruling on whether the beneficiary’s proposed action would be a will contest may not involve a determination on the merits of the action itself. [Citation.] This makes sense. Otherwise, the summary procedure could be used to allow the very form of challenge and protracted litigation the testator sought to prevent.” (See also Genger v. Delsol (1997) 56 Cal.App.4th 1410, 1428, fn. 17 [66 Cal.Rptr.2d 527]; 20 Cal. Law Revision Com. (1990) pp. 1981-1982.)

Notwithstanding the express immunity provided by section 21320, subdivision (b), and the express intent of the statute’s drafters that beneficiaries be able to obtain a determination as to the scope of a no contest clause without triggering enforcement of the clause, the majority opinion holds that a no contest clause may be enforceable against a section 21320 applicant. (Maj. opn., ante, at pp. 1135-1136.) My colleagues hold that under section 21320 the probate court must always determine the scope of a no contest clause and that when an application under the statute requires a determination of the merits of the beneficiary’s claim, the immunity provided by section 21320, subdivision (b), is simply lost. (Maj. opn., ante, at pp. 1135-1136.) Under the majority’s holding, a beneficiary will be taking a considerable risk in employing section 21320, subdivision (a). If a court finds both that the no contest clause covers the beneficiary’s proposed claim and that in making that determination it. .reached the merits of the proposed claim, under the majority holding the no contest clause will have been triggered and the beneficiary will get nothing under the terms of the will or trust. As a practical matter, the majority’s interpretation deprives beneficiaries of the safe harbor that section 21320 was plainly designed to give them.

I would avoid the risk to beneficiaries the majority has created by interpreting the limitation set forth in section 21320, subdivision (b), not as a limitation on the immunity the statute provides, but as a limitation on the declaratory relief available under the statute. Thus where construction of a no contest clause requires a resolution of the merits of a beneficiary’s claim, like the probate court, I would read the statute as requiring that the section 21320 application be denied. This interpretation gives full effect to the prohibition on using section 21320 as a means of obtaining a ruling on the merits of a proposed claim but avoids entirely the possibility that a section 21320 application will trigger enforcement of a no contest clause. I would add this is the interpretation apparently adopted by the only other cases which have discussed the issue, Estate of Ferber, supra, 66 Cal.App.4th at page 251, and Genger v. Delsol, supra, 56 Cal.App.4th at page 1428, footnote 17.

In short, as one commentator has noted, when a determination on the merits is required, a section 21320 petition is not appropriate and “the beneficiary must take the proposed action in order to find out whether the action constitutes a contest.” (Cal. Trust and Probate Litigation (Cont.Ed.Bar 2001) No Contest Clauses and Other Obstacles to Litigation, §5.11, pp. 90-91.)

II

Like the probate court, I find that in determining the scope of the no contest clause, the court will inevitably be required to determine the merits of Maria’s domestic partnership claim and that accordingly, relief under section 21320 is not available.

In Burch the court found that the decedent intended “to put his surviving spouse to an election between taking the distribution provided for her under the trust, or alternatively, renouncing that distribution and taking against the trust estate pursuant to her independent legal rights. This intention appears from the declaration in the recital that the property subject to the trust is and is to remain the trustor’s ‘separate property.’ ” (Burch v. George (1994) 7 Cal.4th 246, 257 [27 Cal.Rptr.2d 165, 866 P.2d 92] (Burch).) The court found that this interpretation was supported by the extrinsic evidence offered

. by the trustee: “This evidence is uncontroverted that [the husband] transferred the disputed assets to the trust, that he intended that the trust dispose of these assets, and that any assertion of independent rights to these assets by [the wife] would trigger the no contest clause.” (Id. at p. 258.)

Here, Viljo’s will recites that he is not married and has in mind the nature and extent of his estate. The will then makes a substantial bequest to Maria and bequests a dollar to any person who “shall establish a right to any part of my estate, whether or not such person is related in any way by blood to me and if I died intestate would be entitled to any part of my estate.” (Italics added.) Arguably, these provisions of the will support Vemer’s contention that, like the decedent husband in Burch, Viljo intended to compel Maria to make an election between accepting the bequest provided by the will and asserting any rights she may have thought she had as his domestic partner.

However, the inference raised by the cited provisions of Viljo’s will is just that, an inference. The inference is in no sense compelling and does not exclude the possibility that, as Maria contends, the will was intended to dispose of only one-half of the property Viljo acquired during his 30-year relationship with Maria. Indeed, her interpretation of the will is supported to some extent by the statement that the will is intended to dispose of property Viljo has the “right to dispose of by will.”

Given the conflicting inferences arising from the face of the will, the need for extrinsic evidence as to Viljo’s intent is unmistakable. In particular, extrinsic evidence as to how Viljo viewed the property held in his name at the time of his death would be particularly relevant. (See Burch, supra, 7 Cal.4th at pp. 257-258.) For instance, evidence of conduct or statements by Viljo which reflect a belief that he was the sole owner of the property would tend to support Vemer’s interpretation that Viljo meant to compel an election by Maria. Even if his belief as to his unfettered right to control the property was erroneous, his belief would still be relevant with respect to his intent at the time he executed his will. (Ibid.) On the other hand, any references to joint ownership or conduct which suggested an acknowledgment by Viljo of Maria’s partnership interest in his property would tend to support Maria’s contention that Viljo intended that the will only cover his interest in property acquired during the course of their relationship.

In considering whatever in the nature of extrinsic evidence the parties may offer as to how Viljo viewed his property, the probate court would inevitably be drawn in to the merits of Maria’s domestic partnership claim. In this regard I note that in addition to finding that domestic partners may expressly agree to share ownership of property held in the name of only one partner, the court in Marvin v. Marvin (1976) 18 Cal.3d 660, 684 [134 Cal.Rptr. 815, 557 P.2d 106], found that an implied agreement to share property may also be enforced. In determining whether such an implied agreement existed: “The courts may inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract or implied agreement of partnership or joint venture [citation], or some other tacit understanding between the parties.” (Ibid.) This of course is almost the same inquiry that will be required in order to determine Viljo’s testamentary intentions. (See Burch, supra, 7 Cal.4th at pp. 257-258.)

In sum then, I conclude relief under section 21320 is not available because in interpreting Viljo’s will, the probate court will be required to determine the merits of Maria’s domestic partnership.

I would affirm the probate court’s order.

A petition for a rehearing was denied January 23, 2002.

1 A11 further statutory references are to the Probate Code unless otherwise specified.