Post v. Post CA4/2 ( 2021 )

Filed 10/29/21 Post v. Post CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
CINDY POST,
Plaintiff and Appellant, E073129
v. (Super. Ct. No. RIP1600477)
TRAVIS POST, OPINION
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Thomas H. Cahraman,
Judge. Affirmed.
Nett & Nett, Catherine Convy and Amy K. Nett, for Plaintiff and Appellant.
The Law Office of Evan D. Williams and Evan D. Williams, for Defendant and
Respondent.
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I.
INTRODUCTION
Before he died, decedent James E. Post created the James E. Post Irrevocable
Trust (the Trust). The Trust’s only purported asset, and the subject of this lawsuit, is JP
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Preferred, LLC (JP). After James’s death, his ex-wife, Cindy Post, claimed that JP is the
property of the Estate of James E. Post (the Estate). James and Cindy’s son, respondent
Travis Post, is a beneficiary of the Trust and claimed JP is the Trust’s property. The
probate court agreed and declared JP to be the Trust’s asset.
Cindy appeals. We affirm the judgment.
II.
FACTUAL AND PROCEDURAL BACKGROUND
On May 20, 2010, James created JP, an Alaska limited liability company. James
named himself as JP’s only member, manager, and owner.
A few days later, James created the Trust. The Trust is organized under and
governed by the laws of Alaska, and designates James as its “Investment Trustee.” It
provides that upon James’s death, shares of the Trust are to be distributed to six
beneficiaries. Travis is one of those beneficiaries, but Cindy and the Estate are not.
Section 13.03 of the Trust states, “[t]he Trustees acknowledge the receipt from the
Grantor of the property set forth in the annexed Schedule.” Attached to the Trust is a
1
Because the decedent and the parties share the same last name, we refer to them
by their first names to avoid confusion. We mean no disrespect.
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document entitled “SCHEDULE OF PROPERTY TRANSFERRED,” which lists only
“JP Preferred, LLC.” It identifies no other assets.
James’s counsel, Jerry Mark Lobb, testified that he prepared an assignment for
James to execute. In Lobb’s view, the executed assignment would have formally
transferred JP to the Trust in accordance with Alaska law. James, however, never signed
the assignment before his death.
Although James and Cindy divorced in 2012, they had an amicable relationship
afterwards. James designated Cindy as the executor of the Estate and bequeathed her
almost all of his property. After James died in 2016, Cindy, as executor of the Estate,
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filed a petition under Probate Code sections 850, subdivision(a)(2)(C) and 17200,
requesting an order declaring JP an asset of the Estate. Travis objected to the petition on
the ground that James transferred JP to the Trust, and requested an order confirming JP as
the Trust’s asset. The probate court agreed that JP was the Trust’s property, denied
Cindy’s petition, declared JP an asset of the Trust, and entered judgment for Travis.
Cindy timely appealed.
2
Probate Code section 850, subdivision (a)(2)(C) allows “[t]he personal
representative” to file “a petition requesting that the [probate] court make an order” under
the Probate Code “[w]here the decedent died in possession of, or holding title to, real or
personal property, and the property or some interest therein is claimed to belong to
another.” Probate Code section 17200 similarly allows a trust beneficiary to petition the
probate court for various orders “concerning the internal affairs of the trust.”
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III.
DISCUSSION
For a host of reasons discussed below, Cindy argues the probate court erred in
finding that JP is the Trust’s asset. We conclude the probate court did not err.
A. Standards of Review
The interpretation of a statute is a question of law that we review de novo.
(Harustak v. Wilkins (2000) 84 Cal.App.4th 208, 212.) The interpretation of the terms of
a written instrument, such as a trust, is generally a question of law that we review de
novo. (Johnson v. Greenelsh (2009) 47 Cal.4th 598, 604.) “In construing a trust
instrument, the intent of the trustor prevails and it must be ascertained from the whole of
the trust instrument, not just separate parts of it. [Citation.]” (Scharlin v. Superior Court
(1992) 9 Cal.App.4th 162, 168.) But when the probate court makes findings of fact based
on its evaluation of extrinsic evidence, we review those findings for substantial evidence,
meaning we resolve any conflicts and draw all legitimate and reasonable inferences in
favor of the judgment. (See Estate of Dodge (1971) 6 Cal.3d 311, 318.)
B. Cindy Has Standing
At the outset, we address and reject Travis’s argument that Cindy lacks standing.
“‘A litigant’s standing to sue is a threshold issue to be resolved before the matter can be
reached on the merits. [Citation.]’” (Troyk v. Farmers Group, Inc. (2009) 171
Cal.App.4th 1305, 1345.) Although Travis did not argue in the probate court that Cindy
lacked standing, “[a] party’s standing can be raised at any time in the litigation, even for
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the first time on appeal.” (Applera Corp. v. MP Biomedicals, LLC (2009) 173
Cal.App.4th 769, 785.)
Travis contends Cindy’s interest in the Trust, if any, was revoked upon her divorce
from James under Alaska Statute § 13.12.804. That statute “revokes any beneficiary
designations to a former spouse upon divorce unless ‘the express terms’ of some
applicable agreement or court order provide otherwise.” (Snead v. Wright (D. Alaska
2019) 427 F.Supp.3d 1133, 1138.) Travis thus argues, and Cindy appears to agree, that
Cindy lacks standing under Alaska Statute § 13.12.804 to assert any claim to the Trust’s
assets “unless [she] can show ‘proof’ that her interests in [James’s] Estate were not
revoked by [James].”
We disagree. As a beneficiary of the Estate, Cindy is an “interested person” in the
Estate and thus has standing to bring this action challenging the Trust’s claim to JP. (See
(See Prob. Code, §§ 48, subd. (a)(1), 8000, subd. (a); Schwan v. Permann (2018) 28
Cal.App.5th 678, 698 [an “‘interested person’” has “legal standing to contest the
provisions of a will or trust”]; Estate of Harootenian (1951) 38 Cal.2d 242, 248 [standing
in probate court to challenge a will or trust requires only a prima facie showing of an
interest in the estate].)
C. The Probate Court Had Jurisdiction
Travis also argues the probate court lacked jurisdiction under Alaska Statute
§ 13.36.035, subdivision (a). We understand Travis’s position to be that the probate court
lacked subject-matter jurisdiction because Alaska has exclusive jurisdiction over all
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matters related to the Trust. Cindy contends Travis waived his right to raise this “forum
non conveniens” argument by failing to assert it in the probate court and failing to
exercise his right to bring the case in Alaska under the Trust’s choice-of-forum clause.
We disagree. Travis may raise this argument at any time, even for the first time on
appeal. (See Kabran v. Sharp Memorial Hospital (2017) 2 Cal.5th 330, 369;
Consolidated Theatres, Inc. v. Theatrical Stage Employees Union, Local 16 (1968) 69
Cal.2d 713, 721 [addressing whether action was within exclusive jurisdiction of National
Labor Relations Board, which was not raised in probate court].) We nonetheless reject
the argument.
Alaska Statute § 13.36.035 “vests the [Alaska] superior court with exclusive
jurisdiction over proceedings initiated by interested parties concerning the internal affairs
of trusts.” (First National Bank of Anchorage v. State (Alaska 1995) 902 P.2d 330, 334.)
“[P]roceedings that may be maintained” under this provision include “those concerning
the administration and distribution of trusts, the declaration of rights, and the
determination of other matters involving trustees and beneficiaries of trusts.” (A.S.,
§ 13.36.035, subdivision (a).) Without citing any authority or providing any further
argument, Travis argues this case “clearly falls” under Alaska Statute § 13.36.035,
subdivision (a), and therefore it should be dismissed for lack of jurisdiction.
The parties do not cite, nor can we locate, any authority from Alaska or elsewhere
discussing the validity of Alaska Statute § 13.36.035, subdivision (a). But the Alaska
Supreme Court held that a similar statute purporting to grant Alaskan courts exclusive
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jurisdiction over certain claims involving Alaskan trusts could not “unilaterally deprive
other state and federal courts of jurisdiction.” (Toni 1 Trust v. Wacker (Alaska 2018) 413
P.3d 1199, 1201 (Tangwall).) In Tangwall, a Montana state court issued judgments in
favor of William and Barbara Wacker and against Donald Tangwall and his family.
(Ibid.) Tangwall responded by transferring two pieces of property to a trust created under
Alaska law. (Ibid.) The Wackers filed an action against Tangwall in Montana state court
under Montana law alleging that he fraudulently transferred the property. (Ibid.)
Tangwall, in turn, filed complaints against the Wackers in federal bankruptcy court and
Montana state court. (Ibid.) The Montana state court and federal bankruptcy court held
that Tangwall’s transfers of the property to the Alaska trust were unenforceable. (Ibid.)
Tangwall again sued the Wackers, this time in Alaska state court. (Tangwall,
supra, 413 P.3d at p. 1201.) He argued the Alaska superior court had exclusive
jurisdiction over the Wackers’ fraudulent transfer actions under Alaska Statute
§ 34.40.110, subdivision (k). (Ibid.) That statute, like Alaska Statute § 13.36.035,
subdivision (a), provides that the Alaska courts have “exclusive jurisdiction over an
action brought under a cause of action or claim for relief that is based on a transfer of
property to a trust that is the subject of this section.” (A.S. § 34.40.110, subd. (k).)
The Alaska Supreme Court held that § 34.40.110, subdivision (k) could not
lawfully strip the Montana state courts or federal bankruptcy courts of jurisdiction over
the Wackers’ claims. (Tangwall, supra, 413 P.3d at p. 1201.) As to the Montana courts,
the Tangwall court relied on the holding in Tennessee C.I & R. Co. v. George (1914) 233
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U.S. 354 at page 360 (Tennessee Coal) that “‘jurisdiction . . . cannot be defeated by the
extraterritorial operation of a statute of another state, even though it created the right of
action.’” (Tangwall, supra, at p. 1203.) The Tangwall court recognized Tennessee
Coal’s holding that states are not compelled “to follow another state’s statute claiming
exclusive jurisdiction over suits” under the federal Constitution’s Full Faith and Credit
Clause. (Tangwall, supra, at p. 1204.)
According to the Tangwall court, “[t]he clear implication” of this rule is that “the
constitutional argument rejected in Tennessee Coal would be even less compelling were a
state to assert exclusive jurisdiction over suits based on a cause of action it did not
create.” (Tangwall, supra, 413 P.3d at p. 1204.) The Tangwall court thus rejected
Tangwall’s argument that Alaska Statute § 34.40.110, subdivision (k) granted the Alaska
courts exclusive jurisdiction over the Wackers’ Montana state-law claims, reasoning that
it was “a more extreme interpretation of the ‘full faith and credit’ principle . . . rejected in
Tennessee Coal.” (Tangwall, supra, at p. 1204.) As a result, the Tangwall court held that
Alaska Statute § 34.40.110, subdivision (k) did not “deprive Montana courts of
jurisdiction over cases arising under Montana law,” such as the Wackers’ case.
(Tangwall, supra, at p. 1204.)
Tangwall’s reasoning applies here. Just as Alaska Statute § 34.40.110,
subdivision (k) “cannot unilaterally deprive other state and federal courts of jurisdiction,”
(Tangwall, supra, 413 P.3d at p. 1201), Alaska Statute § 13.36.035, subdivision (a)
cannot strip California courts of jurisdiction to hear cases, like this one, brought in
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California under the California Probate Code. We therefore reject Travis’s argument that
the probate court lacked subject-matter jurisdiction.
D. The Probate Court Properly Confirmed JP Is the Trust’s Asset
The probate court found that JP is a Trust’s asset under Alaska law because James
“intended to fund, and did fund” the Trust with JP. The parties agree that the probate
court properly found that Alaska law governs the issue. They disagree, however, whether
the probate court erred in finding that JP is the Trust’s asset under the Alaska Supreme
Court’s decision in Aiello v. Clark (Alaska 1984) 680 P.2d 1162 (Aiello). We conclude
the court did not err.
In Aiello, a mother, Fern Palfy, created a trust whose trustees were her and her
daughter, Donna Aiello. (Aiello, supra, 680 P.2d at p. 1164.) Palfy sold a piece of real
estate. The promissory note for the property stated that Palfy and Aiello would each
receive a one-half interest in the lien on the property. (Ibid.) Palfy’s trust agreement
stated that Palfy transferred to Aiello “the property set forth in Exhibit ‘A’” attached to
the agreement, which listed only the promissory note for the property. (Id. at p. 1167.)
Palfy, purportedly on her behalf and as Aiello’s attorney, signed an “Assignment
of Beneficial Interest” that transferred Palfy and Aiello’s interests in the promissory note
to Clark and his daughter, Joyce Clark. (Aiello, supra, 680 P.2d at p. 1164.) Aiello did
not agree to the transfer and was “completely divested of her interest” in the property, so
she sued the Clarks to set aside the assignment and recoup her interest. (Id. at p. 1164.)
The probate court ruled in the Clarks’ favor. (Ibid.)
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The Clarks argued the assignment was valid because “no conveyance of the
property to the [t]rust was ever made.” (Aiello, supra, 680 P.2d at p. 1165.) Without
much difficulty, the Alaska Supreme Court disagreed. (Ibid.) The Aiello court
recognized Palfy’s trust agreement stated that she transferred the promissory note to
Aiello and that “[a] note may be assigned merely by execution of the trust document.”
(Id. at p. 1167.) The Aiello court thus concluded that “a trust was completed as to
[Palfy’s] one-half interest” in the property and she did not validly assign her interest to
the Clarks under the trust agreement’s terms. (Ibid.) Because “neither Palfy’s nor
Aiello’s interest was properly transferred to the Clarks” under the trust agreement, the
Aiello court reversed. (Id. at p. 1168.)
Although not on all fours with this case, Aiello guides our analysis here,
particularly given that Cindy cites no Alaska authority more on point. Just as Palfy
transferred the promissory note to her trust by explicitly stating in the trust agreement that
she was doing so, James transferred JP to the Trust by explicitly stating in the Trust’s
agreement that he was doing so. Under Aiello, this was enough to transfer JP to the
Trust, thus rendering it the Trust’s asset. We therefore reject Cindy’s argument that
James had to execute additional documents to validly transfer his interest in JP to the
Trust. Had James intended to transfer his interest in JP to his Estate, he would not have
expressly transferred it in the Trust’s agreement and would not have named six
individuals—not Cindy or the Estate—as the Trust’s beneficiaries if he wanted Cindy or
the Estate to inherit his interest in JP. James’s intent to transfer his interest in JP to the
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trust was apparent from the Trust’s terms, which control here. (See Aiello, 680 P.2d at p.
1165.)
Cindy still argues JP should not be considered an asset of the Trust for a series of
reasons. We find none of them persuasive.
Cindy asserts Aiello is distinguishable because the promissory note at issue in
Aiello was “administered” by Palfy’s trust while JP was not “administered” by James’s
Trust. Cindy fails to explain why this distinction is material and thus fails to persuade us
that Aiello does not control here. As the Aiello court explained, the language of Palfy’s
trust alone was enough to show that she intended to transfer the promissory note to the
trust. (Aiello, supra, 680 P.2d at p. 1167.)
Cindy also contends James’s transfer of JP to the Trust was invalid because he did
not comply with section 7.2 of JP’s Operating Agreement (section 7.2). That provision
provides in relevant part: “Except as expressly provided in this Agreement, a Member
shall not Transfer any part of the Member’s Membership Interest in the Company,
whether now owned or hereinafter acquired unless (1) the other Members unanimously
approve the transferee’s admission to the Company as Member upon Transfer . . . .”
Cindy argues James’s transfer of his interest in JP to the Trust did not comply with this
provision because he did not obtain the unanimous consent of all JP members before
assigning his interest. But because James was JP’s only member, his consent was all that
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was required. As we explained, his execution of the Trust shows that he consented to
3
transferring JP to the Trust.
Again pointing to section 7.2, Cindy argues James could not transfer his interest in
JP to an irrevocable trust. The relevant portion of section 7.2 states, “Notwithstanding
any other provision of this Agreement to the contrary, a Member who is a natural person
may transfer all or a portion of his or her Membership Interest to any revocable trust
created for the benefit of the Member, or any combination between or among the
Member and the Member’s spouse.” (Italics added.) Although this provision states that a
JP member may transfer its interest in JP to a revocable trust, nothing in the provision or
elsewhere in the Operating Agreement prohibited James from transferring his interest in
JP to an irrevocable trust.
The Operating Agreement also provides that James, as JP’s only manager, “shall
make all decisions concerning the management of [JP’s] business,” and further provides
that decisions about JP “may be reached through one or more informal consultations
followed by agreement among” JP members. Again, because James was JP’s only
manager and member, his consent was all that was required to comply with these
provisions, which allowed him to transfer JP to the Trust.
Yet Cindy maintains that her consent to the transfer was required under the
Operating Agreement. She again points to section 7.2 to support her position. Neither
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Cindy also seems to argue that James could not transfer his interest in JP to the
Trust without “an express assignment” because the Trust was created a few days after JP.
We do not follow Cindy’s argument.
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this provision nor anything else in the Operating Agreement says anything about a
member spouse’s consent being required for the member to transfer his or her interest.
Relatedly, Cindy asserts James could not transfer JP to the Trust without her
consent under Family Code section 1100, subdivision (b). But because Cindy did not
make this argument in the probate court, she has forfeited it on appeal. (Rancho Mirage
Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 265.)
Cindy next argues that JP’s transfer to the trust was invalid because section 7.8 of
the Operating Agreement required the Trust administrator, the Alaska Trust Company, to
execute the Operating Agreement, which it did not do. That section states in relevant
part: “Substituted Member: Except as expressly permitted under [s]ection 7.2 of this
Agreement, a prospective transferee (other than an existing Member) of a Membership
Interest may be admitted as a Member with respect to such Membership Interest (a
‘Substituted Member’) only . . . on such prospective transferee’s executing a counterpart
of this Agreement as a party hereto.” The provision thus pertains to whether a transferee
may become a member of JP. It does not affect the terms under which James could
transfer his interest in JP.
Cindy also relies heavily on the opinion of James’s counsel, Mr. Lobb. According
to Cindy, Mr. Lobb opined that James invalidly transferred JP to the Trust under Alaska
law. But Mr. Lobb, who is not admitted to practice in Alaska, conceded that he was not
familiar with applicable Alaska law. Cindy does not identify any Alaska authority Mr.
Lobb purportedly relied on to reach his opinions. Mr. Lobb’s unsupported opinion does
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not alter our analysis. (Cf. Estate of Teed (1952) 112 Cal.App.2d 638, 646 [“The ipse
dixit of the most profound expert proves nothing except it finds support upon some
adequate foundation.”].)
Cindy notes that Mr. Lobb testified that he told James around the time the Trust
was created in May 2010 that he needed to execute a written assignment to validly
transfer JP to the Trust and that he sent James an assignment to sign. According to Mr.
Lobb, the Alaska Trust Company, the administrator of the Trust, would not accept the
transfer of JP to the Trust unless and until James executed a written assignment. Mr.
Lobb also claimed that a representative from the Alaska Trust Company, Brandon
Cintula, told Mr. Lobb that the only asset in the Trust was a $1,000 deposit and that JP
had not been accepted as an asset of the Trust. In Cindy’s view, the fact that James never
executed the written assignment in 2010 shows that he did not intend to transfer his
interest in JP to the Trust, because James always signed things immediately.
The evidence on this issue is disputed, and the probate court found that it did not
support Cindy’s position. We therefore review that finding for substantial evidence.
(Estate of Dodge, supra, 6 Cal.3d at p. 318.)
Mr. Lobb testified on two consecutive days of the trial. The probate court noted
that on the first day of trial Mr. Lobb “guess[ed]” that he sent James a written assignment
to execute in May 2010, and had “a very skimpy recollection” of whether he followed up
with James about executing the assignment. The probate court observed that Mr. Lobb
sent James several executed documents for his records in June 2010, about a month after
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the Trust was formed, and none of them mentions “any formal assignment which still
needed to be signed.” The court also noted that there is no evidence that James
responded to Mr. Lobb requesting any revisions to the documents.
The probate court therefore found that Mr. Lobb’s testimony on the second day of
his testimony that he counseled James “in detail as to the effect of failing to execute the
assignment” conflicted with his prior testimony. The probate court also found Mr.
Lobb’s testimony was imprecise as to when he supposedly counseled James about
executing the assignment because he did not “specify[] whether that was in 2010, 2015,
or some other year.”
In short, the probate court did not believe Mr. Lobb’s testimony that he told James
in 2010 that the assignment of JP to the Trust was invalid unless James executed a written
assignment and “doubt[ed]” that Mr. Lobb ever sent James a written assignment to
execute. As a result, the probate court rejected Cindy’s arguments that James refused to
execute the written assignment in 2010 and that his alleged refusal to do so showed that
he did not intend to transfer JP to the trust.
Beyond his own testimony, there is no evidence that Mr. Lobb sent James a
written assignment transferring JP to the Trust for James to execute. There is likewise no
evidence James received the written assignment in 2010. We must defer to the probate
court’s finding that Mr. Lobb’s testimony on the issue was not credible. (Lenk v. Total-
Western, Inc. (2001) 89 Cal.App.4th 959, 968.)
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The probate court permissibly found the Trust’s language reflects James’s “clear
intent” to fund the Trust with JP despite Mr. Lobb’s testimony that James did not want to
transfer—and did not transfer—his interest in JP to the Trust. The probate court thus
reasonably rejected Cindy’s argument that James intentionally did not execute the
assignment because he did not want to transfer JP to the Trust.
Cindy argues that even if the probate court correctly found that James validly
transferred JP to the Trust, JP was or should be transferred out of the trust for three
reasons. We are not persuaded.
As we understand Cindy’s first argument on this point, she contends that James
intended to transfer his interest in JP from the trust back to JP’s members (i.e., to himself
and his estate) through his “subsequent and continual representation” that he was JP’s
sole owner. Cindy forfeited this argument by failing to assert it in the probate court.
(See Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1216-1217 [issues not
raised in probate court forfeited on appeal].)
Second, Cindy argues the probate court erroneously declined to “modify, reform,
or terminate” the Trust’s terms under Alaska Statutes §§ 13.36.350 and 13.36.345 to
reflect James’s intent to leave his property to her. Those statutes permit courts to modify,
reform, or terminate an irrevocable trust only “[o]n petition by a trustee, settlor or
beneficiary” of the irrevocable trust. (Alaska Stats., §§ 13.36.350, subd. (a), 13.36.345,
subd. (a).) The statutes do not apply here because Cindy is not a trustee, settlor, or
beneficiary of the Trust.
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Third, Cindy argues the Trust should not be enforced because it violates California
public policy. Cindy acknowledges she did not make this argument in the probate court,
so we decline to consider it. (See Karlsson v. Ford Motor Co., supra, 140 Cal.App.4th at
pp. 1216-1217.)
As the probate court succinctly put it, “[t]his case is controlled . . . by [James’s]
intent at the time of forming and funding the [T]rust.” Because the Trust’s language
shows James’s intent to fund the Trust with JP, the probate court correctly found that JP
is an asset of the Trust, not the Estate. The probate court therefore properly denied
Cindy’s petition to confirm JP is an Estate asset and properly granted Travis’s request to
confirm JP is a Trust asset.
IV.
DISPOSITION
The judgment is affirmed. Travis may recover his costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON
J.
We concur:
McKINSTER
Acting P. J.
RAPHAEL
J.
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