Clampett v. Heger CA2/7 ( 2013 )

Filed 6/17/13 Clampett v. Heger CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
EARL A. CLAMPETT, JR., B241142
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BP113428)
v.
JOEL W. HEGER et al., as Trustees, etc.,
Defendants and Respondents.
APPEAL from an order of the Los Angeles County Superior Court, Michael I.
Levanas, Judge. Reversed and remanded with directions.
Law Offices of Henry N. Jannol, Henry N. Jannol, Neal B. Jannol; Andreos &
Andreos, and George P. Andreos for Plaintiff and Appellant.
Palermo, Barbaro, Chinen & Pitzer, Philip Barbaro, Jr. for Defendants and
Respondents.
_____________
Earl A. Clampett, Jr. appeals from an order entered after the probate court
sustained without leave to amend a demurrer to his petition seeking to compel trustees
Joel W. Heger and Christian M. Heger to make a distribution under the terms of a trust.
The probate court ruled Clampett, the holder of a durable power attorney conveyed to
him by the trust beneficiary, had no standing as a matter of law to demand distribution on
his principal‟s behalf and, in any event, his request did not conform to the requirements
in the trust. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Trust’s “Five-or-Five” Clause
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Jack Heger and Marion Heger were married for 27 years until Jack‟s death in
April 2008. When Jack died, his sons from a prior marriage, Joel and Christian, became
trustees of his separate property trust. The trust contained a “five-or-five clause,”
granting Marion, as Jack‟s surviving spouse, the right to request an annual distribution of
the greater of $5,000 or 5 percent of the value of the trust as of the end of the preceding
calendar year. “This request shall be by a written document specifically referring to this
right of withdrawal during December of each such calendar year. This right of
withdrawal is noncumulative, so that if the Settlor‟s spouse does not withdraw, during
December of any one calendar year, the full amount allowed, the right to withdraw the
amount not withdrawn shall lapse at the end of that calendar year.”
2. Clampett’s Exercise of the Five-or-Five Clause on His Mother’s Behalf
Marion suffers from Alzheimer‟s disease. On August 25, 2006, prior to Jack‟s
death, Marion conveyed to Clampett, her son from a prior marriage, a general durable
power of attorney appointing him as her attorney-in-fact for all purposes, “effective
immediately.”
1 Because Marion and Jack and Jack‟s two sons, Joel and Christian, share the same
surname, we refer to them by their first names for convenience and clarity. (See Jones v.
ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1191, fn. 1; Cruz v. Superior Court
(2004) 120 Cal.App.4th 175, 188, fn. 13.)
2
On December 3, 2010 Clampett‟s lawyer, Geoge Andreos, sent a letter to Joel and
Christian and their counsel “on behalf of Marion” requesting the trustees to “please
accept this as a written request for the payment of 5% of the principal valuation” of the
trust “as determined at the end of the preceding calendar year. (December 31, 2009).”
The trustees did not respond.
On January 4, 2011 Clampett, through Andreos, sent another letter, reminding the
trustees of his timely demand on December 3, 2010 and requesting the trustees‟ prompt
response.
On January 10, 2011 counsel for Joel and Christian denied the request, stating in a
letter to Andreos, “It is my understanding that you do not represent Marion Heger, but
even if you did, the trust instrument would not provide for your exercise on her behalf.
Therefore, the attempted exercise of the 5 or 5 power does not conform to the
requirements of the trust and is rejected.”
On January 26, 2011 Andreos responded, asserting the rejection of Clampett‟s
demand on Marion‟s behalf was disingenuous and a violation of the trust terms. Andreos
asserted the trustees had long known he represented Clampett, Marion‟s attorney-in-fact;
indeed the trustees had previously forwarded accountings of trust assets to him for that
reason. Clampett also forwarded to the trustees the signed durable power of attorney
showing his status as Marion‟s attorney-in-fact. The trustees continued to deny the
request.
3. Clampett’s Petition To Compel Distribution Under the Trust’s Five-or-Five
Clause
On May 31, 2011 Clampett filed a petition pursuant to Probate Code
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sections 17200 and 850 to compel the trustees to make the distribution to his mother
under the trust‟s five-or-five clause. Clampett attached to his petition the trust document
2 Probate Code sections 17200 and 850 permit a person to request the court to make
certain orders, including directing a trustee to convey property in compliance with the
terms of a trust instrument and to hold a trustee personally liable if the failure to do so
was in bad faith.
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and the correspondence between his counsel and the trustees‟ counsel concerning his
timely demand. The petition also included causes of action for elder abuse, breach of
fiduciary duty and a request for an accounting.
The trustees demurred to the petition and accompanying causes of action, asserting
the five-or-five power was not properly exercised. According to the trustees, the trust
required Marion to submit her request to exercise her rights under that provision in
writing. Marion never did. The request from Andreos, Clampett‟s attorney, they argued,
was insufficient as a matter of law. Marion or Clampett, as her agent and attorney-in-
fact, was required to personally exercise that right, not Clampett‟s attorney. The probate
court agreed with the trustees that Andreos‟s effort to exercise the right on behalf of
Clampett was insufficient as a matter of law and sustained the demurrer to that cause of
action without leave to amend. Because each of the remaining causes of action was
premised on a valid exercise of the five-or-five power under the trust, they, too, failed as
a matter of law.
DISCUSSION
1. Standard of Review
On appeal from an order dismissing an action after the sustaining of a demurrer,
we independently review the pleading to determine whether the facts alleged state a cause
of action under any possible legal theory. (McCall v. PacifiCare of Cal., Inc. (2001)
25 Cal.4th 412, 415; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) We
may also consider matters that have been judicially noticed. (Committee for Green
Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42; see Serrano
v. Priest (1971) 5 Cal.3d 584, 591.) We give the complaint a reasonable interpretation,
“treat[ing] the demurrer as admitting all material facts properly pleaded,” but do not
“assume the truth of contentions, deductions or conclusions of law.” (Aubry, at p. 967;
accord, Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126; see Evans v. City of
Berkeley (2006) 38 Cal.4th 1, 20 [demurrer tests sufficiency of complaint based on facts
included in the complaint, those subject to judicial notice and those conceded by
plaintiffs].) We liberally construe the pleading with a view to substantial justice between
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the parties. (Code Civ. Proc., § 452; Schifando v. City of Los Angeles (2003) 31 Cal.4th
1074, 1081.)
Absent conflicting extrinsic evidence, the interpretation of a written instrument,
including a trust, is a judicial function subject to de novo review. (Parsons v. Bristol
Development Co. (1965) 62 Cal.2d 861, 965; Mooney v. County of Orange (2013)
212 Cal.App.4th 865; Wolf v. Walt Disney Pictures and Television (2008)
162 Cal.App.4th 1107, 1134.)
2. The Probate Court Erred in Sustaining the Demurrer Without Leave To Amend
The trust provides that “the trustee shall distribute to the Settlor‟s spouse such
amounts as she shall request from principal, not exceeding in any calendar year the
greater” of $5,000 or 5 percent of the trust property. “This request shall be by a written
document specifically referring to this right of withdrawal during December of each such
calendar year.” Thus, to invoke the five-or-five power, the trust requires the following:
(1) Marion must request the distribution; (2) the request must be made in writing; and
(3) the request must be made in a timely manner. All three requirements were satisfied
here.
Clampett, as Marion‟s attorney-in-fact for all purposes, was legally entitled to
make the request on Marion‟s behalf; and that request was just as valid as if Marion had
made it herself. (See Prob. Code, § 4261 [“[i]f a power of attorney grants general
authority to an attorney-in-fact and is not limited to one or more express actions, subjects,
or purposes for which general authority is conferred, the attorney-in-fact has all the
authority to act that a person having the capacity to contract may carry out through an
attorney-in-fact specifically authorized to take the action”]; see also Civ. Code, § 2330
[“[a]n agent represents his principal for all purposes within the scope of his actual or
ostensible authority, and all the rights and liabilities which would accrue to the agent
from transactions within such limit, if they had been entered into on his own account,
accrue to the principal”].) While there are certain occasions where a general power of
attorney is insufficient to bind the principal (see Prob. Code, § 4264 [general power of
attorney may not be used to create, modify or revoke a trust or make a loan to the
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attorney-in-fact, unless expressly authorized in the power of attorney]; Estate of Huston
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(1997) 51 Cal.App.4th 1721, 1726 [same]), there is no contention, much less any facts in
the petition to suggest, that any of those restrictions on a general power of attorney
applied here.
The trust itself designates when the holder of rights must exercise them personally.
For example, paragraph 2.3 of the trust states Jack‟s powers to amend or revoke the trust
are “personal to” him and not “exercisable by any guardian, conservator, or other
person.” No similar limiting language appears in the five-or-five clause. Indeed, nothing
in the trust document precluded Clampett from acting on Marion‟s behalf as her
designated agent in regard to demanding a distribution under this clause.
The trustees appear to concede this point—that Clampett could have exercised the
power on Marion‟s behalf had he submitted a signed request for distribution—but argue
that he did not “sign a request”; his lawyer, Andreos, signed the letter. Thus, they argue,
Clampett failed to comply with the requirements of the trust. However, nothing in the
trust requires Marion‟s signature (or, in her stead, that of her attorney-in-fact). It requires
only that Marion make the demand in a writing documenting her request. Thus, Marion
3 Probate Code section 4264 provides, “An attorney-in-fact under a power of
attorney may perform any of the following acts on behalf of the principal or with the
property of the principal only if the power of attorney expressly grants that authority to
the attorney-in-fact: [¶] (a) Create, modify, revoke, or terminate a trust, in whole or in
part. If a power of attorney under this division empowers the attorney-in-fact to modify
or revoke a trust created by the principal, the trust may be modified or revoked by the
attorney-in-fact only as provided in the trust instrument. [¶] (b) Fund with the
principal‟s property a trust not created by the principal or a person authorized to create a
trust on behalf of the principal. [¶] (c) Make or revoke a gift of the principal‟s property
in trust or otherwise. [¶] (d) Exercise the right to reject, disclaim, release, or consent to
a reduction in, or modification of, a share in, or payment from, an estate, trust, or other
fund on behalf of the principal. This subdivision does not limit the attorney-in-fact‟s
authority to disclaim a detrimental transfer to the principal with the approval of the court.
[¶] (e) Create or change survivorship interests in the principal‟s property or in property
in which the principal may have an interest. (f) Designate or change the designation of
beneficiaries to receive any property, benefit, or contract right on the principal‟s death.
[¶] (g) Make a loan to the attorney-in-fact.”
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could have made the request through her own attorney, provided the request was in
writing and made in a timely fashion. The result is no different simply because it was
made by the attorney for Marion‟s attorney-in-fact for all purposes.
The trustees‟ reliance on Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396(Blanton) is misplaced. The plaintiff in Blanton sued her health care provider for
malpractice. The plaintiff‟s lawyer then entered into an agreement with defendants to
submit the action to binding arbitration. After the defendants sought to compel
arbitration, the plaintiff argued she was not bound by her attorney‟s agreement because
she had not consented to it. The Supreme Court held an attorney may not, and has no
apparent authority under the laws of agency to, surrender any substantial right of his or
her client or enter into any contracts affecting the client‟s substantial rights without the
client‟s consent. (See id. at p. 407 [“„[a]bsent express authority, it is established that an
attorney does not have implied plenary authority to enter into contracts on behalf of his
client‟”; “[w]hen a client engages an attorney to litigate in a judicial forum, the client has
a right to be consulted, and his consent obtained, before the dispute is shifted to another,
and quite different, forum, particularly where the transfer entails the sort of substantial
consequences present here”]; Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1221 [same];
see also Sanker v. Brown (1985) 167 Cal.App.3d 1144, 1147 [“an attorney‟s mere
assertion of authority to waive a trial de novo on behalf of his client cannot be relied
upon”; “[a]dding a party‟s signature line to the stipulation is an obvious preventative
measure”].)
Unlike the situation in Blanton, there is no allegation here that Andreos entered
into a contract without his client‟s consent; none of the facts alleged in Clampett‟s
petition suggest, let alone establish, an absence of implied or apparent authority on which
the trustees could reasonably rely in rejecting the distribution demand. To the contrary,
the petition asserts Andreos acted at Clampett‟s behest and in accordance with the trust‟s
terms to provide a timely writing to preserve Marion‟s distribution rights and the trustees
knew Andreos was acting as the agent of Marion‟s attorney-in-fact. Nothing in the trust
documents required Marion to exercise her five-or-five distribution right personally
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rather than through her designated agent. Accordingly, the court erred in sustaining the
demurrer without leave to amend and dismissing the petition.
DISPOSITION
The order dismissing the petition is reversed. The matter is remanded to the trial
court with directions to enter an order denying the trustees‟ demurrer and to conduct
further proceedings not inconsistent with this opinion. Clampett is to recover his costs on
appeal.
PERLUSS, P. J.
We concur:
WOODS, J.
ZELON, J.
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