Tedesco v. White ( 2023 )

Filed 10/27/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
THOMAS S. TEDESCO et al.,
Plaintiffs and Appellants, G061197
v. (Super. Ct. No. 30-2019-01078628)
LAURA K. WHITE, as Co-trustee, etc., OPINION
et al.,
Defendants and Respondents.
Appeal from an order of the Superior Court of Orange County, David L.
Belz, Judge. Affirmed.
Herzog, Yuhas, Ehrlich & Ardell, Ian Herzog and Evan D. Marshall for
Plaintiffs and Appellants.
Sheppard, Mullin, Richter & Hampton, Adam F. Streisand, Nicholas J. Van
Brunt and Valerie E. Alter for Defendants and Respondents Laura K. White, Julie M. Bas
and Sandra L. Kay.
Freeman, Freeman & Smiley, Saul Ewing, Geraldine A. Wyle, Jeryll S.
Cohen and Thomas C. Aikin for Defendant and Respondent David M. Wilson.
* * *
A bulldozer can move piles of dirt from one place to another. But when the
goal is to move minds rather than dirt, employing a bulldozer may be counterproductive.
The bulldozer in this case is appellant Debra Wear’s counsel. In our prior nonpublished
opinion, Tedesco v. White (June 15, 2022, G059883) (Tedesco 1), we made clear to these
lawyers that “[w]e do not confuse aggressive argument with persuasive advocacy.”
Although the aggression has not abated, our view of it remains unchanged.
This appeal challenges an order of discovery sanctions in the amount of
$6,000. But that sanctions order does not appear to be counsel’s real concern; if it were,
counsel would have noticed an appeal from that order on their own behalf as well, since
counsel were held jointly and severally liable for the same sanction. 1 They did not.
Instead, counsel attempt to use that sanctions order as a basis for
challenging the merits of the trial court’s nonappealable order quashing Wear’s document
subpoena, and then to further use the trial court’s analysis underlying that discovery
ruling into a basis for reviewing a separate order we have already ruled cannot be
appealed. All of this seems to be in furtherance of counsel’s broader quest: to again
collaterally attack the validity of a conservatorship over the estate of Thomas S. Tedesco,
which was established in the probate court in Riverside county in 2015. In keeping with
that sweeping goal, Wear’s counsel has presented us with an appellant’s appendix in
excess of 9,000 pages.
1
Attorney Russell L. Davis, who also represented Wear in connection with
the deposition subpoena and the opposition to Wilson’s motion to quash, is similarly
liable for payment of the monetary sanction. But he is not involved in this appeal as
either counsel or client.
2
That same attack has already been repeatedly rejected by both the probate
court and the appellate court in Riverside County, and also by a trial in Orange County
Superior Court and this court in Tedesco 1. Counsel’s dogged refusal to acknowledge
those losses (other than by disparaging some of the courts involved) 2 changes nothing.
In any event, as we explain below, our jurisdiction here is limited to the
issue of sanctions. The court justified its order on the basis that “one of more of the
requirements of the subpoena was oppressive” and “the subpoena was a misuse of
discovery,” which followed its determination that the subpoena should be quashed on the
basis it was overly broad and constituted an unreasonable intrusion on the privacy rights
of Wilson’s conservatee, Tedesco. Our review is limited to those issues.
Wear fails to directly challenge the court’s pertinent determinations, let
alone demonstrate why the court abused its discretion in making them. We find no error
in the court’s ruling. We therefore affirm. 3
FACTS
This case arises out of disputes over the propriety and enforceability of
amendments to Tedesco’s living trust, which was conceived of as part of a family estate
plan Tedesco created with his late wife, Wanda Tedesco. The trust came into being
2
In appellant’s opening brief, counsel once again explicitly disparages the
integrity of our colleagues in the Fourth District, Division 2. We caution counsel about
such tactics.
3
Respondents Laura K. White, Julie M. Bas, and Sandra L. Kay (Tedesco’s
adult daughters and the cotrustees of the Thomas S. Tedesco Living Trust) use their
respondents’ brief solely to argue for dismissal of the appeal on the ground Wear lacks
standing to participate in the trial court proceeding. The assertion is misplaced. This
appeal is from an order imposing a monetary sanction against Wear. As the subject of
that order, Wear has standing to appeal from it, without regard to whether she has
standing to participate in this case on the merits.
3
following Wanda Tedesco’s death in 2002, and it was later restated. The primary
beneficiaries of the restated trust are the cotrustees.
Specifically, Wear questions the propriety of a June 2013 amendment to the
restated trust that limited Tedesco’s ability to further amend the restated trust without the
concurrence of the cotrustees. Wear also challenges other actions by the cotrustees and
seeks a court order to suspend their powers as cotrustees.
For their part, the cotrustees have petitioned the court to validate the 2013
amendment, and thus to establish the invalidity of a purported 2020 amendment to the
restated trust. 4 The 2020 amendment indicates it is Tedesco’s intent to revoke the
restated trust entirely, but due to Tedesco’s concerns that he may be unable to accomplish
that amendment, he modifies its provisions to (1) remove cotrustees as trustees and as
beneficiaries, and (2) leave 75% of the assets to his current wife, Gloria Tedesco, and in
the event she does not survive him, to her two daughters (including Wear).
Wear also contends that Wilson has abdicated his responsibilities as
Tedesco’s conservator by refusing to challenge the validity of the 2013 amendment or by
otherwise addressing the allegedly fraudulent actions of Tedesco’s daughters. She
alleges Wilson refused to do so “despite findings of fiduciary breach by his own
attorneys, Parker Mills, as set forth in a letter of July 16, 2016,” 5 and further that his
inaction was “in exchange for payment of exorbitant fees of himself and his lawyers by
the daughters from the trust. [Wilson] and his attorneys thus became the daughters’
tool.”
4
We say “purported” not because we have developed any opinion about the
propriety of this 2020 amendment, but rather to acknowledge that it fails to comply with
the explicit requirements of the 2013 amendment.
5
The Parker Mills letter Wear is concerned about is actually dated July 5,
2016.
4
In June of 2021, Wear served a notice of deposition on the custodian of
records at Parker Mills, LLP (Parker Mills), the law firm that previously represented
Wilson and allegedly found the “fiduciary breach” Wear is concerned about. The
subpoena requested that the custodian of records for Parker Mills produce eight separate
categories of documents:
“1. Each record, writing and/or electronically stored data that in any way
relate or refer to any communication concerning Thomas S. Tedesco, or any account,
asset or trust in which Thomas S. Tedesco has or at any time had an interest, or TW
Tedesco Properties.
“2. Each record, writing and/or electronically stored data that in any way
relate or refer to any investigation concerning Thomas S. Tedesco, or any account, asset
or trust in which Thomas S. Tedesco has or at any time had an interest, or TW Tedesco
Properties.
“3. Each record, writing and/or electronically stored data that in any way
relate or refer to any communication with MICHAEL BAS, ROBERT LATIMER,
LATIMER & MASSONI, MICHAEL BAS, LAURA WHITE, SANDRA KAY, JULIE
BAS or their attorneys including SHEPPARD MULLIN RICHTER & HAMPTON, or
with DAVID WILSON or his attorneys, including HOLLAND & KNIGHT, concerning
Thomas S. Tedesco, or any account or trust in which Thomas S. Tedesco has or at any
time had an interest, or TW Tedesco Properties.
“4. Each record, writing and/or electronically stored data that in any way
relate or refer to any communication with JEFFER MANGELS BUTLER & MITCHELL
or any of its attorneys, including BURTON MITCHELL, concerning either Thomas S.
Tedesco, or any account, asset or trust in which Thomas S. Tedesco has or at any time
had an interest, or TW Tedesco Properties.
“5. Each record, writing and/or electronically stored data referring or
pertaining to David Wilson or any attorneys for David Wilson concerning or relating to
5
Thomas S. Tedesco and/or any trust, property, assets and/or conservatorship proceeding
related to Thomas S. Tedesco, or TW Tedesco Properties.
“6. Any and all Partnership Agreements for TW Tedesco Properties
Limited Partnership.
“7. Each record, writing and/or electronically stored data referring or
pertaining to Kenneth Jenkins or any attorneys for Kenneth Jenkins concerning or
relating to Thomas S. Tedesco and/or any trust, property, assets and/or conservatorship
proceeding related to Thomas S. Tedesco, or TW Tedesco Properties.
“8. Each record, writing and/or electronically stored data referring or
pertaining to any communication with Terence Nunan and/or David Humphrey
concerning or relating to Thomas S. Tedesco and/or any trust, property, assets and/or
conservatorship proceeding related to Thomas S. Tedesco, or TW Tedesco Properties.”
In December 2021, Wilson moved to quash the Parker Mills deposition
subpoena and requested an award of $12,105 in monetary sanctions against Wear. He
argued the subpoena should be quashed because (1) Wear’s efforts were in violation of an
elder abuse restraining order issued against her; (2) Wear lacked standing to seek any
relief with respect to the restated trust; (3) Wear failed to serve Tedesco with a notice to
consumer as required by Code of Civil Procedure section 1987.1; and (4) the subpoena
was overly broad, unduly burdensome and reflected an improper effort to seek Tedesco’s
private confidential financial records and information.
Wear opposed the motion; she disputed Wilson’s procedural claims and
relied on the July 2016 Parker Mills letter to support her claim that all the documents in
Parker Mills’ possession were discoverable because “Wilson used Parker Mills as
investigator [and thus] Parker Mills’ knowledge is directly relevant to Wilson’s
knowledge of fraud, and the practice of fraud, perjury, elder abuse and fiduciary abuse by
the daughters and their lawyers, and to the necessity of their removal. That pervasive
6
dishonesty of the daughters and the lawyers who are presently looting the trust implicates
the crime-fraud exception.”
Wear accused Wilson and his attorneys of significant wrongdoing: “their
dishonesty about the results of the Parker Mills [2016] investigation, their retention of
funds unlawfully disbursed by the daughters from Tedesco’s personal assets, their
agreement to assist the daughters[’] fraud by perjury in exchange for payment with
misappropriated funds, all contribute to a prima facie case that Wilson and Holland &
Knight 6 are engaged in an effort to deny Tedesco the right to petition, the right to hearing
on the merits of his claims, the right to recover stolen assets, and the right to defend his
interest in trust proceedings—that they are engaged in a criminal enterprise, which
Holland & Knight has been retained to execute.”
In January 2022, the court granted the motion to quash. The court
explained that, although it was not persuaded by Wilson’s arguments regarding the elder
abuse restraining order, Wear’s lack of standing to propound discovery, or her failure to
serve Tedesco with a notice to consumer, it agreed with his contentions that the subpoena
was overly broad and it represented an unreasonable intrusion into Tedesco’s right to
maintain the privacy of his financial information. The court also concluded Wear failed
to explain how the 2016 Parker Mills letter was relevant to her claimed interest as an
objector, which comes by way of the 2020 trust amendment that favors Wear and her
mother.
The court awarded $6,000 in sanctions against Wear and her counsel,
jointly and severally, on the grounds that “one or more of the requirements of the
subpoena was oppressive and, further, that the subpoena was a misuse of discovery.”
6
Holland & Knight is the law firm that represented Wilson in filing the
motion to quash.
7
DISCUSSION
1. Scope of the Appeal and Standard of Review
The notice of appeal, which was filed on behalf of both Wear and Stephen
Carpenter (claiming to be acting as the guardian ad litem of conservatee Thomas
Tedesco), sought to challenge two rulings: the January 7, 2022 order quashing the
document subpoena Wear had served on attorneys representing Wilson, and (2) a
subsequent order denying an application—purportedly filed on behalf of Tedesco—to
distribute funds from the trust to pay for claims favored by Wear and her counsel.
Wilson moved to dismiss the appeal, arguing the order quashing the
subpoena was not appealable, and that neither Carpenter nor Wear had standing to
challenge the latter order on Tedesco’s behalf. We granted that motion in part,
dismissing the appeal from the second order entirely on standing grounds and explaining
the first ruling was appealable only as to the order awarding monetary sanctions against
Wear. 7 We stated explicitly that Carpenter lacked standing to challenge the sanctions,
which were imposed against him. (Tedesco v. White (Aug. 15, 2022, G061197)
[nonpub.opn.].)
The opening brief on appeal, which counsel purported to file on behalf of
both Wear and Carpenter, largely ignored our ruling. The word “sanctions” appears for
the first time at page 30, and it is not mentioned in argument until page 59. The opening
brief instead challenges the merits of the order quashing the subpoena, asserting without
7
Wear’s notice of appeal reflected she was appealing from the court’s
January 7, 2022 order quashing the document subpoena Wear issued to Parker Mills “and
from ever[y] other subsidiary thereto.” While Wilson was correct about the
nonappealability of discovery orders, we found the notice of appeal broad enough to
encompass the court’s additional order of the same date, imposing a $6,000 monetary
sanction against Wear and her counsel. Because that monetary sanction was directly
appealable pursuant to Code of Civil Procedure section 901.4, subdivision (a)(12), we
denied the motion to dismiss the appeal from the January 7, 2022 order.
8
analysis that it remains appealable “by reason of the $6,000 sanctions order,” and then
arguing the subsequent order denying the application to distribute funds was also
appealable for essentially the same reasons we already rejected in dismissing that portion
of the appeal.
We disagree. In relying on our dismissal ruling, Wilson moved to strike the
portions of the opening brief which purport to challenge the order denying the requested
distribution of funds, and we granted that motion. That ruling stands.
The appealability of the monetary sanction order does not change the fact
the discovery order made on that same date is not appealable. (Doe v. United States
Swimming, Inc. (2011) 200 Cal.App.4th 1424, 1433 [when sanctions are imposed in
connection with a discovery ruling, the “appeal is limited to review of that portion of
the . . . order imposing a monetary sanction of over $5,000”].) When reviewing an
appealable sanctions order, we review the merits of related orders only to the extent
necessary to resolve the challenge to the appealable monetary sanctions.
An order awarding monetary sanctions is reviewed for abuse of discretion,
and “we will reverse the trial court only if it was arbitrary, capricious, or whimsical in the
exercise of that discretion.” (Department of Forestry & Fire Protection v. Howell (2017)
18 Cal.App.5th 154, 191, disapproved on another point in Presbyterian Camp &
Conference Center, Inc. v. Superior Court (2021) 12 Cal.5th 493, 516, fn. 17.) “[I]n
reviewing the trial court’s determination, ‘[w]e defer to the court’s credibility decisions
and draw all reasonable inferences in support of the court’s ruling.’ [Citation.] To the
extent the trial court’s decision to issue sanctions depends on factual determinations, we
review the record for substantial evidence to support those determinations. [Citation.]
Thus, our review ‘“begins and ends with the determination as to whether, on the entire
record, there is substantial evidence, contradicted or uncontradicted, which will support
the determination [of the trial court].”’” (Id. at p. 192.)
9
2. Justification for Subpoena
Wear’s sole challenge to the sanctions order is to attack the merits of the
court’s ruling quashing her subpoena. Because our concern here is the sanctions order,
our review is limited to those aspects of the court’s merits ruling that supported the award
of sanctions. Since the court sided with Wear in rejecting Wilson’s arguments about
(1) the elder abuse restraining order, (2) the notice to consumer, and (3) Wear’s standing
to participate in the case, we know those issues did not contribute to its decision to
sanction Wear and her counsel. We consequently do not address them here.
We also disregard Wear’s argument that Wilson is not Tedesco’s legitimate
conservator, that the conservatorship is “defective” or “invalid,” or that Wilson is
somehow disqualified from protecting or representing Tedesco’s interests in this
litigation. We have already ruled in Tedesco 1 on those issues: “the conservatorship
judgment and the orders issued therein are valid and binding for purposes of this case.”
(Tedesco 1, supra, G059883.) Wilson’s capacity to represent Tedesco’s interests is not
subject to further dispute, and as a result every argument which relies on that assertion
fails as a matter of law.
3. Overbreadth and Privacy Issues
Instead, we focus on the court’s findings that (1) the subpoena was
overbroad and an unreasonable intrusion into Tedesco’s right to financial privacy; and
(2) one or more of the requirements of the subpoena was oppressive and the subpoena
was a misuse of the discovery process.
According to Wear’s own argument, the July 2016 Parker Mills letter, and
the investigation it reflects, “forms the core of the subpoena.” But contrary to Wear’s
assertion that the cotrustees are “the subject of the Parker Mills investigation,” the letter
is actually directed to Jeffer, Mangels, Butler & Mitchell, LLP (Jeffer Mangels)—which
is the law firm that had previously acted as Tedesco’s long-time estate counsel. The
10
letter seeks disgorgement of fees previously paid to Jeffer Mangels based on allegations
that it had acted improperly.
Disgorgement is requested for two reasons: first, because Jeffer Mangels
allegedly continued to charge for services rendered long after it had been formally
discharged as counsel; and, second, because Jeffer Mangels had allegedly been operating
under a potential conflict of interest when it drafted the 2013 amendment—which
prevented further amendments of the restated trust without the concurrence of both
Tedesco and his daughters (the cotrustees)—allegedly because the amendment “offered
Mr. Tedesco . . . no estate planning benefit and which [Tedesco] does not recall
executing.” 8
The letter draws no conclusions about wrongdoing by Tedesco’s daughters,
nor does it offer any opinions about the validity of the 2013 amendment to the restated
trust. Moreover, the claim that the 2013 amendment offered no estate planning benefit to
Tedesco is debatable because he may have shared his daughters’ legitimate concern that
he could become increasingly vulnerable to the undue influence of persons seeking to
obtain a share of the restated trust, and thus wished to ensure the trust was protected from
that danger going forward. Indeed, that would be the same instinct that later caused
Tedesco to stipulate to the conservatorship established under Wilson’s authority.
The allegation that Tedesco did not recall signing the 2013 amendment, if
true, is not inherently suspicious because by the time Wilson’s counsel made that claim,
Tedesco had been the subject of conservatorship proceedings for two years, and under a
conservatorship for one. His memory problems at that point of his life were well
documented.
8
The letter suggests the potential conflict created by drafting the 2013
amendment had “ripened” into an actual conflict a month later when Jeffer Mangels
“began improperly sharing information received from [Tedesco’s doctor] with the
Daughters.”
11
Despite the fact the letter accuses only Jeffer Mangels of impropriety, Wear
claims “the record shows” that Wilson had “knowledge of the daughter[s’] fraud [but]
undertook their defense when they agreed to pay his fees.” Wear then points to the fact
that in October 2015 (i.e., nine months before the Parker Mills letter), Wilson petitioned
the court for instructions allowing him to remain neutral and not undertake an
investigation relating to the validity of either the 2013 amendment or of a series of
documents executed by Tedesco in 2015, purporting to revoke the restated trust.
In that filing, Wilson acknowledged the existence of evidence questioning
the validity of both the 2013 amendment and the 2015 trust documents, and that he was
uncertain whether either was valid. He then explained that “[i]t is in Gloria Tedesco’s
interests to have the [2013 a]mendment invalidated and the Revocation of Trust to be
upheld. It is in the Daughters’ interest to have all of the documents executed June 4,
2015 invalidated,” and he noted that all of those parties were represented by counsel.
Based on those facts, Wilson asked the court to require that “the interested parties litigate
the validity of these documents rather than the Conservator . . . [which] will allow the
Conservator to remain neutral and focus on assisting Mr. Tedesco with managing his
personal financial affairs.”
Despite Wilson’s expressed neutrality and dispassionate description of the
family’s trust disputes, Wear asserts the filing reflects Wilson “not only admitted the
factual basis for the [removal of] the daughters [as cotrustees], but admitted that Tedesco
was likely owed millions, which should have gone into the conservatorship estate.” The
record before us does not support this argument.
All eight categories of documents Wear demanded in her subpoena are
broadly drawn. Taken together, they seek all documents, writings or communications, in
whatever form, relating or referring to Tedesco or any of his accounts or assets—
including, but not limited to, those that are held by the restated trust. Nothing ties or
limits any of the categories to the July 2016 Parker Mills letter, or to the investigation
12
alluded to in that letter. We believe the trial court’s concerns that regard were well
founded.
In its ruling, the court stated the categories of documents are overbroad “on
their face . . . as they are without limitation as to time.” Wear ignores that specific
conclusion, and by doing so, she effectively concedes the point. (In re Marriage of
Arceneaux (1990) 51 Cal.3d 1130, 1133 [“A judgment or order of a lower court is
presumed to be correct on appeal, and all intendments and presumptions are indulged in
favor of its correctness”]; (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655 [Issues not
properly raised or that lack adequate legal discussion will be deemed forfeited].)
The court also concluded that, because Wear seeks discovery of Tedesco’s
private financial information, it was required to balance Wear’s interest in disclosure
against Tedesco’s protected privacy interest and reasonable expectation of privacy. (See
Williams v. Superior Court (2017) 3 Cal.5th 531, 557.) After doing so, the court
concluded the subpoena threatened a serious intrusion into Tedesco’s protected privacy
interest, and that Wear had failed to raise a legitimate and countervailing interest in
disclosure.
Wear contends the court erred in reaching that conclusion because “[i]t was
ludicrous to allow a patently conflicted pseudo ‘conservator’ to assert Tedesco’s privilege
or privacy rights in a manner that was plainly adverse to Tedesco’s interests [when there
is evidence] that demonstrated fiduciary breach by Wilson and the daughters, and that
justified removal from office of both Wilson and the daughters.” We disagree. Because
Wilson is Tedesco’s duly appointed conservator, it would have been inappropriate not to
allow him to assert the claim of financial privacy on Tedesco’s behalf. 9
9
Even if evidence of fiduciary breach sufficient to justify Wilson’s removal
as Tedesco’s conservator existed (we have not seen any), that evidence should be
presented to the court that appointed him.
13
Stated plainly, as long as Wilson remains as Tedesco’s conservator, it is
he—not Wear or her counsel—who is empowered to decide what claims are in Tedesco’s
interest to make. After disputing Wilson’s standing to assert Tedesco’s privacy interests,
Wear fails to demonstrate the court erred in its required balancing of the interests in this
case.
4. Award of Sanctions
Finally, the court’s award of sanctions was based on findings that the
subpoena was oppressive and a misuse of discovery. Wear’s opening brief fails to rebut
either charge; indeed, it confirms the latter one.
Wear attempts to justify her requested intrusion into Tedesco’s financial
affairs by arguing that the “invalidity of the conservatorship means that [Tedesco’s]
incompetence renders the trust irrevocable and [she] and Gloria have standing to
complain of the daughter[s’] breach of fiduciary duty and Wilson’s fraud and collusion.”
She then asserts Wilson’s “failure to account renders it necessary to determine what
assets [Tedesco] had, whether they were accounted for by the conservator or trustees;
whether they had been misappropriated; whether they should have been held in or
recovered by the trust. The requests are directed to these issues.”
In other words, Wear effectively admits that her goal in propounding the
subpoena—however flawed her justification—was to obtain and examine all of
Tedesco’s financial records, for the specific purpose of conducting an expeditionary
search for unidentified financial misconduct. That is a misuse of the discovery process;
by itself it justifies the award of monetary sanctions.
14
DISPOSITION
The order of sanctions is affirmed. Respondents are to recover their costs
on appeal.
GOETHALS, J.
WE CONCUR:
O’LEARY, P. J.
SANCHEZ, J.
15