Estate of Walsh CA4/1

Filed 1/27/21 Estate of Walsh CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
Estate of PATRICIA N. WALSH,
Deceased.
D076600
DEBRA LUCAS et al.,
Plaintiffs and Appellants, (Super. Ct. No. 37-2017-00016491-
PR-PW-CTL)
v.
DANA M. MOORE, as Co-executor,
etc.,
Defendant and Respondent.
LORA STARRY,
Real Party in Interest and
Respondent.
APPEAL from a judgment of the Superior Court of San Diego County,
Julia C. Kelety, Judge. Affirmed.
Frisella Law; Lisa J. Frisella and John W. Melvin, for Plaintiffs and
Appellants.
Law Offices of Johanna S. Schiavoni and Johanna S. Schiavoni for
Defendant and Respondent.
No appearance by Real Party in Interest and Respondent.
Patricia Walsh and her husband John Walsh had six adult children:
plaintiffs and appellants Debra Lucas and William Walsh (collectively,
“plaintiffs”); defendant and respondent Dana Moore; real party in interest
and respondent Lora Starry; Sean Walsh; and Timothy Walsh.1 John passed
away intestate in 2007.2 The family’s home burned down a few months
later.
Patricia passed away in February 2016, leaving a will. Eight years
before her death, Patricia transferred $600,000 to Dana. Plaintiffs sought a
ruling that Patricia lent the money to Dana and that she was required to pay
it back to the estate. Dana asserted the money was a gift. After an
evidentiary hearing, the court found the monetary transfer was a gift to
Dana. Plaintiffs challenge the judgment. Affirmed.
PROCEDURAL BACKGROUND
A petition for probate was filed on May 8, 2017. Dana and Lora were
appointed as co-executors. Dana petitioned to remove Lora as co-executor.
Lora filed a cross-petition to remove Dana as co-executor. These cross-
petitions were continued to trail the evidentiary hearing on other issues.
Debra and William filed a petition to characterize the $600,000 transfer
from Patricia to Dana as a loan and to require Dana to repay the money to
the estate. The petition contained five causes of action: (1) Petition for Order
Determining Characterization of Intrafamily Monetary Transfer of $600,000
1 We refer to the parties by their first names to avoid confusion, and
mean no disrespect.
2 John’s estate is the subject of a separate proceeding.
2
as Estate Assets; (2) Petition for Order Directing Satisfaction of Debts Owed
to [Patricia] from Beneficiary [Dana’s] Distributive Share; (3) Resulting or
Constructive Trust; (4) Double Damages Under Probate Code § 859; and (5)
Civil Theft. Dana filed an opposition to the petition, claiming the transfer
was a gift.
The court conducted a lengthy evidentiary hearing over several days.
At the conclusion of the hearing, the record shows the court on May 10, 2019,
met with the parties’ attorneys who agreed to take off calendar all pending
petitions, including the cross-petitions of Dana and Lora to remove each other
as a co-executor. The new family house, which was the largest estate asset,
already had been sold with the proceeds deposited in a locked account. The
attorneys further agreed that other than some minor issues such as a final
accounting and attorney fees, the estate proceedings could be resolved once
the court resolved the overarching issue regarding the “characterization of
the intrafamily monetary transfer” between Patricia and Dana.
As discussed post, the court by clear and convincing evidence found
that the $600,000 transfer was a gift to Dana. The court therefore denied
plaintiffs’ petition in full.
Plaintiffs thereafter requested a Statement of Decision (SOD) (Cal.
Rules of Ct.,3 rule 3.1590(d) & Code Civ. Proc. § 632), raising the following
questions: (1) Whether Dana bore the burden of proof to establish by clear
and convincing evidence that the $600,000 transfer was a gift from Patricia;
(2) Whether Dana proved sufficient facts to satisfy her burden as to each of
the six separate factors to establish the $600,000 was a gift: (a) the
competency of Patricia; (b) the intent of Patricia; (c) delivery; (d) acceptance;
3 All further references to rules are to the Rules of Court.
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(e) divestment of all control by Patricia; and (f) the lack of consideration; (3)
Whether a confidential relationship existed between Patricia and Dana, and
if so, whether Dana showed that the transaction “ ‘was fair and free of undue
influence or fraud’ ”; (4) Whether (under the second cause of action) the
$600,000 should be deducted from Dana’s share of the estate; (5) Whether
(under the third cause of action) Dana held the $600,000 for the benefit of the
estate; (6) Whether (under the fourth cause of action) Dana took property by
undue influence, bad faith, or elder financial abuse (Prob. Code, § 859); and
(7) Whether Dana fraudulently obtained property from the estate. (Pen.
Code, § 4.)
The court filed its SOD on June 6, 2019. It included a description of the
transaction and the evidence on which it relied about the nature of the
transaction and Patricia’s intent. The court confirmed its oral
pronouncement at the May 10 hearing that Patricia gifted the $600,000 when
she transferred it to Dana in 2008. The court in its SOD considered each of
the six factors necessary for a gift and found each was proven by clear and
convincing evidence. In so doing, the court noted there was conflicting
evidence on the issue of whether the $600,000 transfer was a gift or a loan.
The court nonetheless found Patricia’s intent in 2008 at the time of transfer
was to make a gift to Dana. The court denied the petition and awarded costs
to Dana.
Dana filed objections to the SOD on June 21, 2019, and plaintiffs filed
their own objections on June 27. The court overruled the objections and left
the SOD unchanged. The court signed and filed a judgment on June 28,
2019, referencing its SOD. Plaintiffs filed objections to the judgment on
July 15, 2019. Notice of entry of judgment was filed on July 16, 2019.
Plaintiffs filed a notice of appeal on August 27, 2019.
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FACTUAL BACKGROUND4
“[Dana and her husband] each testified credibly about the
many things they had done to help [Patricia], as well as
[John, Dana’s] father, including the payment of substantial
sums for their benefit over the years. [Dana] was
personally very close with her mother. They spent a good
deal of time together, even living under the same roof at
various times. [Patricia] was especially proud of [Dana]
and very fond of [her husband]. This evidence was
undisputed.
“After years of living without much money, [Patricia]
acquired a substantial amount of cash upon the death of
her husband, in the form of life insurance proceeds and the
proceeds from an [sic] fire insurance policy.[5 ] Not long
after she acquired the money, in 2008, while on an
excursion to look at model homes in San Diego, [Patricia]
told [Dana], in the presence of [Dana’s husband], that she
wanted to give them $600,000 so that they could buy a lot
in the neighborhood, as a way to thank [Dana and her
husband] for everything that [they] had done for her over
the years. She said that no one else needed to know about
it, and that she would ‘take the matter to her grave.’ There
was no discussion of a loan, or of a promissory note, or of
interest, or of repayment. Instead, shortly thereafter,
[Patricia] transferred the money to [Dana], who used the
money to purchase the lot.
“Although [Patricia] noted the sum and [Dana’s] name on a
yellow pad, she did not write ‘loan’ next to it as she had for
other transactions with her children. In the many years
after 2008, [Patricia] did not mention to anyone that she
had made such a loan to [Dana], nor were there any other
4 As we discuss post, the court’s findings are supported by substantial
evidence summarized by the court in its SOD. This summary is thus taken
from the SOD.
5 As noted, Patricia’s house burned down in October 2007, a few months
after her husband had passed away.
5
indications of a loan, such as any payment or request for
repayment. The evidence establishes that Patricia usually
was not reticent about sharing the details of her affairs
with her other children, nor about reminding her children
when they owed her money, nor about demanding the
return of sums that she had loaned. However, she did not
breathe a word about the transfer to Dana, apparently
sticking with her statement that she would ‘take it to her
grave,’ until a day many years later, in 2016.
“On a date in 2016, when she was peeved with Dana about
a perceived slight, [Patricia] blurted out a statement to
William . . . that referenced a loan of $600,000 to [Dana].
When questioned about it by her grandson[6] shortly
thereafter, she became furious, stating firmly that it was
her own business. When urged by another daughter [i.e.,
Lora] to clear the matter up, she instead did nothing.
“Thus, from 2008 until 2016, there was no evidence of any
intent to make a loan. As to events and statements made
in 2016 and thereafter, it may be that having inadvertently
blurted out the amount of money that she transferred to
Dana, Patricia lied to protect herself from the backlash to
come from her other children. Or it may be that Dana was
confused and forgetful about the details of the transfer. Or
it may be that [Patricia] felt remorse about the gift (and the
backlash to it) and re-characterized it in her own mind as a
loan. But Patricia’s motivation in 2016 did not and could
not change the legal effect of her actions and intentions in
2008. At that time, the credible evidence established that
Patricia intended the $600,000 transfer to be a gift. The
court so finds, by clear and convincing evidence.”
6 The record shows this conversation was with her son Sean, and not
with a grandson.
6
DISCUSSION
A. Guiding Principles
“In reviewing a judgment based upon a statement of decision following
a bench trial, we review questions of law de novo. [Citation.] We apply a
substantial evidence standard of review to the trial court’s findings of fact.”
(Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981; Schwan v. Permann
(2018) 28 Cal.App.5th 678, 693–694 (Schwan).) “ ‘Under the substantial
evidence standard of review, “we must consider all of the evidence in the light
most favorable to the prevailing party, giving it the benefit of every
reasonable inference, and resolving conflicts in support of the [findings].
[Citations.]” ’ ” (Schwan, at pp. 693–694.) Credibility of the witnesses is a
matter for the trier of fact to decide. We accept the findings of credibility and
do not reweigh the credibility of the witnesses. (Do v. Regents of University of
California (2013) 216 Cal.App.4th 1474, 1492 (Do).)
“ ‘ “It is not our task to weigh conflicts and disputes in the evidence;
that is the province of the trier of fact. Our authority begins and ends with a
determination as to whether, on the entire record, there is any substantial
evidence, contradicted or uncontradicted, in support of the judgment. Even
in cases where the evidence is undisputed or uncontradicted, if two or more
different inferences can reasonably be drawn from the evidence this court is
without power to substitute its own inferences or deductions for those of the
trier of fact, which must resolve such conflicting inferences in the absence of
a rule of law specifying the inference to be drawn.” ’ ” (Schwan, supra, 28
Cal.App.5th at pp. 693–694.)
In connection with substantial evidence review, we note our high court
in Conservatorship of O.B. (2020) 9 Cal.5th 989 (O.B.)) just recently clarified
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the standard we must use in evaluating a sufficiency of the evidence claim
when the clear and convincing standard of proof is applied by the trier of fact.
It concluded: “[W]hen reviewing a finding that a fact has been proved by
clear and convincing evidence, the question before the appellate court is
whether the record as a whole contains substantial evidence from which a
reasonable factfinder could have found it highly probable that the fact was
true. Consistent with well-established principles governing review for
sufficiency of the evidence, in making this assessment the appellate court
must view the record in the light most favorable to the prevailing party below
and give due deference to how the trier of fact may have evaluated the
credibility of witnesses, resolved conflicts in the evidence, and drawn
reasonable inferences from the evidence.” (Id. at pp. 995–996.)
This case turns on the court’s characterization of the transfer as a gift.
A gift is a “transfer of personal property made voluntarily, and without
consideration.” (Civ. Code, § 1146.) The determination of whether a
monetary transfer was a gift or a loan is a genuine issue of material fact that
must be decided by the trier or fact. (Burkle v. Burkle (2006) 141 Cal.App.4th
1029, 1036 (Burkle).) “The question depends principally upon [the
transferor’s] intent at the time he [or she] advanced the funds . . . .” (Ibid.)
We review the entire record for evidence “from which a reasonable factfinder
could have found it highly probable” that the $600,000 transfer was a gift
from Patricia to Dana. (See O.B., supra, 9 Cal.5th at p. 996; Schwan, supra,
28 Cal.App.5th at pp. 693–694.)
B. The Judgment Was Premature but Any Error Is Harmless
Plaintiffs contend, accurately, that judgment was prematurely entered
because the court signed and filed the judgment before the time for objections
to the proposed judgment had expired.
8
Rule 3.1590(g) provides: “Any party may, within 15 days after the
proposed statement of decision and judgment have been served, serve and file
objections to the proposed statement of decision or judgment.” Dana
electronically served the proposed judgment on June 26, 2019. The court
signed and filed the judgment on June 28, 2019, without waiting 15 days for
objections to be filed. Errors in pleadings and procedure are reviewed for
harmless error. (F.P. v. Monier (2017) 3 Cal.5th 1099, 1107–1108, 1116
(F.P.).) A matter may be reversed for errors in pleadings and procedures only
if there was a miscarriage of justice. (Ibid.)
Plaintiffs argue they were prejudiced by the court’s premature filing of
the judgment because it failed to rule on their objections to the SOD and to
“finalize” the statement. We disagree, as we conclude there was no error in
the court’s SOD, as we explain post. As such, the court’s premature filing of
the judgment amount to harmless error. (See F.P., supra, 3 Cal.5th at
p. 1116.)
C. The SOD
Plaintiffs also contend that the SOD was incomplete and thus not
“finalized” because the court did not specifically respond to their objections.
We presume that the court reviewed plaintiffs’ objections and overruled those
objections before signing the judgment. (See In re Marriage of Winternitz
(2015) 235 Cal.App.4th 644, 653–654 [recognizing the general rule that as a
court of review, “ ‘[w]e must presume that the court knew and applied the
correct statutory and case law’ and applied them . . . to the facts in this
case”].) Plaintiffs have not cited any authority for their claim that the court
was required to respond to their objections before entering judgment.
“In rendering a statement of decision under Code of Civil Procedure
section 632, a trial court is required only to state ultimate rather than
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evidentiary facts; only when it fails to make findings on a material issue
which would fairly disclose the trial court’s determination would reversible
error result. [Citations.] Even then, if the judgment is otherwise supported,
the omission to make such findings is harmless error unless the evidence is
sufficient to sustain a finding in the complaining party’s favor which would
have the effect of countervailing or destroying other findings. [Citation.] A
failure to find on an immaterial issue is not error. [Citations.] The trial
court need not discuss each question listed in a party’s request; all that is
required is an explanation of the factual and legal basis for the court’s
decision regarding the principal controverted issues at trial as are listed in
the request. [Citation.]” (Hellman v. La Cumbre Golf & Country Club (1992)
6 Cal.App.4th 1224, 1230 (Hellman).)
The opportunity to object to a proposed statement of decision is not a
chance to reargue the evidence or to tell the trial court where it went wrong.
(Heaps v. Heaps (2004) 124 Cal.App.4th 286, 292–293.) Rather, the “main
purpose of an objection to a proposed statement of decision is . . . to bring to
the court’s attention inconsistencies between the court’s ruling and the
document that is supposed to explain and embody that ruling.” (Id. at
p. 292.)
Errors in the statement of decision are reviewed for harmless error.
(F.P., supra, 3 Cal.5th at pp. 1107–1108.) Indeed, the complete failure to file
a statement of decision after it is requested is subject to harmless error
review. (Id. at p. 1102.) A matter will be reversed for an error in the
statement of decision only if it resulted in a miscarriage of justice. (Id. at
pp. 1107–1108.)
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1. Confidential Relationship
Plaintiffs contend that the court prejudicially erred because it failed in
its SOD to answer plaintiffs’ specific question whether a confidential
relationship existed between Dana and Patricia at the time of the transfer.
As noted, a “ ‘court is not required to respond point by point to the issues
posed in a request for statement of decision. The court’s statement of
decision is sufficient if it fairly discloses the court’s determination as to the
ultimate facts and material issues in the case.’ ” (Thompson, supra, 6
Cal.App.5th at p. 983.)
Plaintiffs in their request for a statement of decision questioned
whether Patricia and Dana were in a confidential relationship at the time of
the transfer, such that Dana bore the burden of demonstrating that the
transaction “was fair and free of undue influence or fraud.” The court in its
SOD responded to this question as follows: “There was no evidence of undue
influence or fraud, and therefore the court does not reach the issue of
whether the relationship between [Patricia] and [Dana] in 2008 rose to the
level of a confidential relationship.” Plaintiffs objected that the court “failed
to make sufficient findings on these essential elements.” As noted, the court
entered judgment without changing its SOD.
A transfer of value between parties without consideration raises a
presumption of undue influence or fraud when the relationship between the
parties rises to a confidential level because such a relationship involves
among other factors reliance and trust that distinguish it from an ordinary
relationship. (Solon v. Lichtenstein (1972) 39 Cal.2d 75, 82; In re Estate of
Stephens (2002) 28 Cal.4th 665, 677 (Stephens); Sparks v. Mendoza (1948) 83
Cal.App.2d 511, 514 (Sparks).) The relationship between a parent and child
11
is not inherently confidential. (Stephens, at p. 677; Goldman v. Goldman
(1953) 116 Cal.App.2d 227, 237; Sparks, at p. 514.) However, “ ‘where the
relationship between the parties is that of parent and child and the parent
relies on the child for advice in business matters, a gift inter vivos . . . which
is without consideration and where the parent does not have independent
advice, is presumed to be fraudulent and to have been made under undue
influence.’ ” (Stephens, at p. 677, italics added; see Sparks, at p. 512 [finding
a confidential relationship existed between a daughter and her mother
because the daughter “had assisted her mother in business transactions from
the time she was a little girl [and] because the mother was ignorant of
business affairs and of the English language”].)
Here, there is no substantial record evidence to support a finding that
Dana and Patricia were in a confidential relationship, in contrast to a
familial relationship, at the time of the transfer. For this reason alone we
reject this claim of error. However, even assuming a confidential relationship
existed, we conclude substantial evidence supports the finding it was
rebutted, as found by the court.7
The presumption of undue influence or fraud that arises from a
confidential relationship is rebuttable. “The burden of proof then shifts to the
child ‘to show that the transaction was free from fraud and undue influence,
and in all particulars fair.’ [Citation.] Put differently, this presumption may
be rebutted by ‘evidence that the act in question had its genesis in the mind
of the parent and that he was not goaded to a completion by any act of such
child.’ [Citation.] The child’s burden of proof is by a preponderance of the
evidence.” (Stephens, supra, 28 Cal.4th at p. 677.)
7 We do not imply that a confidential relationship existed. We simply
make no decision one way or the other.
12
The court tacitly found that Dana rebutted the presumption in its SOD
that “[t]here was no evidence of undue influence or fraud” when Patricia
transferred the money to Dana. (See Stephens, supra, 28 Cal.4th at p. 677.)
As noted, the court was not required to state evidentiary facts in support of
its finding. (Hellman, supra, 6 Cal.App.4th at p. 1230.) Our review of the
record shows there is ample evidence to support the court’s finding that the
transfer “ ‘had its genesis in the mind of the parent and that [Patricia] was
not goaded to a completion by any act of such child.’ ” (Stephens, at p. 677.)
Dana and her husband both testified that while looking at a
development for Patricia’s new house, they saw an empty lot. Patricia said,
“Your father would have loved to live here. He would love for that to happen
to you.” Patricia also said she wanted to thank them for all they had done for
her. Dana and her husband were “overwhelmed” by Patricia’s gesture, as
Dana had never asked her mother for the money and she and her husband
owned their own home and were not planning on moving. Patricia also never
told Dana that the money was a loan and never asked for the money back. In
short, the court found that Patricia was “rightfully grateful” to Dana and her
husband for their help over the years, and made a spontaneous gift to them
“in a moment of feeling flush and exuberant and grateful and excited.” (See
Estate of Franco (1975) 50 Cal.App.3d 374, 382 [spontaneous act of giving is
inconsistent with undue influence].)
Based on the foregoing, we conclude that even if a confidential
relationship existed between Dana and Patricia at the time of the transfer,
there is sufficient evidence “from which a reasonable factfinder could have
found it highly probable” there was no undue influence or fraud in connection
with that transfer, thereby supporting the court’s finding the presumption of
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such was rebutted. (See O.B., supra, 9 Cal.5th at p. 996; Schwan, supra, 28
Cal.App.5th at pp. 693–694.)
Plaintiffs rely on Ortiz v. Avila (1963) 222 Cal.App.2d 786 (Ortiz) to
support their confidential relationship argument. Ortiz is inapposite because
in that case, unlike here, the trial court failed to make a finding on the
presumption of undue influence or fraud that arose from the confidential
relationship. (Id. at pp 792–793.) We thus reject this claim of error.
2. Clear and Convincing Evidence Supports the Finding the $600,000
Transfer Was a Gift
Plaintiffs next contend that “uncontroverted facts compelled a finding
of a loan” by Patricia to Dana. Plaintiffs repeat their contention that there
was a presumption of fraud or undue influence because a confidential
relationship existed between Dana and Patricia, a point we now have
rejected. Plaintiffs emphasize the burden of proof by clear and convincing
evidence, and suggest that we should review Dana’s testimony with
“heightened suspicion,” which as noted ante, we have done. (See O.B., supra,
9 Cal.5th at p. 996.)
The nature of the monetary transfer between Patricia and her daughter
was an issue of fact that was decided by the trial court. (See Burkle, supra,
141 Cal.App.4th at p. 1036.) The court correctly examined Patricia’s intent at
the time she gave the money to Dana. (See ibid. [intent at time of transfer of
funds].) The court was well aware that the standard of proof was by clear
and convincing evidence and applied that standard, as we have noted.
Plaintiffs claim of error is in effect a request that we reweigh the
evidence and the credibility of the witnesses, including Dana and her
husband. This we cannot do. (Schwan, supra, 28 Cal.App.5th at pp. 693-694;
Do, supra, 216 Cal.App.4th at p. 1492.) Factual decisions and credibility of
14
witnesses are determined by the trier of fact. (Schwan, at pp. 693–694; Do,
at p. 1492.)
We have reviewed the record and found that substantial evidence
supported the finding it was “highly probable” that the $600,000 transfer
from Patricia to Dana was a gift. (See O.B., supra, 9 Cal.5th at p. 996); and
that any presumption of fraud or undue influence was rebutted by the
evidence that Patricia came up with the idea of the gift on her own. Our
authority ends with our determination that the evidence that supports the
judgment was substantial. (Schwan, supra, 28 Cal.App.5th at pp. 693–694.)
E. The Judgment Is Not Interlocutory
Plaintiffs contend that the judgment from which they appealed is
interlocutory and that there are claims against Dana that are yet to be
resolved. The only factual claim in the petition filed by plaintiffs, however,
was the characterization of the $600,000 transfer to Dana. Each of the five
causes of action of the petition was based on the same factual
characterization of the $600,000 transfer to Dana. The court by clear and
convincing evidence found the money was a gift to Dana, and ruled in favor of
Dana on each of those causes of action.
As noted, on the final day of the hearing, the parties told the court that
after the decision on the $600,000 given to Dana, they could resolve any
remaining issues. At that point, Patricia’s primary house had been sold, with
the proceeds in a separate account. The parties would wait and see whether
any other creditors filed claims. Lora and Dana both took off calendar their
petitions to remove each other as co-executors. The court acknowledged there
could be other disputes that arose in the calculation of attorney fees and a
final accounting, but based on the attorneys’ representations, found these
were relatively minor matters when compared to the disposition of the large
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transfer to Dana of $600,000. The court referred to these as “snags down the
road.” Nothing else of substance remained to be decided.
Plaintiffs assert that their claims are intertwined with Lora’s petition
to remove Dana as co-executor. Plaintiffs filed a joinder of Lora’s petition to
remove Dana, but not until August 15, 2019, nearly two months after the
court judgment had been entered, and less than two weeks before plaintiffs
filed their notice of appeal. Lora had effectively dismissed her petition
without prejudice before plaintiffs’ purported joinder.
The judgment that we affirm is not interlocutory.
DISPOSITION
The judgment is affirmed. Costs to be awarded to Dana.
BENKE, J.
WE CONCUR:
McCONNELL, P. J.
O'ROURKE, J.
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