Venuti v. Venuti CA6

Filed 9/16/20 Venuti v. Venuti CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
ADRIAN VENUTI et al., H044922
(Santa Clara County
Plaintiffs and Appellants, Super. Ct. No. 16-PR-180116)
v.
MARC VENUTI et al.,
Defendants and Respondents.
This appeal arises from a dispute between half-siblings over a family trust.
Odette and Adrian Venuti petitioned the probate court to compel trustee Michael Venuti
to account for the 1984 Venuti Living Trust for the period from September 1, 2011 to the
present. Prior to any discovery and based solely on the pleadings, the probate court
granted in part and denied in part that request. The court further determined that Odette
and Adrian lack standing to request accounting for the period prior to September 2011
(an issue that was not before it) and denied them leave to amend their petition to
adequately allege such standing. On appeal, Odette and Adrian challenge the partial
denial of their request for accounting, the probate court’s determination that they lack
standing to request accounting for the period prior to September 2011, and the denial of
their motion for leave to amend their petition. We reverse and remand with directions.
I. FACTUAL BACKGROUND
A. The Venuti Family and the 1984 Trust
Alexandre and Louise Venuti moved from Canada to California in the early 1960s
with their young sons Marc and Michael. Alexandre had two older children from a prior
marriage—Odette and Adrian.
Alexandre and Louise settled the 1984 Venuti Living Trust (the 1984 Trust), of
which they were the trustors and initial trustees. Alexandre died in 1989. Upon his
death, pursuant to the terms of the 1984 Trust, the trust estate was divided into two
separate trusts—the Marital Trust (consisting of Louise’s share of community property
held in the trust, Louise’s separate property held in the trust, and an amount equal to the
maximum marital deduction allowable for federal estate tax purposes) and the Residuary
Trust (consisting of the balance of the trust estate). The Residuary Trust became
irrevocable upon Alexandre’s death. The 1984 Trust provided that, upon the death of the
surviving trustor (here, Louise), the balance of the Marital Trust estate was to be
distributed “to such person or persons . . . as the surviving Trustor shall appoint” and the
Residuary Trust estate was to be divided equally among the trustors’ children
(i.e., Odette, Adrian, Marc, and Michael). In the event that the surviving trustor failed to
exercise the power to appoint persons to whom the Marital Trust estate should be
distributed, the Marital Trust estate was to be distributed to the Residuary Trust.
B. Louise Amends the 1984 Trust
In August 1990, Louise executed an amendment to 1984 Trust (the First Trust
Amendment). The First Trust Amendment subdivided the Marital Trust into two
subtrusts—the Survivor’s Trust and the Qualified Domestic Trust. The amendment was
executed, in part, to comply with provisions of the Internal Revenue Code and certain
Treasury Regulations applicable to non-citizens because Louise was, at the time, a
Canadian citizen. The First Trust Amendment called for the balance of the Survivor’s
Trust estate to be distributed, upon Louise’s death, “to such person or persons . . . as the
2
surviving Trustor shall appoint” or to the Residuary Trust estate if she failed to make
such an appointment. The First Trust Amendment provided that any remaining principal
of the Qualified Domestic Trust be distributed according to the Residuary Trust
distribution provisions upon Louise’s death. The First Trust Amendment appointed Marc
to act as co-trustee of the Qualified Domestic Trust with Louise.
Louise executed another trust amendment (the Second Trust Amendment)
approximately six months later, in February of 1991. The Second Trust Amendment
changed the distribution of the Survivor’s Trust estate after Louise’s death. It provided
that the balance of the Survivor’s Trust estate was to be distributed to such persons as
Louise appointed or, if she failed to do so, equally to Marc and Michael.
C. Louise Resigns as Trustee and Appoints Michael as Trustee
On September 1, 2011, Louise resigned as co-trustee of the Qualified Domestic
Trust and as trustee of the Survivor’s and Residuary Trusts. At the same time, Louise
appointed Michael as sole successor trustee of all three subtrusts.
D. Louise’s Death and Initial Settlement Discussions
Louise died on February 27, 2016, at which time the Qualified Domestic Trust and
the Survivor’s Trust became irrevocable. In July 2016, Marc, Michael, Odette, and
Adrian entered into a stipulation to suspend the tolling of the statute of limitations
governing trust contests. They engaged in settlement discussions and considered splitting
all of the trust assets equally.
In October 2016, Michael, in his capacity as trustee, retained new counsel.
He subsequently withdrew “any prior offers or suggestions regarding any alternate
distribution of th[e] estate” and indicated that he intended to administer and distribute the
trust estate in accordance with the terms of the trust agreement. On December 19, 2016,
counsel for Michael in his capacity as trustee informed Odette and Adrian by letter that
he was terminating the tolling agreement.
3
II. PROCEDURAL HISTORY
On December 23, 2016, Michael (as trustee) filed a petition seeking instructions
and orders to administer the trust pursuant to its terms, as amended.
On January 5, 2017, Odette and Adrian filed a petition seeking, among other
things, orders removing Michael as trustee; instructing the trustee to account for all
actions taken as trustee since September 1, 2011; determining that the Second Trust
Amendment is invalid or has been revoked; and for damages for financial elder abuse.
Odette and Adrian’s petition included allegations that Marc and Michael “systematically
manipulated” Louise “to enrich themselves”; on information and belief that “Louise
believed the Second Amendment was either invalid or that Louise had revoked the
Second Amendment by September 1, 2011”; and on information and belief that “Louise
was unable to manage the Trust properties or supervise Trustee Michael Venuti’s
management of the Trust properties from at least the date of the Resignation.”
Michael and Marc, in their capacities as trust beneficiaries, joined the trustee’s
petition for instructions on February 21, 2017.
Michael, as trustee, filed objections to Odette and Adrian’s petition on
February 22, 2017. As to their request for accounting, the objections stated that the
trustee was willing to provide accounting from the date of Louise’s death, but argued that
Adrian and Odette lacked standing to request or compel an accounting for any prior
dates.
The Probate court held its first hearing on the petitions on February 27, 2017.
The parties raised the issue of accounting, with Odette and Adrian’s counsel arguing that
they were entitled to accounting back to September 2011, when Michael became trustee.
The trustee’s counsel responded that Odette and Adrian were entitled to accounting only
back to the date of Louise’s death in 2016. The court suggested that they brief the
accounting issue first and “take care of that” prior to engaging in discovery. The parties
did not object to that proposal. Accordingly, the court directed the parties to brief the
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issues of “which trust . . . needs to be accounted for . . . [a]nd then the date when the
accounting goes back to.”
Odette and Adrian’s brief was somewhat vague as to the appropriate scope of
accounting. It stated: “Without question, Trustee Michael Venuti must account for his
administration of the Trust and all subtrusts since he became sole trustee in
September 2011. Trustee Marc Venuti should be ordered to account for his period of
administration due to the indications that he did not manage the Trust for the benefit of
the settlor.” The brief requested an “order instructing trustees to account from the date
that any portion of the trust became irrevocable or such earliest date that the court deems
proper.”
The court held a hearing on the accounting issue in April 2017. At that time,
counsel for Marc sought to clarify whether Odette and Adrian were seeking accounting
for the period prior to September 2011. Odette and Adrian’s counsel responded,
“The pleading requests an accounting for 2011 forward of all trusts.”
The probate court issued its order regarding accounting on May 17, 2017.
The court framed its order, which it captioned “Decision Re Adrian Venuti and Odette
Venuti’s Standing to Seek Trust Accountings,” as determining Odette and Adrian’s
“standing to make the requests” for accounting. Reasoning that the allegations in Odette
and Adrian’s petition were insufficient to support a claim of incompetence or undue
influence and that “Louise served in the capacity of Co-Trustee or Trustee until
September 1, 2011,” the court concluded that Odette and Adrian “either lack standing to
request or the Probate Court lacks jurisdiction to order the Trustees to provide any
accounting before the date of September 1, 2011.” The court ordered accounting of the
Qualified Domestic Trust and the Residuary Trust from September 1, 2011 forward,
implicitly finding that Odette and Adrian not only had standing to request such
accounting but were entitled to it. Finally, the court stated “[n]o accounting is ordered
for the Survivor’s Trust as [Odette and Adrian] are not beneficiaries” of that subtrust.
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On May 30, 2017, Odette and Adrian moved for reconsideration of the May 17
order. They also requested leave to amend their petition to allege additional facts to
establish standing to seek accounting for the pre-September 2011 period and to add
claims of estoppel and breach of fiduciary duty.
The court held a hearing on those motions on June 29, 2017. The court declined to
change its May 17 ruling on accounting and denied the motion for leave to amend the
petition. As to the motion for leave to amend, the court explained that it was denying the
motion only to the extent that Odette and Adrian were seeking to include new facts in an
effort to establish standing to seek accounting for dates prior to September 1, 2011.
The court stated: “If you see that there was abuse, elder abuse, financial abuse, or
anything else that was done wrong, you’re free to put that and amend your petition to
include that.” “I’m just saying you couldn’t amend it to change the order that I made
regarding standing. If you choose . . . you can always amend your petition.”
On July 13, 2017, Odette and Adrian appealed from the May 17 and June 29
orders.1 Specifically, they challenge the May 17 accounting order to the extent the court
determined that they lack standing to request accounting for the pre-September 2011
period and denied them any accounting of the Survivor’s Trust. They challenge the
June 29 denial of their request for leave to amend their petition.
1
Odette and Adrian later appealed from a subsequent order issued in August 2017.
However, they have since abandoned their appeal of that order by not addressing it in
their briefs.
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III. DISCUSSION
A. The Motions to Dismiss the Appeal are Denied
Michael (as trustee) and Marc and Michael (as beneficiaries) have moved to
dismiss the appeal, arguing it is premature in the absence of a final judgment. For the
reasons set forth below, we disagree and deny their motions.2
1. Appealability of Probate Court Orders
“Generally, rulings in probate proceedings are not appealable unless expressly
made appealable by statute.” (Estate of Martin (1999) 72 Cal.App.4th 1438, 1441-1442.)
The Probate Code expressly provides that orders granting or denying petitions to compel
an accounting are not appealable. (Prob. Code, § 1304, subd. (a)(1) [“With respect to a
trust, the grant or denial of the following orders is appealable: [¶] (a) Any final order . . .
except the following: [¶] (1) Compelling the trustee to submit an account or report acts
as trustee”].) 3 And the Probate Code does not identify orders denying leave to amend as
being appealable.
Importantly, however, “the appealability of an order of the probate court is
determined not from its form, but from its legal effect.” (Estate of Martin, supra, 72
Cal.App.4th at p. 1442.) “An order is appealable, even if not mentioned in the Probate
Code as appealable, if it has the same effect as an order the Probate Code expressly
makes appealable.” (Estate of Miramontes-Najera (2004) 118 Cal.App.4th 750, 755.)
2
Odette and Adrian, in connection with their opposition to the motions to dismiss
the appeal, have requested that we take judicial notice of documents filed in the probate
court subsequent to the filing of the notice of appeal and of Louise’s death certificate.
We deny the request to take judicial notice of subsequently filed court documents
because they are not relevant to our resolution of the appeal. (Jordache Enterprises, Inc.
v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [declining to take
judicial notice of materials not “necessary, helpful, or relevant”].) We grant the request
to take judicial notice of Louise’s death certificate. (18 Cal.4th 739, 748, 452; People v.
Terry (1974) 38 Cal.App.3d 432, 439.)
3
All further statutory references are to the Probate Code unless otherwise
indicated.
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An order determining the existence of a power, duty, or right under a trust is made
appealable by sections 1304, subdivision (a) and 17200, subdivision (b)(2). (Esslinger v.
Cummins (2006) 144 Cal.App.4th 517, 523 (Esslinger).) Because appealability depends
on legal effect, not form, an order to account is appealable when it expressly or implicitly
decides the existence of a power, duty, or right under a trust. (Id. at pp. 522-523 [holding
that an order directing a trustee to prepare accountings was appealable because it
determined that a remainder beneficiary had the power or right to request an
accounting].)
In view of the foregoing, to determine whether the orders are appealable, we must
determine their legal effect.
2. Legal Effect of the Appealed-From Orders
The May 17 order contained three distinct rulings. First, the probate court
determined that Odette and Adrian had failed to adequately plead that Louise was
incompetent or subject to undue influence during the pre-September 2011 period, such
that they lacked standing to request or the court lacked jurisdiction to order any
accounting for that period (the pre-September 2011 ruling). Second, the court ordered
accounting of the Qualified Domestic Trust and the Residuary Trust from September 1,
2011 forward, thereby implicitly ruling that Odette and Adrian not only had standing to
request such accounting, but also are entitled to such accounting on the merits
(the post-September 2011 ruling). Third, the court declined to order accounting for the
Survivor’s Trust (the Survivor’s Trust ruling). Odette and Adrian challenge only the
pre-September 2011 and Survivor’s Trust rulings.
In assessing the legal effect of those rulings, we are mindful of the distinction
between standing to request relief, such as accounting, and entitlement to such relief.
(Babbitt v. Superior Court (2016) 246 Cal.App.4th 1135, 1144 (Babbitt) [“The fact that
she had standing to bring her petition [for an accounting of the trust], however, does not
mean she was entitled to all of the relief she sought in her petition”].) “ ‘ “Standing” is a
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party’s right to make a legal claim and is a threshold issue to be resolved before reaching
the merits of an action.’ [Citation.]” (Dent v. Wolf (2017) 15 Cal.App.5th 230, 233-234.)
Standing is a threshold issue because “ ‘without it no justiciable controversy exists. . . .
Typically, the issue of standing is decided by reference to the allegations made in a
party’s complaint.’ ” (Shapell Industries, Inc. v. Superior Court (2005) 132 Cal.App.4th
1101, 1111.) By contrast, a party’s entitlement to relief depends on their ability to prove
their factual allegations.
The pre-September 2011 ruling was based on perceived pleading deficiencies.
In its subsequent June 29 order, the court denied Odette and Adrian leave to amend their
petition to attempt to cure those deficiencies. The combined legal effect of those rulings
was to determine that Odette and Adrian lack the power or right to request accounting of
the Residuary and Qualified Domestic Trusts prior to September 1, 2011. As such, they
are appealable. (Esslinger, supra, 144 Cal.App.4th at p. 523.)
The basis for the Survivor’s Trust ruling is ambiguous. As noted above, the court
framed the order as determining Odette and Adrian’s standing to request accounting,
which suggests the ruling was based on lack of standing. Yet, in the unchallenged
post-September 2011 ruling, the court determined Odette and Adrian’s entitlement to
accounting of the Qualified Domestic Trust and the Residuary Trust from September 1,
2011 forward. The Survivor’s Trust ruling immediately followed the post-September
2011 ruling, suggesting the court may have denied Odette and Adrian’s request for
accounting of the Survivor’s Trust on the merits. To the extent the Survivor’s Trust
ruling was premised on a perceived failure to adequately allege standing, the combined
effect of that ruling and the order denying leave to amend was to determine that Odette
and Adrian lack the power or right to obtain accounting of the Survivor’s Trust and it is
appealable. (Esslinger, supra, 144 Cal.App.4th at p. 523.) Alternatively, if the
Survivor’s Trust ruling was a ruling on the merits, its effect was the same given that the
court did not indicate that the denial of the request for accounting was without prejudice
9
to a later showing of entitlement. Thus, either way, the Survivor’s Trust ruling is
appealable.
For the foregoing reasons, we deny the pending motions to dismiss the appeal.
B. The Probate Court Erred in Ruling on Odette and Adrian’s Standing to
Request Pre-September 2011 Accounting, an Issue Not Before It
Odette and Adrian challenge the probate court’s ruling that they lacked standing to
request (or the court lacked jurisdiction to order) any accounting for the pre-September
2011 period. We agree that the pre-September 2011 ruling cannot stand.
Odette and Adrian sought accounting from September 1, 2011 forward. They
cited the September 1, 2011 date in their petition, at the February 2017 hearing, and again
at the April 2017 hearing. In their opening appellate brief, Odette and Adrian take the
position that they effectively amended their prayer for relief to request accountings dating
back to 1989. They did not. They acknowledge as much in their reply brief where they
assert that “the pre-2011 period was not an issue presented to the probate court for
resolution at all.” We agree; the issue of accounting before September 1, 2011 was not
before the court.
Nevertheless, the court decided that Odette and Adrian “either lack standing to
request or the Probate Court lacks jurisdiction to order the Trustees to provide any
accounting before the date of September 1, 2011.” That aspect of the court’s order is
beyond the scope of the pleadings, constitutes an inappropriate advisory opinion, and
shall be reversed.
C. The Survivor’s Trust Ruling
Odette and Adrian also challenge the probate court’s refusal to order accounting of
the Survivor’s Trust.
1. Legal Principles and Standard of Review
“A revocable trust is a trust that the person who creates it, generally called the
settlor, can revoke during the person’s lifetime. The beneficiaries’ interest in the trust is
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contingent only, and the settlor can eliminate that interest at any time. When the trustee
of a revocable trust is someone other than the settlor, that trustee owes a fiduciary duty to
the settlor, not to the beneficiaries, as long as the settlor is alive. During that time, the
trustee needs to account to the settlor only and not also to the beneficiaries. When the
settlor dies, the trust becomes irrevocable, and the beneficiaries’ interest in the trust
vests.” (Estate of Giraldin (2012) 55 Cal.4th 1058, 1062, fn. omitted.)
Section 15800 provides that, except in certain specified circumstances not relevant
here, “during the time that a trust is revocable and the person holding the power to revoke
the trust is competent: [¶] (a) The person holding the power to revoke, and not the
beneficiary, has the rights afforded beneficiaries under this division. [¶ and] (b) The
duties of the trustee are owed to the person holding the power to revoke.” Courts have
construed section 15800 to mean that during a settlor’s life “(and in the absence of a
showing of [the settlor’s] incompetence), a contingent beneficiary lacks standing to
petition the probate court to compel a trustee to account . . . [a] revocable trust.”
(Babbitt, supra, 246 Cal.App.4th at p. 1144.)
Generally, a settlor’s “death [does] not give the beneficiaries a right to obtain
information about the disposition of assets while the trust was revocable . . . .” (Babbitt,
supra, 246 Cal.App.4th at p. 1146.) However, an exception to that general rule applies
where someone other than the settlor acted as trustee while the settlor was alive and the
trust was revocable. (Id. at p. 1139.) In that circumstance, “after the settlor’s death, the
beneficiaries [do] have standing to assert a breach of the fiduciary duty the trustee owed
to the settlor to the extent that breach harmed the beneficiaries.” (Estate of Giraldin,
supra, 55 Cal.4th at p. 1076.) That standing includes standing to request an “accounting
and information from the trustee regarding trust assets and transactions during the time
period before the trust became irrevocable.” (Babbitt, supra, at p. 1139.)
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“[A]fter a settlor dies and the trust or a portion of the trust becomes irrevocable,
section 17200 gives a contingent beneficiary standing to petition the probate court for an
accounting of assets. [Citation.]” (Babbitt, supra, 246 Cal.App.4th at p. 1144.)
Section 16062, which provides that contingent or remainder beneficiaries are not
entitled to accounting on a regular basis, does not preclude such beneficiaries from
petitioning the probate court for an accounting of assets. (Babbitt, supra, 246
Cal.App.4th at pp. 1141-1142 [citing Esslinger, supra, 144 Cal.App.4th at p. 526 for the
proposition that “[w]hile an accounting under section 16062 is mandatory, information or
a particular account under section 16061, sought by petition under section 17200,
subdivision (b)(7), lies within the probate court’s discretion”].)
“We review the probate court’s construction of the Probate Code de novo.”
(Babbitt, supra, 246 Cal.App.4th at p. 1144.) We review the existence of standing to sue
based on undisputed facts (or based on properly pled allegations taken as true) de novo.
(A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 687.)
2. Analysis
As discussed above, the basis for the court’s ruling as to the Survivor’s Trust is
unclear.4
4
Odette and Adrian take the position that the court’s ruling was based on lack of
standing. In their capacities as beneficiaries, Marc and Michael suggest the court
determined Odette and Adrian’s “entitlement to accountings as a threshold issue.”
(Italics added.) As trustee, Michael says the ruling was based on lack of standing. But he
goes on to assert that, if Odette and Adrian “ultimately . . . prevail on their claim that the
Second [Trust] Amendment is invalid or revoked, they would then have standing to
compel an accounting.” It appears that the trustee is conflating the issues of standing to
request accounting and entitlement on the merits to accounting. As discussed above,
standing (i.e., the right to make a legal claim) typically is decided based on
the allegations in the complaint or petition. Odette and Adrian’s ability to prove their
allegations—though pivotal to their entitlement to accounting—has no bearing on
whether they have standing, at the pleading stage, merely to request accounting.
12
To the extent that the court concluded that Odette and Adrian lack standing to
request accounting of the Survivor’s Trust based on the allegations in their petition, it
erred. The petition alleged (and the 1984 Trust, the First Trust Amendment, and Second
Trust Amendment show) that Odette and Adrian were beneficiaries of the Survivor’s
Trust until Louise executed the Second Trust Amendment, which removed them as
beneficiaries of that subtrust. The petition further alleged that the Second Trust
Amendment “is fatally flawed in its structure” and that “Louise believed the Second
Amendment was either invalid or that Louise had revoked the Second Amendment by
September 1, 2011.”
“[W]hen a demurrer or pretrial motion to dismiss challenges a complaint on
standing grounds, the court . . . determine[s] standing by treating the properly pled
allegations as true.” (Barefoot v. Jennings (2020) 8 Cal.5th 822, 827.) Here, there was
no demurrer or motion to dismiss. Rather, the court elected, with the parties’ agreement,
to determine the issue of Odette and Adrian’s standing to request accounting as a
threshold matter and on the pleadings before any discovery had been conducted. As
such, the procedural posture was akin to a demurrer and the court was required to assume
the truth of the allegations in Odette and Adrian’s petition.
Accepting the allegations in the petition as true and construing them liberally,
Odette and Adrian adequately alleged that the Second Trust Amendment is invalid such
that they remain beneficiaries of the Survivor’s Trust. Beneficiaries have standing to
request accounting, as discussed above and as the court ruled with respect to the subtrusts
of which Odette and Adrian undisputedly are beneficiaries (the Residuary and Qualified
Domestic Trusts).
That is not to say that the court should have ordered accounting based solely on
the allegations in the petition. Such an order is not proper unless and until Odette and
Adrian prove their entitlement to accounting by showing the Second Trust Amendment is
invalid.
13
To the extent that the court concluded that Odette and Adrian have standing to
request accounting of the Survivor’s Trust but are not currently entitled to such an
accounting, having not yet proven their allegations that the Second Trust Amendment is
invalid, it did not err. The validity of the Second Trust Amendment, and by extension
Odette and Adrian’s status in connection with the Survivor’s Trust, are issues that remain
to be litigated. However, at this early stage, any denial of the request for accounting on
the merits must be without prejudice to a later request after the validity of the Second
Trust Amendment has been litigated.
Odette and Adrian also advance a second theory supporting their request for
accounting of the Survivor’s Trust. They say that such an accounting is necessary for
them to protect their interests in the Residuary Trust. Specifically, they contend that
records from the Survivor’s Trust are “reasonably likely to be necessary to determine
whether” the trustee violated restrictions set forth in the 1984 Trust on distributions of
Residuary Trust principal to the surviving spouse. They further argue that section 17206,
which grants the probate court discretion to “make any orders and take any other action
necessary or proper to dispose of the matters presented by [a] petition,” authorizes the
court to order (and, by extension, them to request) an accounting of the Survivor’s Trust.
The petition contains no allegations supporting the foregoing theory. Accordingly, the
probate court did not err to the extent it concluded Odette and Adrian lacked standing to
seek accounting of the Survivor’s Trust on this alternate theory. And, to the extent the
court made a ruling on the merits, it plainly did not abuse its discretion in declining to
order an accounting of the Survivor’s Trust based solely on Odette and Adrian’s
conjecture that an accounting of the Survivor’s Trust might have some bearing on their
rights as beneficiaries of the Residuary Trust.
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D. The Court Erred by Denying Odette and Adrian Leave to Amend
The probate court denied Odette and Adrian leave to amend—for the first time—
their petition to cure pleading deficiencies identified in the May 17 accounting order.
That was error.
A court may, in its discretion, allow an amendment to any pleading upon any
terms as may be just. (Code Civ. Proc., § 473, subd. (a)(1).) “ ‘There is a policy of great
liberality in permitting amendments to the pleadings at any stage of the proceeding.’ ”
(Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.) We review an order denying
leave to amend for abuse of discretion. (Ibid.) “ ‘ “When a request to amend has been
denied, an appellate court is confronted by two conflicting policies. On the one hand, the
trial court’s discretion should not be disturbed unless it has been clearly abused; on the
other, there is a strong policy in favor of liberal allowance of amendments. This conflict
‘is often resolved in favor of the privilege of amending, and reversals are common where
the appellant makes a reasonable showing of prejudice from the ruling.’ ” [Citation.]
. . .’ ‘[I]t is an abuse of discretion to deny leave to amend where the opposing party was
not misled or prejudiced by the amendment. [Citation.]’ ” (Ibid.)
Marc and Michael defend the court’s order on the ground that it was narrow—it
merely prohibited Odette and Adrian from curing the pleading defects that led the court
to conclude they lacked standing to request accounting. That argument runs counter to
the state’s strong policy “that liberal interpretation and amendment of pleadings is
strongly favored . . . to allow resolution of actions on the merits in furtherance of
substantial justice between the parties.” (Dieckmann v. Superior Court (1985) 175
Cal.App.3d 345, 352.) And it ignores the governing principle that a court abuses its
discretion by denying leave to amend if there is a reasonable possibility a pleading defect
can be cured by amendment and the opposing party was not misled or prejudiced by the
amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
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IV. DISPOSITION
The May 17 and June 29 orders are reversed and the cause is remanded to the
probate court. On remand, the probate court is directed to enter a new order (1) omitting
any discussion of Odette and Adrian’s standing to request accountings for the
pre-September 1, 2011 period; (2) ordering accounting of the Residuary and Qualified
Domestic Trusts from September 1, 2011; (3) concluding that Odette and Adrian have
standing to request accounting of the Survivor’s Trust; and (4) granting Odette and
Adrian leave to amend their petition.
The parties shall bear their own costs on appeal.
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_________________________________
ELIA, J.
WE CONCUR:
_______________________________
PREMO, Acting P.J.
_______________________________
BAMATTRE-MANOUKIAN, J.
Venuti et al. v. Venuti et al.
H044922