Gomez v. Smith CA3

Filed 10/19/20 Gomez v. Smith CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
THIRD APPELLATE DISTRICT
(Nevada)
----
LOUISE A. GOMEZ, C091322
Plaintiff and Respondent, (Super. Ct. No. P1716096)
v.
TAMMY J. SMITH, as Trustee, etc.,
Defendant and Appellant.
In a prior appeal, we affirmed the Shasta County Superior Court’s judgment in
favor of plaintiff Louise Gomez against defendant Tammy Smith for intentional
interference with Gomez’s expected inheritance from Frank Gomez’s (decedent) estate
(judgment). (See Gomez v. Smith (2020) __ Cal.App.5th __ .) Decedent was Gomez’s
husband and Smith’s father. The Shasta County Superior Court imposed a constructive
trust in favor of Gomez upon Smith’s and her brother’s share of and rights to decedent’s
estate, to be held by Gomez until her death in accordance with a draft living trust attached
to the judgment as an exhibit (draft living trust). Following the Shasta County Superior
Court’s ruling, Gomez filed a verified petition to determine to whom trust property shall
1
pass, enforce the constructive trust, and compel transfer of trust assets (petition) in the
Nevada County Superior Court (trial court). Smith filed a verified objection and
opposition to the petition; she also requested an evidentiary hearing. The trial court
denied the evidentiary hearing request and granted the petition. Smith appeals.
Smith argues the trial court erred in denying her evidentiary hearing request on the
issue of a reserve for reasonable trust administration expenses and income tax liabilities.
She further argues the trial court’s order exceeds the scope of the judgment by failing to
include language that Gomez’s beneficial interest is limited to a life estate. Gomez
argues Smith lacks standing to challenge the trial court’s order and her evidentiary
hearing request was properly denied.
We find no merit in Smith’s arguments and affirm the order. We thus do not reach
Gomez’s alternative standing argument.
FACTUAL AND PROCEDURAL BACKGROUND
In 2017, the trial court, upon Smith’s request, appointed Smith as the successor
trustee of the Frank and Beverly Gomez 1998 Revocable Trust dated December 16, 1998,
as amended (1998 trust). Gomez thereafter filed suit against Smith and her brother in
Shasta County Superior Court, resulting in the judgment in Gomez’s favor for intentional
interference with expected inheritance. The judgment imposes a constructive trust in
favor of Gomez upon Smith’s and her brother’s “share of and rights to the Frank and
Beverly Gomez 1998 Revocable Trust dated December 16, 1998, as amended (including
those trust assets already received by them, if any), to be held by [Gomez] until her death
and pursuant to the terms of the Frank P. Gomez and Louise A. Gomez Living Trust
dated August 20, 2016, drafted by Erik Aanestad at the request of Frank P. Gomez
(Exhibit 3 herein) as set forth in and in accordance with the Statement of Decision.”
2
Gomez attempted to enforce the judgment by gaining access to the trust funds held
by a financial institution; the financial institution froze the trust accounts. Gomez then
filed the petition in the trial court pursuant to Probate Code1 sections 850,
subdivision (a)(3)(A), and 17200, subdivision (b)(4) and (6). Section 850,
subdivision (a)(3)(A), provides an interested person may petition the court for an order
“[w]here the trustee is in possession of, or holds title to, real or personal property, and the
property, or some interest, is claimed to belong to another.” Section 17200,
subdivision (b)(4), provides a trustee or beneficiary of a trust may petition the court for
purposes of “[a]scertaining beneficiaries and determining to whom property shall pass or
be delivered upon final or partial termination of the trust, to the extent the determination
is not made by the trust instrument.” And, section 17200, subdivision (b)(6), provides a
trustee or beneficiary of a trust may petition the court for purposes of instructing the
trustee.
Gomez requested an order requiring Smith, as trustee of the 1998 trust, to
distribute $12,196.31 to each Kathleen Broderick and Mariann Gundogsu, “beneficiaries
of the [t]rust whose interests in the [t]rust . . . have yet to be determined,” and the
remainder of the trust assets to Gomez or, in the alternative, to provide an undertaking in
Gomez’s favor pursuant to Code of Civil Procedure section 917.1.
Smith filed a verified objection and opposition to the petition, accompanied by a
declaration. In her objection and opposition, Smith principally disputed the scope of the
trust assets identified in the petition and asserted that, pursuant to the terms of the draft
living trust, Gomez was entitled only to a constructive trust over $35,981.54 held by the
financial institution. Smith, however, agreed with Gomez’s request to distribute
$12,196.31 to each Broderick and Gundogsu.
1 All further section references are to the Probate Code unless otherwise specified.
3
At a hearing on the petition, Smith requested an evidentiary hearing. Her counsel
argued there were “some factual issues that need to be resolved.” Specifically, Smith’s
counsel said he wanted to call three witnesses: (1) Gomez -- to impeach her prior
testimony regarding her understanding of the draft living trust’s terms and to ascertain
what assets she received upon the decedent’s death; (2) Aanestad -- to elicit “how he
drafted [the draft living trust], what he was thinking, what his notes were on all of that”;
and (3) an unidentified expert witness -- to give an opinion regarding “the nature of the
format” of the draft living trust and the terms thereof. The trial court asked Smith “to
articulate in writing why you believe an evidentiary hearing is warranted, and the
witnesses you intend to call and for what purpose, and give [Gomez] an opportunity to
respond.”
Smith filed a brief requesting an evidentiary hearing. The brief was not verified or
accompanied by a declaration. Smith asserted an evidentiary hearing was necessary
regarding the interpretation of the draft living trust and schedules and “the separate
property nature of the bulk of the [financial institution] account.” Smith further asserted,
“[a]t the evidentiary hearing, as a precaution, testimony should be elicited from” her
regarding a reasonable reserve for outstanding administrative expenses of the trust,
including tax payments, tax preparation expenses, her out-of-pocket trust-related
expenses, and her reasonable trustee fees for 2017, 2018, and 2019. She also argued no
further bond was necessary because the trust accounts were frozen, thus maintaining the
status quo.
Gomez filed a response to Smith’s brief requesting an evidentiary hearing. Gomez
asserted an evidentiary hearing was unnecessary because the draft living trust was clear
and unambiguous. She further argued: “The issue of trust administration is over.
Decedent died over three years ago. Such further administration request is simply to
delay the inevitable.” Gomez also noted there was no stay as to the enforcement of the
judgment absent posting of a sufficient bond with the court.
4
The trial court granted Gomez’s petition and denied Smith’s request for an
evidentiary hearing. The court explained: “Objector Tammy Smith failed to establish
that the interpretation of the trust instrument required extrinsic evidence. Thus, the
interpretation issue presented only a question of law, and not a question of fact, for the
probate court.” Smith appeals.
DISCUSSION
I
Request For An Evidentiary Hearing
Smith raises two arguments on appeal. First, she asserts the trial court erred in
denying her request for an evidentiary hearing regarding the establishment of a reserve
for trust administration expenses and income tax liabilities. We find no merit in this
argument.
Smith requested an evidentiary hearing pursuant to section 1022, as discussed in
Estate of Lensch (2009) 177 Cal. App. 4th 667. Section 1022 provides that, in a
proceeding under the Probate Code, “[a]n affidavit or verified petition shall be received
as evidence when offered in an uncontested proceeding.” Therefore, when a petition is
contested, “affidavits and verified petitions may not be considered as evidence at a
contested probate hearing.” (Evangelho v. Presoto (1998) 67 Cal. App. 4th 615, 620.)
Courts have interpreted section 1022 to require live testimony whenever an objection is
raised to the adjudication of a probate issue by affidavits, declarations, or verified
petitions, i.e., where factual conflicts are presented by the parties’ evidence. (E.g., Estate
of Bennett (2008) 163 Cal. App. 4th 1303, 1309 [“factual conflicts presented by the
parties’ competing declarations mandated an evidentiary hearing”]; Estate of Lensch,
supra, 177 Cal.App.4th at pp. 671, 676-677 [where parties’ evidence raised a factual
conflict as to whether the son or mother died first, the court erred in refusing to hold an
evidentiary hearing].)
5
Smith did not raise the reserve argument in her verified objection and opposition
to the petition. Thus, she did not contest the petition on that ground. At the hearing on
the petition, Smith’s counsel further did not request an evidentiary hearing for trust
administration reasons. He requested an evidentiary hearing to elicit testimony from
Gomez, Aanestad, and an expert witness regarding the terms of the trust and property
Gomez had already received. In her brief requesting an evidentiary hearing, which was
unverified and unaccompanied by a declaration or affidavit, Smith did not argue an
evidentiary hearing was necessary because the trust administration concerns raised a
factual dispute as to anything stated in Gomez’s petition. She instead merely stated that,
“[a]t the evidentiary hearing, as a precaution, testimony should be elicited from [her] at
the [sic] on the issue of a reasonable reserve for outstanding administrative expenses of
the trust . . . .” And, “[t]here obviously has to be a reserve to complete the trust
administration, pay trustee’s fees, outstanding billings, pay taxes and tax preparation, as
in any trust.” Smith introduced no evidence to support her trust administration argument.
(In re Zeth S. (2003) 31 Cal. 4th 396, 413, fn. 11 [“[i]t is axiomatic that the unsworn
statements of counsel are not evidence”].) There was, therefore, no factual conflict in the
evidence presented to the trial court necessitating an evidentiary hearing on Smith’s
proposed reserve.
Smith did not assert in the trial court, as she does on appeal, that she was entitled
to an evidentiary hearing on her reserve request under “the mandatory language of
Probate Code Section 15684 and Internal Revenue Code Section 3713(b)” or that the
“payment of taxes, debts, and legitimate expenses of administration [had a fundamental
priority] prior to distribution to the beneficiaries, or in this case, the judgment creditor of
a beneficiary . . . .” We thus do not consider the argument. (In re Marriage of Davenport
(2011) 194 Cal. App. 4th 1507, 1528-1529 [arguments not raised in trial court are
6
forfeited]; City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126
Cal. App. 4th 668, 685 [“[c]ontentions or theories raised for the first time on appeal are not
entitled to consideration”].) We conclude the trial court did not err in denying Smith’s
request for an evidentiary hearing regarding establishing a reserve.
II
Challenge To Scope Of Prior Judgment
We also find no merit in Smith’s second argument. Smith argues the trial court’s
order exceeds the scope of the judgment because it does not limit Gomez’s beneficial
interest to a life estate. The pertinent portion of the order provides: “IT IS FURTHER
ORDERED that, pursuant to the proceedings in Shasta County Superior Court Case
No. 186804 and specifically pursuant to the Judgment dated March 1, 2019, to the
Statement of Decision dated February 15, 2019, and to the Order re Motion for Order
Ascertaining Beneficiaries of Trust; Determining to Whom Trust Property Shall Pass;
Enforcing Constructive Trust and Compelling Transfer of Defendants’ Interest in Trust to
Plaintiff dated June 26, 2019, this Court finds that all beneficial interests of Tammy J.
Smith and Richard M. Gomez in the Frank and Beverly Gomez 1998 Revocable Trust
dated December 26, 1998, as amended, have been effectively granted to Louise A.
Gomez, in trust, and that neither Tammy J. Smith nor Richard M. Gomez have any
beneficial interests in such Frank and Beverly Gomez 1998 Revocable Trust dated
December 26, 1998, as amended.” (Bolding omitted.) The order appropriately provides
the beneficial interests granted to Gomez are granted in trust pursuant to the judgment.
(See Taylor v. Bunnell (1926) 77 Cal. App. 525, 533 [beneficiary of a life estate in land
held legal title to the remainder in trust for the benefit of the remainderman].) The order
is thus consistent with the judgment; the order does not exceed the scope of the judgment.
7
DISPOSITION
The order is affirmed. Gomez shall recover her costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1)-(2).)
/s/
Robie, J.
We concur:
/s/
Raye, P. J.
/s/
Hull, J.
8