Filed 5/23/18 Benton v. Granados-Saenz CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION TWO



NOAH B. BENTON, as Successor Trustee, etc.,

Plaintiff and Appellant,

v.

ASHLEY GRANADOS-SAENZ,

Defendant and Respondent.


E069303

(Super.Ct.No. MCP1601187)

O P I N I O N


APPEAL from the Superior Court of Riverside County. Mark Ashton Cope, Judge and Kevin Andrew McKenzie, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed with directions.
The Law Office of Kyle A. Patrick and Kyle A. Patrick for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
I. INTRODUCTION
Plaintiff and appellant, Noah B. Benton, the successor trustee of a trust which became irrevocable upon the death of the trustor (the Trust), petitioned the superior court to invalidate the Trust’s donative transfers to the trustor’s care custodian, defendant and respondent, Ashley Granados-Saenz (Ashley), on the ground the donative transfers were a product of Ashley’s fraud or undue influence. (Prob. Code, §§ 17200, 21380, subd. (a)(3).) The court granted Ashley’s motion for judgment on the pleadings (on the petition) without leave to amend. Benton appeals, and Ashley has not filed a respondent’s brief. We reverse with directions.
The court granted the motion for judgment on the pleadings on two independent grounds: (1) the Trust beneficiaries were time-barred from contesting the Trust’s donative transfers to Ashley under section 16061.8, and Benton lacked standing in his own right, or independently of the beneficiaries, to contest the validity of the donative transfers to Ashley; and (2) Benton was judicially estopped from contesting the validity of the donative transfers to Ashley, because Benton had previously petitioned the court to confirm the validity of the Trust, and the court had issued a previous order confirming the validity of the Trust. The court was mistaken on both counts.
As we explain, section 16061.8 does not bar a trustee from contesting the validity of a trust instrument or any of its provisions. Rather, section 16061.8 only bars trust beneficiaries and other persons who are served with a trustee’s “notification” pursuant to section 16061.7 from contesting the validity of the trust after the 120- and 60-day time periods identified in the notification have lapsed. The petition to invalidate the donative transfers to Ashley was properly brought pursuant to section 17200, subdivision (b)(3), which authorizes a trustee to contest the validity of a trust provision.
Additionally, the court abused its discretion in ruling that Benton was judicially estopped from petitioning to invalidate the Trust’s donative transfers to Ashley, based on Benton’s previous petition to confirm that a real property asset was an asset of the Trust, and his related request, in that petition, that the court find the Trust was valid. Benton did not take an inconsistent position in later asking the court to invalidate the Trust’s donative transfers to Ashley.
II. FACTS AND PROCEDURE
A. Background
On March 22, 2013, the trustor created the Trust (an inter vivos trust), and executed a “pour-over” will, stating that her “residuary estate” would be added to the principal of the Trust and be administrated and distributed in accordance with the Trust. The trustor died at age 60 on November 15, 2015, and the Trust then became irrevocable. The trustor’s husband predeceased her in June 2011, and she was not married when she created the Trust or at the time of her death. The trustor was survived by her son, Nicholas, and her stepdaughter, Leslee.
The Trust named Nicholas as successor trustee following the trustor’s death, and named the trustor’s brother-in-law, Andrew, as the “second successor trustee.” Nicholas resigned as trustee on June 17, 2016, and Andrew resigned as trustee on June 18, 2016. The Trust authorized any trustee to name a successor trustee. Andrew appointed Benton as successor trustee, and Benton accepted the appointment effective June 17, 2016. Benton is an attorney and a “California Licensed Professional Fiduciary.”
B. Benton’s August 2016 Service of the Notification by Trustee (§§ 16061.7, 16061.8)
On August 12, 2016, Benton served the Trust beneficiaries with a copy of the Trust, together with a document titled “Notification By Trustee Under Probate Code Section 16061.7” (the Notification by Trustee). Among other things, the Notification by Trustee included the name of the Trust, Benton’s contact information, and the following statement in boldface capital letters: “WARNING: YOU MAY NOT BRING AN ACTION TO CONTEST THE TRUST MORE THAN 120 DAYS FROM THE DATE THIS NOTIFICATION BY THE TRUSTEE IS SERVED UPON YOU OR 60 DAYS FROM THE DAY ON WHICH A COPY OF THE TERMS OF THE TRUST IS MAILED OR PERSONALLY DELIVERED TO YOU DURING THAT 120-DAY PERIOD, WHICHEVER IS LATER.”
Section 16061.7 requires the trustee of a trust which has become irrevocable due to the death of the trustor to serve “a notification by the trustee” on each trust beneficiary, within 60 days of the occurrence of certain events, including the date the trust becomes irrevocable or there is a change of trustee. (§ 16061.7, subds. (a), (f).) The notification is required to include, among other things, the above quoted “warning” in not less than 10-point boldface type. (§ 16061.7, subd. (h).) The service of the notification by trustee commences a limitations period on the recipient’s right to contest the validity of the trust. (§ 16061.8 [“No person upon whom the notification by the trustee is served . . . may bring an action to contest the trust” following the later of 120 days from the date the notification by the trustee is served, or 60 days from the date the person is served with a copy of the trust].)
C. The Trust’s Donative Transfers to Ashley
At the time of her death, the trustor owned a residence (the real property). The Trust provides that, upon the trustor’s death, Ashley “shall be given the right” to live in the real property until her youngest child reaches the age of majority or graduates from high school, whichever occurs later. At that time, the real property is to be sold, and 20 percent of its proceeds are to be divided between Nicholas and Leslee, with Nicholas receiving two-thirds and Leslee receiving one-third of the 20 percent. The other 80 percent of the proceeds are to be “unequally distributed” between Nicholas, Leslee, and Ashley: Nicholas is to receive a four-sevenths share, Leslee a two-sevenths share, and Ashley a one-seventh share, of the 80 percent.
The Trust also provides that Ashley shall have “the right of first refusal to purchase the [real] property, with the Wells Fargo loan to remain in place and the other beneficiaries agreeing to accept a 2nd Trust Deed loan from Ashley . . . . Such loan shall be upon mutually acceptable terms. Further, Ashley[’s] One Seventh (1/7) share shall be considered her downpayment and she shall make every effort to supplement this interest with a cash payment.” The Trust also provides that Ashley shall receive the furniture of the real property and the trustor’s jewelry. Nicholas and Leslee are the Trust’s residual beneficiaries.
D. Benton’s Heggstad Petition to Transfer the Real Property and Other Assets to the Trust, Confirm the Trust’s Validity, and Confirm Benton as Successor Trustee
On December 7, 2016, Benton, as successor trustee of the Trust, filed a verified petition (the Heggstad petition) for orders (1) confirming validity of the Trust, (2) confirming that the real property and the decedent’s personal properties were assets of the Trust, and (3) confirming himself as successor trustee. A petition to confirm that certain property belongs to a trust—and is not part of the decedent’s probate estate—is known as a Heggstad petition. (Estate of Heggstad, supra, 16 Cal.App.4th 943 [declaration in trust instrument that trustor holds real property in trust for another’s benefit is sufficient to convey the real property to the trust, and a separate grant deed conveying the real property to the trust is unnecessary].)
According to the Heggstad petition, the Trust listed the real property as an asset of the Trust on “Schedule A,” but title to the real property was in the trustor’s individual name at the time of her death and had inadvertently not been transferred to the Trust. The petition also averred that the trustor’s personal properties were gifted to the Trust by the trustor’s will. Thus, the petition alleged that the trustor intended that her real property and her personal properties would be held in the Trust and distributed according to the terms of the Trust.
On January 20, 2017, the superior court granted the Heggstad petition in full. On the same date, the court issued an order declaring the Trust to be valid, confirming Benton as successor trustee, and confirming the real property as a Trust asset, “to be held, administered, and distributed by the Successor Trustee, under the terms of said Trust.” The order was recorded on January 25, 2017, and the real property became titled in the Trust’s name.
E. The Petition to Invalidate the Trust’s Donative Transfers to Ashley
On April 27, 2017, Benton filed the present verified petition, seeking to invalidate the Trust’s donative transfers to Ashley and to impose a constructive trust on the rental value of the real property, its contents, and on the trustor’s jewelry, from and after the date of the trustor’s death. (§§ 17200, 21380, subd. (a)(3).)
A provision of an instrument making a donative transfer to a care custodian of the transferor, who is a dependent adult during the period the care custodian provided services to the transferor, or within 90 days before or after that period, “is presumed to be the product of fraud or undue influence.” (§ 21380, subd. (a)(3).) The presumption affects the burden of proof and “may be rebutted by proving, by clear and convincing evidence, that the donative transfer was not the product of fraud or undue influence.” (§ 21380, subd. (b).) The petition alleges Ashley was the trustor’s “care custodian” (§ 21362), and that the Trustor was a “dependent adult,” for several years before the Trust was executed through the time of the trustor’s death (§§ 21366, subd. (b), 811, subd. (a)(1)-(4)).
More specifically, the petition alleges the trustor’s husband hired Ashley from an agency in 2009. Before she was hired, Ashley had no relationship with the trustor. At the time Ashley was hired, the trustor had been suffering from “a very aggressive form of Multiple Sclerosis for over ten years.” She “was unable to walk at all and could only be moved via wheelchair for bathing”; she “was permanently confined to a hospital bed located in the living room and was completely dependent upon others for food, medication, daily care, etc.”; and she was “in constant pain from muscular contractures bought on by atrophy and inactivity.” She also “suffered from pressure ulcers to her tailbone” that required “a significant amount of care.”
Ashley was initially paid $20 per hour and worked for a few hours, approximately three times per week. Ashley’s “initial duties included . . . light housecleaning, providing companionship, and personal care [for the trustor] including bathing, dressing, hair care, etc.” Around mid-2010, less than one year after Ashley was hired, Ashley and her four children moved into the real property, with the trustor and the trustor’s husband, “in exchange for continuing to care for [the trustor].” After the trustor’s husband died in June 2011, Ashley became the trustor’s sole caregiver. Shortly thereafter, Ashley moved her boyfriend into the trustor’s residence.
After the trustor’s husband died, the trustor “became severely depressed and her condition worsened rapidly.” Her stepdaughter, Leslee, reported that, when Leslee was able to reach the trustor by phone, the trustor’s speech “was often garbled, and [the trustor] would sob uncontrollably. Leslee also observed that the trustor, “demonstrated noticeable memory impairment, in that she would often ask the same questions over again and seemed disoriented or confused.”
Around mid-2012, “Adult Protective Services were contacted to investigate [Ashley] for potential elder abuse.” No legal action was taken by Adult Protective Services, but Benton understood that the trustor’s husband’s “IRA account with Bank of America was frozen due to suspected fraudulent activity.”
In May 2014, the trustor “was admitted to the hospital for what is believed to be an infection secondary to bed sores. Her son [Nicholas] was required to fly in from Boston to sign medical discharge papers as her next of kin because the hospital deemed [her] unable to make medical decisions for herself.” Since the trustor died in November 2015, Ashley has continued to occupy the trustor’s residence.
F. Ashley’s Motion for Judgment on the Pleadings
Ashley filed objections to the petition and a response, and later moved for judgment on the pleadings, claiming the petition failed to state a claim for relief. In her motion, Ashley argued the petition was time-barred because it was filed more than 120 days, or 180 days, following Benton’s August 2016 service of the Notification by Trustee, which advised the beneficiaries they had 120 days, or 60 days from the date they received a copy of the Trust, whichever was later, to petition to invalidate the Trust. (§§ 16061.7, 16061.8.)
Benton filed opposition to the motion for judgment on the pleadings, and later filed a first verified supplement to the petition, addressing the “Probate Notes” of the court’s probate examiner. In his opposition and first verified supplement, Benton argued that section 16061.8, and his August 2016 service of the Notification by Trustee on the Trust beneficiaries, meant that the beneficiaries were time-barred from contesting the validity of the Trust, but, as a matter of statutory construction, sections 16061.7 through 16061.9 did not bar trustees, such as himself, from contesting the validity of a trust or trust provision.
The court ordered supplemental briefing on two questions: (1) whether the court’s previous order confirming the validity of the trust, which was granted as part of Benton’s Heggstad petition, precluded Benton’s petition to invalidate the Trust’s donative transfers to Ashley under the doctrine of collateral estoppel, and (2) whether Benton was a “real party in interest,” or had standing to petition the court to invalidate the Trust’s donative transfers to Ashley in his own right, independently of the Trust’s beneficiaries, who were time-barred from contesting the validity of the Trust.
Benton filed a second verified supplement to the petition, arguing the petition was not barred by collateral estoppel (the claim preclusion aspect of res judicata), and that Benton had standing in his own right to contest the validity of the donative transfers to Ashley under section 17200. Ashley did not file supplemental briefing.
At a combined hearing on the petition and motion, the court took the matters under submission, and subsequently issued a written decision and order granting the motion for judgment on the pleadings. In its decision and order, the court ruled (1) the Trust beneficiaries were time-barred from contesting the Trust’s donative transfers to Ashley under section 16061.8, and Benton lacked standing in his own right to contest the validity of the donative transfers to Ashley, and (2) Benton was judicially estopped from contesting the validity of the donative transfer to Ashley based on Benton’s previous petition to confirm the validity of the Trust. Benton timely appeals from the order granting Ashley’s motion for judgment on the pleadings.
III. DISCUSSION
A. Standard of Review
“‘A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. [Citations.]’ [Citation.]” (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064.) Our task on appeal is to determine, independently of the trial court, whether the complaint states a cause of action as a matter of law. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300.)
B. Section 16061.8 Does Not Bar a Trustee from Contesting the Validity of a Trust
Benton claims the court erroneously ruled that his April 2017 petition to invalidate the Trust’s donative transfers to Ashley was time-barred (§ 16061.8), based on Benton’s August 2016 service of the Notification by Trustee on the Trust beneficiaries (§ 16061.7). We agree. As we explain, section 16061.8 does not bar a trustee from contesting the validity of a trust, or any of a trust’s provisions. (§ 17200, subd. (b)(3).)
Ashley moved for judgment on the pleadings based on Benton’s August 2016 service, on each of the Trust beneficiaries, of the Notification by Trustee, together with a copy of the Trust, pursuant to section 16061.7. The limitations period on the Trust beneficiaries’ right to contest the validity of the Trust, or any of its provisions, expired in December 2016, 120 days after each beneficiary was served, in August 2016, with the Notification by Trustee and a copy of the Trust. (§ 16061.8.)
The court mistakenly ruled that Benton’s April 2017 petition to invalidate the Trust’s donative transfers to Ashley was likewise time-barred by section 16061.8. The statute states: “No person upon whom the notification by the trustee is served pursuant to this chapter . . . may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him or her, or 60 days from the day on which a copy of the terms of the trust is mailed or personally delivered to him or her during that 120-day period, whichever is later.” (§ 16061.8.)
The words of section 16061.8 are unambiguous, and its plain meaning governs. (Hunt v. Superior Court (1999) 21 Cal.4th 984, 1000.) Simply put, section 16061.8 does not apply to a trustee who serves a notification by the trustee (§ 16061.7); it only applies to the “person[s] upon whom the notification by the trustee is served.” (§ 16061.8.) Such persons are time-barred from bringing an action to contest the trust after 120 days or maximum 180-day limitations periods set forth in section 16061.81 have expired, but the trustee is not. Instead, section 17200, subdivision (b)(3) authorizes the trustee of a trust to petition the court to determine the validity of a trust provision, regardless of whether the trustee has served the beneficiaries, or any other persons with a notice of trustee pursuant to section 16061.7
In its decision and order, the court acknowledged that Benton “is technically correct that the 120-Day notice does not apply to him in his capacity as trustee,” but the court also wrote: “However, that position raises the issue of whether a neutral fiduciary has standing to challenge the trust instrument. [Benton] argues that he has standing under [Probate Code section] 17200, et seq. . . . [I]n order to do so [to have standing under Probate Code section 17200 et seq.] the trustee must also be a real party in interest with regards to the relief sought. . . .” (Italics added.) On this latter point, the court was mistaken. As Benton points out, Code of Civil Procedure section 369 authorizes certain persons to sue “without joining as parties the persons for whose benefit the action is prosecuted,” including the trustee of an express trust. (Code Civ. Proc., § 369, subd. (a)(2).) Thus, a trustee of an express trust may, on behalf of the beneficiaries, petition the court to determine the validity of a trust provision (Prob. Code, § 17200, subd. (b)(3)) without joining the beneficiaries as parties, and even if the beneficiaries are time-barred from bringing an action to contest the validity of the same trust provision themselves (Prob. Code, § 16061.8). Thus, Ashley’s motion for judgment on the pleadings was erroneously granted on the ground Benton was time-barred from bringing the April 2017 petition to invalidate the Trust’s donative transfers to Ashley. The petition was properly brought under Probate Code section 17200, subdivision (b)(3).
C. Judicial Estoppel Should Not Have Been Invoked to Bar the Petition
The court granted Ashley’s motion for judgment on the pleadings on the additional and independent ground that Benton was judicially estopped from petitioning to invalidate the donative transfers to Ashley. The court reasoned that, in his January 2017 Heggstad petition, Benton took the inconsistent position that the Trust was valid, and obtained an order determining that the Trust was valid.
“‘“The doctrine of judicial estoppel, sometimes referred to as the doctrine of preclusion of inconsistent positions, is invoked to prevent a party from changing its position over the course of judicial proceedings when such positional changes have an adverse impact on the judicial process. [Citation.]”’” (International Engine Parts, Inc. v. Feddersen & Co. (1998) 64 Cal.App.4th 345, 350.) “‘“Judicial estoppel is ‘intended to protect against a litigant playing “fast and loose with the courts.”’”’ [Citation.]” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181.)
“Judicial estoppel is an equitable doctrine with some vagueness in its application. [Citation.]” (International Engine Parts, Inc. v. Feddersen & Co., supra, 64 Cal.App.4th at p. 351.) Judicial estoppel differs from the doctrine of equitable estoppel in that it “‘looks to the connection between the litigant and the judicial system while equitable estoppel focuses on the relationship between the parties to the prior litigation.’ [Citation.]” (Id. at pp. 350-351.) Because the primary purpose of judicial estoppel “is not to protect the litigants but to protect the integrity of the judiciary, the doctrine does not require reliance or prejudice before it may be invoked. [Citation.]” (Id. at p. 351.)
Judicial estoppel “‘should apply when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. [Citations.]’” (International Engine Parts, Inc. v. Feddersen & Co., supra, 64 Cal.App.4th at p. 351, capitalization omitted, citing Jackson v. County of Los Angeles, supra, 60 Cal.App.4th at p. 183.)
“Even if the necessary elements of judicial estoppel are found, because judicial estoppel is an equitable doctrine [citations], whether it should be applied is a matter within the discretion of the trial court [citations].” (Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 46-47.) We review the court’s exercise of its equitable discretion to apply the doctrine of judicial estoppel for an abuse of discretion. (Id. at p. 47.)
Benton argues that the elements of judicial estoppel are not present here, because he did not take inconsistent positions in his January 2017 Heggstad petition and in his April 2017 petition to invalidate the Trust’s donative transfers to Ashley. In his Heggstad petition, he argues, he only asked the court to determine that the Trust instrument was valid, or that the Trust was “a legal entity that was created by the [trustor],” not that the Trust’s donative transfers to Ashley were valid. We agree.
In the Heggstad petition, the court was only asked to determine, and only did determine, that the Trust was valid, that Benton was its successor trustee, and that the real property was an asset of the Trust. As Benton points out, the court’s general finding that the Trust was valid was “necessary” because “[t]he fact that the Trust exists is a condition precedent to the fact that certain property could belong to it.” In contrast, whether the Trust’s donative transfers to Ashley were valid under section 21380 is a different question than whether the Trust instrument was valid, which the court was not asked to determine and did not determine in granting the Heggstad petition.
Thus, the court abused its discretion in determining that the doctrine of judicial estoppel applied and precluded Benton from petitioning the court to invalidate the Trust’s donative transfers to Ashley.
IV. DISPOSITION
The order granting Ashley’s motion for judgment on the pleadings is reversed. The matter is remanded to the superior court with directions to conduct further proceedings on Benton’s April 2017 petition to invalidate the Trust’s donative transfers to Ashley. The parties shall bear their costs on appeal. (Cal. Rules of Court, rule 8.278.)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

FIELDS
J.


We concur:

RAMIREZ
P. J.

CODRINGTON
J.