Conservatorship of Ashley

Filed 2/23/07 Conservatorship of Ashley CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION THREE

This is an appeal from an order imposing a surcharge against the estate of Jack L. Ottovich, the deceased conservator of the estate of Francis L. Ashley (conservatee). The trial court ordered the surcharge after finding Jack Ottovich breached his fiduciary duty to the conservatee by using conservatorship funds to make an unsecured loan and to invest in a poorly performing annuity. The trial court imposed joint and several liability for the surcharge against Jack Ottovichs estate (Estate); appellants Karen Rayl, Harvey Ottovich and Randy Ottovich, as the Estates executors; and respondent Seaboard Surety Company (Seaboard), the Estates surety.[1] We affirm.

DISCUSSION

In 1996, Jack Ottovich petitioned the court to be named conservator of the estate of his longtime friend and fellow veteran, Francis L. Ashley. Letters of conservatorship were issued to Jack Ottovich on July 31, 1996. At that time, conservatorship assets totaled $13,214.66. Jack Ottovich posted a $10,000 bond with Seaboard to guarantee his performance as conservator.

On August 14, 1997, Jack Ottovich filed the First Account and Report with the trial court, describing financial activity for the conservatorship for the period of July 19, 1996 to July 18, 1997. The First Account and Report listed $47,225.81 in conservatorship assets. It also reported that an unsecured loan for $32,000 had been made with conservatorship funds on June 16, 1997. The loan documentation, which was attached to the First Account and Report, stated among other things that the loan was made to John Gonzales, president of Network Enterprise, Inc., carried an 8.25% interest rate, and was due on June 16, 1998 (the Gonzales loan).

The trial court approved the First Account and Report as submitted, finding that the Conservator has performed his duties as Conservator, and on behalf of the Conservatees best interest, [and] that the Conservatorship shall continue in full force and effect.

Jack Ottovich thereafter posted two additional bonds with Seaboard guaranteeing his performance as conservator. The first, posted on October 17, 1997, was for $88,000. The second, posted on March 10, 1999, was for $55,000.

On November 15, 1999, Jack Ottovich filed the amended Second Account and Report with the trial court, describing the conservatorships financial activity from July 18, 1997 to July 17, 1999. The Second Account and Report showed that conservatorship assets had increased in value to $105,393.83, due in large part to the sale of the conservatees house for $68,000. The report noted the Gonzales loan had been extended, and was worth $33,096.85. It also noted that $50,000 in conservatorship funds had been used to purchase an annuity from Pacific Life (Pacific Life annuity). As of July 17, 1999, the Pacific Life annuity was valued at $52,635.02.

The amended Second Account and Report was approved by the trial court on December 21, 1999. As before, the court found that the Conservator has performed his duties as Conservator, and on behalf of the Conservatees best interest, [and] that the Conservatorship shall continue in full force and effect.

Jack Ottovich died on May 12, 2001. His son, appellant Mark Ottovich, petitioned the trial court to become successor conservator. No one objected, and the trial court granted the petition on November 1, 2001. Letters of conservatorship were issued to Mark Ottovich on December 20, 2001.

On April 25, 2002, Jack Ottovichs attorney, John Murray, filed the Third Account and Report on behalf of the Estate. The Third Account and Report described the conservatorships financial activity from July 18, 1999 to May 12, 2001, the date of Jack Ottovichs death. It listed both the Gonzales loan and the Pacific Life annuity as conservatorship assets. It noted the Gonzales loan was still outstanding, and was worth $34,379.37. It also noted the Pacific Life annuity had declined in value to $46,691.92.

After reviewing the Third Account and Report, the court investigator expressed concern about the Gonzales loan and the Pacific Life annuity. The court investigator requested the Estate be surcharged for the amount of the Gonzales loan, which appeared uncollectible, and for the amount of the Pacific Life annuity, which had declined in value. The court deferred ruling on the Third Account and Report.

Mark Ottovich thereafter filed a request for resignation as conservator, which the trial court accepted on November 18, 2002, on the condition that he file a First and Final Account and Report. The trial court appointed respondent Public Guardian of Alameda County (Public Guardian) as successor conservator.

On March 6, 2003, Mark Ottovich filed his First and Final Account and Report, which valued conservatorship assets at $106,999.39. It also listed the still-outstanding Gonzales loan, valued at $33,096.85, and the Pacific Life annuity, valued at $43,919.22 as of June 30, 2002.

On October 31, 2003, the Public Guardian filed a petition for surcharge against the Estate for the Pacific Life annuity and the Gonzales loan. It also sought a surcharge against Mark Ottovich, as successor conservator, for missing Social Security payments and other items.[2]

The first phase of a bifurcated trial on the surcharge petition was held September 14, 2004. The first phase focused only on the surcharge sought against the Estate, leaving for the second phase the issue of the surcharge sought against Mark Ottovich.

At the start of the first phase, Mark Ottovich informed the trial court that counsel for the Estate was not present, and requested to appear instead on the Estates behalf. Mark Ottovich also presented a trial brief on behalf of the Estate, which was signed by himself and by appellant Karen Rayl, the Estates executor, but not by the Estates attorney.

The trial court denied Mark Ottovichs request to represent the Estate at trial, finding he could not appear in propia persona on behalf of anyone but himself.[3] Mark Ottovich thus requested a continuance to permit the Estate to appear at trial with counsel. He explained that Jerome Blaha, an attorney for the Estate, was not representing it with respect to the surcharge petition against Jack Ottovich, and showed the trial court a letter in an attempt to prove that fact. The trial court reviewed the letter, and concluded it did not indicate Mr. Blaha was no longer representing the Estate. The attorney for the Public Guardian informed the court that Mr. Blaha was in fact the attorney of record for the Estate and had received notice of the petition. The trial court then denied Mark Ottovichs request for a continuance, and called on the parties to begin opening statements.

The Estate thus was not represented at trial. Seaboard, however, which faced joint and several liability with the Estate, was present at trial and argued against imposition of the surcharge. Seaboard called Mark Ottovich as a witness in seeking to establish that Jack Ottovich acted in good faith as conservator.

On November 3, 2004, the trial court issued an order finding that Jack Ottovich breached his fiduciary duty to the conservatee by making the Gonzales loan and by purchasing the Pacific Life annuity. The trial court thus imposed a surcharge in the amount of $58,660.51, consisting of (1) the principal amount of the $32,000 loan plus 8.25% interest per annum (totaling $51,123.35), and (2) the $2,375 penalty for selling the annuity before its maturity date plus 2% interest per annum on the annuitys principal amount (totaling $7,536.64). The trial court further ruled that liability for the surcharge would be joint and several against: (1) the Estate, (2) appellants Karen Rayl, Harvey Ottovich and Randy Ottovich, as the Estates administrators, and (3) respondent Seaboard, as the Estates surety.[4]

On January 3, 2005, Mark Ottovich, as former conservator, and Karen Rayl, Harvey Ottovich and Randy Ottovich, as the Estates executors, filed a timely notice of appeal.

DISCUSSION

Appellants challenge the trial courts order imposing a surcharge against the Estate and its executors on the following grounds: (1) the order was barred by Probate Code section 2103 and by the doctrine of laches; (2) it improperly subjected the Estates executors to personal liability for the surcharge; and (3) the trial court should have granted Mark Ottovichs request for a continuance on behalf of the Estate to enable it obtain representation at trial.

The Public Guardian responds that any challenge to the surcharge order is barred on appeal because the Estate and its executors failed to raise it, or even to appear, below. We agree.[5]

The Estates only purported representative at trial was Mark Ottovich. He admittedly was not a licensed attorney, but nonetheless requested to represent the Estate in propia persona. He explained that attorney Jerome Blaha, the Estates attorney of record, was not representing the Estate with respect to the surcharge petition against Jack Ottovich, and thus that the Estate would be left without representation were the trial court to deny his request to appear.

The trial court denied Mark Ottovichs request after finding he lacked authority to represent the Estate in propia persona. The trial courts ruling was proper: [A] non-lawyer appearing in his representative capacity in propia persona [does] not have the right to appear and defend [an] action [against the estate]. (City of Downey v. Johnson (1968) 263 Cal.App.2d 775, 780; see also Drake v. Superior Court (1994) 21 Cal.App.4th 1826, 1830-1831 [a nonlawyer representing his mothers estate as conservator and executor cannot appear in propia persona on behalf of the estate]; Hansen v. Hansen (2003) 114 Cal.App.4th 618, 621 [persons may represent their own interests in legal proceedings, but may not represent the interests of another unless they are active members of the State Bar].)[6]

To have permitted Mark Ottovich to represent the Estate in propia persona would [have] be[en] a condonation of acts constituting both a crime and a possible contempt of court[,] for we [would] have a lay person not a member in good standing of any bar practicing law illegally, . . . although perhaps unwittingly.[7] (City of Downey v. Johnson, supra, 263 Cal.App.2d at p. 783; see also Drake, supra, 21 Cal.App.4th at p. 1830 [Prohibiting unlicensed practice is within the police power [of the state] and is designed to assure the competency of those performing [legal] services. [Citation.] ].)

Moreover, our conclusion that Mark Ottovich lacked authority to represent the Estate in propia persona requires us to refrain from considering on appeal any arguments he purported to raise or documents he purported to file in the trial court, including his motion for continuance and the trial brief he co-signed with appellant Karen Rayl, another non-lawyer.[8] Where, as here, an individual litigant is barred from appearing in propia persona in an action, the litigants arguments and court filings made in that capacity in the trial court are nullities. (City of Downey v. Johnson, supra, 263 Cal.App.2d at pp. 782-783; Hansen, supra, 114 Cal.App.4th at p. 622.) We are thus left without any appearance by the Estate at trial. And without any appearance at trial, we must deem waived the arguments raised by the Estate on appeal. (Ochoa v. Pacific Gas & Electric Co. (1998) 61 Cal.App.4th 1480, 1488 fn. 3 [[i]t is axiomatic that arguments not asserted below are waived and will not be considered for the first time on appeal].)

In attempting to avoid this result, appellants raise several contradictory arguments. In their opening brief, appellants concede the Estate had counsel and all parties acknowledged it had counsel at trial, but nonetheless argue the trial court should have granted Mark Ottovichs request for a continuance so the Estate could secure counsel. In their reply brief, appellants contend for the first time that Jerome Blaha, the person identified at trial as the Estates attorney of record, was not in fact its attorney of record, but nonetheless that he, somehow, abandoned the Estate at trial. Faced with that situation, appellants continue, the trial court should have issued an order to show cause compelling Mr. Blaha to appear for the Estate, rather than let trial continue with the Estate unrepresented. They also contend for the first time that the trial court had previously permitted Mark Ottovich to appear and argue on the Estates behalf.

We reject appellants arguments, which are not only inconsistent and nonsensical, but raised in part for the first time on reply. (Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1209 fn. 1 [arguments not raised until reply are waived].) Moreover, even were we to consider them, appellants have failed to provide an adequate record to support their claim of attorney abandonment or of being led by the trial court to believe Mark Ottovich could represent the Estate.[9]

Indeed, if the Estate had a legitimate reason for failing to appear at trial with counsel, such as being abandoned by its attorney, one proper remedy would have been to move the trial court to set aside the surcharge order under Code of Civil Procedure section 473, subdivision (b). That statute provides a trial court with discretion to relieve a party from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief . . . shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. The Estate made no such motion. Accordingly, we decline to provide the Estate any relief from the surcharge order on appeal.[10]

We acknowledge this result seems harsh, as it precludes any consideration of the merits in this case. The fault for this result lies with the Estate, however, not with this court.

DISPOSITION

The trial courts order imposing a surcharge against the Estate; Karen Rayl, Harvey Ottovich and Randy Ottovich, as the Estates executors; and Seaboard, as the Estates surety is affirmed. Costs are awarded to the Public Guardian of Alameda County.

_________________________

Parrilli, Acting P. J.

We concur:

_________________________

Pollak, J.

_________________________

Siggins, J.

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[1] We grant Seaboards unopposed request for judicial notice of a page from the Alameda Superior Courts official website that shows Karen Rayl, Harvey Ottovich and Randy Ottovich, were appointed as executors of the Estate. As the parties agree, the trial courts surcharge order erroneously identifies those three individuals as administrators of the Estate.

[2] The surcharge against Mark Ottovich is not at issue before this court, and is discussed only in passing.

[3] The trial court did permit Mark Ottovich to appear in propia persona during the second phase of trial to defend against the surcharge sought to be imposed against him.

[4] As discussed in footnote 1, Karen Rayl, Harvey Ottovich and Randy Ottovich are executors, not administrators, of the Estate.

[5] As an initial matter, we note that appellants do not challenge on this appeal the trial courts imposition of a surcharge against Mark Ottovich. Nor is there evidence in the record that Mark Ottovich is liable in any capacity for the surcharge imposed against the Estate and its executors, appellants Karen Rayl, Harvey Ottovich and Randy Ottovich. Appellants identify Mark Ottovich as a beneficiary of the Estate in their reply brief, but they point to no support in the record, and we have found none, for their claim. We thus conclude that Mark Ottovich was not aggrieved by the order at issue, and that he lacks standing to bring this appeal. (Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 295 [only an aggrieved party to an action may appeal].) Accordingly, we interpret the notice of appeal to include as appellants only the Estate and its executors, Karen Rayl, Harvey Ottovich and Randy Ottovich. (Cal. Rules of Court, rule 8.100, subd. (a)(2) [notice of appeal must be liberally construed].)

[6] Indeed, Mark Ottovich had even less of a basis for seeking to represent the Estate at trial than the appellants in City of Downey v. Johnson, supra, 263 Cal.App.2d 775, and Hansen, supra, 114 Cal.App.4th 618. In those cases, the appellants precluded from appearing in propia persona were executors or personal representatives of the estates being sued. Here, Mark Ottovich is the decedents son, but does not appear to serve the Estate in any representative capacity.

[7]Several California statutes prohibit or penalize lay persons practicing law. For example, Business and Professions Code section 6125 provides:

No person shall practice law in California unless the person is an active member of the State Bar.

Business and Professions Code section 6126, subdivision (a) provides:

Any person . . . holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active member of the State Bar, or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so, is guilty of a misdemeanor . . .

Business and Professions Code section 6127 provides:

The following acts or omissions in respect to the practice of law are contempts of the authority of the courts: (a) Assuming to be an officer or attorney of a court and acting as such, without authority.

[8] Under the same law set forth above, appellant Karen Rayl, a non-lawyer, was also barred from representing the Estate in propia persona. (City of Downey v. Johnson, supra, 263 Cal.App.2d at p. 780.)

[9] For example, the letter Mark Ottovich relied upon at trial to suggest to the trial court that Mr. Blaha no longer represented the Estate was not made part of the record, nor was the hearing transcript appellants relied upon in their reply brief to suggest the trial court had permitted Mark Ottovich to appear and argue for the Estate.

[10] Mark Ottovichs non-lawyer status provides no basis for overlooking his improper attempt to appear in propia persona for the Estate. Litigants appearing in propia persona are held to the same level of knowledge of procedural law as those represented by counsel. (Lawrence v. Superior Court (1988) 206 Cal.App.3d 611, 619, fn. 4.) We see no reason to hold a litigant improperly purporting to appear in propia persona to a lesser standard.