Estate of Gridley

Filed 10/17/06 Estate of Gridley CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

INTRODUCTION

Objectors and respondents Michael A. Gridley, Robert Gridley, Benjamin R. Winslow, Ed Flynn, Larry Kenning, and Wetland Resources, LLC (respondents) move this court to dismiss this appeal filed by petitioners and appellants Patricia Gridley and Christine Bennett (appellants) on the grounds that we lack jurisdiction because the two probate orders from which the appeal is taken are nonappealable orders under the Probate Code.^[1] Respondents also seek sanctions against appellants and/or their counsel pursuant to California Rules of Court, rule 27(e), for filing a frivolous and dilatory appeal. We shall grant the motion to dismiss and deny appellants’ request that we treat the appeal as a petition for a writ. We shall deny the request for sanctions.

FACTS AND PROCEDURAL BACKGROUND

Appellants are sisters and beneficiaries of the Estate of Elsie N. Gridley and the Elsie N. Gridley Irrevocable Trust. Respondent Michael Gridley (Michael) is appellants’ brother and the trustee of the trust and executor of the estate. Respondent Winslow is the attorney for respondent trustee and appellants allege he previously represented them in matters relating to the trust.

The underlying action involves a long-running dispute over the estate and trust. Elsie Gridley died on May 21, 1992. Soon after, Michael began probate proceedings in the Probate Department of the San Francisco County Superior Court. Thereafter, Michael was engaged in protracted and acrimonious litigation with his father, Arnold Gridley, a beneficiary of the estate and trust. Michael and Arnold entered into a written stipulation in 1994 to have their disputes resolved by the Honorable Harry W. Low, Justice of the Court of Appeal, Retired, at JAMS. Judge Isabella Grant, entered a temporary judge appointment order in accordance with the stipulation of the parties to the litigation. The stipulation specified, among other things, that Low “be appointed as a Temporary Judge, to hear and determine the above entitled matter until final determination thereof.”^[2]

Since his appointment in 1994, Justice Low has presided over all probate-related and trust-related issues in the estate (except for the April 23, 1996 “Order Settling Final Account” issued by Judge Grant closing the estate and distributing its assets to the trust).^[3] Justice Low has issued numerous rulings in the estate and trust proceedings.

Arnold died in May 2004. Appellants have challenged the jurisdiction of Justice Low to act in these matters, following the death of Arnold, on several grounds.^[4]

On March 22, 2006, appellants filed the underlying petition alleging that Michael and attorney Winslow and their associates used trust funds and an interest free loan to purchase trust and estate real property for themselves. The petition was entitled: “Petition For: (1) Immediate Suspension of Powers of Trustee and/or Appointment of Temporary Trustee; (2) Removal and Replacement of Trustee; (3) Surcharge of Trustee; (4) Breach of Fiduciary Duties; (5) Breach of Trust; (6) Rescission; (7) Quiet Title; (8) Conversion; (9) Fraud; (10) Constructive Fraud; (11) Legal Malpractice; (12) Conspiracy; (13) Disqualification of Attorney Winslow; and (14) Attorneys Fees and Costs.”

On May 16, 2006, after conducting a hearing on the issue of his and JAMS’s jurisdiction, Justice Low issued an “Order re Continuing Authority.” The order provided “that the temporary judge has continuing authority to hear and determine the matter of the approval of the accounting of Elsie N. Gridley until its final determination. The Court recognizes that there is a pending petition which brings in possibly new parties, specifically the legal malpractice client, and the bringing in of two additional parties to the action. The Court reserves determination whether those should be severed and returned to the Superior Court. In the meantime, the objections to the approval of the accounting will be deferred until all the parties have conducted a degree of discovery, and the discovery will be orderly and conducted with deliberate speed. The first status conference will be held July 18, 2006 at 10:00 a.m. Five days prior to July 18, 2006, each party is to submit a status conference statement. If any discovery issues are outstanding at that time, the Court will hear those issues at the July 18, 2006 status conference. The request to suspend the powers of Michael Gridley, Trustee of the Elsie N. Gridley Trust, is denied at this time.”

Meanwhile, the petition was heard by the probate court, the Honorable John Dearman, presiding on May 2 and 17, 2006. On June 29, 2006, Judge Dearman issued an “Order Re Authority to Hear Matters Set Forth in Petition,” ruling as follows:

“1. The request of [appellants] that the Probate Court hear the matters set forth in the petition is denied to the extent more fully set forth below. [Italics added.]

“2. The matter is returned to Justice Harry Low to hear those matters in which he decides he has authority to hear.

“3. In the event Justice Low finds that there are issues upon which he has no authority to decide, those matters shall be sent back to be heard by the Probate Court.

“4. [Appellants] shall present a motion of points and authorities to Justice Low setting forth the issues in the petition, discovery which shall be required and an estimate regarding the amount of time to hear such matters and Justice Low shall first hear such motion to determine those issues prior to proceeding with hearing substantive issues in connection with the causes of action set forth in the petition.”

On July 18, 2006, appellants filed the appeal that is the subject of this motion to dismiss. As a consequence of the filing of the appeal, “all proceedings relating to the estate/trust of Elsie Gridley are stayed . . . .”

On August 29, 2006, respondents filed the instant motion for dismissal of the appeal and motion for sanctions. Appellants filed opposition to both motions on September 15, 2006.^[5]

MOTION TO DISMISS THE APPEAL

“Appeals from orders in probate are regulated by statute. [Citations.] An appeal may be taken from a superior court from an order made appealable by provisions of the Probate Code. [Code Civ. Proc., § 904.1[, subd.] (a)(10)] . . . There is no right to appeal from any probate order other than those specified in the Probate Code.“ (2 Gold et al., Cal. Civ. Practice: Probate & Trust Proceedings (2006) § 10:45, citing Estate of Stoddart (2004) 115 Cal. App. 4th 1118 [orders denying motions for reconsideration not appealable], italics added; accord, Estate of Miramontes-Najera (2004) 118 Cal.App.4th 750, 754.) The reason is simple. “ ‘ “If there [were] a free appeal in every probate matter, estates could be unreasonably delayed.” ‘ (Estate of Stoddart, [at pp.] 1125-1126.)” (Estate of Miramontes-Najera, at p. 754.)

Appealable probate orders are set forth in sections 1300-1304.^[6] A ruling on a request for a court to assume jurisdiction over a probate petition is not among the list of appealable orders set forth in sections 1300-1304.

Respondents move to dismiss the appeal on the grounds that the two orders by Judge Dearman and Justice Low are interlocutory orders and are not among the orders made appealable by the Probate Code. They argue:

“Judge Dearman’s order simply rejected [a]ppellants’ request for the Probate Court to hear the matters raised in their [p]etition and affirmed Justice Low’s authority ‘to hear those matters [in the [p]etition] in which he decides he has authority to hear.’ [Citation.] Likewise, Justice Low’s Order re Continuing Authority merely confirms that he has continuing authority with regard to the Gridley estate dispute. [Citation.] However, Justice Low reserved determination as to which matters in the [p]etition, if any, he will retain.”

Respondents also contend that there is no final ruling ripe for appellate review as Judge Dearman declined the request to hear the petition, but contemplated that some parts of the petition might be adjudicated in the probate court. Similarly, Justice Low has not yet rendered any decision regarding whether he will retain any aspect of the petition. (He did, however, deny the petition’s request to suspend the powers of the trustee, Michael, “at this time.”)

Appellants counter that the orders of Judge Dearman and Justice Low are appealable under section 1300, subdivisions (a),(c), (g), and (k), as “the refusal to make“ an order: “(a) Directing, authorizing, approving, or confirming the sale, lease, encumbrance, grant of an option, purchase, conveyance, or exchange of property”; “(c) Authorizing, instructing, or directing a fiduciary, or approving or confirming the acts of a fiduciary”; or “(k) Adjudicating the merits of a claim made under Part 19 (commencing with Section 850) of Division 2.” Sections 850 et seq. relate to the conveyance or transfer of property claimed to belong to the decedent or to another.

Appellants contend that as the petition seeks to quiet title to trust property and to rescind the sale of trust real property to respondents, these orders are included in section 1300, subdivisions (a), (c) and (k). Subdivisions (a) and (c) are clearly inapplicable as the court was not asked to direct, authorize or approve the sale (§ 1300, subd. (a)), or to authorize, instruct or direct the fiduciary or to confirm the fiduciary’s actions (§ 1300, subd. (c)).

With reference to section 1300, subdivision (k), a quiet title action may be brought pursuant to sections 855^[7] and 850, subdivision (a)(3)(A).^[8] Had Judge Dearman or Justice Low made an order granting or denying the quiet title claim, such order would have been appealable under section 1300, subdivision (k).

Appellants further contend that their petition sought immediate suspension of the powers of the trustee, appointment of a temporary trustee and removal, replacement, and surcharge of the trustee and was therefore immediately appealable both under section 1304 as a “final order” under section 17200, subdivisions (a) and (b)(10),^[9] and under section 1300 subdivision (g) as the “refusal to make” an order “[s]urcharging, removing, or discharging a fiduciary.”

Clearly, neither the order of Judge Dearman nor the order of Justice Low was a “final order.” Both Judge Dearman and Justice Low anticipated that rulings on the claims of the petition itself would follow proceedings either before Justice Low or, in those matters that Justice Low ultimately determined he did not have jurisdiction to hear, before the probate court.

Appellants contend that the phrase “refusal to make an order” in section 1300 is far broader than a simple denial of an order, apparently recognizing that neither Judge Dearman, nor Justice Low, denied the requests in the petition, other than Judge Dearman’s denial of the request to hear the matters set forth therein and Justice Low’s denial “at this time” of the request to suspend Michael as trustee. Appellants further contend that the “refusal to hear the [p]etition constituted, in effect, a denial of the motion.” We disagree. However broad may be the phrase “refusal to make” an order in section 1300, we are not persuaded that it stretches so far as to encompass the orders made by Judge Dearman and retired Justice Low here. (See Estate of Keuthan (1968) 268 Cal.App.2d 177, 179-180 [denial without prejudice of petition for distribution pending determination of other parties’ petition to determine heirship amounts to postponement and is not an appealable order]; Estate of Vai (1959) 168 Cal.App.2d 147, 149-150 [postponement or refusal to postpone final distribution is not appealable].) Appellants have cited no cases supporting their interpretation of the phrase.

It is true that “the appealability of an order of the probate court is determined not from its form, but from its legal effect.” (Estate of Martin (1999) 72 Cal.App.4th 1438, 1442^[10]; Estate of Miramontes-Najera, supra, 118 Cal.App.4th at p. 755.^[11]) However, neither of the two orders at issue here had the legal effect of approving or confirming any action by the trustee, and neither had the legal effect of denying any claim in the petition from which an appeal would lie under the Probate Code. Rather, the legal effect of each of the two orders was to defer resolution of the issues raised in the petition to a later time.

The order at issue in Estate of Keuthan, supra, 268 Cal.App.2d 177, appears analogous to orders challenged here. In Estate of Keuthan, the probate court denied without prejudice an estate administrator’s petition for payment of the balance of fees and denied distribution “without prejudice” pending determination of an heirship proceeding. (Id. at pp. 178-179.) The administrator attempted to appeal from the probate court’s order. (Id. at p. 178.) In dismissing the appeal, the Court of Appeal recognized the general rule that ordinarily, pursuant to former section 1240 (a predecessor of section 1303, subd. (g)), an appeal may be taken from an order distributing property or a refusal to make such an order. (Estate of Keuthan, at p. 179.) By denying a petition for distribution without prejudice, the probate court did not pass upon the merits of the petition; it merely postponed its ruling, making the order nonappealable. (Id. at p. 179; see also Estate of Vai, supra, 168 Cal.App.2d at pp. 149-150 [interlocutory judgment ordering no hearing on petition for distribution until final determination of a civil action to rescind a property settlement was not an appealable order, as it was not a refusal to make an order, but was merely a postponement of the hearing]; cf. Johnson v. Superior Court (1929) 102 Cal.App. 178 [postponement of distribution pending determination of action to declare plaintiff to be an adopted child was not a refusal to direct distribution and hence was not appealable; however writ issued to compel probate court to determine the issue].) The court reasoned that “[t]he words ‘without prejudice’ eliminate any binding effect that the order appealed from might have.” (Estate of Keuthan, at p. 180.)

The same analysis persuades us that even Justice Low’s denial of appellants’ request to suspend the powers of Michael as trustee “at this time” was not an appealable order under the Probate Code. The denial of a request to suspend the powers of a trustee is not one of the orders made appealable by section 1300, subdivision (g), referencing orders “[s]urcharging, removing, or discharging a fiduciary.” Even assuming that it were, the effect of the denial “at this time” anticipates a future determination of the issue, following the completion of discovery ordered by Justice Low and actual consideration of the issues raised in the petition. As in Estate of Keuthan, supra, 268 Cal.App.2d 177, the effect is the same as if Justice Low had simply postponed his ruling on that request as he did on the petition’s request that the trustee be removed and/or surcharged.

Finally, appellants also contend the orders denied the petition’s request to disqualify respondent attorney Winslow from representing the trust and, as such, are immediately appealable, as the denial of a motion to disqualify counsel due to a conflict of interest. However, neither Judge Dearman nor Justice Low ruled upon that request.

REFUSAL TO TREAT APPEAL AS A WRIT PETITION

Appellants request this court to treat the appeal as a writ, if we find the orders nonappealable. The only issues that could be raised on such a writ relate to the jurisdiction of Justice Low to hear and determine any of the issues set forth in the petition. Appellants attack Justice Low’s jurisdiction to continue to hear any of the matters relating to the trust. (See fn. 4, ante.) We decline to treat this appeal as a writ, mindful that petitions to treat nonappealable probate orders as writs “should only be granted under extraordinary circumstances.” (Estate of Weber (1991) 229 Cal.App.3d 22, 25, italics added; see Eisenberg et al., Cal. Practice Guide: Civil Appeals & Writs (The Rutter Group 2005) 2:191.1, p. 2-105.) Appellants have failed to persuade us that those extraordinary circumstances are present here. Upon Justice Low’s determination of the issues raised in the petition, an appeal is likely and the question of his jurisdiction can be raised therein, upon a more complete record than we have before us here.

MOTION FOR SANCTIONS

Respondents seek sanctions of $7,050 against appellants for the filing of a frivolous appeal and appealing solely to cause delay. (Cal. Rules of Court, rule 27(e)(1).)^[12] They contend that the appeal was pursued to take advantage of the automatic stay and to prevent Judge Low from addressing the issues raised in the petition. Although we have found the appeal to be without merit, we cannot say that it was necessarily frivolous or pursued solely for delay. Moreover, we are mindful that if a judgment or order is appealable, aggrieved parties must file an appeal or forever lose the opportunity to obtain review. (Eisenberg et al., Cal. Practice Guide: Civil Appeals & Writs, supra, 2:13, pp. 2-10 to 2-11.) “The orders listed as appealable in the Probate Code must be challenged timely or they become final and binding. They may not be collaterally attacked in a subsequent appeal from the final order of distribution. [Citations.]” (Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1450, fn. 5.) Finally, other than the general delay and the fees and costs incurred in bringing the motion to dismiss, respondents have not asserted any particular loss or injury they will incur by being subject to the automatic stay pending resolution of this motion.

DISPOSITION

We grant respondents’ motion to dismiss the appeal. We deny respondents’ motion for sanctions. Respondents shall recover their costs on the motion to dismiss the appeal.

_________________________

Kline, P.J.

We concur:

_________________________

Haerle, J.

_________________________

Richman, J.

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^[1] All statutory references are to the Probate Code, unless otherwise indicated. We take judicial notice of the documents set forth in respondents’ request for judicial notice in support of respondent’s motion to dismiss and appellants’ opposition thereto. (Evid. Code, § 452, subd. (d).)

^[2] Respondents assert the trust was amended and restated in 1994 with the approval of all affected parties, including appellants herein, to expressly vest the trustee with the sole authority to elect between the probate court or JAMS to resolve all trust-related matters. Appellants counter that this document is void, that it was never filed with the court, and that they did not sign and are not bound by this document.

^[3] In November 1997, on Arnold’s appeal, we affirmed the probate court order authorizing final distribution of the estate and approving the final account of the executor. (Estate of Elsie N. Gridley (Nov. 5, 1997, A074510 [nonpub. opn.].)

^[4] They contend that Judge Dearman’s order of June 29, 2006, refusing to hear the matter in the probate court in the first instance and referring the matter to Justice Low, is void under Code of Civil Procedure sections 638 et seq., and Probate Code section 9620, that prescribe the procedure for referral to a referee or private judge, including a requirement there be an agreement in writing, signed by them and filed with the court. Appellants argue that they never signed the stipulation referring the matter to Justice Low and never consented to his appointment and therefore they were not bound by the stipulation; that after Arnold’s death in May 2004, the temporary judge no longer was authorized to act in the matter; and that appellants were not parties to the disputes between Arnold and Michael, although they did file objections to Justice Low’s authority to decide various matters. They also attack the “amended trust provisions” authorizing Michael to submit matters to a temporary judge as invalid, an attempt to modify the trust without the consent of all beneficiaries, unauthenticated, and not part of the record below. These allegations go to the merits of the appeal and do not affect the issue at hand on this motion to dismiss--whether the orders are appealable.

^[5] In filing their sanctions opposition before any request of this court, appellants violated California Rules of Court, rule 27(e)(3), which provides: “The court must give notice in writing if it is considering imposing sanctions. Within 10 days after the court sends such notice, a party or attorney may serve and file an opposition, but failure to do so will not be deemed consent. An opposition may not be filed unless the court sends such notice.”

^[6] Section 1300 provides: “In all proceedings governed by this code, an appeal may be taken from the making of, or the refusal to make, any of the following orders:

“(a) Directing, authorizing, approving, or confirming the sale, lease, encumbrance, grant of an option, purchase, conveyance, or exchange of property.

“(b) Settling an account of a fiduciary.

“(c) Authorizing, instructing, or directing a fiduciary, or approving or confirming the acts of a fiduciary.

“(d) Directing or allowing payment of a debt, claim, or cost.

“(e) Fixing, authorizing, allowing, or directing payment of compensation or expenses of an attorney.

“(f) Fixing, directing, authorizing, or allowing payment of the compensation or expenses of a fiduciary.

“(g) Surcharging, removing, or discharging a fiduciary.

“(h) Transferring the property of the estate to a fiduciary in another jurisdiction.

“(i) Allowing or denying a petition of the fiduciary to resign.

“(j) Discharging a surety on the bond of a fiduciary.

“(k) Adjudicating the merits of a claim made under Part 19 (commencing with Section 850) of Division 2.“ (§ 1300, italics added.)

^[7] “An action brought under this part may include claims, causes of action, or matters that are normally raised in a civil action to the extent that the matters are related factually to the subject matter of a petition filed under this part.” (§ 855.)

^[8] “(a) The following persons may file a petition requesting that the court make an order under this part: . . . (3) The trustee or any interested person in any of the following cases: (A) Where 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.” (§ 850, subd. (a)(3)(A).)

^[9] “(a) Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust. (b) Proceedings concerning the internal affairs of a trust include, but are not limited to, proceedings for any of the following purposes: . . . (10) Appointing or removing a trustee.” (§ 17200, subds. (a) & (b)(10)

^[10] In Estate of Martin, supra, 72 Cal.App.4th 1438, the probate court order, which not only denied the will beneficiary’s petition to vacate the sale of estate property by the executor, but also determined that the sale “ ‘should not be voided,’ “ and limited the remedy for any impropriety concerning sale to a surcharge on the executor, was in legal effect an order “ ‘[d]irecting, authorizing, approving, or confirming the sale,’ “ which was appealable under section 1300, subdivision (a). (Id. at pp. 1442-1443.)

^[11] In Estate of Miramontes-Najera, supra, 118 Cal.App.4th 750, the surviving spouse filed a petition to set aside the transfers of her community property interest in certain pay-on-death accounts made by her deceased husband without her consent. The trial court denied the petition. The appellate court held that although the Probate Code did not list as appealable orders denying petitions to set aside nonconsensual nonprobate transfers of community property, the orders were appealable under section 1303, subdivision (f), because they were in legal effect “the grant of or refusal to grant an order ‘determining heirship, succession, entitlement, or the persons to whom distribution should be made.’ The orders here determine the distribution of the pay-on-death accounts, and thus fall within the statutorily defined class of appealable orders. [Citation.]” (Id. at p. 755.)

^[12] In accord with California Rules of Court, rule 27(e)(2), respondents support this motion with a declaration of counsel regarding the hours spent preparing the instant motion to dismiss and the billing rate of the attorney performing this task.