Estate of Olvera

Filed 6/20/07 Estate of Olvera CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Paulette Barkley, Temporary Judge. (Pursuant to Cal. Const., art. VI, 21.) Affirmed.

The Gray Law Offices and Patricia Mireles for Objector and Appellant.

Charles K. Mills for Petitioner and Respondent.

Introduction

This is a dispute between two sisters, Mary Watkins and Barbara Blanco, over the personal care of their mother, Narcita Olvera, and the management of her funds, which consisted primarily of $54,524 in pension benefits. While providing care for Olvera, Blanco used Olveras funds for her own benefit. Although Blanco sought $744,000 in compensation for providing care and paying Olveras expenses, the trial court ruled against her and ordered her to reimburse the estate. Blanco raises the following claims on appeal: whether the trial court erred in finding that she lacked authority to contract for services as Olveras attorney-in-fact under her power of attorney; if so, whether Blanco was entitled to compensation for those services; and whether the court failed to balance the equities in determining if Blanco should have received some compensation for her services.

We conclude that, regardless of whether Blanco had the authority to contract for services as Olveras attorney-in-fact, substantial evidence in the record supports the trial courts findings that there was no implied contract for services. Based on the facts in this case, equity does not weigh in Blancos favor. We affirm the judgment.

Factual and Procedural History

Olvera had five children, including Mary Watkins and Barbara Blanco. Blanco began providing care for Olvera in 1989, when Olvera came to live with her in Arizona. At the time, Olvera was self-sufficient for the most part. Blanco worked as a bartender at various hotels and taverns from 1990 to 1994. Blancos income and Olveras social security benefits were used to support the household. Blanco shared her home with her daughter and later also with her boyfriend, Donald Jennings.

Blanco and Jennings moved to California in 1994 because of Olveras health. After the move, Blanco stopped working. The family lived on Jenningss income and Olveras social security.

Olveras mental and psychological health continued to decline over the next several years. She was diagnosed with stomach cancer in 1994. She had surgery and then cancer treatments. After her surgery, Olvera required additional care to meet her basic needs. A few months later, Olvera suffered a broken hip and was limited in mobility after her surgery, sometimes requiring a wheelchair. She also suffered from various ailments, including arthritis, osteoporosis, incontinence, diverticulitis, dementia, alcoholism, depression, and dehydration. As her primary caretaker, Blanco assisted Olvera with her basic needs, including meals, laundry, baths, taking her medicine, using the toilet, and making her appointments.

In 1997, Blanco purchased property in Landers, California using Olveras name and credit. Jennings initially loaned Blanco $4,000 for the downpayment to buy the $24,000 house. According to Blanco, she later wrote Jennings a check for $5,000 to repay the loan. Jennings denied any repayment. Blanco later filled out a quitclaim deed turning the property over to herself. She had Olvera sign the deed. Before and after this transfer, Olveras social security benefits and savings were used for the mortgage payments. After living in the Landers home for a brief period of time, Blanco, Jennings, and Olvera moved to Lake Elsinore, California in 2000.

In that year, Watkins discovered that Olvera was entitled to pension benefits through her late husbands membership in the Teamsters Union. Watkins informed Blanco about the pension benefits. Olvera later received checks for a lump sum of $45,146 from Travelers Insurance Company and $4,524 from Prudential Insurance Company. The checks were deposited into two separate bank accounts, a joint account between Olvera and Blanco and another account held by Blanco alone.

In 2001, Blanco had Olvera execute a general power of attorney designating her as Olveras attorney-in-fact. The instrument delegated certain powers and withheld others. Based on the instrument, Blanco was not authorized on Olveras behalf to engage in business operating transactions, make gifts to charities and individuals, or make decisions concerning medical care. Blanco, however, was authorized to act in the following areas: real estate transactions, tangible personal property transactions, banking and other financial transactions, insurance transactions, claims and litigation, personal relationships and affairs, access to safe deposit boxes, and all other matters.

After depositing Olveras pension checks into her accounts, Blanco made various purchases with the money. She spent $4,500 on Lasik eye surgery and $8,000 on a facelift. She used some of the funds to buy a used Jeep. After breaking up with Jennings, Blanco paid $5,000 in attorneys fees to resolve a dispute with him concerning their jointly-owned Lake Elsinore home. She also wrote a $5,000 check to repay Jennings for the downpayment on the Landers house. The funds also were used to pay the mortgage and other expenses. According to Blanco, Olvera gave her the money to buy whatever she wanted.

When Blanco and Jennings separated, Olvera was forced out of the Lake Elsinore house. Olvera moved back to Arizona and lived with her sister for about seven months, shortly before her death. Before she passed away, Blanco went to Arizona and brought Olvera back to California. After being diagnosed again with cancer, Olvera was hospitalized and then released to a skilled nursing facility. Olvera died on March 10, 2004, at the age of 91.

Before Olveras death, on January 6, 2004, Watkins filed a petition to compel Blanco to produce an accounting and to turn over information concerning her use of Olveras funds. Watkins alleged that Blanco misappropriated Olveras funds for her own personal use. Blanco objected to the request for an accounting and denied the allegation. In her declaration, Blanco explained that she used some of the funds from their joint account for her own use and benefit in lieu [of] any compensation.

On May 28, 2004, the court ordered Blanco to file within 60 days an accounting for Olveras property from the date of the power of attorney and produce information pertaining to the use of the property. Blanco did not respond to the courts order.

On August 11, 2004, Watkins filed another petition in probate court against Blanco for damages and to turn over real and personal property to Olveras estate. Watkins alleged that any transfers of real and personal property were the result of undue influence. Blanco allegedly brought Olvera into her home in order to have access to her social security income and her pension. Watkins also alleged that Blanco isolated Olvera and subjected Olvera to emotional abuse.

A few weeks later, Blanco filed a creditors claim for $744,000 in compensation for care giving services and expenses from 1989 to 2004. On January 28, 2005, Blanco also filed a cross-claim against Olveras estate for services rendered and quantum meruit. In her declaration in support of her cross-claim, Blanco stated that Olvera told her to take the money for herself because of her care giving services.

Watkins answered the cross-claim and argued that no amount was due because any services rendered to Olvera were rendered without the expectation of payment.

The court consolidated the petitions and cross-claim on August 25, 2005. After considering the parties evidence and arguments, the court found that Blanco took advantage of her position of trust by spending Olveras pension money and obtaining title to the Landers property. The court also found that there was no evidence to support Blancos argument of a prior agreement or understanding between her and Olvera concerning compensation. The court granted Watkins petition and denied Blancos cross-claim. The court ordered that title to the Landers property be returned to Olveras estate. The court also ordered Blanco to turn over $54,524, less the amount paid toward the Landers property.

Discussion

Blanco seems to argue that the court erred in finding that she was not entitled to compensation based on an express or implied contract for services. Although Blanco raises a few specific complaints, her arguments mischaracterize the courts findings and rulings.^[1] We will address them only if relevant to our review of the courts actual finding that there was no prior agreement between Blanco and Olvera.

As noted by Watkins, Blanco does not challenge the trial courts other factual findings, including its finding of undue influence. Blancos complaints are directed solely at the courts finding that she was not entitled to compensation based on a prior agreement.

There is a general presumption that a person who renders continuous personal services, even without a written agreement, is entitled to receive compensation for the reasonable value of the services. (Winder v. Winder (1941) 18 Cal.2d 123, 127.) The opposite is true, however, when the services are rendered to a close relative or a member of the same household. (Ibid.; Eklund v. Eklund (1946) 76 Cal.App.2d 389, 392; Newbert v. McCarthy (1923) 190 Cal. 723, 724.) In fact, [t]he relationship between the parties may repel the idea of contract. (Winder, supra, at p. 127, citing Murdock v. Murdock (1857) 7 Cal. 511.) In these situations, at the time the services were rendered, the services may have been intended to be gratuitous, or prompted by kindness, familial affection, or other similar motivation. (See Newbert, supra, at p. 442; see also In re Giambastianis Estate (1934) 1 Cal.App.2d 639, 644.) Services originally intended as such cannot later form the basis of a demand for payment. (Ibid.)

The person seeking payment for personal services bears the burden of showing either an express or implied contract. (Winder v. Winder, supra, 18 Cal.2d at pp. 127-128.) Of course, if there was an express contract, the person who rendered services is entitled to payment. (Murdock v. Murdock, supra, 7 Cal. at pp. 513-514.) And, even if the parties to the contract failed to specify an amount, a reasonable amount will be assumed. (Id. at p. 514.)

In the absence of an express contract, however, the right of the person to recover payment for services rendered rests on the existence of an implied contract. (Murdock v. Murdock, supra, 7 Cal. at p. 514.) The existence of an implied contract is determined by considering all the circumstances of a particular case to ascertain the parties intent. (Ibid.) The parties intent, therefore, is the controlling factor. (Winder v. Winder, supra, 18 Cal.2d at pp. 127-128; Bean v. Wilson (1953) 120 Cal.App.2d 58, In re Giambastianis Estate, supra, 1 Cal.App.2d at p. 644.) If, at the time the services were rendered, the person performed the services out of affection for the other, and without expectation of remuneration or return, that person has no right to demand payment at some later time. (Giambastianis Estate, supra, at p. 644.)

To warrant the finding of an implied contract, . . . the elements of intention to pay on the one hand, and expectation of compensation on the other, must be found to exist; but such elements, like other ultimate facts, may be inferred from the relation and situation of the parties, the nature and character of the services rendered, and any other facts or circumstances which may reasonably be said to throw any light upon the question at issue. (Winder v. Winder, supra, 18 Cal.2d at p. 128.)

The question of the parties intentions or expectations is a question of fact for the court. The courts determination therefore must be upheld if supported by substantial evidence. (Baker v. Solari (1958) 166 Cal.App.2d 472, 474; see also Conservatorship of Ramirez (2001) 90 Cal.App.4th 390, 401; In re Edwards Estate (1959) 173 Cal.App.2d 705, 711.) In applying the substantial evidence test, we review the entire record in the light most favorable to affirming the trial courts rulings and resolve all conflicts in the evidence and draw all reasonable inferences necessary for the courts findings. (Ramirez, supra, at p. 401.) Even if the circumstances are consistent with a contrary finding, we cannot substitute our own conclusions for that of the trial court and must uphold the trial courts finding if supported by substantial evidence. (See In re Giambastianis Estate, supra, 1 Cal.App.2d at p. 644.)

In this case, substantial evidence supported the courts finding. The evidence showed that Blanco deposited Olveras pension proceeds into her accounts, one of which she shared with Olvera, and used the money as if it were her own. There was no credible evidence that the money was received as compensation for personal services. Specifically, as discussed below, there was no evidence that there was an implied contract between Olvera and Blanco that Blanco would be entitled to the use of Olveras pension funds in exchange for her services. Also, there was no evidence that Blanco contracted with herself, as Olveras attorney-in-fact, to meet Olveras personal needs.

The evidence in the record shows that Blanco brought Olvera into her household in 1989 and provided care for her mother according to her mothers needs. Olvera did not pay for the services and Blanco had no reason to expect compensation. At the time, Olvera had only her social security income, which was used to pay for some of the household expenses. Olvera did not receive the pension proceeds until 2002.

The evidence shows that, after receiving the pension checks and depositing them into the bank accounts, Blanco continued to care for her mother as before. There was no agreement that Blanco would be entitled to use the pension money as compensation for her services. Blanco repeatedly testified that Olvera gave her the money and that she simply used the money as if it were her own. Blancos testimony that the money was a gift is inconsistent with her claim that the money was intended as payment for her services. (See Keene v. Keene (1962) 57 Cal.2d 657, 668.)

Because Olveras pension proceeds were deposited into a joint account between Olvera and Blanco and another account held solely by Blanco, Blanco had full access to Olveras money. With this money, Blanco spent $4,500 on Lasik eye surgery, $8,000 on a facelift, and an unspecified sum on a vehicle. She spent $5,000 to resolve a personal dispute with Jennings. She also used Olveras credit to purchase the Landers property and Olveras money to repay Jennings for the downpayment and to pay the monthly mortgage payments.

Blancos son and his girlfriend, Kara Flint, lived with Blanco at various times. Flints testimony also indicated that Blanco spent Olveras money as if it were her own. In describing Blancos spending habits, Flint explained: If we couldnt afford it, thats okay. She took out grams [Olveras] checkbook when we went to the mall. Its okay, its my moms check. Thats why I have power of attorney. . . . Lets buy this. Flint described Blanco as an alcoholic who often subjected the other members of the household, including Olvera, to verbal and emotional abuse.

According to Flints testimony, Blanco felt entitled to the money because she was the only one who took care of Olvera. The question, however, was not Blancos subjective opinion as to what she felt entitled to, but whether Olvera had the intention to pay her and whether Blanco had the expectation of payment at the time she rendered the services based on a prior agreement. (In re Giambastianis Estate, supra, 1 Cal.App.2d at p. 644; see also Crane v. Derrick (1910) 157 Cal. 667, 672.) As stated above, there was no evidence of a prior agreement for compensation between Olvera and Blanco.

Furthermore, even if Blanco had the power to contract for care giving services on her mothers behalf as her attorney-in-fact,^[2]there still was no evidence of a contract. Blanco seems to be arguing that, while acting both as Olveras attorney-in-fact and as Olveras paid caregiver, she contracted with herself to provide care giving services. Under the facts in this case, Blanco has failed to show that she was operating under any kind of agreement, whether it be one directly made with Olvera or one made by her on Olveras behalf.

The relationship between the parties in this case supports the finding that the parties did not intend to exchange services for payment. This case involved a daughter caring for her elderly mother. In such cases the relationship existing between the parties, as parent and child, stepparent and stepchild, brother and sister, and the life, is itself strong negative proof that no remuneration was intended. (Newbert v. McCarthy, supra, 190 Cal. at p. 726.) The evidence above shows that Blanco provided care for her mother for years without any expectation of return and, even after learning about the pension proceeds, continued to provide care. While one child may be called upon to make greater sacrifices, the services provided by Blanco are of a character that one child ordinarily would expect to render to an ailing parent without compensation. (Ibid.; Crane v. Derrick, supra, 157 Cal. at pp. 672-673.)

In light of the presumption against payment, it was incumbent upon Blanco to establish the existence of an agreement. If Blanco expected compensation for her services, she should have consulted an attorney, created a formal agreement, or otherwise safeguarded against potential conflicts of interest. An attorney-in-fact has a duty to act solely in the interest of the principal and to avoid conflicts of interest. (Prob. Code, 4232, subd. (a).) Nothing in the record confirms Blancos self-serving assertion that she contracted with herself to provide care for her mother.

Blanco began providing care in 1989, and thereafter Olvera executed the general power of attorney in July 2001. She, therefore, did not have the authority to enter a contract on Olveras behalf. Also, Blanco testified that, when Olvera executed the power of attorney, she was unaware of the pension. At that point, then, Blanco also could not have expected the pension proceeds to provide payment for her services. After depositing the pension checks, as described above, the record shows that Blanco simply used the money as if the power of attorney somehow entitled her to the unlimited use of Olveras funds.

The Probate Code, however, safeguards against such self-dealing and abuse of power. (See, e.g., Prob. Code, 4128, 4232, 4233, 4236.) Probate Code section 4233 specifically provides that, [t]he attorney-in-fact shall keep the principals property separate and distinct from other property in a manner adequate to identify the property clearly as belonging to the principal. Section 4236, subdivision (a) also provides, [t]he attorney-in-fact shall keep records of all transactions entered into by the attorney-in-fact on behalf of the principal. In this case, although Blanco conveniently asserts that she was acting as Olveras attorney-in-fact, she failed to comply with these statutory requirements by separating Olveras pension proceeds from her own personal accounts and keeping a record of all transactions entered into on Olveras behalf. Blanco cannot defend her actions as covered under her authority as Olveras attorney-in-fact when she failed to perform her fiduciary duties. The presumption against the payment for these services as between a parent and child thus applies and Blanco has failed to establish otherwise.

As noted by the court, had Blanco not mismanaged Olveras money, Olvera may not have been forced to leave her home in California and depend on the hospitality of a sister in Arizona during the last months of her life. Rather than acting solely for the benefit of Olvera as required under Probate Code section 4232, the record shows that Blanco deprived Olvera of the small amount saved for her by her late husband by spending most of it on herself.

Under the facts in this case, Blancos argument that the trial court did not balance the equities to award her restitution for her services is utterly devoid of merit. Aside from the fact that restitution implies a contract, equity does not weigh in favor of a daughter who asserts undue influence upon an ailing mother who was dependent upon her for care. (See Beckmann v. Beckmann (1959) 174 Cal.App.2d 717, 721.) The court properly balanced the equities in denying Blancos request for compensation and ordering her to reimburse the estate.^[3]

Disposition

We affirm the judgment. Watkins shall recover her costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

s/Ramirez

P.J.

We concur:

s/Richli

J.

s/Miller

J.

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^[1] For instance, Blanco claims that the court found that she was not entitled to compensation for personal services because it created a rule that compensation is allowed only for the care of those in poor health. But the court made no such rule. The court denied compensation because there was no prior agreement. The court further noted that Blancos request for $744,000 was not justified by the evidence, including the level of care required to meet Blancos needs. This was not a novel statement of law, but an observation concerning the facts. This argument fails because it mischaracterizes the courts ruling. (See Baize v. Eastridge Companies (2006) 142 Cal.App.4th 293, 303-304.)

^[2] Probate Code section 4123, subdivision (a), allows the principal to authorize an attorney-in-fact to act on the principals behalf with regard to the principals property, personal care, and other matters.

^[3] In challenging the courts ruling on equitable grounds, Blanco further contends that the court should have ordered that she convey the Landers property to Jenkins, who provided the downpayment. Because substantial evidence supported the courts finding that the funds to reimburse Jenkins and pay the monthly mortgage were taken from Olveras accounts, the court appropriately returned the property to Olveras estate after reimbursing Jenkins for his contributions.