Griggs v. Temps

Filed 3/16/07 Griggs v. Temps 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

APPEAL from the Superior Court of Riverside County. James A. Cox, Judge. Affirmed.

Russell L. Davis and Mary P. Kelly for Plaintiff and Appellant.

Lynch Crowell & Associates and David Justin Lynch for Defendants and Respondents.

This appeal concerns three siblings and the effect of a no-contest clause contained in their parents living trust. ( 21320.)^[1] The trial court ruled plaintiffs proposed petition would constitute a contest of the trust. We affirm.

I

FACTUAL AND PROCEDURAL BACKGROUND

A. Facts

Thomas and Flo Griggs were the parents of Eleanor Thomasine Griggs, Thomas Griggs, Jr., and Bonnie Griggs Temps.^[2] Thomas, Sr., and Flo first established a revocable living trust in 1996. The original trust provided that, upon the death of both parents, the trust estate was to be distributed in equal shares to the three children. The trust was amended twice, in December 1998 and March 1999. The second amendment revoked the first amendment and changed the ultimate distribution of the estate, making a specific distribution of $50,000 to Eleanor and distributing the balance of the estate in equal shares to Thomas Jr. and Bonnie.

The original version of the trust contained a no-contest clause: If any Beneficiary under this Trust shall contest, in any court, the validity of any part of this Trust Agreement, or of Trustors Last Will, then in such event such Beneficiary shall forfeit his or her share, cease to have any right or interest in the Trust Property, and shall be deemed to have predeceased the Trustor, without issue.

Thomas and Flo died in September 2001 and March 2002, respectively, leaving an estate valued at about $1 million dollars.

B. Procedural History

In August 2002, Eleanor filed a verified application seeking a judicial determination that her proposed petition for breach of an oral agreement would not violate the no-contest clause. The petition alleged that, in early 1987, Thomas and Flo promised Eleanor that, in exchange for her taking care of them, they would bequeath one-third of their estate to her. In 1995, they promised they would bequeath more than one-third of the estate to her and she would not have to work for the rest of her life. Eleanor undertook their care and consequently made choices that prevented her from becoming financially secure or remarrying. The petition seeks to enforce the parents oral promises. Eleanor reasoned the petition for enforcement would not violate the trusts no-contest clause because it did not attack the validity of the trust but instead sought to enforce an independent oral promise for a particular testamentary disposition.

In support of her application, Eleanor submitted evidence that her parents gave her $26,000 and $20,000 in the 1970s. Eleanor contends the first trust amendment was meant to clarify the $46,000 was a gift and did not have to be repaid to the parents estate. She also claims the second amendment was initiated by Thomas Jr. to cause her to be effectively disinherited.

Thomas Jr. and Bonnie filed a response to the section 21320 application and also prematurely filed a response to the proposed petition.

Subsequently, in September 2003, Eleanor filed an amended verified application seeking the same relief based on substantially the same allegations as previously. In a subsequent declaration, she explained that she had been married and divorced three times and had one son, who was born in 1957 and died in 1995. Between 1975 and 1978, she cared for her parents after Flo suffered a serious back injury. In 1983, Eleanor spent several months caring for Thomas, Sr., after he suffered a subdural hematoma. Beginning in 1987, Eleanor assumed full responsibility for her parents care. Thomas, Jr. did not assist her.

After a hearing, the court ruled the proposed petition, except for Eleanors claim to certain itemized items of personal property, would violate the no-contest clause by thwarting the trustors intent to give her $50,000.

II

ANALYSIS

The parties agree and we concur that the appellate standard of review is de novo. (In re Estate of Davies (2005) 127 Cal.App.4th 1164, 1173, citing Burch v. George (1994) 7 Cal.4th 246, 254.)

In her appeal, Eleanor makes two principal points: one, that the subject no-contest clause is narrow in its effect and only prohibits judicial action expressly challenging the trusts validity; and, two, that her proposed petition does not contest the validity of the trust but, instead, seeks to impose a constructive trust based on a binding oral promise to make a testamentary disposition. We disagree with both contentions.

The no-contest clause prohibits a contest, in any court of the validity of any part of this Trust Agreement. Between 1990 and 2002, former section 21300, subdivision (a), defined contest to mean an attack in a proceeding on an instrument or on a provision in an instrument.

In 2002, section 21300 was amended and now defines a contest as being direct or indirect, which, in turn, are defined as follows:

(b) Direct contest . . . means a pleading in a proceeding in any court alleging the invalidity of an instrument or one or more of its terms based on one or more of the following grounds:

(1) Revocation.

(2) Lack of capacity.

(3) Fraud.

(4) Misrepresentation.

(5) Menace.

(6) Duress.

(7) Undue influence.

(8) Mistake.

(9) Lack of due execution.

(10) Forgery.

(c) Indirect contest means a pleading in a proceeding in any court that indirectly challenges the validity of an instrument or one or more of its terms based on any other ground not contained in subdivision (b), and that does not contain any of those grounds.

Eleanors proposed petition, seeking to enforce her parents purported oral promises or, alternatively, to obtain quantum meruit for the value of her caretaking services, qualifies as a contest under either version of section 21300 because it indirectly challenges the trusts express disposition of the parents estate. Instead of receiving $50,000 as determined by the trust, Eleanor seeks to obtain one-third or more of her parents estate. As such, she proposes to file a proceeding that attacks the validity of a provision or term of the trust.

We are not persuaded by Eleanors arguments relying upon several cases, one of which did not involve a no-contest clause. In Estate of Watson (1986) 177 Cal.App.3d 569, a father died leaving a small bequest to his two daughters and the rest of his estate to the daughters stepmother. The stepmother died leaving nothing to the daughters. The daughters sued the beneficiaries of their stepmothers estate for breach of contract, constructive trust, and injunctive relief, alleging that the father left his property to the stepmother, except for a small bequest to his daughters, based on an agreement the stepmother would bequeath the property to the daughters when she died. The stepmothers beneficiaries cross-complained, alleging the daughters lawsuit violated the no-contest clause of their fathers will.

The appellate court reversed the trial courts judgment against the daughters, holding the daughters lawsuit did not challenge the provisions or the disposition of their fathers will: Here, the daughters do not seek a distribution based on the terms of the will itself or to establish that the will is any way invalid, e.g., due to fraud or undue influence [citation] but rather seek enforcement of a separate and distinct oral agreement. As such, their creditors claim and complaint are based on a source of right independent of the will. [Citations.] [] Nor does it appear the daughters filing of the creditors claim and complaint to enforce the oral agreement is designed to result in the thwarting of the testators wishes as expressed in his will. [Citation.] (Estate of Watson, supra, 177 Cal.App.3d at p. 573.)

The instant case is factually distinguishable from Watson because Eleanor, unlike the Watson daughters, challenges the validity of the distribution of the trust estate and seeks to thwart her parents wishes as expressed in the trust.

Two earlier cases are Ludwicki v. Guerin (1961) 57 Cal.2d 127, and In re Millers Estate (1963) 212 Cal.App.2d 284. Ludwicki involved the breach of a recorded, written contract to make a will and did not involve the effect of a no-contest clause, a case quite different factually from the present one. Miller concerned a mothers disposition in three equal shares to two of her children directly and to one child in trust. The court held the third child could properly receive her share directly without invoking the no-contest clause -- once again presenting quite different circumstances from the present case.

Nor do we find support for Eleanors arguments in Varney v. Superior Court (1992) 10 Cal.App.4th 1092. In that case, petitioner Varney asserted an agreement with Magdaleno to own and operate a restaurant. Varney would receive reduced compensation and Magdaleno would bequeath his residence and the restaurant to Varney. Magdaleno died and left nothing to Varney. (Id. at p. 1097.) The appellate court held Varneys creditors claim did not violate the no-contest clause for the following reasons: Magdalenos will leaves a specified percentage of his estate to several persons. Petitioners proposed action seeks recovery of specific property under an alleged oral contract. [P]etitioner is not seeking to impose a constructive trust on specific bequests left to other beneficiaries, nor is he attempting to achieve a result contrary to Magdalenos will or a prior agreement between Magdaleno and himself. Rather, he seeks to enforce a contract that is independent of the will. A successful conclusion to petitioners . . . petition would not affect the other beneficiaries right to recover the percentage of the estate left to them by the will. (Id. at p. 1107.)

In Varney, Varney received nothing under the will. In the present case, Eleanor is entitled to $50,000 under the trust. Also Eleanor specifically seeks to impose a constructive trust on the assets of the trust estate and achieve a result contrary to the dispositions made under the trust. Although the other two siblings might still be entitled to one-third of what remained of the estate after Eleanors claims were satisfied, their shares would be significantly diminished in comparison to hers.

Additionally, we conclude the subject no-contest clause is broad in scope, not narrow as urged by Eleanor. The clause itself refers to a contest in any court of the validity of any part of the trust agreement. The statute in effect when the trust was created defines contest to mean an attack in a proceeding on an instrument or a provision in an instrument. Broad, general language, as used in the subject clause and the statute, encompasses both direct and indirect attacks and does not logically exclude indirect attacks on the trusts plan of distribution allowing Eleanor $50,000, instead of one-third or more of the estate. (Burch v. George, supra, 7 Cal.4th at pp. 260-261; Nairne v. Jessop-Humblet (2002) 101 Cal.App.4th 1124, 1127.)

The outcome of Eleanors arguments, if she were to prevail ultimately in her claims, is she might receive at least one-third of her parents estate. Based on the trust, she would also receive $50,000, giving her the greater share of the estate than her two siblings. Unquestionably, such a result would violate the parents intent as expressed both in the original trust and the amended trust. (Burch v. George, supra, 7 Cal.4th at p. 255.) Under the original trust, Eleanor received one-third of the estate. Under the amended trust, she received $50,000. Neither version of the trust contemplated Eleanor receiving one-third or more of the estate plus an additional $50,000.

III

DISPOSITION

We affirm the judgment. The prevailing parties shall recover their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

s/Richli

J.

We concur:

s/McKinster

Acting P. J.

s/King

J.

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^[1] All statutory references are to the Probate Code unless stated otherwise.

^[2] For ease of reference, we will use first names.