Wolber v. Bank of America

Filed 3/15/07 Wolber v. Bank of America CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Marjorie Laird Carter, Judge. Affirmed.

Law Offices of Lawrence M. Lebowsky and Lawrence M. Lebowsky for Plaintiff and Appellant.

Sheppard Mullin Richter & Hampton, Randolph B. Godshall and Karin Dougan Vogel for Defendant and Respondent.

* * *

This thorny matter involves two trusts, three probate proceedings in two states, and two litigious factions of natural grandchildren versus adopted grandchildren. Bank of America, N.A. (the Bank) was the trustee holding over $11 million dollars in California trust assets, subject to a trust established in 1937. It did not distribute the assets until 16 months after the date of death of the Colorado life beneficiary, having waited until the expiration date for the filing of a will contest in the ancillary probate in California. Richard Wolber (Wolber), the California executor of the life beneficiarys will, has sued the Bank for breach of fiduciary duty. He alleges that the Bank dragged its feet in distributing the trust assets and he seeks compensation for the diminution in value of the assets during the 16-month period. Wolber also claims that the Bank took a termination fee to which it was not entitled. The court entered judgment in favor of the Bank and Wolber appeals.

We affirm the judgment. The Bank, duly concerned about ongoing litigation between the two sets of grandchildren over the assets of a different trust, established in 1954, exercised due caution in the distribution of the $11 million in assets in the trust at issue here. Substantial evidence supports the trial courts finding that the Bank did not breach its fiduciary duty in waiting for the expiration of the will contest filing deadline in California before effectuating the distribution. Also, Wolber has failed to show that the court erred in confirming a fee to the Bank.

I

FACTS

A. Identification of Trusts and Beneficiaries:

(1) 1937 Trust

Jacob Paley (the Trustor) established a trust on November 27, 1937. On November 2, 1950, he completely amended the trust (as amended, the 1937 Trust). The Trustor gave his adopted daughter, Jacqueline Paley (Paley), a life estate under the 1937 Trust. He also granted Paley a testamentary power of appointment to dispose of the remainder of the trust estate on her death. The Trustor further provided that if Paley failed to exercise the testamentary power of appointment, then the remainder of the trust estate would pass to Paleys issue.

(2) 1954 Contested Trust

The Trustor created a second trust in 1954 (the 1954 Trust). (Ehrenclou v. MacDonald (2004) 117 Cal.App.4th 364, 367.) That trust was divided into separate shares upon the Trustors death. One of the shares was set aside for Paley for her lifetime. The 1954 Trust provided that upon the death of Paley, her share was to be distributed by the trustees to her then living lawful issue per stirpes. (Ibid.)

The issue ultimately arose as to the persons considered to be Paleys then living lawful issue, considering that she had two natural children and two children that she had adopted as adults in 1992. (Ehrenclou v. MacDonald, supra, 117 Cal.App.4th

at p. 367.) Martine Ehrenclou (Ehrenclou) and Konrad M. Bors (Bors) were Paleys natural children and Steven MacDonald (MacDonald) and Cynthia Hutt (Hutt) were her adopted children. Upon Paleys death in 2001, Ehrenclou and Bors petitioned the court to be declared Paleys sole living lawful issue, so as not to have to share the available 1954 Trust assets with MacDonald and Hutt. (Ibid.) In a complex opinion detailing the fine technicalities of applicable California and Colorado laws, this court concluded that Ehrenclou and Bors were indeed Paleys sole living lawful issue, entitled to take the entirety of Paleys share under the 1954 Trust. (Id. at p. 377.)

(3) Jacqueline Paley Will and Testamentary Power of Appointment

In her will, Paley stated that she was married to Wolber, and that she had two natural children and two adopted children. Paley expressly stated that she had adopted MacDonald and Hutt for the purpose of including them as her lawful issue to take property under the 1954 Trust upon her death. In addition, she had the foresight to provide that if MacDonald and Hutt were nonetheless determined to be ineligible to take a share of the 1954 Trust, she would then give to each of them one-fourth of her residuary estate.

In her will, Paley exercised her testamentary power of appointment, under the 1937 Trust, in favor of her estate. Also, she named Wolber, Hutt, and her accountant, Elliott Friedman (Friedman), as the co-personal representatives of her estate.

Paley clearly had anticipated the problem that eventually came about when, upon her death, litigation arose over whether MacDonald and Hutt would be permitted to take under the 1954 Trust. This court having resolved that issue in the negative, the question then became whether any challenge would arise to their taking their designated shares under Paleys will.

B. Three Probate Proceedings:

(1) Informal Colorado probate

Paley died in Colorado, where she resided, on May 16, 2001. In June 2001, Wolber, Hutt and Friedman applied to the court in Colorado for the informal probate of Paleys will and for their appointment as co-personal representatives of her estate. They were so appointed by the court on June 22, 2001, and letters testamentary issued on that date.

By letter dated August 13, 2001, the co-personal representatives demanded that the assets of the 1937 Trust be distributed in kind to the estates securities broker. Thereafter, by letter of September 14, 2001, counsel for the co-personal representatives contacted counsel for the Bank, again seeking the distribution of the 1937 Trust assets.

(2) Formal Colorado probate

The 1937 Trust was being administered in California, and the Banks California trust officer decided to retain Colorado counsel to assist with the matter. The Banks Colorado counsel recommended that the informal probate proceedings be converted to formal probate proceedings. The co-personal representatives reluctantly agreed.

On November 16, 2001, Wolber, Hutt and Friedman filed, in the existing probate proceeding, a petition for formal probate of will. By order of December 10, 2001, the court admitted the will to formal probate and confirmed the prior appointment of Wolber, Hutt and Friedman as co-personal representatives. The parties anticipated that the 1937 Trust assets would be distributed immediately after December 10, 2002, at which time the one-year period for bringing a will contest under Colorado law would have expired.

(3) Ancillary California probate

The 1937 Trust assets were not, of course, the only assets to be handled on Paleys death. Paley held other assets outside of trust. It came to the attention of Wolber, Hutt and Friedman that Paley held approximately $400,000 in checking and savings accounts at a Bank branch in Brentwood, California. They consulted California counsel, who told them that an ancillary probate in California would be required to clear title to those assets. This issue was addressed with counsel for the Bank.

The Bank then gave consideration to whether the 1937 Trust assets should also pass through the ancillary probate in California. The Bank came to the conclusion that they should, and notified the co-personal representatives. In a February 27, 2002 letter to counsel for the co-personal representatives, the Banks counsel explained the benefits of the ancillary probate as follows: Since an ancillary administration is needed in all events for the California bank accounts, there should be no prejudice to the persons interested in the decedents estate in having the Paley 1937 Trust assets administered in the same ancillary proceeding. Indeed, by promptly initiating an ancillary administration in California, the California personal representatives of the decedents 1997 Will can gain possession of the trust assets more quickly than was earlier anticipated for the Colorado personal representatives. Under California law, absent extrinsic fraud the order admitting the decedents 1997 Will to probate becomes final and conclusive if no postprobate contest is filed within 120 days after the will is admitted to probate. (California Probate Code sections 8007; 8226; and 8270.) Thus, absent a preprobate or postprobate contest of the decedents 1997 Will, the California personal representatives could be appointed in the ancillary proceedings and gain possession of the Paley 1937 Trust assets well before the earlier anticipated date of December 11, 2002.

On May 24, 2002, a California probate court entered an order for probate and issued letters testamentary to Wolber as executor of Paleys will. Shortly thereafter, Wolber demanded that the Bank turn over all 1937 Trust assets. The Bank responded that it would distribute the assets after September 18, 2002 the date the 120-day period for filing a will contest in the ancillary probate was to expire.

C. Wolbers Lawsuit:

On September 13, 2002, Wolber, as executor of Paleys will, filed a lawsuit in which he sought orders directing the Bank to distribute the 1937 Trust assets to Paleys estate and to pay a surcharge as redress for breach of trust. The Bank delivered the assets to the Paley estates blocked account on September 27, 2002. However, Wolber continued to press his suit.

Following trial, judgment was entered in favor of the Bank. Wolber appeals.

II

DISCUSSION

A. Requests for Judicial Notice:

As a preliminary matter, we note that Wolber, on March 20, 2006, filed a request for judicial notice in which he asked this court to take notice of certain Colorado statutes, out-of-state cases and other items. By order filed April 5, 2006, we granted that request. On December 11, 2006, Wolber filed a supplemental request for judicial notice, in which he asked us to take notice of certain additional Colorado statutes and out-of-state cases. We hereby grant that supplemental request. This court will take notice of the documents attached to the supplemental request for judicial notice filed December 11, 2006.

B. Introduction:

The gist of Wolbers lengthy argument is that the Bank delayed 16 months in distributing the 1937 Trust assets in order to churn fees. In essence, he argues the Bank threw up one artificial road block after another, making a new demand every time the last demand was met, all for self gain. He also claims that, while the Bank was playing this game, the trust corpus lost over $1 million in value. Wolber reminds us that the Bank, as a trustee, is a fiduciary with a duty to the beneficiaries to wind up the trust and make final distribution expeditiously. (Prob. Code,  16202 [trustee has fiduciary duties]; Rest.2d Trusts,  345, com. e, p. 195 [re duty to wind up expeditiously]; cf. Botsford v. Haskins & Sells (1978) 81 Cal.App.3d 780, 784-787 [distribution is one of trustees duties].) He also reminds us that a trustee must avoid conflicts of interest. (Prob. Code,  16004.) Wolber claims that the Bank breached its fiduciary duty by failing to distribute the 1937 Trust assets upon the opening of the informal Colorado probate and by favoring itself instead through the continued incurrence of fees.

The Bank acknowledges that it is a fiduciary and that it had a duty to wind up the 1937 Trust and to distribute the trust corpus to the correct beneficiaries. It emphasizes that it had a duty to transfer [the] property to the proper persons. (Botsford v. Haskins & Sells, supra, 81 Cal.App.3d at p. 786, italics added.) The Bank stresses the rule that [i]f the trustee conveys trust property to a person who is not entitled to it, the trustee is liable to the beneficiary even though he reasonably believes that the person to whom he conveys the property is the beneficiary or that the conveyance was authorized or directed by the beneficiary. (Rest.2d Trusts,  345, com. j, p. 197; see Botsford v. Haskins & Sells, supra, 81 Cal.App.3d at pp. 784-785 [applying the Rest.2d Trusts in California].) The Bank also underscores the rule that the trustee is not liable for breach of trust merely because he does not immediately convey the trust property to the beneficiary entitled to it. The duty of the trustee is to proceed to wind up the trust within such time as under all the circumstances is reasonably required for the

purpose. . . . [] . . . [] . . . The trustee is entitled to take such time and such steps as are reasonably necessary for the protection of the interests of the beneficiary and for the trustees own protection. (Rest.2d Trusts,  345, com. e, pp. 194-195.)

Given these rules, the Bank argues that it fulfilled its obligations as trustee to the best of its ability by taking all necessary steps to ensure that the trust assets were distributed to the correct beneficiaries. It explains its great concern that, given the litigation over the 1954 Trust, Ehrenclou and Bors would wage a will contest to invalidate Paleys will and the gifts thereunder in favor of MacDonald and Hutt. The Banks bottom line, in evaluating how to proceed under each of the three probate proceedings, was that it would not distribute the 1937 Trust assets under any of those three proceedings until the time for filing a will contest had expired in the respective proceeding and the beneficiaries entitled to distribution had been finally determined. The Bank maintains that the earliest expiration date under any of the proceedings was under the ancillary probate in California and that it distributed shortly after that date.

C. Breach of Fiduciary Duty:

(1) Potential will contest as basis for concern

(a) Estate of Miller

Wolber insists that the Banks concern about whether a will contest might be brought was not a proper basis for delaying distribution of the 1937 Trust assets. He cites Estate of Miller (1963) 212 Cal.App.2d 284 in support of his position.

In Estate of Miller, supra, 212 Cal.App.2d 284, probate proceedings were commenced with respect to a will that provided for division of the estate into three shares, one for each of the testators daughters. The share of one daughter, Miriam, was to be held in trust. (Id. at p. 287.) Miriam filed a civil action alleging that the testator and her predeceased husband had entered into a contract to make reciprocal wills, wherein each daughter would receive her share free of trust. The executor of the will filed a petition in the probate proceedings, seeking an order for a preliminary distribution in three equal shares, one to himself as trustee for Miriam and one to each of the other two daughters. (Id. at pp. 287-288.) The court denied the petition for a preliminary distribution to the trustee, out of a concern that someone might one day assert that Miriam had violated the in terrorem clause contained in the will by filing the civil action. (Id. at pp. 292, 297.) The appellate court reversed the order. In so doing, it stated: The court has refused preliminary distribution to the testamentary trustee on the sole ground that someone may possibly file and litigate a claim that Miriam has forfeited her rights under the will. Such contention has not been made, and it may never be made. The timely administration of an estate should not be delayed because of the mere possibility that some future event might affect the rights of a distributee. (Id. at p. 297.)

Wolber latches onto this language and asserts that it means distribution should never be held up on the notion that a challenge such as a will contest might one day be brought. However, he overlooks the fact that the Miller court specifically stated that the time for filing a will contest had passed. (Estate of Miller, supra, 212 Cal.App.2d at p. 297.) The court did not address the question of whether distributions should be made before the time for filing a will contest has expired. Rather, in framing the language in question, the court was addressing the issue of civil actions being filed outside of probate proceedings. The case is inapposite.

(b) Colorado statutes

Wolber cites additional authority in support of his argument that the Bank had no reason for concern about a potential will contest. He insists that Colorado law would have protected the Bank had it made distribution to the co-personal representatives on entry of the June 22, 2001 Colorado order for informal probate. Wolber cites Colorado Revised Statutes section 15-12-714, which provides in pertinent part: (1) A person who in good faith either assists a personal representative or deals with him for value is protected as if the personal representative properly exercised his power. . . . A person is not bound to see to the proper application of estate assets paid or delivered to a personal representative. . . . (Colo. Rev. Stats.,  15-12-714.) However, Wolber cites no case construing this statute to mean that a trustee, who is bound by law to distribute assets to the correct trust beneficiaries, is exonerated from that duty upon delivering the assets to a personal representative under an informal probate proceeding, prior to the expiration date for a possible will contest and thus prior to the time the trust beneficiaries are finally determined.

When the Bank learned of the order for informal probate, its Colorado counsel informed it that [t]he informal procedure involves a nonadjudicative determination of the validity of a will and the formal procedure involves the judicial determination of the validity of a will after notice to all interested parties. (See Colo. Rev. Stats.,  15-12-102 [differentiating between an informal probate by the registrar and an adjudication of probate by the court].) Citing Colorado Revised Statutes section 15-12-108,^[1]Colorado counsel also informed the Bank that if the informal probate was continued, any order concerning the [Paley] Will or the exercise of the Power of Appointment could be challenged at any time within three years of death. In other words, Paleys will could be held invalid almost three years after Wolber, Hutt and Friedman were appointed to execute its terms. To avoid this possibility, the Banks Colorado counsel, as indicated previously, recommended converting the informal probate to a formal probate, thereby taking advantage of the shorter, one-year limitations period for bringing a will contest in a formal probate. (See Colo. Rev. Stats.,  15-12-412.)^[2]

Although the co-personal representatives, relying on Colorado Revised Statutes section 15-12-714, did not believe that a formal probate was necessary for the Banks protection, they reluctantly agreed to open one.^[3] Their counsel stated in a confirming letter that it was agreed that the Estate would be opened formally and that after one year the Will could no longer be contested and the funds would be distributed to the Estate. The Order admitting the Will to formal probate was entered on December 10, 2001. As the Bank asserts, once Wolber agreed to open a formal probate on the understanding that the 1937 Trust assets would be distributed after December 10, 2002, he can hardly complain now that the Bank breached its fiduciary duty by failing to distribute into the informal probate on receipt of the June 22, 2001 order. Moreover, the Bank, by distributing on September 27, 2002, through the ancillary probate proceedings, distributed months earlier than the date agreed upon for distribution under the Colorado formal probate proceedings.

(c) availability of petition for instructions

As the foregoing shows, the Bank chose to rely on its Colorado counsel, to carry out its duty to make certain that the assets were distributed to the correct trust beneficiaries after those beneficiaries were finally determined, and to avoid buying a lawsuit from Ehrenclou and Bors several years down the line. Wolber continues to think the Banks concerns were unfounded and, in any event, could have been resolved more expeditiously. He says that rather than insisting on waiting for the expiration of a will contest period, the Bank should have filed a petition for instructions. (See Rest.2d Trusts,  345, com. j, p. 197 [petition for instructions available when trustee uncertain as to person to whom to make conveyance].) Yet at the same time, Wolber admits he has found no California authority that would have required the Bank to file a petition for instructions. What the Bank did was consult legal counsel as to how to proceed. Wolber cites no authority for the proposition that this was an imprudent or unreasonable way for the Bank to obtain the advice it needed.

(2) Requirement of ancillary probate

Wolber maintains that the Bank breached its fiduciary duty by ignoring the Colorado order commencing the informal probate. He insists that the Banks demand for an ancillary probate in California was just one more ill-founded excuse to hold onto the 1937 Trust assets and churn fees. However, as we shall show, the Bank had good reason for concern that an ancillary probate in California was required.

When the Bank informed the co-personal representatives that an ancillary probate was necessary, it gave a detailed explanation as to why. The Bank noted that California Probate Code section 12570 permits California assets to be collected by a sister state personal representative by use of an affidavit procedure, and without the need for an ancillary probate, but only when the requirements of California Probate Code section 13100 are met.^[4] (All further statutory references are to the California Probate Code, except as otherwise specifically noted.) Section 13100 applies when, excluding certain specified property, the gross value of the decedents real and personal property in this state does not exceed one hundred thousand dollars ($100,000) . . . . The Bank reasoned that, since Paley held more than $400,000 in her bank accounts in California, an ancillary probate would be required to clear title to those assets.

In addition, the Bank concluded that the 1937 Trust assets were subject to ancillary administration as well. The Bank observed that section 13005 defines a decedents property to include property that becomes part of the decedents estate on the decedents death . . . . The Bank reminded the co-personal representatives that Paley had specifically stated in her will that the 1937 Trust assets would become part of her estate on her death. It further explained that if the Paley will were ultimately determined to be valid, the 1937 Trust assets would become her property on her death. Pursuant to section 13500, those assets, being administered in California, were to be counted in determining the total value of Paleys property in this state and therefore the availability of the affidavit procedure to clear title. Since the value of the 1937 Trust assets that became Paleys property on her death well exceeded the $100,000 limit under section 13100, the affidavit procedure was not available to clear title to those assets. Therefore, the Bank deduced, those assets were required to pass through an ancillary probate.

Wolber maintains that this analysis is flawed. According to Wolber, the 1937 Trust assets were not California assets at all, so the California statutes were inapplicable. Wolber reasons that when Paley exercised her power of appointment in favor of her estate, she appointed the property to her Colorado estate, not to her California estate, inasmuch as Paley lived in Colorado and expressed her intention that her estate be administered in an administrative, not a judicial, proceeding under the Colorado Probate Code. However, just because Paley had hoped that her beneficiaries would be spared a judicial administration and that an informal proceeding in Colorado would suffice, this does not mean either that her hopes would come to fruition or that she could dictate the requirements of law in either Colorado or California.

More importantly, Wolber cites no authority addressing the situs of trust assets administered in California on behalf of a nondomiciliary life beneficiary, with the exception of a misguided citation to section 13050, subdivision (a)(1). Section 13050, subdivision (a)(1) states, (a) For the purposes of this part: [] (1) Any property or interest . . . which, at the time of the decedents death, was held by the decedent as a joint tenant, or in which the decedent had a life or other interest terminable upon the decedents death . . . , shall be excluded in determining the property or estate of the decedent or its value. . . . The statute makes clear that it applies to California Probate Code, division 8, part 1, sections 13000 to 13210, pertaining to the collection or transfer of small estates without formal administration. The effect of section 13050, subdivision (a)(1), with respect to a decedent who was a life beneficiary of a trust and who held only a small amount of property outside of trust, is to provide that the trust corpus will be excluded from the determination of the total value of the decedents property on death, in order to permit summary administration of the decedents nominal non-trust assets. Section 13050 does not state that a decedents property in this state is defined to exclude a trust corpus in all circumstances, however. It does not, for example, provide that when a life beneficiary domiciled in California dies, having properly appointed a trust corpus to his or her estate, that trust corpus is nonetheless excluded from the estate in all events. Similarly, it does not address the treatment of a trust corpus when a life beneficiary domiciled outside of the state dies, holding non-trust assets too large in value to be collected or transferred through the summary administration procedures of sections 13000 to 13210. Contrary to Wolbers assertion, section 13050, subdivision (a)(1) simply does not govern the situation before us.

The real issue, however, is not whether the Bank was right or wrong in its legal analysis, but whether it breached its fiduciary duty to the trust beneficiaries by urging Wolber to open an ancillary probate in California. The Bank acknowledges that it had a fiduciary duty to the trust beneficiaries and that, as a professional trustee, it had a heightened duty of care. The Bank concedes that a trustee who is a layman must discharge his or her duties with that degree of prudence and diligence which a man of ordinary judgment would be expected to bestow upon his own affairs of a like nature. [Citations.] However, as a bank engaged in the business of acting as a fiduciary for estates and trusts [citations], [it is liable] to exercise the skill and knowledge ordinarily possessed by such professional fiduciaries. [Citations.] (Estate of Beach (1975) 15 Cal.3d 623, 631.)

Here, the Bank prudently sought the advice of legal counsel on how to proceed. Counsel for the Bank specifically stated to counsel for the co-personal representatives: We have accordingly advised the [Bank] that, under California law, the [Bank] is not permitted to distribute the assets of the . . . 1937 Trust to the Colorado executors of [Paleys] 1997 Will, and that such assets must instead be subject to an ancillary administration in California (assuming the validity of [Paleys] exercise of her power of appointment in the 1997 Will, which subjects the trust assets to probate in the first instance). (Underscoring omitted.) Wolber has not explained how the Bank, in exercising the skill and knowledge ordinarily possessed by professional trustees, could have disregarded the pointed advice of legal counsel, when backed up by a well reasoned legal analysis, and failed to request that he open an ancillary probate. This is particularly true when an ancillary probate for Paleys California bank accounts was required in any event and when the Bank was able to distribute more than a year and a half earlier under the ancillary probate than it would have under the informal Colorado probate, given the differences in the limitations periods for the filing of will contests.

It is Wolbers burden, as the appellant, to demonstrate reversible error. (Del Real v. City of Riverside(2002) 95 Cal.App.4th 761, 766.) He has not shown us that the trial court erred in finding no breach of fiduciary duty in this context.

(3) Full faith and credit:

Although Wolber asserts that the ancillary probate was unnecessary, at least with respect to the 1937 Trust assets, he also maintains that once it was opened, it required that the June 22, 2001 Colorado order admitting the Paley will to probate be given full faith and credit. What this means, he says, is that both the California court and the Bank were required to treat the will admitted to ancillary probate as a will that already had been determined to be valid. Thus, the Bank had a fiduciary duty to make distribution as soon as the ancillary probate was opened, without waiting for the expiration of the 120-day will contest period. He cites Thorley v. Superior Court (1978) 78 Cal.App.3d 900 in support of his position.

Thorley v. Superior Court, supra, 78 Cal.App.3d 900 involved two competing wills presented for probate in two different states. A will executed in Utah in 1975 was submitted for probate in that state and a will contest was filed in opposition. Similarly, a will executed in California in 1964 was submitted for probate in this state and, again, a will contest was filed in opposition. (Id. at pp. 902-903.) Before a trial was held on the California will contest, the Utah will contest proceeded to trial and judgment was entered determining the Utah will to be valid. (Id. at pp. 903-904.) The proponent of the Utah will then moved the California court to stay the proceedings before it, to vacate the trial setting, and to admit the Utah will to probate for ancillary administration. The California court denied the motions and the proponent of the Utah will sought extraordinary writ relief. (Id. at p. 904.)

At the outset, the court in Thorley v. Superior Court, supra, 78 Cal.App.3d 900 stated: It is well settled that the principle of full faith and credit requires only that a valid judgment of one state be given the same effect in a sister state as it would have in the rendering state [citation]; a judgment need not be given greater effect abroad than it enjoys at home. . . . [] As a corollary of this broader principle, [a] judgment will not be recognized or enforced in other states insofar as it is not a final determination under the local law of the state of rendition. [Citation.] (Id. at p. 906.)

In ascertaining whether the Utah judgment was entitled to full faith and credit in California, then, the Thorley court stated that the analysis began with a determination of whether the judgment was final under Utah law. (Thorley v. Superior Court, supra, 78 Cal.App.3d at p. 906.) The Thorley court observed that, under Utah law, the judgment was enforceable immediately upon entry of judgment. While Utah law did provide than an appeal could be taken and a stay could be obtained upon the giving of a bond, at the time the motions were made, no evidence of any appeal or any stay had been presented to the trial court. (Id. at p. 907.) Therefore, because the Utah judgment was final under Utah law, it had to be regarded as final for the purposes of giving full faith and credit to that judgment in California. (Ibid.) The Thorley court issued a peremptory writ of mandate compelling the lower court to vacate the orders denying the motion to stay and the motion to vacate the trial setting. (Id. at pp. 911-912.)

However, the Thorley court held that the order denying the motion to admit the Utah will to ancillary probate was not erroneous, although it based that holding on reasoning different from that of the lower court. The Thorley court concluded that since the Utah judgment was, by the time of the California appellate proceedings, on appeal to the Utah Supreme Court, it was proper to delay admitting the will to ancillary probate until such time as the Utah appeal was decided. (Thorley v. Superior Court, supra, 78 Cal.App.3d at pp. 911-912.) Otherwise, the California court could wind up enforcing the Utah judgment only to learn that the judgment was later overturned. (Ibid.)

Applying Thorley v. Superior Court, supra, 78 Cal.App.3d 900 to the facts before us, Wolber says we must first look to Colorado law to determine whether the June 22, 2001 order for probate was final, and thus entitled to full faith and credit in California. Wolber points us to Colorado Rules of Civil Procedure, rule 62(a), which provides that no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of fifteen days after its entry . . . . He also cites Colorado Rules of Civil Procedure, rule 62(b),(d) concerning stays. Wolber concludes that the June 22, 2001 Colorado order was final and enforceable on the date of the hearing on his petition for an ancillary probate in California, inasmuch as more than 15 days had expired since the entry of the Colorado order and there had been no stay. He contends that, under similar circumstances, the Thorley court held the sister state judgment was entitled to full faith and credit.

Wolbers analysis is correct as far as it goes. However, Wolber overlooks a major distinction between the facts before us and those in Thorley v. Superior Court, supra, 78 Cal.App.3d 900. In Thorley, by the date of the motions in question, a full blown will contest already had been waged and a trial on the validity of the will had been completed. Although the judgment could have been reversed on appeal, absent appeal, it could not otherwise have been attacked. The Thorley court underscored the significance of the completed will contest by stating: Public policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest; and that matters once tried shall be considered forever settled as between the parties. We see no reason why this doctrine should not apply in every case where one voluntarily appears, presents his case and is fully heard, and why he should not, in the absence of fraud, be thereafter concluded by the judgment of the tribunal to which he has submitted his cause. [Citation.] The full faith and credit clause is designed to avoid relitigation of domicile and multiplicity to which [the proponent of the Utah will] would be subjected if the proceedings to probate the California will went forward. (Thorley v. Superior Court, supra, 78 Cal.App.3d at p. 911.)

In contrast to Thorley v. Superior Court, supra, 78 Cal.App.3d 900, in the case before us, the Banks whole concern was that, although the will had been admitted to probate in Colorado, the validity of the will nonetheless remained subject to challenge under Colorado law, by means of a postprobate will contest. Furthermore, unlike the situation in Thorley, in the matter before us the will sought to be admitted to probate in the sister state was the same will that was sought to be admitted to probate in California. The two sets of proceedings sought to do exactly the same thing, i.e., to have Paleys will admitted to probate. The point of the California probate, with respect to the 1937 Trust assets, was to have that will become incontestable at the earliest possible time, not to ace out the Colorado court and have a different will fully adjudicated to be valid and incontestable. Thorley does not dictate that the June 22, 2001 Colorado order should have been construed as a final determination that the Paley will was free from attack by will contest.

(4) Applicability of California 120-day Will Contest Period:

Next, Wolber says there was simply no reason to avoid distributing the 1937 Trust assets for 120 days after the entry of the California order for probate, because the 120-day contest period was inapplicable under the circumstances. Wolber claims that the Paley will was admitted to probate pursuant to section 12522.

Section 12522 provides in pertinent part: If a will of a nondomiciliary decedent was admitted to probate, or established or proved, in accordance with the laws of a sister state, the court shall admit the will to probate in this state, and may not permit a contest or revocation of probate, unless one or more of the following are shown: [] . . . [] (c) The determination in the sister state is not final. Wolber interprets this language to mean that once the will is admitted to probate pursuant to section 12522, there can be no subsequent will contest.

However, as Wolber admits, there is more than one way to open an ancillary probate in California. Section 12520 provides as follows: (a) If a nondomiciliary decedents will has been admitted to probate in a sister state . . . and satisfies the requirements of this article, probate of the will in an ancillary administration proceeding is governed by this article. [] (b) If a nondomiciliary decedents will has been admitted to probate in a sister state . . . , but does not satisfy the requirements of this article, the will may be probated in an ancillary administration proceeding pursuant to Part 2 (commencing with Section 8000). Further as Wolber admits, if the will is admitted to probate pursuant to section 8000, a will contest may be brought under section 8270 within 120 days thereafter, under specified circumstances. The Bank claims that this is indeed a section 8000 probate, to which the 120-day will contest provision of section 8270 applies.

The record is inconclusive on the matter. However, it favors the Banks position. We observe that neither the California order for probate nor the California letters testamentary give any indication that the proceedings constitute a probate under section 12522, as opposed to a probate under section 8000. To the contrary, the order for probate states that the will was admitted to probate by minute order dated May 21, 2002. This is not the date that the will was admitted to probate under either the informal proceeding or the formal proceeding in Colorado. Furthermore, there is no attachment to the order for probate showing that the Colorado court had admitted the Paley will to probate and reflecting that the California court was giving full faith and credit to a Colorado order, as is customary when an ancillary probate is opened under section 12522. (See Ross, Cal. Practice Guide: Probate (The Rutter Group 2006) [] 14:379.1, p. 14-76.2 [re form of order for ancillary probate].)

In addition, Wolber has failed to provide this court with a copy of the petition for probate, which would indicate whether he even sought to proceed under section 12522 rather than section 8000. (See Ross, Cal. Practice Guide: Probate (The Rutter Group 2006) [] [] 14:368 to 14:371, p. 14-76 [re form of petition for ancillary probate].) Had he sought to initiate proceedings under section 8000, this would have satisfied the Banks stated objective of obtaining the shortest possible will contest deadline and would have ensured the Banks distribution at the end of the 120-day period. Whether this is what Wolber did, or not, we do not know.

Again, it is Wolbers burden to demonstrate reversible error. (Del Real v. City of Riverside, supra, 95 Cal.App.4th at p. 766.) He has not met that burden in this case.

(5) Conclusion:

As the foregoing shows, the Bank responded appropriately at each turn. When informed that an informal probate proceeding had been opened in Colorado, the Bank hired Colorado counsel to render advice on how to proceed. When Colorado counsel recommended that the proceedings be converted from an informal probate to a formal probate, the Bank relayed the recommendation to the co-personal representatives and secured their agreement to the same. The Bank was understandably concerned that Ehrenclou and Bors might bring another will contest and it wanted to make certain that the 1937 Trust assets were distributed to the correct beneficiaries as finally determined by the court.

When it was drawn to the Banks attention that Paley held bank accounts in California, the Bank evaluated whether an ancillary probate in California would be the most expeditious way to get the 1937 Trust assets distributed and, with the advice of California legal counsel, concluded that it would. When the 120-day period for a will contest expired under California law, the Bank distributed the 1937 Trust assets, months earlier than it would have under the Colorado formal probate and more than a year and a half earlier than it would have under the Colorado informal probate. There is substantial evidence to support the trial courts finding that the Bank did not breach its fiduciary duty by failing to distribute the 1937 Trust assets earlier. (Cf. Estate of Beach, supra, 15 Cal.3d at p. 631; Conservatorship of Pelton (1982) 132 Cal.App.3d 496, 502-503.)

Given this, we need not address Wolbers arguments concerning liability for damages for breach of fiduciary duty or concerning the expert testimony of Thomas Casey. In addition, we do not address Wolbers arguments concerning the application of Colorado Revised Statutes section 15-12-413 and Colorado Rules of Probate Procedure, rule 8.8 to non-appearance hearings, and the significance of California Probate Code section 5000 et seq. Inasmuch as he raised these arguments for the first time in his reply brief, the arguments are deemed waived. (Schubert v. Reynolds, supra, 95 Cal.App.4th

at p. 108; Reichardt v. Hoffman, supra, 52 Cal.App.4th at p. 764.)

D. Termination Fee:

In addition to arguing that the Bank wrongfully delayed in distributing the 1937 Trust assets, Wolber asserts on appeal that the Bank wrongfully paid itself a termination fee on final distribution of the trust assets. As Wolber points out, the 1937 Trust provided that the trustee thereof was to receive compensation for its services. The trust instrument specified that the trustee was to pay itself certain amounts at certain times, including: on every distribution of principal hereunder one per cent (1%) of the reasonable value of the Trust Estate distributed . . . . As Wolber also notes, a representative of the Bank acknowledged at trial that the Bank took a fee of approximately $104,000 on final distribution. The court found only $80,279 to be a reasonable fee and confirmed that amount to the Bank.

On appeal, Wolber contends that the court failed to address his argument that the Bank was not entitled to any fee at all, i.e., that the 1 percent fee only applied to distributions made during the ongoing administration of the trust, not on distribution. However, he fails to support his argument with citation to any portion of the record showing what arguments he made with respect to the 1 percent fee at trial. Therefore, his argument is waived. (Del Real v. City of Riverside, supra, 95 Cal.App.4th at p. 768.)

Wolber also maintains that the court erred in addressing the reasonableness of the fee, when the parties had not argued reasonableness, and in stating that the Bank had taken an excessive fee in the amount of $94,000, when the Bank had in fact taken a fee of $104,000. Whether or not the court erred in addressing the reasonableness of the fee or in stating that the Bank had taken a $94,000 fee, any error is harmless. The court reduced the amount of the fee the Bank had taken, and Wolber has not explained how this constitutes prejudicial error warranting a reversal of the judgment. (See Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574 [no reversal for harmless error].)

III

DISPOSITION

Wolbers supplemental request for judicial notice, filed December 11, 2006, is granted. The judgment is affirmed. The Bank shall recover its costs on appeal.

MOORE, J.

WE CONCUR:

OLEARY, ACTING P. J.

FYBEL, J.

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^[1] Colorado Revised Statutes section 15-12-108, subdivision (1)(c) provides: A proceeding to contest an informally probated will and to secure appointment of the person with legal priority for appointment in the event the contest is successful may be commenced within the later of twelve months from the informal probate or three years from the decedents death.

^[2] Colorado Revised Statutes section 15-12-412 provides in pertinent part: (1) Subject to appeal and subject to vacation as provided in this section . . . , a formal testacy order . . . is final as to all persons . . . ; except that: [] . . . [] (c) A petition for vacation

. . . must be filed prior to the earlier of the following time limits: [] . . . [] (III) Twelve months after the entry of the order sought to be vacated.

^[3] There is no indication that the co-personal representatives cited Colorado Revised Statutes section 15-1-203 to the Bank. There is also no indication that Wolber cited the statute to the trial court, inasmuch as he did not mention it in his trial brief. Having cited the statute for the first time in his reply brief, Wolber has waived his arguments based thereon. (Schubert v. Reynolds (2002) 95 Cal.App.4th 100, 108; Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.)

^[4] California Probate Code section 12570 provides: If a nondomiciliary decedents property in this state satisfies the requirements of Section 13100, a sister state personal representative may, without petitioning for ancillary administration, use the affidavit procedure provided by Chapter 3 (commencing with Section 13100) of Part 1 of Division 8 to collect personal property of the decedent.