Estate of De Rouen

Filed 4/2/07 Estate of De Rouen CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from an order of the Superior Court of Los Angeles, Bruce E. Mitchell, Commissioner. Affirmed.

Law Office of Kayretha Hale Willis and Kayretha Hale Willis; Ian Noel for Petitioner and Appellant.

Stacker, Hoting & Associates, Patrick C. Stacker and Maria Solomon-Williams for Objectors and Respondents.

____________________________________

Barbara Hines appeals from an order directing her to convey her 50 percent interest in certain real property to the estate of her mother, Josephine De Rouen; removing her as administrator of the estate; and appointing her brother Rufus De Rouen as successor administrator. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Transfer of a Partial Interest in the Family Home to Hines

Josephine owned a home in Los Angeles.[1] In 1989 Josephine was receiving Supplemental Security Income (SSI) and Medicare benefits. Because she was concerned ownership of the home might jeopardize her receipt of these government benefits and to prevent possible creditors from obtaining the home, Josephine asked her son Thomas if he would consent to having title to the home placed in his name with the understanding the property would be distributed evenly among her children after her death. Thomas declined because he was having tax problems and was concerned a lien might be placed on the home if it were placed in his name.

On January 5, 1989 Josephine quitclaimed the home to Hines as her sole and separate property. On July 12, 1991 a second quitclaim deed was executed transferring the property to Josephine and Hines, giving each a 50 percent interest.[2]

2. The Administration of Josephines Estate and Petitions Seeking to Replace Hines as Administrator and to Have Her 50 Percent Interest Conveyed to the Estate

Josephine died intestate on July 20, 2001. On March 20, 2002 Hines filed a petition for probate estimating the value of Josephines home at $154,000; the petition did not indicate the estate only held a 50 percent interest in the home.[3]Hines was appointed administrator of the estate on May 24, 2002. On July 18, 2002 Hines filed an ex parte application for authority to borrow $56,000 to pay her credit card bills and to execute a deed of trust encumbering her 50 percent interest in the home; the application was granted.[4]The final inventory and appraisal filed by Hines on August 14, 2002 listed a 50 percent interest in the home, valued at $70,000, as the estates sole asset.

On May 26, 2004 Hines filed a report of sale and petition for order confirming the sale of the home. The petition stated the estates interest in the home was 50 percent.

On August 27, 2004 James filed a petition for suspension of power and removal of Hines as the estate administrator, asserting Hines had failed to give proper notice of probate hearings, including her ex parte application to borrow $56,000, and had filed incomplete documentation regarding the estates assets; and arguing Hiness 50 percent interest in the home was held in trust for the benefit of the estate. On September 24, 2004 James filed a petition pursuant to Probate Code section 850[5]for an order declaring Hines held her 50 percent interest in the home in constructive trust for the benefit of the estate, directing conveyance of the property to the estate and requiring that Hines return the $56,000 she borrowed against the property and for an accounting of the estates real and personal property in Hiness possession and control. On October 7, 2004 Rufus filed a petition for appointment as successor administrator; on November 24, 2004 James filed a supplement to petition to appoint Rufus as successor administrator.[6]

On December 14, 2004 the probate court (Commissioner Hautpman) suspended Hiness powers as administrator and ordered the petitions to be tried.

3. The Trial

Trial was held on March 22 and 23, 2005. Hines testified she had a conversation with Josephine at the time Josephine first discussed transferring an interest in the property to Hines in which Josephine explained she wanted Hines to have half the home as her separate property because I was helping her, she could depend on me for whatever she needed, and I was there when she needed me. This testimony was in sharp contrast to Hiness deposition testimony in which she stated the only reason she could recall Josephine transferred the home to her was she had been thinking about . . . putting the property in my name with her and that she wanted to do it.[7] Hines also testified at her deposition she could not recall any discussion she may have had with anyone regarding why the second quitclaim deed transferring a 50 percent interest back to Josephine was prepared or the purpose for that transfer. Rufus and Thomas, however, testified at trial they believed Josephine had her name put back on title with Hines because of the familys concerns (also testified to by Bertrina, the widow of Josephines deceased son Edson and mother of David and Michele) Hiness husband would keep the home for himself if Hines predeceased him.

James and Rufus testified Josephine had told them she transferred a 50 percent interest to Hines to protect the estate and her benefits. None of the heirs who provided declarations in this action or testified at trial received notice of Hiness application to borrow $56,000.[8] Several heirs also stated they had not received the August 14, 2002 final inventory and appraisal.

After trial the probate court (Commissioner Mitchell) found, among other things, Josephine had transferred a 50 percent interest to Hines to protect the home from possible creditors and to protect Josephines asset-sensitive government benefits; Hiness interest was held in constructive trust for the benefit of the estate; Hines had a conflict of interest with the other heirs based upon her claim to a 50 percent interest; Hines had repeatedly failed to give proper notice of proceedings, particularly notice to the heirs of her application to borrow $56,000; and Hines had a history of late and deficient status reports and accountings and had been cited by the court for those failures. The court ordered Hines removed as administrator and Rufus appointed as the replacement administrator and directed Hines to repay $39,038.22[9]to the estate and to execute a conveyance of her 50 percent interest in the home to the estate.

CONTENTIONS

Hines contends the probate court lacked jurisdiction to hear the section 850 petition; the section 850 petition is barred by the statute of limitations; insufficient evidence supports the courts finding Hines held the home in trust for the benefit of the estate; and insufficient evidence supports the appointment of Rufus as successor trustee.

DISCUSSION

1. The Probate Court Had Jurisdiction To Hear the Section 850 Petition

Section 850, subdivision (a)(2)(C) and (D),provides that any interested person[10]may file a petition requesting the court make an order regarding property [w]here the decedent died in possession of, or holding title to, real or personal property, and the property or some interest therein is claimed to belong to another and [w]here the decedent died having a claim to real or personal property, title to or possession of which is held by another. This provision is intended to operate as a mechanism for pursuing 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.) (Estate of Myers (2006) 139 Cal.App.4th 434, 440.) Jamess petition falls squarely within section 850s parameters: Josephine died holding legal title to 50 percent of the home, and there is a dispute whether the 50 percent claimed by Hines as her separate property was to be held in trust for the benefit of the estate.

Hines contends, however, the probate court is without jurisdiction because her claim to a 50 percent interest in the home is adverse to the estate and she claims her interest as a stranger to the estate, not as an heir or administrator. (Estate of Hart (1959) 51 Cal.2d 819, 823 [the superior court sitting in the exercise of its probate jurisdiction is without power to determine adverse claims to the properties of an estate in the course of administration when asserted by a stranger to the estate]; Estate of Dabney (1951) 37 Cal.2d 672, 676.) Hines asserts section 850 only provides an alternative remedy to an action in a civil proceeding when the petitioners right to the real property is free from doubt. (ODonnell v. Lutter (1945) 68 Cal.App.2d 376, 385 [the Probate Code sections are permissive and that resort may be had to them in cases where the right of petitioner in the premises is free from doubt].)

The cases upon which Hines relies are no longer good authority. Former section 851.5 (Stats. 1965, ch. 1901, 1, p. 4409), now codified as section 850, was amended in 1972 (Stats. 1972, ch. 641, 1, p. 1192) to abrogate the long-standing rule that the probate court lacked jurisdiction to determine adverse claims to the properties of an estate or to try the question of title to property as between a representative of the estate and strangers to the estate. [Citation.] Indeed, as one commentator analyzed the 1972 amendment: The principal impact of the above amendment is to allow the probate court to determine controversies concerning the title to property where the party asserting an interest is claiming adversely to the estate and not in privity with it.[11] (Estate of Sayles (1982) 130 Cal.App.3d 275, 279 [citing Estate of Dabney, supra, 37 Cal.2d 672 and Estate of Hart, supra, 51 Cal.2d 819 for the abrogated rule].) The probate court had jurisdiction to hear the petition and resolve the dispute over ownership of the home.

2. Sufficient Evidence Supports the Probate Courts Finding Hines Held Her 50
Percent Interestin Trust for the Benefit of the Estate

A constructive trust may be imposed as an equitable remedy whenever the evidence establishes a party has gained property by fraud, breach of trust or other wrongful act: A constructive trust is not a true trust but an equitable remedy available to a plaintiff seeking recovery of specific property in a number of widely differing situations. The cause of action is not based on the establishment of a trust, but consists of the fraud, breach of fiduciary duty, or other act which entitles the plaintiff to some relief. That relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff. (5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, 791, p. 234, original italics.) (Olson v. Toy (1996) 46 Cal.App.4th 818, 823; Martin v. Kehl (1983) 145 Cal.App.3d 228, 237 [A constructive trust is a remedial device primarily created to prevent unjust enrichment; equity compels the restoration to another of property to which the holder thereof is not justly entitled.].) [A] constructive trust may be imposed in practically any situation where there is a wrongful acquisition or detention of property to which another is entitled. (Nelson v. Nevel (1984) 154 Cal.App.3d 132, 139; see generally Civ. Code, 2223 [One who wrongfully detains a thing is an involuntary trustee therefor, for the benefit of the owner.], 2224 [One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.].)[12]

A party attempting to establish the constructive trust must establish the claim by clear and convincing evidence. (Taylor v. Fields (1986) 178 Cal.App.3d 653, 665.) We review the probate courts factual findings for substantial evidence. (Estate of Auen (1994) 30 Cal.App.4th 300, 310.) The clear and convincing standard is a guide for the trier of fact not a standard of appellate review. On appeal the clear and convincing test disappears . . . [and] the usual rule of conflicting evidence is applied, giving full effect to the respondents evidence, however slight, and disregarding the appellants evidence, however strong. (Sheila S. v. Superior Court (2000) 84 Cal.App.4th 872, 880-881.) We review the courts imposition of a constructive trust for abuse of discretion. (GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 878; Hicks v. Clayton (1977) 67 Cal.App.3d 251, 265 [propriety of granting equitable relief in a particular case by way of . . . impressment of a constructive trust, generally rests upon the sound discretion of the trial court exercised in accord with the facts and circumstances of the case].)

The probate court based its finding Josephine had transferred an interest in the home to Hines, not as a gift, but to protect it from possible creditors and to protect her asset-sensitive government benefits in part on testimony from family members that this was her intention and that she had previously asked Thomas to assist in this regard. Hines asserts this testimony is insufficient evidence of Josephines intent because it conflicts with other evidence.

Hines misapprehends the nature of substantial evidence review: To be substantial, evidence need only be of ponderable legal significance, . . . reasonable, credible and of solid value. (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) We resolve all factual conflicts and questions of credibility in favor of the prevailing party and indulge in all legitimate and reasonable inferences to uphold the finding of the trial court if it is supported by substantial evidence . . . . (Schild v. Rubin (1991) 232 Cal.App.3d 755, 762.) If there is substantial evidence, contradicted or uncontradicted, that will support the finding, it must be upheld regardless of whether the evidence is subject to more than one interpretation. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571 [When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court]; Von Beltz v. Stuntman, Inc. (1989) 207 Cal.App.3d 1467, 1481 [reviewing court may not reweigh the evidence].)

The probate court clearly weighed the conflicting evidence and resolved it in favor of the other heirs. In its statement of decision the court explained, The Court finds that [Josephine] placed [Hines] on title to protect the asset from possible creditors, and to protect her various benefits which included Medical, Medicare, and SSI, eligibility for which [is] asset-sensitive. While this issue was disputed, the clear weight of the evidence favored the Petitioners. [Josephine] stated her intention to several family members, and asked others of her children if they would be willing to serve in this capacity. The probate was opened by [Josephine] listing the full interest in the house as an asset of the estate. [Hiness] repeated statements in her deposition that she cannot remember discussions with the mother regarding the purpose of the two deeds are difficult to accept. While it clear that [Hines] assisted her mother and was trusted by her mother, it appears that [Josephine] had affection for her other children as well. James, for example, lived with [Josephine] for the 10 years before her death, and provided companionship and care. The evidence cited by the probate court is of sufficient legal significance as well as reasonable, credible and solid enough to support the judgment in favor of the heirs; and the court did not abuse its discretion in finding Hines held her interest in constructive trust for the benefit of the estate.

Hines also argues that, even if Josephine had initially intended to have Hines hold the property in trust for the benefit of the estate when she quitclaimed the entire house to Hines in 1989, that trust was repudiated when Hines quitclaimed a 50 percent interest back to Josephine because that transfer undermined the premise for the trust ‑‑ to protect Hiness asset-sensitive government benefits and shield the home from creditors. The record amply supports the probate courts rejection of that interpretation of the underlying events. Hines herself could not state why she re-conveyed the 50 percent interest to Josephine in 1991, and there was no evidence refuting the family members testimony Hines did so because of the familys concerns Hiness husband might take the property if Hines pre-deceased him.[13]

3. The Section 850 Petition Is Not Barred by the Statute of Limitations

An action brought pursuant to section 850 is subject to the statute of limitations applicable to the underlying claim. (See Estate of Myers, supra, 139 Cal.App.4th at pp. 439-440 [ 850 petition for fraudulent conveyance]; Parker v. Walker (1992) 5 Cal.App.4th 1173, 1184-1189 [holding Code of Civ. Proc. limitations periods are applicable to actions brought under 850s predecessor, 9860].) Because a constructive trust is a remedy, not a cause of action itself, the applicable statute of limitations in cases involving constructive trusts depends on the nature of the underlying wrong. (Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3 [cause of action seeking imposition of a constructive trust and an accounting . . . is not an independent cause of action but merely a type of remedy for some categories of underlying wrong . . . subject to the statute of limitations governing the nature of the underlying wrong]; see generally 3 Witkin, Cal. Procedure (4th ed. 1997) Actions,  620, p. 797 [analyzing [p]roblem of determining statute of limitations in constructive trust proceedings].)

Regardless of which limitations period is applicable, however, in constructive trust actions when there is no claim of wrongdoing in the original placing of the title in defendants name, the cause of action for a constructive trust does not arise until the transferee repudiates the oral promise or in some other way indicates she is holding the property adversely to the plaintiff in violation of her duty. (Martin v. Kehl, supra, 145 Cal.App.3d at p. 240.) Accordingly, we need not characterize the nature of the underlying wrong at issue or resolve the parties dispute as to the limitations period that properly governs this action in light of the probate courts implied finding the action did not accrue until James learned in the report of sale and petition for order confirming sale that Hines was claiming a 50 percent interest in the home as her separate property ‑‑ a date only four months prior to the filing of the section 850 petition.[14] Substantial evidence supports this finding by the probate court that the petition was timely under the delayed accrual rule.[15] Although Hiness application for authority to borrow $56,000 in July 2002 stated she owned 50 percent of the home and the August 2002 final inventory and appraisal stated the only asset of the estate was a 50 percent interest in the home, there is substantial evidence the heirs did not receive notice of those filings. Moreover, the petition for probate filed on March 20, 2002 valued the estates real property in the amount of $154,000 (the fair value of the home) and did not indicate the estates interest in the home was only 50 percent.[16]

4. Hines Has Forfeited Her Arguments Regarding Her Removal as Administrator and the Appointment of Rufus as the Successor Administrator

In her opening brief on appeal, Hines does not challenge her removal as administrator. Rather, without citation to authority, Hines contends the trial court was not presented with any evidence to support the appointment of Rufus as the successor administrator.[17] In her reply brief Hines abandons this argument and instead asserts for the first time the probate courts grounds for removing her as administrator were not supported by sufficient evidence. We decline to address either contention. Hines has failed to cite any legal authority or the record to support her first argument (Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699-700 [party who fails to cite to legal authority waives argument]; Cal. Rules of Court, rule 8.204(a)(1)(B) & (C)), which in any event appears to be without merit. She has improperly raised the second contention for the first time in her reply brief. (Locke v. Warner Bros., Inc. (1997) 57 Cal.App.4th 354, 368 [appellants failure to raise issue in opening brief ordinarily waives issue on appeal]; Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11 [Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.].)

5. James, Rufus and Micheles Request for Sanctions

In their respondents brief James, Rufus and Michele seek attorney fees and costs incurred to oppose Hiness appeal on the ground it is frivolous. (Code Civ. Proc., 907.) By failing to file a motion and supporting declaration, however, they did not comply with the proper procedure for seeking sanctions. (Cal. Rules of Court, rule 8.276(e)(1) & (2).) Moreover, we cannot conclude the issues Hiness raised are frivolous. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 [[A]n appeal should be held to be frivolous only when it is prosecuted for an improper motive ‑‑ to harass the respondent or delay the effect of an adverse judgment ‑‑ or when it indisputably has no merit.)

DISPOSITION

The order is affirmed. Rufus De Rouen, James De Rouen and Michele De Rouen are to recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

PERLUSS, P. J.

We concur:

JOHNSON, J.

WOODS, J.

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Analysis and review provided by Spring Valley Property line Lawyers.

[1] We will refer to the family members who share the De Rouen surname by their first names, not out of disrespect, but to avoid confusion. (Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.)

[2] The quitclaim deed stated, Barbara A. Hines, a married woman as her sole and separate property hereby REMISE, RELEASE AND FOREVER QUITCLAIM to Josephine De Rouen, a widow and Barbara A. Hines, a married woman as her sole and separate property the home.

[3] The heirs to Josephines estate were Hines (daughter), Martin (son), Helen (daughter), Rufus (son), Calvin (son), Thomas (son), Michele (niece), David (nephew) and Peter (grandson). Josephines husband had predeceased her, as had her sons Edson and Marshall.

[4] Hines had discussed with Thomas and Rufus prior to filing the application that she wanted to borrow $10,000 against the property.

[5] Statutory references are to the Probate Code unless otherwise indicated.

[6] Michele subsequently joined the action as a co-petitioner.

[7] A week before trial Hiness counsel purported to add to Hiness deposition testimony, She also said, she could always count on me to be there when she needed me. And, she trusted my judgment, I was always there for her.

[8] Of the nine heirs, six submitted declarations in support of the petition for suspension and removal of Hines as administrator. Only Helen did not support the petition. Peter was a minor at the time the petition was filed.

[9] The sum $39,038.22 was calculated by deducting valid expenses paid by Hines from the $56,000 borrowed against the property: $11,790.80 for a city repair lien; $2,469.83 for funeral expenses; and one third of the closing costs and brokerage fees for the loan.

[10] Section 48 defines interested person as including [a]n heir, devisee, child, spouse, creditor, beneficiary, and any other person having a property right in or claim against a trust estate or the estate of a decedent which may be affected by the proceeding.

[11] Section 850 has an even broader standing provision than former section 851.5 because it allows any interested party to file a petition; section 851.5 permitted only the executor, administrator or any claimant to file a petition. (Estate of Myers, supra, 139 Cal.App.4th at p. 441.)

[12] Because the probate court, as well as the parties, have referred throughout these proceedings to a constructive trust, we do as well. However, it would appear more accurate to denominate the involuntary trust at issue as a resulting trust because it carried out the inferred intent of the parties. (Martin v. Kehl, supra, 145 Cal.App.3d at p. 238; see generally 5 Scott on Trusts (4th ed. 2001) 404.2, 462.)

[13] Hiness trial testimony that she recalled a conversation before the first quitclaim deed in which Josephine told her she wanted Hines to have half the home because of all Hines had done for her lacks credibility. If that were the case, there would have been no reason for Josephine to have initially quitclaimed the entire house to Hines.

[14] In support of its finding the statute of limitations did not bar the action, the probate court stated, While various family members knew in the early 1990s that [Hines] was on title, they had been assured by [Josephine] that this was to protect the asset for the benefit of the family.

[15] Unless the facts are undisputed, we review the courts finding on the accrual of a cause of action for substantial evidence. (Institoris v. City of Los Angeles (1989) 210 Cal.App.3d 10, 17.)

[16] Although James, Michele and Thomas testified they did not receive the petition for probate, it was stipulated the hearing on the petition was properly noticed because one of the heirs ‑‑ Martin ‑‑ appeared at the hearing to object to Hiness appointment as administrator.

[17]James, Rufus and Michele contend Hiness argument regarding Rufuss appointment as successor administrator lacks merit because he was entitled to priority appointment under section 8461 as Josephines son. ( 8461 [a person in the following relation to the decedent is entitled to appointment as administrator in the following order of priority: [] (a) Surviving spouse or domestic partner . . . . [] (b) Children].)