Conservatorship of Napier

Filed 7/6/07 Conservatorship of Napier CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION ONE

Laura Jane Napier, a California resident, created an inter vivos trust in 2003, designating herself as trustee and sole lifetime beneficiary. After Laura was placed in a conservatorship, appellant Larry Napier (Napier), a Florida resident, became the trustee. When a dispute arose between Napier and Lauras conservator, respondent Debra J. Dolch, Dolch filed a petition for instructions. Napier appeared specially, arguing that California courts could not assert personal jurisdiction over him because he was a nonresident who had no contacts with California. The trial court rejected his argument and granted the relief requested by the conservator. We affirm.

I. BACKGROUND

The Laura Jane Napier Revocable Living Trust (trust) is an inter vivos trust established in 2003 by Laura, who was the trusts initial trustee. Laura, then and now a resident of Corte Madera, is a widow in her 60s with no living children. She is the trusts sole lifetime beneficiary.

Lauras sister, Mary Margaret Malott, was appointed to serve as a conservator for Laura in October 2004, an appointment necessitated by Lauras bipolar condition. Nominated as first successor trustee in the declaration of trust, Malott also assumed Lauras position as trustee. Her duties as trustee and conservator included overseeing the management of an 11-unit apartment building in San Francisco and the maintenance of Lauras residence in Corte Madera, both owned by the trust, paying Lauras living and medical expenses, and managing other income-producing trust investments. In addition, Malott and her husband engaged in negotiations over a possible sale of the trusts interest in a parcel of real property in Palm Springs. In part because she lives in Virginia, Malott found these duties burdensome and resigned as conservator in February 2005.

Dolch, a professional fiduciary, was appointed to succeed Malott as conservator in February 2005. After the two other persons named as successor trustees in the trust declaration declined to take over for Malott, Napier agreed to become trustee. He is Lauras brother and a resident of Florida. Pursuant to authority granted by the trust instrument, Malott appointed him successor trustee in April 2005.

In November 2005, Malott petitioned in Marin County Superior Court for approval and settlement of her first and final accounting as trustee. Although, as noted, Malott was a resident of Virginia during the time she served as trustee, the petition was filed in Marin County because, the petition noted, When [Laura] created the [trust] and transferred all of her real property to herself as Trustee, the principal place of administration of the trust was at her residence in Corte Madera, California. Petitioner submits to the jurisdiction of this court as the appropriate place for settling the accounts and passing upon the acts of the Trustee as Marin County is the location where the trust was created and originally administered. The sole current beneficiary is a resident of Marin County. She is under a conservatorship in Marin County. Therefore, any issues concerning the Trust should be resolved in Superior Court of California located in Marin County where [Laura] resides. The Declaration of Trust requires that the Trust be administered . . . in accordance with the laws of the State of California.^[[1]] This can most easily be done in a California Court. In January 2006, the probate court entered an order finding that it had jurisdiction, approving the accounting, settling the trust, and noting that all assets had been turned over to Napier as the successor trustee.

On April 10, 2006, Dolch served an ex parte petition for instructions asking that Napier be required to pay $100,000 from the trust to provide for Lauras immediate living expenses and to sell or refinance the apartment building to create a source of funds for future expenses. The petition explained that Laura was receiving 24-hour nursing care and had other living expenses totaling nearly $200,000 per year and the assets of the conservatorship were nearly exhausted. According to Dolch, she had discussed the situation with Napier, and he had refused to release any assets to the conservator and had taken no other action to provide for Lauras future expenses. The petition was accompanied by a declaration stating that Dolchs office had given notice of the ex parte petition to Napier and other family members.

The probate court held a hearing the next day. The attorney who appeared on behalf of Laura informed the court that he was also appearing specially for Napier. The attorney argued that because Napier was a Florida resident and administered the trust from Florida, the probate court lacked jurisdiction over him. He further argued that, pursuant to Probate Code section 17002, the place of administration of the trust was now Florida, where Napier lived. The probate court rejected this argument and entered an order granting the requested relief, including directions to sell or refinance the apartment building.[2]

Two weeks later, Napier, again appearing specially, filed an objection to the courts jurisdiction and requested dismissal of the courts supervision of the trust. While this objection was pending decision, Napier filed a notice of appeal of the probate courts order granting the relief requested in Dolchs ex parte petition. On appeal, Napier objects to the courts assertion of personal jurisdiction and contends that he was not given adequate notice of the ex parte hearing.[3]

II. DISCUSSION

A. Personal Jurisdiction[4]

Under Code of Civil Procedure section 410.10, California courts may exercise jurisdiction over nonresidents on any basis not inconsistent with the Constitution of this state or of the United States. The same jurisdictional statute applies to the probate court. (Prob. Code,  17004.) Code of Civil Procedure section 410.10 manifests an intent to exercise the broadest possible jurisdiction, limited only by constitutional considerations. (Sibley v. Superior Court (1976) 16 Cal.3d 442, 445.) In general, the federal Constitution permits a state to exercise jurisdiction over a nonresident defendant if the defendant has sufficient minimum contacts with the forum such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. [Citations.] (Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316.)

Personal jurisdiction may be either general or specific. [Citation.] A nonresident defendant is subject to the forums general jurisdiction where the defendants contacts are  substantial . . . continuous and systematic.  [Citations.] In that situation, the cause of action need not be related to the defendants contacts. [Citations.] Such a defendants contacts with the forum are so wide-ranging that they take the place of physical presence in the forum as a basis for jurisdiction. (Thomson v. Anderson (2003) 113 Cal.App.4th 258, 265266.) Because no evidence was presented that Napier has substantial, systematic contacts with California, however, any assertion of personal jurisdiction over him must be specificthat is, tied to the nature of this particular proceeding.

When determining whether specific jurisdiction exists, courts consider the  relationship among the defendant, the forum, and the litigation. [Citations.] A court may exercise specific jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits [citation]; (2) the controversy is related to or arises out of [the] defendants contacts with the forum [citations]; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice [citations]. (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269.)

The first element, personal availment of the benefits of the jurisdiction, can be based only on a voluntary, affirmative act of the defendant over whom jurisdiction is sought, not on the unilateral acts of others. [I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. (Hanson v. Denckla (1958) 357 U.S. 235, 253 (Hanson); Thomson v. Anderson, supra, 113 Cal.App.4th at p. 265 [ The substantial connection [citations], between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State ].)

We have evidence of only one act by Napier involving California: his acceptance of the trusteeship. Because the trust is connected so substantially to California, however, we conclude that his acceptance of the trusteeship satisfies the purposeful availment element. There is no question that Napiers acceptance of the trusteeship was a voluntary, purposeful act directed at California. Whether or not Napiers activities as trustee cause him to travel to this state, as Malott was required to do, the California-centered nature of this trust inevitably will require Napier to interact extensively with persons and entities located in California, including Laura, her conservator, and the persons involved in managing and maintaining the trusts real estate investments here. Further, Napier necessarily invoked the protections and benefits of California law by accepting the trusteeship. The trust was established by a California settlor, with a California resident as its sole current beneficiary. By its terms, the trust is governed by California law, and it holds three interests in California real estatean apartment building, a private residence, and a partial interest in landas primary assets. California law will regulate Napiers administration of the trust, and any legal issues that arise with respect to the trusts real estate investments will be resolved under our law and in our courts.

Dolchs petition unquestionably satisfies the second element because it is directly related to Napiers contacts with California. He accepted the trusteeship, and this dispute concerns his conduct as trustee.

The third element, that the assertion of jurisdiction must comport with our traditional conception of fair play and substantial justice (Internat. Shoe v. Washington, supra, 326 U.S. at p. 324), means that it is reasonable . . . to require the [defendant] to defend the particular suit which is brought there. (Id. at p. 317.) Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum States interest in adjudicating the dispute, [citation]; the plaintiffs interest in obtaining convenient and effective relief [citation], at least when that interest is not adequately protected by the plaintiffs power to choose the forum, [citation]; the interstate judicial systems interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies [citation]. (World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 292.) In World-Wide Volkswagen, the court summed up these factors as requiring that the defendants conduct and connections with the forum State are such that he should reasonably anticipate being haled into court there. (Id. at p. 297.)

There is little doubt that Napier should reasonably have anticipated being haled into a California court when he accepted the trusteeship of this particular trust. As noted above, the trust is governed by California law, making California an efficient forum for the resolution of disputes. By the time Napier became trustee, the only current beneficiary of the trust, Laura, was already under the supervision of a California court by reason of the conservatorship. Any problem growing out of her relationship with the trust would logically be filed in Marin County Superior Court, which has a substantial interest in ensuring that the trust is properly managed to fund the conservatorship. In addition, the trust was formed in California, and substantial assets of the trust are invested in California real estate. There is no other state with an even remotely comparable interest in or connection with the proper administration of this trust. More than being foreseeable that any dispute with respect to the trust would be filed in California, it is difficult to envision any other forum that might be appropriate for such a dispute.

Napier cites Hanson, a landmark decision in the law of personal jurisdiction, as support for his position, but the distinct differences between this case and Hanson support Californias assertion of personal jurisdiction in these circumstances. In Hanson, also an inter vivos trust dispute, the trust had been created by a Pennsylvania resident, who executed the trust in Delaware and appointed a Delaware trust company as trustee. Several years after creating the trust, the trustor moved to Florida, where she later died. (Hanson, supra, 357 U.S. at pp. 238239.) A dispute over gifts made from the trust resulted in lawsuits filed in both Florida, where several beneficiaries lived, and Delaware. (Id. at pp. 240242.) The Supreme Court overturned the Florida Supreme Courts conclusion that Florida could assert personal jurisdiction over the Delaware trustee. In so doing, the court emphasized both that the trust company conducted no business in Florida and that the trust itself had no connection to Florida. (Id. at pp. 251252.) The trusts only connection with Florida came about when the settlor moved to Florida several years after the trust was executed. The court rejected the argument that this activity by the settlor could be used to support jurisdiction over the trustee, holding that [t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of [the defendants] contact with the forum State. (Id. at p. 253.) Here, by contrast, the trust was firmly embedded in California by the time Napier became involved. Unlike the trust in Hanson, which had no connection to Florida when the Delaware trustee accepted the trusteeship, this trust, at the time Napier agreed to become the trustee, was governed by California law, had been executed in California by a California resident, had as its single beneficiary a California resident placed in a California conservatorship, and owned California real estate as its primary assets. The contacts with California did not result from the unilateral acts of others but were a necessary incident of Napiers acceptance of the trusteeship.

Napier also argues that, under Probate Code section 17002, subdivision (a), the principal place of administration of the trust is now Florida.[5] There is some reason to doubt this. The initial principal place of administration of the trust was California, and we have been provided no evidence that a petition for a change in the place of administration pursuant to Probate Code section 17401 has ever been filed or granted.[6] Nonetheless, we need not decide whether California is no longer the principal place of administration of the trust because such a change would have no jurisdictional implications. Principal place of administration is generally regarded as a doctrine of forum convenience, rather than jurisdiction. (Schuster v. Superior Court (1929) 98 Cal.App. 619, 624; 8 Wests U. Laws Ann. (1998) U. Prob. Code (1969)  7-203, p. 496.) The primary statutory significance of the principal place of administration of a trust under the Probate Code is that it fixes venue within California for proceedings concerning the trust. (Prob. Code,  17005; Estate of Ivy (1994) 22 Cal.App.4th 873, 880 [holding that [t]he proper venue is where the principal place of administration of the trust is located in adjudicating between Los Angeles and Sonoma counties].) Nothing in the Probate Code deprives a California court of jurisdiction that would otherwise exist over a particular proceeding merely because the principal place of administration changes to a location outside California. On the contrary, as noted above, section 17004 permits the court to exercise jurisdiction to the full extent permitted by the Constitution.

Because we find sufficient minimum contacts to support an assertion of personal jurisdiction, we need not address Dolchs claim that in rem jurisdiction would support jurisdiction or that Napier consented to jurisdiction in California pursuant to Probate Code section 17003.

B. Notice of the Ex Parte Hearing

As noted above, Dolch proceeded by way of ex parte application when petitioning for instructions. Napier contends that he was not given adequate notice of the ex parte hearing.

Napier first contends that Dolch did not demonstrate exigent circumstances sufficient to justify proceeding by way of ex parte application, rather than noticed petition. Former California Rules of Court, rule 379(g),[7] in effect at the time, required an ex parte applicant to make an affirmative factual showing in a declaration . . . of irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte. Dolchs verified petition stated that monthly expenses for Laura were approximately $14,00015,000.[8] On March 1, the conservatorships cash had been reduced to $23,000. Because the petition was drafted on April 10, it was reasonable to assume that actual cash remaining at the time of the petition was less. Relative to the foreseeable need, the assets of the conservatorship were, Dolch claimed, nearly exhausted. Dolch also provided evidence that Napiers conduct as trustee had been erratic because he was difficult to reach and did not keep his commitments.

We find no abuse of discretion in the trial courts conclusion that these facts demonstrated sufficient exigency to support ex parte consideration. In light of the trustees history of poor cooperation, a reduction in the conservatorships assets to less than two months expenses created an emergency. Napiers contention that no urgency was demonstrated because there was no representation below that any essential service had been terminated, or would be terminated before the statutory notice period expired takes far too narrow a view of the urgency necessary to justify ex parte treatment.

Laura and Napier also argue more vaguely that their right to due process was violated because notice was completely inadequate. The proof of service submitted by Dolch shows that a telephone message was left for Napier and his attorney prior to 10:00 a.m. the day prior to the hearing, as required by former California Rules of Court, rule 379(b)(1).[9] The petition was subsequently faxed to both of them. Although Napier complains that there was no showing he received the petition prior to the close of business hours, the Rules of Court required only service of papers at the first reasonable opportunity. (Former Cal. Rules of Court, rule 379(h).) In any event, the attorney who had been representing Napier prior to the hearing was served in California with the papers as well. Because Napier and Laura make no further showing that Dolchs notice did not comply with the requirements of relevant rules of court governing ex parte proceedings, we find no grounds for concluding that notice was inadequate or threatened a violation of due process.

III. DISPOSITION

The trial courts order is affirmed.

_________________________

Margulies, J.

We concur:

_________________________

Marchiano, P.J.

_________________________

Swager, J.

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[1] The declaration of trust states, The validity, construction, and all rights under this Declaration shall be governed by the internal laws of the State of California.

[2] In October 2006, Napier filed a petition for a writ of supersedeas seeking a stay of the probate courts order. That petition was denied. Although there were suggestions in the papers submitted with the writ petition that Laura was seeking termination of her conservatorship, we have not been informed of any facts demonstrating that this appeal has been rendered moot.

[3] We reject Dolchs argument that Napiers appeal was filed too late because the trial court had already made a finding that it had jurisdiction over out-of-state trustees in the order settling Malotts first accounting. Regardless of the courts findings, there was no showing that Napier was made a party to that petition or appeared in connection with that hearing.

[4] Ordinarily, the issue of lack of personal jurisdiction is raised by way of a motion to quash service pursuant to Code of Civil Procedure section 418.10, subdivision (a)(1), and review is sought by writ of mandate, rather than appeal, if the motion is denied. (See McCorkle v. City of Los Angeles (1969) 70 Cal.2d 252, 257.) Because Dolch does not challenge Napiers decision to raise the personal jurisdiction issue on appeal of an order rendered on an ex parte petition for instructions, we render no opinion about the application of section 418.10 in these circumstances.

[5] To the extent relevant, Probate Code section 17002, subdivision (a) states, The principal place of administration of the trust is the usual place where the day-to-day activity of the trust is carried on by the trustee or its representative who is primarily responsible for the administration of the trust.

[6] Probate Code section 17401 permits a court to transfer . . . the place of administration of a trust . . . to a jurisdiction outside this state, according to the provisions of Probate Code sections 17402 through 17405.

[7] The same requirement is now found in California Rules of Court, rule 3.1202(c).

[8] Counsel for Laura contends that the application was deficient because it contained no declaration. Because the petition submitted by Dolch was verified, it served the same purpose.

[9] The same requirement is now in California Rules of Court, rule 3.1203(a).