Hill v. Perez

Filed 10/22/07 Hill v. Perez CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SIXTH APPELLATE DISTRICT

Petitioner Yvonne Hill (petitioner) is a beneficiary of the Dorothy L. Hill 1998 Revocable Trust (Trust). Petitioner appeals from the trial courts order denying her petition to set aside a 2006 amendment to the Trust. We concur with the trial court that the petition was untimely, and affirm the order.

BACKGROUND

Dorothy L. Hill (decedent) executed the Trust on November 13, 1998, and first amended it on April 2, 2004. She executed a second amendment to the Trust on January 10, 2006. Decedent passed away on February 4, 2006.

The 2006 amendment designates respondent Kelin Taylor (respondent) as successor trustee of the Trust. Under the terms of the amendment, petitioner (decedents daughter) is entitled to 70 percent of the funds in decedents Franklin Templeton Investments Fund. One of decedents grandsons, Tyler Lloyd Hill-Hoffman, is entitled to the remaining 30 percent. The balance of the trust estate is to be divided equally between respondent Joseph Perez (decedents grandson) and respondent. This allocation of assets differs from the original terms of the Trust and from the first amendment to the trust.

The Trust contains a no contest clause, unaltered by the second amendment. Article Ten, Paragraph F of the Trust states that if any beneficiary contests the validity of the Trust in court, then that persons right to take any interest given to him or her by this trust shall be determined as it would have been determined if the person had predeceased the execution of this declaration of trust without surviving issue.

On March 7, 2006, respondent, as successor trustee of the Trust, mailed a copy of the Trust and an accompanying notification to each of decedents beneficiaries and heirs, including petitioner. The notification complied with Probate Code section 16061.7,[1] which sets forth the form of notice required when a trust becomes irrevocable. Pursuant to subdivision (h) of section 16061.7, the notification included the following statement in bold-faced type and 13-point font: You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is mailed or personally delivered to you during that 120 day period, whichever is later. This provision highlights the 120-day limitations period set forth in section 16061.8. Under the terms of section 16061.8, July 5, 2006 was the deadline to contest the Trust.

On May 16, 2006 (70 days after service of the notification), petitioners counsel wrote respondents counsel to request an opportunity to inspect the records of the Trust and to make copies of those documents relevant to petitioners interest in the Trust. Respondents counsel telephoned petitioners counsel and informed her that the trust records would be made available for her inspection and review. In late June, petitioners counsel coordinated a date (June 30) for inspection of the requested information.[2]

On June 30, 2006, petitioners counsel inspected the available records relating to the Franklin Templeton Investments Fund, including the current bank statements. Respondents counsel also answered a number of questions regarding the Trust, its assets, and the withdrawal of funds from the investment account. Petitioner decided to contest the Trust, and the petition was prepared on July 3, 2006. However, due to petitioners personal circumstances at the time, petitioner did not meet with her counsel until July 6, 2006. The petition was filed that day, one day past the 120-day deadline.

Respondent, as successor trustee, opposed the petition. She argued, among other things, that the petition is time-barred and that petitioner is thus prohibited from pursuing the petition or any other legal action against the Trust. In response, petitioner contended that respondent failed to fulfill her statutory duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration[,] that petitioner was prejudiced by this failure, and that the court should exercise its discretion to allow the petition to proceed despite the lapse of the limitations period. Both parties submitted attorney declarations as support.

At the hearing on the matter, the trial court observed: And my understanding is that this particular statute is a very unforgiving statute, as compared to other statutes, where excusable neglect and other kinds of things are easily allowed, and I almost always find excusable neglect. I dont have that discretion in this case. If I did, I would. I dont. Its black and white, as I understand the law. The court explained that equitable estoppel, in contrast, was an available defense to the strict application of the limitations period but that the court found no evidence to support such a claim.[3] The trial court therefore concluded that the petition was time barred by the applicable statute of limitations period pursuant to Probate Code Sections 16061.7 and 16061.8 and ordered petitioner to file a dismissal with prejudice as to her petition.

Petitioner timely appealed from the courts order denying her petition.

DISCUSSION

Section 16061.8 states: No person upon whom the notification by the trustee is served pursuant to this chapter may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him or her, or 60 days from the day on which a copy of the terms of the trust is mailed or personally delivered to him or her during that 120-day period, whichever is later. As noted, there is no dispute that petitioner failed to comply with the 120-day period set forth in section 16061.8 and referenced in the Trust notification mailed to petitioner. Petitioner argues instead that: (1) respondent breached her duty as trustee to provide information regarding the trust assets and administration within a reasonable period of time,[4] (2) this duty was of special importance in this case in which the Trust contained a no contest clause, and (3) respondents failure to fulfill her duty in a timely manner excuses petitioners failure to comply with the limitations period under an excusable neglect theory. To support this argument, petitioner asserts that the limitations period is not  mandatory and jurisdictional, and, thus, the trial court had discretion to excuse noncompliance because petitioner was prejudiced by respondents actions.

Whether strict compliance with the limitations period of section 16061.8 may be excused under an excusable neglect theory is a question of law. Accordingly, we apply the de novo standard of review. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432.)

Section 473, subdivision (b) of the Code of Civil Procedure (hereafter section 473) states, in relevant part: The court may, upon any terms as may be just, relieve a party or his or legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. As our Supreme Court has cautioned, however, [n]otwithstanding the broad construction afforded section 473, subdivision (b), the statute does not offer relief from mandatory deadlines deemed jurisdictional in nature. Thus, section 473, subdivision (b) cannot extend the time in which a party must move for a new trial, since this time limit is considered jurisdictional. Nor does section 473, subdivision (b) generally apply to dismissals attributable to a partys failure to comply with the applicable limitations period in which to institute an action, whether by complaint or by writ petition. (Maynard v. Brandon (2005) 36 Cal.4th 364, 372, internal citations omitted [citing, among others, Castro v. Sacramento County Fire Protection Dist. (1996) 47 Cal.App.4th 927 (Castro) and Hanooka v. Pivko (1994) 22 Cal.App.4th 1553, 1563 (Hanooka)].)

More particularly, [s]tatutes of limitations are generally regarded as inflexible, and are upheld and enforced regardless of personal hardship. However, some limitations statutes provide for an extension of the limitation period on a showing of good cause, which has been interpreted as equivalent to a showing under section 473. Where the statute lacks an explicit provision for extension, it must be inferred the Legislature did not intend to permit relief on grounds of good cause or under section 473. (Hanooka, supra,22 Cal.App.4th at pp. 1561, 1563, internal citations and quotation marks omitted [section 473 did not apply to statute of limitations for medical practice claim or to statutory requirement to give doctor 90 days notice of intent to commence action]; see also Castro, supra, 47 Cal.App.4th at p. 934 [relief is not available under section 473 for dismissal based on failure to comply with requirement that a suit against a public entity be filed within six months of notice that claim against entity has been rejected].) The California Supreme Court, in one apt example, rejected a plaintiffs attempt to invoke section 473 to excuse compliance with a Probate Code limitations period, having concluded that the probate court lacked any authority to permit a [creditors claim to be filed against the estate] after the statutory period had run. (Nathanson v. Superior Court (1974) 12 Cal.3d 355, 369.)

Filing a petition challenging the validity of a trust is analogous to filing a complaint or bringing a creditors claim against an estate. Section 16061.8 sets forth a strict 120-day period to contest a trust and does not provide for an extension under any circumstances. The 120-day limitations period protects trustees and ensures timely administration of the trust; heirs and beneficiaries are given reasonable opportunity to contest the validity of the trust but then barred from a belated contest. The importance of finality in this context supports the conclusion that excusable neglect does not excuse compliance with the statute. (See, e.g., Maynard, supra, 36 Cal.4th at pp. 376-377 [stressing the importance of a 30-day deadline to request a trial after a fee arbitration in injecting a measure of finality into [the] dispute and ensuring an efficient and effective procedure for resolving fee disputes].) We therefore conclude that the statute is mandatory and jurisdictional, and that the Legislature did not intend to permit relief from compliance under section 473.

Petitioner contends that section 16061.8 cannot be mandatory and jurisdictional in this type of case, and thus excusable neglect is a defense, because of the drastic penalty imposed by the no contest clause for acting without the requisite information. This unsupported argument is unpersuasive. Petitioner contends, for example, that absent a no contest clause, the 120-day period would be absolute. The suggestion that the limitations period of section 16061.8 has different jurisdictional effects based on the presence or absence of a provision in the document being challenged is not well-taken. If no contest clauses pose a problem for heirs and beneficiaries attempting to file a petition with the 120-day deadline, it is a matter for the Legislature to resolve.

Petitioner asserts that if we conclude the filing is time-barred despite respondents failure to fulfill her statutory duties, it would logically mean that [a trustee] has no obligation to provide any information to [a] [p]etitioner prior to the running of the statutory period[.] We disagree. This appeal is not from an action to contest respondents fulfillment of her duties as trustee, but an order of dismissal of a time-barred petition. Our focus therefore is whether there is a legal or an equitable basis to excuse the untimely petition. Although petitioner may point to respondents conduct to excuse her own failure to comply with section 16061.8, a decision that the respondents alleged breach of duty is not an adequate basis to excuse petitioners lapse does not condone any action or inaction on the part of respondent. Petitioners oft-repeated hypothetical that under such a ruling a trustee could refuse to provide any information, or provide information only the day prior to the 120-day deadline, is unavailingthose are not the facts presented in this case. We therefore reach the same conclusion as the trial court; the court had no discretion to excuse noncompliance with the 120-day deadline pursuant to section 473.

Citing a passage from Germino v. Hillyer (2003) 107 Cal.App.4th 951 (Germino), petitioner stresses in general terms the prejudice to her interests resulting from respondents alleged wrongdoing. The court in Germino stated: Appellant has not cited a single case in which one partys failure to provide information to the other party as required by statute has resulted in a tolling of the statute of limitations in the absence of prejudice to the party designated to receive the information. (Id. at p. 957.) Seizing on the Germino courts observation regarding the lack of evidence of prejudice in the case before it, petitioner argues that because she was prejudiced by respondents alleged failure to provide timely information, the 120-day statute should be tolled. The analysis underlying the Germino courts statement is not, however, applicable in this case. The primary issue in Germino was whether the trustees failure to specify in the trust notification that appellant was entitled to a copy of the terms of the trust (a requirement under section 16061.7, subdivision (g)(5)) tolled the 120-day statute of limitations. (Germino, at p. 955.) The court found no prejudice to the appellant resulting from the technically deficient notice under section 16061.7 because the appellant was actually provided with a copy of the trust.[5] (Germino, at pp. 956-957.) The alleged failure of the trustee in this case simply is not analogous; petitioner concedes the notice was adequate and that the statute began to run upon mailing. (See 1215.)

The Germino court also discussed prejudice in the context of equitable estoppel cases. (See Germino, supra, 107 Cal.App.4th at p. 957 [citing Migliore v. Mid-Century Ins. Co. (2002) 97 Cal.App.4th 592 and Galloway v. Workers Comp. Appeals Bd. (1998) 63 Cal.App.4th 880].) The trial court here considered the applicability of an equitable estoppel defense, and found no evidence to support it. The trial courts factual finding on this issue will be upheld if supported by substantial evidence. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053, superseded by statute on other grounds; see also County of Santa Clara v. Vargas (1977) 71 Cal.App.3d 510, 524 [whether estoppel exists is a question of fact].) Although petitioner claims she is not relying on an equitable estoppel defense, to the extent it was raised below, we consider it.

Equitable estoppel applies if there has been some conduct by the defendant, relied on by the plaintiff, which induces the belated filing of the action. It is not necessary that the defendant acted in bad faith or intended to mislead the plaintiff. It is sufficient that the defendants conduct in fact induced the plaintiff to refrain from instituting legal proceedings. (Shaffer v. Debbas (1993) 17 Cal.App.4th 33, 43, internal citations omitted.) There is no evidence here that petitioner relied on any statement or action by the respondent in filing the late petition. Indeed, petitioners counsel prepared the petition in a timely manner (counsels declaration states the petition was completed on July 3, 2005) despite reviewing the trust information only five days before the deadline, on June 30. Counsels inability to get final approval from her client until the day after the deadline, or, perhaps, counsels mistake regarding the correct date, cannot be attributed to any wrongdoing by respondent or her counsel. There is simply no evidence respondent induced the belated filing through a statement or action.

Petitioner further argues that Probate Code statutes of limitation are not immutable. She cites the fact that the relevant statutory provisions allow late filing of a creditors claim against a trust if the creditor did not have actual knowledge of the claim at least 15 days prior to the end of the statutory period. (See generally 19100, 19103 [a court may allow a claim to be filed after expiration of the time provided in Section 19100 if the claimant did not have actual knowledge more than 15 days before the statutory deadline and the petition was filed within 30 days after actual knowledge].) This argument is unavailing. Regardless of any similarities between a creditors claim and a petitioners challenge to the trust, the presence of an express discovery rule for creditors in the Probate Code does not establish the availability of an implied discovery rule for those contesting the validity of the trust. Petitioner nevertheless contends that the limitations periods for creditors and beneficiaries should be treated similarly, as both trustees and executors use section 1215 in giving notice to creditors. Section 1215 does not establish or govern the conditions of the statutes of limitation; it is a general notice provision that simply authorizes notice by mailing and specifies when mailing is complete for purposes of calculating the applicable deadlines. (See 1215 [Manner of Mailing Notice; When Mailing Complete].)

Finally, we reject petitioners complaint regarding the practical problem of complying with a section 17200 procedure to force a trustees compliance with his or her duties with both the 120-day deadline and a no contest clause.[6] Petitioner did not institute a section 17200 procedure, and the argument is irrelevant to the question before this court.

CONCLUSION

We conclude the trial court had no discretion to consider the excusable neglect defense, there is no evidence to support a claim of equitable estoppel, and the petition is time-barred by section 16061.8.

DISPOSITION

The order is affirmed.

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McAdams, J.

WE CONCUR:

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Rushing, P.J.

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Elia, J.

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Hill v. Perez, et al.

[1] All further statutory references are to the Probate Code unless otherwise noted.

[2] Petitioners counsel gives a slightly different account. She states in her declaration that in response to her letter, respondents counsel called her office to say that he would get back to [her] when he had acquired the requested documents. She called his office twice thereafter, without speaking to respondents counsel personally, before arranging a date for inspection during a phone call on June 26.

[3] Earlier in the hearing, the court elaborated on this point: In other words, what Im hearing or what Im interpreting what I think that Ive heard is some suggestion of not playing fair. Now, if in fact clearly, if you were able to demonstrate to my satisfaction, to the Courts satisfaction that [respondents counsel] or someone either in his office or his client played hide the ball and prevented you [petitioners counsel] from getting information that you needed to make an informed decision, then thats important. Having read the paperwork, in terms of all the moving and responding papers, that is not the sense that I have. Its the sense that I have that youre -- you are suggesting it. Im not seeing the evidence to support it.

[4] Sections 16000 to 16105 set forth a trustees duties. Section 16061, in particular, provides that on reasonable request by a beneficiary, the trustee shall provide the beneficiary with a report of information about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relevant to the beneficiarys interest, including the terms of the trust.

[5] The court explained: Where the statute does not require a particular form of notice, cases consistently hold that courts will look to the issue of prejudice when a party seeks to excuse its own failings-such as appellants failure to file his petition attacking the trust within 120 days of the trustees notice-based on a defect in statutory notice provided by the other party-such as the claimed omission from the trustees notice in this case. (Germino, supra, 107 Cal.App.4th at p. 956.)

[6] Section 17200 sets forth the grounds for petitions concerning the internal affairs of the trust which include [c]ompelling the trustee to report information about the trust or account to the beneficiary[.] ( 17200, subds. (a), (b)(7).)