Conservatorship of Huss

Filed 6/6/06 Conservatorship of Huss CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

Wayne Souza was a cotrustee of an inter vivos trust established by and for the benefit of his mother, Maxine Van Huss. The superior court established a conservatorship over Maxine^[1] based on her dementia and appointed a receiver to protect the assets of the trust. Wayne and Janett Souza appeal from various orders issued by the superior court in connection with the conservatorship. We affirm.

BACKGROUND

Wayne is Maxine's adult son and is married to Janett Souza. Earl Van Huss is Maxine's second husband. When Earl married Maxine, the two signed a prenuptial agreement providing that each of them would maintain their separate property so it would pass to their heirs. Maxine owned real property in Arroyo Grande, California and Washington State. Maxine established the Maxine Van Huss Trust in 1989 and was its original trustee and beneficiary. As amended on June 7, 2001, the trust document provided that Wayne would serve as a cotrustee and that if either of them should become unable to serve, Janett would serve as a successor cotrustee. The trust document also provided that if Maxine became physically or mentally incapacitated, as certified by two licensed physicians, Janett would succeed her as cotrustee.

On October 6, 2003, Earl filed a petition to establish a probate conservatorship over Maxine and asked the court to appoint respondent Cynthia Brown, a private professional conservator. Earl alleged that Maxine suffered from dementia and that Wayne had abused his authority over the trust by refinancing its properties, using the proceeds for his own benefit, and then claiming he was unable to provide the funds necessary for Maxine's care. The court appointed Brown as temporary conservator on October 14. At a hearing on November 12, the court became concerned that Maxine's assets were at risk and appointed a receiver to "take possession, manage, operate, preserve, and maintain all property, whether real property or personal property, wherever situated, in the name of Maxine Van Huss as an individual, as conservatee, as trustor/settlor of the Maxine Van Huss Trust dated February 16, 1989, or as any beneficial interest in assets owned by Maxine Van Huss pending further order of this court." On December 3, after Wayne objected to the appointment on jurisdictional grounds, the court stayed its order and instructed the receiver to take no action beyond the gathering of information.

The conservator brought a separate action on behalf of Maxine for removal of Wayne as a cotrustee, recovery of trust property and for damages under the Elder Abuse and Dependent Adult Civil Protection Act. Wayne filed a motion to quash on jurisdictional grounds. This case was consolidated with the conservatorship proceeding.

On February 11, 2004, the court approved a permanent conservatorship after receiving declarations by two qualified physicians attesting to Maxine's incapacity. The court also denied Wayne's motion to quash and reinstated the order instructing the receiver to protect trust assets and the assets of Maxine as an individual.

Maxine died after a brief sudden illness on July 24, 2004. Wayne petitioned the court to dismiss the trust and conservatorship actions and the conservator brought a motion for appointment of a special administrator to pursue the litigation against Wayne as a trustee. Earl sought reimbursement from the trust for medical and tax expenses he had paid on Maxine's behalf out of his separate property. The conservator and receiver each filed a report and final accounting seeking compensation for services.

After a hearing to consider these issues, the court entered a judgment approving the final accountings by the conservator and the receiver. The conservator was awarded $23,541.65 in fees, her attorney was awarded $39,675 in fees and $934 in costs and the receiver was awarded $10,672.20 in fees. The fees were to be paid from the trust, and the receiver was directed to continue his duties until all fees were paid in full. The court also granted Earl's request for reimbursement of $36,394.55 in medical costs and $12,654 in tax payments. It denied the conservator's request for appointment of a special administrator to pursue the action for elder abuse and other relief against Wayne and dismissed that action.

DISCUSSION

Jurisdictional Issues

Wayne argues that the probate court lacked jurisdiction over the conservator's action against him for elder abuse and removal as cotrustee. That action was dismissed by the trial court after Maxine's death, and the issue would be moot except that it potentially affects the amount of compensation and legal fees the conservator was entitled to recover from Maxine's estate. We address the claim on its merits and conclude that it fails.

Probate Code section 17004 provides, "The court may exercise jurisdiction in proceedings under this division on any basis permitted by Section 410.10 of the Code of Civil Procedure." Code of Civil Procedure section 410.10 is California's "long-arm" statute and enables the court to exercise jurisdiction on any basis not inconsistent with its Constitution or the United States Constitution. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444.) Due process is satisfied if a defendant sued in California has purposefully established minimum contacts with the state. (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 478-482.)

Wayne claims the court did not have jurisdiction over him because he was a resident of Washington State. We disagree. Wayne established minimum contacts with California when, in 2001, he agreed to become cotrustee of a trust whose cotrustee and beneficiary resided in California and which held real property in California. The document establishing the trust specifically provides that it is governed by California law, demonstrating that the participants in the trust administration have purposefully availed themselves of the privilege of acting in or causing a result within this state. (See Burger King Corp. v. Rudzewicz, supra, 471 U.S. at pp. 478-482; Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 904.) The trial court correctly concluded that it had jurisdiction to entertain the action filed against Wayne for elder abuse and removal of a trustee.

Propriety of Receivership

Wayne contends the trial court erred when it appointed a receiver to manage Maxine's personal property and the property in her trust. He claims there is no authority permitting the court to make such an appointment sua sponte and complains that he was never given a hearing on the propriety of a receivership. We are not persuaded.

Code of Civil Procedure section 564, subdivision (b)(9) allows the court to appoint a receiver in cases "where necessary to preserve the property or rights of any party." Moreover, "[a] court has inherent equitable power to appoint a receiver on its own motion where essential to accomplish a judicial objective." (Gold v. Gold Realty Co. (2003) 114 Cal.App.4th 791, 802.) The probate investigator issued a report recommending that Maxine's funds be placed in a blocked account and the conservator was concerned that Maxine's assets were at risk due to Wayne's conduct. The court was entitled to appoint a receiver to protect the estate.

We reject Wayne's argument that the receivership was invalid because the appointment was made without a hearing. It is true the court originally appointed the receiver before a hearing had been held, but it invited the parties to submit motions on the issue and then suspended its order that the receiver take over management of Maxine's property. The order reinstating the receiver's powers was not issued until after a hearing had been held where Wayne had the opportunity to object.

Failure to Discharge of Receiver

After Maxine's death, the court released several Washington State properties from the receivership so there would be sufficient assets to carry out its judgment and pay the expenses outlined in the reports of the conservator and receiver. It continued the receivership with respect to a property in California. Wayne contends the receiver should have been immediately discharged from all of his duties, because there was no conceivable reason for continuing the receivership after the date of Maxine's death. We disagree.

Code of Civil Procedure section 564, subdivisions (b)(4) allows the court to continue a receivership "[a]fter judgment, to dispose of the property according to the judgment, or to preserve it during the pendency of an appeal . . . ." Wayne has cited no authority to support his claim that the trial court abused its discretion by allowing the receiver to continue to exercise some control over trust assets pending a final resolution of the case.

Spousal Reimbursement

The court ruled that Earl had the right to be reimbursed for expenditures he made for Maxine's care out of his separate property. Wayne argues that the trust was not liable for this amount because Earl had a statutory duty to support Maxine under Family Code section 4300. We disagree.

Earl and Maxine signed a prenuptial agreement stipulating that all real or personal property held in their name alone shall be conclusively presumed to be their separate property and that each of them waived any right, title or interest in the other's property. Maxine's separate property was held in the trust. The trial court found that, as cotrustee, Wayne used trust property for his own purposes and did not pay anything for Maxine's maintenance and health costs, requiring Earl to use his own assets to pay for his wife's care and her tax liability. Wayne does not challenge this factual finding, but he claims the statutory duty of support running between spouses is paramount.

Family Code section 4300 states the general rule that a person shall support his or her spouse. Family Code section 4301 provides that one spouse shall support the other out of his or her separate property when they are living together and there is no community or quasi-community property available to pay for that support. Neither section is apposite to the current situation, in which the spouses have agreed to rely on their own separate property for their own support, and where such separate property was available but was not used for that purpose. In such cases, a spouse who pays the other's debts out of his or her separate property is entitled to reimbursement from the community estate or the separate property of the spouse on whose behalf the debt was paid. (Fam. Code, § 914, subd. (b).)

Wayne complains that Earl had no standing to seek reimbursement from the trust. But Probate Code section 15304, subdivision (b) provides that when, as here, the settlor of an inter vivos trust is also the beneficiary and is entitled to payments, a creditor may reach the assets of the trust up to the maximum amount to which the beneficiary could be paid by the trustee. The court did not err when it concluded that Earl had a right to reimbursement from Maxine that could be satisfied out of the trust.

Wayne argues that the appointment of the receiver precluded him from taking the actions necessary to pay Maxine's expenses. The record does not support his claim, but, even if we assume its truth, this does not mean that Earl should be precluded from seeking reimbursement for amounts paid. The trust was liable for Maxine's expenses whether payment was made directly to third party creditors or to Earl as an intermediary who stepped in to pay her creditors.

Fees of Conservator and Counsel

Wayne contends the court should not have approved the fees that were attributable to the conservator's pursuit of the action for elder abuse and his removal as trustee. He argues that much of this time was expended after Maxine had died and the conservatorship had terminated by operation of law. He notes that the court eventually dismissed this action based on Maxine's death.

The itemized billing statements submitted by the conservator and her attorney show only a few hours of time were attributable to the action against Wayne during the period following Maxine's death. Wayne assumes that once Maxine died, all litigation against him should have immediately ceased, but it was not unreasonable for the conservator and her attorney to spend some time determining the viability of the pending litigation as part of the process of terminating the conservatorship and rendering a final report and accounting. Wayne cites no authority to the contrary.

DISPOSITION

The judgment is affirmed. Costs are awarded to respondent.

NOT TO BE PUBLISHED.

COFFEE, J.

We concur:

YEGAN, Acting P.J.

PERREN, J.

Zel Canter, Judge

Superior Court County of Santa Barbara

______________________________

Kirk & Simas and George L. Wittenburg for Objectors and Appellants.

Barbara D. Guerena for Petitioner and Respondent.

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^[1] We refer to the parties and related persons by their first names to avoid confusing them with others who share the same last names and intend no disrespect.