Filed 1/10/18 Warren v. Samaha CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA



CRAIG WARREN et al.,

Plaintiffs and Respondents,

v.

JENIFER SAMAHA,

Defendant and Appellant.
D072276



(Super. Ct. No. 37-2013-00077144- PR-TR-CTL)

APPEAL from a judgment of the Superior Court of San Diego County, Jeffrey S. Bostwick, Judge and B. James Brierton, Referee. Affirmed.
Law Office of Melvin D. Rich and Melvin D. Rich for Defendant and Appellant.
Haskett & Associates, Steven P. Haskett and Andrew M. Haskett for Plaintiffs and Respondents.
In this probate case, which was decided by way of a reference under Code of Civil Procedure section 638, the referee ordered that a trust be reformed. Although an amendment to the trust written by the settlors, a husband and wife, arguably named two of the husband's children as trustees only, the referee determined that extrinsic evidence offered by the children established that, by way of the amendment, the settlors intended that the children take the husband's portion of the trust's assets.
The prior beneficiary under the trust, a niece of the wife, opposed the children's interpretation of the amendment and on appeal challenges the referee's order reforming the trust on a number of grounds. As we explain more fully below, we reject the niece's contentions and affirm the judgment reforming the trust.
FACTUAL AND PROCEDURAL BACKGROUND
Dale Hoppe and Lana Sue Hoppe (Dale and Lana) established the Hoppe Family Trust in 1992. In 1995, the trust was amended and established two subsidiary trusts, a survivor's trust (Trust A) and a decedent's trust (Trust B). The parties' dispute is only with respect to Trust B.
Lana was Dale's second wife and the stepmother of respondents Craig Hoppe (Craig) and Steele Ballew (Steele). Dale and Lana, so far as is known, prepared all their estate planning documents without an attorney. They changed the dispositive terms of their trust frequently, and one consistent policy was to favor family members in good standing with them. Thus, although in 1992 Craig and Steele were initially the named beneficiaries of the entire trust in the Third Amendment to the Hoppe Family Trust dated January 25, 1997, Dale and Lana removed Craig and Steele as beneficiaries altogether. At the hearing on their petition for orders, Craig and Steele acknowledged they were estranged from their father during this period of time. By way of a fifth amendment to the trust executed in 1998, Dale and Lana made Lana's brother Robert Lee Mowery and his daughter, appellant Jenifer Samaha (Jenifer), beneficiaries of Trust B.
However, in late 2006, Craig's wife, Hope Warren (Hope), was suffering from terminal cancer and died in January 2007. These tragic events served as a catalyst to reunite Dale with both Craig and Steele. Upon learning of Dale's genuine concern about Hope's illness, Steele wrote her father an emotional letter on December 20, 2006. Dale responded in kind two days later in which he expressed his regret about the rift which had grown between them over the years. Dale's letter stated: "[P]erhaps we can renew our relationship, but there is a lot I would have to get off my mind. It's your move now.'' In this letter Dale also stated: "For your information, after [Lana's] death, I have left the ranch, my properties, and all my assets to my blood related children. Further, it is my opinion that Craig is the most qualified to distribute assets and make financial decisions, etc.. I have named Craig as my executor of my estate, and is so stated in my living trust which cannot be changed."
In late January 2007, two weeks following Hope's death, Steele again wrote to her father. In this letter Steele discussed the grief Craig was experiencing. Steele wrote to Dale again on February 27, 2007. In this letter Steele stated: "We can't wait to see you again. Our visit last Wednesday was very nice . . . ."
On March 27, 2007, Dale wrote a letter to both Craig and Steele. Dale stated that he had talked with Lana about their estate after they both died and that "It is my desire that when [Lana] and I have passed away, that you Craig and you Steele will handle all of the remaining assets equally. When in disagreement, get a third non-family party opinion. Logic tells me, as long as the profits exceed the liabilities you should keep it as a source of income. When that is no longer possible, it is then time to sell. It's just that simple." Dale also stated that he had paid off the mortgage on Craig's home and intended to "do something as helpful for Steele as well."
In a May 24, 2007 letter to Craig, Dale told Craig he had confidence in Craig's ability to manage the trust, but that "[Y]ou know what you are dealing with when it comes to Steele, you['re] going to have to be careful how you distribute any funds . . . ."
At the hearing on Craig and Steele's petition, Craig testified that during the months before and after Hope's death, Dale on several occasions stated that he was leaving his estate to Craig and Steele. Craig also testified that on one occasion he saw an executed sixth amendment to the trust. For her part, Steele testified that on a visit to the Fallbrook ranch in the fall of 2007, Dale gave her a handwritten version of a sixth amendment. After reading this document, which she believed left Dale's estate equally to her and Craig, she thanked Dale, who then handed this handwritten version to Lana, who said "OK, good."
On October 15, 2007, Dale and Lana executed the sixth and final amendment to the trust. Although Craig had earlier been named successor trustee of Trust B, the sixth amendment altered the trustee provision, Article XII of the trust, to state that Craig was successor trustee and that "my blood related children both CRAIG DALE HOPPE-WARREN and STEELE CLAIR HOPPE WARREN-BALLEW shall share equally in all matters concerned in this trust, such as profits, decisions, expenses, legal matters, etc.." However, the sixth amendment to the trust did not change the beneficiaries of the trust, set forth in Article VI of the trust and they remained Lana's brother Robert Mowery and Jenifer.
Dale died on December 18, 2007, and on September 12, 2008, Lana allocated to Trust B the ranch she and Dale owned, cell tower leases and a small bank account. Robert Mowery died on or about April 2011, and Jenifer succeeded to his interests; Lana died in July 2013.
In April 2015, Jenifer filed a petition seeking an order determining that she was the sole beneficiary of Trust B. In December 2015, Craig and Steele filed a petition under Probate Code section 17200 in which they sought an order interpreting the sixth amendment as creating in them a power of appointment over the assets of Trust B. Jenifer thereafter filed an objection to Craig and Steele's petition.
The competing petitions were heard by a referee appointed under the terms of a stipulated reference pursuant to Code of Civil Procedure section 638. The reference provided in part that the referee would decide: "2. All issues raised and joined regarding the Petition for Order to Determine Existence of General Power of Appointment in Favor of Craig Warren and Steele Ballew, ROA #365, filed on December 15, 2015[, and] 3. Determination of any ancillary issues the referee deems necessary to completely resolve the foregoing matters."
The referee conducted a hearing on the merits of the petitions on
August 11 and 12, 2016. Initially, the referee denied Jenifer's motion to amend her objection to assert that Craig and Steele's petition was untimely. By way of a statement of decision on the merits, the referee found that the sixth amendment was ambiguous and that Dale and Lana's intent was that Craig and Steele receive the assets of Trust B. The referee stated: "Dale undisputably wanted his estate to go directly to Craig and Steele." The court found that the failure to alter the dispositive terms of the trust was due to a drafting error on the part of the Dale and Lana: "The ambiguity arises from drafting errors . . . . [H]ere the flaws arise from language inconsistent with legal terminology drafted by the settlors, i.e., while they intended to state Craig's share of the trust was to be distributed equally to Craig and Steele, they use imprecise and ambiguous language to express their intent, and they erroneously place the provision in Article XII, the trustee provision, rather than Article VI, the dispositive provision."
The referee rejected Jenifer's contention that the sixth amendment merely added Steele as a cotrustee and did not reflect any intent to change the dispositive provisions of the trust. The referee found: "The argument that the language in the sixth amendment shows Dale intended Steele to act as a trust advisor or cotrustee with Craig is inconsistent with several statements in the letters where Dale affirms his confidence in Craig as the person to manage the Trust. The letters also clearly show an intent that both Craig and Steele are to share in the Trust."
Rather than providing Craig and Steele with a power of appointment, the referee determined that it was more appropriate to reform the trust by making them express beneficiaries of the trust in place of Jenifer.
Jenifer moved for a new trial and the referee denied her motion. In denying the motion the referee stated that he had no matters which required disclosure under rule 3.904 of the California Rules of Court. The referee's decision became the judgment of the trial court and Jenifer filed a timely notice of appeal.
DISCUSSION
I
In her first argument on appeal, Jenifer contends the referee erred in denying her motion to amend her response to Craig and Steele's petition. In her motion to amend, Jenifer argued that Craig and Steele's petition was a contest within the meaning of Probate Code section 16061.8 and was therefore untimely; in the alternative, she argued that the petition sought to enforce an agreement and therefore was also untimely under Code of Civil Procedure section 366.3 subdivision (a). As Craig and Steele point out, neither time limit applies to their petition and hence the referee did not err in denying Jenifer leave to amend to assert them.
Probate Code section 16061.7 requires that a trustee give beneficiaries notice when, by virtue of the death of a settlor, a trust has become irrevocable; Probate Code section 16061.8 provides that "[n]o person . . . may bring an action to contest the trust more than 120 days from the date" of such notice. In Safai v. Safai (2008) 164 Cal.App.4th 243 a minor, by way of a guardian ad litem, brought a petition under the safe harbor provisions of Probate Code section 21320; his petition sought an order determining that his underlying claim that trust documents were forged would not trigger a no contest provision of his deceased father's trust. The trustees of the trust opposed the petition on the grounds, among others, that his safe harbor petition was itself a contest within the meaning of Probate Code section 16061.8 and therefore untimely. The court in Safai v. Safai declined to treat the safe harbor petition as a "contest" within the meaning of Probate Code section 16061.8: "It is not, in and of itself, an 'action to contest the trust.' Consequently, the limitations period set forth in Probate Code section 16061.8 does not apply." (Safai v. Safai, supra, 164 Cal.App.4th at p. 243.)
The holding in Safai v. Safai clearly contradicts Jenifer's contention that, as used in Probate Code section 16061.8, the term "contest" is somehow broader than the term is used in determining application of "no contest" provisions in testamentary instruments. As Craig and Steele point out, and Jenifer concedes, those cases have consistently held that actions which call for the interpretation of an instrument rather than attempt to invalidate the instrument are not "contests" within the meaning of "no contest" clauses. (See Giammarrusco v. Simon (2009) 171 Cal.App.4th 1586, 1607; Estate of Black (1984) 160 Cal.App.3d 582, 588.)
The narrow interpretation of "contest" adopted by the court in Safai v. Safai is also consistent with the holding in Estate of Stoker (2011) 193 Cal.App.4th 236, 240–241 (Stoker). In Stoker, the court stated that in determining whether a petition to probate a will "constitutes an action to contest the trust within the purview of section 16061.8, we look to the substance of that petition and its 'practical effect.' We are not bound by its label. [Citations.]" (Stoker, at p. 241.) The court then found that a petition to probate a will was a timely contest within the meaning of Probate Code section 16061.8, because the will in fact purported to revoke an existing trust and was therefore in practical effect an "action challenging the validity of the trust." (Stoker, at p. 241.)
In limiting application of Probate Code section 16061.8 to actions which contest the validity of a trust we plainly avoid creating a trap for the unwary, who might easily interpret the term in the sense in which it has been repeatedly used in cases discussing no contest clauses in wills and trusts. Contrary to Jenifer's argument the holding and language in Estate of Poisl (1957) 153 Cal.App.2d 661, 665–666 (Poisl) have no bearing on interpretation of Probate Code section 16061.8; in Poisl, the court held that an executor under a will could not recover attorney fees expended in opposing a will contest because in effect the contest was a dispute between competing claimants to the decedent's estate. (Poisl, at pp. 665–666.) The court in Poisl did not purport to apply or interpret any time limits on contests, much less the later adopted time limits set forth in Probate Code section 16061.8.
Here, Craig and Steele's petition, in which they sought to have the sixth amendment interpreted so as to provide them with their father's portion of the trust, in no sense sought to invalidate the trust or the amendment. Hence, Probate Code section 16061.8 did not apply to their petition.
We can more easily dispose of Jenifer's alternative reliance on Code of Civil Procedure section 366.3, which by its terms imposes a one-year limitation period on a claim which "arises from a promise or agreement" with a decedent to a distribution from an estate. "[T]he promise or agreement must be express to come within section 366.3." (Maxwell-Jolly v. Martin (2011) 198 Cal.App.4th 347, 358–359.) The cases which have applied Code of Civil Procedure section 366.3 have involved express promises made by a decedent to award an individual an asset or sum of money from his or her estate in exchange for some benefit such as care. (Ibid.) Although Craig and Steele's petition relied on statements their father made with respect to his intent, none of those statements constituted a promise or agreement to any distribution from his estate and Craig and Steele did not assert that they did.
In sum, because neither Probate Code section 16061.8 nor Code of Civil Procedure section 366.3 applied to Craig and Steele's petition, the referee did not err in denying Jenifer's motion to assert either statute.
II
Next, Jenifer contends that in reforming the trust to make Craig and Steele the beneficiaries of Trust B, rather than trustees with a power of appointment, the referee exceeded the bounds of the parties' stipulated reference. We find no such breach of the terms of reference.
As we noted, in their petition Craig and Steele asked that the trust be interpreted to give them a power of appointment over Trust B assets. If granted, such a power of appointment would have given Craig and Steele the power to transfer to themselves all the assets of Trust B. (See Estate of Cohen (1971) 4 Cal.3d 41, 50.) Thus, by way of their petition Craig and Steele put in issue the ultimate question decided by the referee: whether Dale intended that Craig and Steele receive and otherwise benefit from Trust B assets. We also note the parties' stipulated reference expressly provided the referee the power to decide all issues raised by Craig and Steele's petition including any ancillary issues. Given that there is no substantive or practical difference between the power of appointment which Craig and Steele expressly sought in their petition and the more direct remedy provided by the referee, as well as the broad scope of the reference, the referee did not exceed the scope of the reference by simply making Craig and Steele beneficiaries of Trust B assets in place of Jenifer.
III
Jenifer contends that in reforming the trust to make Craig and Steele the beneficiaries of Trust B, the referee erred in failing to give effect to the express beneficiary disposition of the trust. As the referee noted this contention was largely disposed of by this court in our decision in Ike v. Doolittle (1998) 61 Cal.App.4th 51, 73–80 (Ike).
In Ike, we found patent ambiguities in trust documents, resolved those ambiguities by resort to extrinsic evidence, and reformed the trust to provide distribution consistent with what we determined was the intent of the settlors. (Ike, supra, 61 Cal.App.3d at
pp. 74–80.) In particular, we found that the trust documents failure to reflect the settlors' intent was due to a drafting error which in turn, supported the power to reform the trust. (Id. at p. 85.) Here, as in Ike, the sixth amendment, by way of its expression that Craig and Steele "shall share equally in all matters concerned in this trust" without also altering the dispositive portions of the trust created a patent ambiguity. The extrinsic evidence offered by Craig and Steele are convincing evidence that Dale and Lana intended that Craig and Steele receive Trust B, and as in Ike, the documents ambiguity was, as the referee found an obvious drafting error which gave rise to the power to reform the trust to conform with the settlors' actual intention. (Id. at pp. 80–85.) Thus, we find no error in the referee's order reforming the trust.
IV
Finally, we reject Jenifer's contention the referee's decision should be set aside for his failure to comply with rule 3.904 of the California Rules of Court. While it is true that, prior to his service, the referee did not file the written certification of his consent to appointment and agreement to comply with Canon 6 of the Code of Judicial Ethics and the Rules of Court, as required by rule 3.904(a), Jenifer did not raise this defect in proceedings before the referee ruled on the merits. We have found no authority for the proposition the failure to file such a certification renders the reference proceeding void or requires the referee's report be disregarded. In particular, Jenifer makes no contention the referee violated the Code of Judicial Ethics or the California Rules of Court. Were we to permit Jenifer to assert such an error following a referee's ruling on the merits, we would give litigants an opportunity to withhold an objection that could be readily cured in the trial court until they have received an adverse ruling on the merits; our courts have, in analogous procedural contexts, consistently rejected such attempts to play a game of "Heads I win, Tails you lose." (See Tyler v. Norton (1973) 34 Cal.App.3d 717, 722, In re Lamonica (1990) 220 Cal.App.3d 634, 640.)
We recognize that rule 3.904(b) also requires that a referee disclose to the parties any conflicts of interest, significant relationships with any of the parties or counsel, or any matter in which the referees have been compensated by a party or counsel. However, the record shows that, in denying Jenifer's motion for a new trial, the referee stated that he had no such conflict or matter to disclose. Thus, he plainly met the requirements of rule 3.904(b).
DISPOSITION
The judgment is affirmed. Craig and Steele to recover their costs on appeal.


BENKE, Acting P. J.

WE CONCUR:




HALLER, J.




IRION, J.