Miller v. Schneider

Filed 3/21/06 Miller v. Schneider 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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

Appellants Adria L. Schneider and Carly M. Schneider (collectively "Schneiders") appeal from an order granting the petition of respondent Janice Donna Miller (Miller) for an order confirming trust assets. Schneiders assert that a bequest of a single family residence to Miller in a living trust created by their father Alan Schneider (father) is not included in the corpus of the trust because the trust conveyed only personal property and no separate writing conveyed title to the residence to the trustee. We affirm.

FACTS AND PROCEDURAL HISTORY

Father died on January 13, 2005. Prior to death, he created a living trust naming Miller as trustee. Father used a form he purchased from an Internet website. He filled in the form without seeking advice from an attorney. There is no evidence that father had any legal training. The trust was signed by father as grantor and Miller as trustee before a notary public on May 1, 2004.

The "Introduction" to the trust states: "Grantor is creating a revocable trust for the purposes set forth in this Agreement. Grantor, therefore, is transferring to the Trustee the property listed in the attached schedule. The Trustee shall hold the property and any other property which the Trustee may acquire from Grantor or from other people, all of which is collectively referred to as the 'trust,' in trust, upon the following terms."

Article I of the trust is entitled "Distribution of Trust Property." Paragraph (B) of article I, entitled "Distribution of specific bequests upon death of Grantor," states: "Upon Grantor's death, the Trustee shall make the following distributions to the following institutions, and to the following persons who survive Grantor: [¶] The following asset of the Grantor--Single Family Residence shall be given to Janice Donna Miller. If such person does not survive the Grantor or if such institution is not in existence then such property will be given to Alan and Janice's children."

Following the bequest of the "single family residence" to Miller are bequests of specifically identified personal property to Schneiders and others, including vehicles, bank accounts, mutual funds, retirement funds, life insurance policies, etchings, fishing tackle, baseball cards, a camera, a diamond ring and golf clubs.

Paragraph (C) of article I is entitled "Distribution of tangible personal property upon Grantor's death," and states: "Upon Grantor's death, the Trustee shall distribute all the rest of Grantor's tangible personal property not disposed of in Paragraph (B) of this Article I, or all of Grantor's tangible personal property if there are no specific bequests of tangible personal property, to Grantor's children who survive Grantor . . . ."

Article II of the trust is entitled "Alternate Distribution Provisions." Paragraph (D) states in part: "Grantor may transfer from time to time, certain real property to this trust by Deed recorded with the appropriate Office of Recorder of Deeds, the possession of which real property Grantor shall retain in the individual capacity of Grantor."

The "attached schedule" referenced in the introduction lists the following assets: "1. All of the Tangible Personal Property of Alan Jay Schneider now owned or hereafter acquired, which property is hereby assigned and conveyed to the trust. [¶] 2. Home Furnishings."

Miller filed a petition for order confirming trust assets. Schneiders filed objections to the petition. They asserted that no valid trust was created because there is no evidence that father ever transferred any property to Miller as trustee. Alternatively, they argue that, if a valid trust was created, there is no evidence of father's intent to transfer real property to the trust.

In her reply to objections, Miller contended the trust is valid, meeting the requirements of Probate Code sections 15200 to 15205.[1] She also argued that father intended to convey all of his real and personal property to the trust. She filed a declaration with her reply, stating in part that she and father had been involved in a romantic relationship for 12 years before his death and that she had cohabited with him in the residence at 87 Capanna Street in San Luis Obispo. She provided a grant deed showing that the residence was purchased by her and father as joint tenants, father with a 75 percent interest and Miller with a 25 percent interest. She declares that father promised to leave her his interest in the property upon his death and, based on this promise, she paid more than her proportionate share of the expenses of maintaining the home and provided services to him in his dental ceramics business.

In their response to Miller's reply, Schneiders assert that no property was conveyed to the trust, that the term "tangible personal property" in the trust is not ambiguous and is not subject to construction, and that a separate writing conveying real property to the trust was required.

On May 18, 2005, the trial court granted the petition, finding that a valid trust was created, that all the assets listed in the trust were conveyed to Miller as trustee, and that no separate writing was required to convey the real property.

On July 5, 2005, the court entered a minute order confirming its prior order regarding "the effectiveness of the trust and the single-family residence coming within the trust." The court ordered counsel to prepare a stipulation and order regarding the remaining assets in the trust. The court continued the matter on its own motion to July 19.

On July 18, 2005, Schneiders filed a notice of appeal from the order entered May 18, 2005.^[2]

DISCUSSION

The Trust is Valid

Section 15200 provides: "Subject to other provisions of this chapter, a trust may be created by any of the following methods: [¶] (a) A declaration by the owner of property that the owner holds the property as trustee. [¶] (b) A transfer of property by the owner during the owner's lifetime to another person as trustee. [¶] (c) A transfer of property by the owner, by will or by other instrument taking effect upon the death of the owner, to another person as trustee. [¶] (d) An exercise of a power of appointment to another person as trustee. [¶] (e) An enforceable promise to create a trust."

A valid trust is created when there is (1) manifestation of trust intent, (2) trust property, (3) lawful trust purpose, and (4) the designation of a beneficiary. (§§ 15201-15205.)

The question of whether a trust conforms to statutory requirements is a question of law subject to de novo review. (Harustak v. Wilkins (2000) 84 Cal.App.4th 208, 212-213.)

The introduction to the trust states: "Grantor . . . is transferring to the Trustee the property listed in the attached schedule."

Schneiders argue that the trust is invalid because "property can only be established as trust property by actually transferring the property to the trustee . . . . A transfer occurs when personal property is physically delivered to another and when title to real property is conveyed." Section 15200, subsection (b) does not contain such a requirement. To accept Schneiders' argument, we would be required to rewrite the statute and insert a provision that the Legislature omitted. That is not the function of the appellate court. (See, e.g., People v. Guzman (2005) 35 Cal.4th 577, 587 ["'insert[ing]' additional language into a statute 'violate[s] the cardinal rule of statutory construction that courts must not add provisions to statutes'"].)

Schneiders' reliance on Osswald v. Anderson (1996) 49 Cal.App.4th 812 is misplaced. The trial judge noted in his well-reasoned opinion, "[t]he fact that the Trustee signed the Living Trust also distinguishes this case from Osswald . . . . In that case, the 1988 Trust which was held to be invalid named another party as trustee, but that trustee failed or refused to sign. Under these circumstances, Probate Code section 15206(a) was unavailable . . . . In this case, however, the Trustee did sign."

Miller's signature on the trust obviated the requirement for a separate writing transferring the property.

Father Intended to Include the Capanna Residence in the Trust

Schneiders' alternative argument also is without merit. They contend that father did not intend to convey the Capanna residence to the trust. They rely on the fact that the schedule referenced in the introduction to the trust does not mention real property, but only "tangible personal property" and "household furnishings." They argue that this language shows father's intent to exclude the residence from the trust. They point out that California statutory law distinguishes "personal property" from "real property." (See, e.g., Civ. Code, § 663 ["Every kind of property that is not real is personal"].) Therefore, they contend, there is no ambiguity and no need to look beyond this portion of the trust to determine intent. We disagree.

Special rules of statutory construction govern interpretation of trusts. Section 21120 states: "The words of an instrument are to receive an interpretation that will give every expression some effect, rather than one that will render any of the expressions inoperative. Preference is to be given to an interpretation of an instrument that will prevent intestacy or failure of a transfer, rather than one that will result in an intestacy or failure of a transfer."

Section 21121 states: "All parts of an instrument are to be construed in relation to each other and so as, if possible, to form a consistent whole. If the meaning of any part of an instrument is ambiguous or doubtful, it may be explained by any reference to or recital of that part in another part of the instrument."

Section 21122 states: "The words of an instrument are to be given their ordinary and grammatical meaning unless the intention to use them in another sense is clear and their intended meaning can be ascertained. Technical words are not necessary to give effect to a disposition in an instrument. Technical words are to be considered as having been used in their technical sense unless (a) the context clearly indicates a contrary intention or (b) it satisfactorily appears that the instrument was drawn solely by the transferor and that the transferor was unacquainted with the technical sense."

Schneiders' position is contrary to all three rules of construction. They argue that no transfer of real property occurred, contrary to the mandate in section 21120 that an instrument be construed to prevent failure of a transfer, if possible.

Schneiders' argument takes no account of paragraph (B) of article I, entitled "Distribution of specific bequests upon death of Grantor," which states: "Upon Grantor's death, the Trustee shall make the following distributions to the following institutions, and to the following persons who survive Grantor: [¶] The following asset of the Grantor--Single Family Residence shall be given to Janice Donna Miller." (Italics added.) We are required to consider all provisions of the trust and to give each provision effect, if possible. (§§ 21120, 21121.)

Schneiders' contention that the residence is not included in the trust because the schedule listing the property transferred only references "tangible personal property" would require us to hold father to a technical legal standard when the evidence shows he had no special legal knowledge, contrary to section 21122.

The trust, when read as a whole and in accordance with the rules of trust construction, shows that father's intent was to convey the Capanna residence to the trust.

The order of the trial court is affirmed. Respondent shall recover costs on appeal.

NOT TO BE PUBLISHED.

PERREN, J.

We concur:

GILBERT, P.J.

YEGAN, J.

Martin J. Tangeman, Judge

Superior Court County of San Luis Obispo

______________________________

David Money for Defendants and Appellants Adria L. Schneider and Carly M. Schneider.

John F. Hodges for Plaintiff and Respondent Janice Donna Miller.

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Analysis and review provided by Santee Apartment Manager Attorneys.

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

^[2] On May 31, 2005, Schneiders filed a motion for reconsideration submitting a declaration and exhibits purportedly containing newly discovered evidence. On July 22, 2005, the trial court filed an order granting in part and denying in part the motion for reconsideration. The trial court had no jurisdiction to enter this order and it is void. (See, e.g., Estate of Hirschberg (1964) 224 Cal.App.2d 449, 466-467 ["'the effect of an appeal is to remove from the jurisdiction of the trial court all questions affecting the validity of the judgment or order appealed from, and while an appeal ... is pending the trial court has no power to amend or correct the same'"]; accord, Safeco Ins. Co. v. Architectural Facades Unlimited, Inc. (2005) 134 Cal.App.4th 1477, 1482.)