Filing a Timely Claim

A litigant can having a winning case but still lose. How can this be you ask? 

The law, known as the statute of limitations, requires parties to timely file their claims. This law prevents parties from indefinitely waiting to file their claim. By imposing this requirement on litigants, it ensures finality to matters once the requisite amount of time has elapsed. Otherwise a litigant could resurrect an ancient claim that would frustrate the current climate. This brings us to a recent unpublished appellate opinion. Kern County Superior Court case # S-1501-PB-62540, Estate of Catlin.

Gretchen Brown claimed that her mother, Lynda Catlin, promised Ms. Catlin's residence to her upon Ms. Catlin's death. However, a few days before Ms. Catlin passed away, she executed a grant deed which transferred the home to Mark Chagoya as "husband and wife as joint tenants." Catlin was not legally married to Mr. Chagoya, as her prior marriage had not been formally dissolved.
 
The unpublished opinion noted irregularities regarding the execution of the deed:

"The notary who notarized Catlin's signature on the grant deed testified that her sequential journal had been lost or stolen after notarizing Catlin's signature. There was no evidence the notary informed the Secretary of State that the journal had been lost or stolen.

Additionally, a doctor testified that the dosage and type of pain medication provided to Catlin was "substantial," and its effect would depend on her "tolerance." Some evidence indicated Catlin's ability to communicate worsened each day beginning with her hospitalization on January 29, 2011.

There was also evidence that on the day after the grant deed was executed, Chagoya said, "I got everything I want anyway," before leaving the hospital."

The trial court invalidated the deed and imposed a constructive trust on the property for Ms. Brown's benefit. Mr. Chayoga appealed this judgment.

The appellate court reversed the trial court's decision, finding that Ms. Brown did not file her constructive trust claim within the statute of limitations. Ms. Brown had 1 year to file her claim because it related to "a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust or under another instrument, whether the promise or agreement was made orally or in writing." Ms. Catlin died on February 4, 2011. Ms. Brown filed her petition on January 28, 2013. 

The opinion concludes with "[w]e only hold that Brown is not entitled to a constructive trust on the property (or the proceeds of its sale) based on her oral agreements with Brothers and Catlin." 

Probate Fees

An attorney can be awarded 2 fees for handling a probate. 

First the attorney can receive ordinary fees for handling the typical duties that entail probate, e.g. filing the petition to open probate, filing the petition to close probate, making court appearances, notifying heirs and beneficiaries, etc. This fee is based off of the value of the estate. Below is the fee calculation for an estate up to $1M.

Estate Value            Ordinary Fee 

$100,000                   $4,000 

$200,000                   $7,000 

$300,000                   $9,000 

$400,000                   $11,000 

$500,000                   $13,000 

$600,000                   $15,000 

$700,000                   $17,000 

$800,000                   $19,000 

$900,000                   $21,000 

$1,000,000                $23,000  

Second, an attorney can be awarded extraordinary fees for certain matters. The most common example of this is the sale of real estate. It is common for a probate estate to own real estate. Invariably the decision will be made to sell that real estate. Rarely do heirs or beneficiaries want to form a business entity to manage a property together. Under such a scenario, the attorney can be awarded an ordinary fee and an extraordinary fee.

However, extraordinary fees are not automatic. You can't always get what you want........

"If, under all the relevant circumstances, the amount awarded as ordinary compensation is fair and reasonable for all the attorney services, the court may disallow a request for extraordinary compensation even though some extraordinary services have been performed." Estate of Trynin (1989) 49 Cal.3d 868, 874.   

In a recent unpublished opinion, the California Court of Appeal addressed the reduction of extraordinary fees awarded to a probate attorney. The attorney had requested $27,510 in extraordinary fees. The trial court reduced the extraordinary fees to $3,399. On appeal, the appellate court upheld this decision. San Francisco Superior Court case # PES14297788.  

Selling Real Estate

The sale of real estate in an estate matter, whether trust administration or probate, is a very common occurrence. 

Typically the beneficiaries will prefer the cash over real estate because of the flexibility that cash provides. This cash can be used to invest in other financial instruments such as stocks, bond, mutual funds, annuities, etc. Furthermore, the beneficiaries are not "in business" with the other beneficiaries in managing the property. One question I commonly pose to beneficiaries who are set to inherit real estate is "do you want to liquidate or retain the property with the other beneficiaries (invariably relatives) and operate as a quasi-partnership?" The response is practically universe, sell.

If the estate's representative is tasked with selling real estate, prudence is naturally expected of them. 

A recent appellate opinion highlighted the failed efforts of an administrator to sell real estate.

"Armuress's expert witness testified Rogers did not effectively market the estate's land holdings in the years after the probate court's 2001 ruling. Rogers removed parcels from the active listings for periods of time and failed to adjust the asking price when the market for similar undeveloped land dropped considerably. At the time of trial, the properties were listed for a total asking price of more than $9 million, but the expert opined the property was worth no more than $6.1 million and the inflated asking price meant the property was effectively off the market. Rogers's expert provided contrary testimony, for sure, but the record supports the probate court's conclusion that "the weight of [the] evidence" showed the properties had been marketable since 2001 yet Rogers failed to sell them."   

Estate of Sapp (2019) _____ Cal.App.4th _____

A conclusion from the case would be that to reasonably market real estate, the estate's administrator needs to be mindful of current market conditions. If the real estate market is soft, the price should be dropped to reflect the lack of demand at the current price. Conversely, if the real estate market is competitive, the price could remain as-is.

For context, the opinion noted that it had been 15 1/2 years since the administrator was instructed to sell the properties and failed to do so. While the administrator "sold four parcels in 2004, in the 12 years that followed she had failed to sell the remaining nine parcels."  

Estate of Michael Jackson

It is hard to believe that Michael Jackson passed away practically a decade ago. He passed away on June 25, 2009. 

Simply put Michael Jackson was a world-famous musician. He still is my sister's favorite musician. I can remember listening to his music as a child during the 1980s on a boombox that was playing a cassette tape. How times have changed.............

Following Mr. Jackson's passing, 4 individuals came forward to assert a claim against his estate. The claimants alleged that Mr. Jackson had promised them a share of a new company during a meeting on June 1, 2006 in Japan.  

However, no claim was immediately filed after the co-executors had been appointed on November 10, 2009 to administer Mr. Jackson's estate. 

Instead, according to the unpublished appellate opinion, "[o]n December 20, 2012, El-Amin wrote to the executors advising them of the June 1, 2006 meeting and claiming that at that meeting Jackson had made promises to appellants of ownership interests in his company and had stated how those supposed equity interests would be allocated."

This prompted the co-executors into action. 

"On January 28, 2013, the executors filed their "Petition for an Order Determining that the Estate of Michael Joseph Jackson Is the Sole Member and Owner of the Michael Jackson Company, LLC," pursuant to Probate Code section 850 (the Petition), by which they sought an order confirming that "the Estate is the sole member and owner of the [LLC] and that no other person has an interest in the [LLC]." The Petition noted that Jackson had been listed as the sole member of the LLC on the Estate Inventory and Appraisal, filed in 2011."

"On May 7, 2013, Morris and El-Amin filed a complaint in the Los Angeles Superior Court, seeking damages for Jackson's alleged repudiation of the claimed joint venture among the parties which they alleged had been formed at the meeting in Tokyo to determine the value of their interests in the claimed joint venture and to obtain damages for its breach."

The probate petition and civil action were eventually consolidated. 

"Following a multi-day bench trial on the Petition in the probate court and posttrial briefing, on March 27, 2017, the trial court issued a 27-page minute order containing its credibility determinations, findings of fact and legal rulings. The court determined the Estate was the sole owner of the LLC."

On appeal, the appellate court affirmed the trial court's decision.

The crux of claimants' case was the delayed filing. Mr. Jackson passed away on June 25, 2009. Code of Civil Procedure § 366.2 generally imposes a strict 1-year deadline to file a claim against a decedent's estate. No exception to Code of Civil Procedure § 366.2 applied to this matter, so the claimants needed to file their claim by no later than June 25, 2010. Unfortunately for the claimants, their claim was filed after June 25,  2010 and so their claim was time-barred.

Trustee-Attorney of a Trust Part II

In a prior post from 2016, I discussed the dangers of being an attorney that serves as the trustee of another's trust (as opposed to the attorney representing the trustee). 

A recent unpublished appellate opinion highlights this danger, as another California attorney made this unfortunate decision.

"In 1988, Virginia and Lloyd created the Trust. The beneficiaries of the Trust were the couple's four adult children: Jean, Julie, Wayne, and Patricia (not a petitioner). Virginia and Lloyd were "astute" business people who bought, sold, and rented various real estate properties. Lloyd was particularly "frugal" in his business and private affairs. The couple's estate was worth about $3 million.

In 2009, Virginia and Lloyd were both diagnosed with dementia. Virginia and Lloyd became progressively worse, but Virginia's dementia progressed more rapidly. In 2011, Virginia was placed in an assisted living nursing facility. In March 2012, Virginia passed away. Without notifying his children, Lloyd then married Marion, who also suffered from dementia.

In August of 2012, Knighton stopped working as an attorney in a law firm. Her salary had been $220,000 per year plus bonus. In September 2012, Knighton began doing legal and caretaking work for Marion and Lloyd.

In January 2013, Lloyd executed a power of attorney naming Knighton as his agent. Lloyd later agreed to pay Knighton a flat fee of $220,000 per year; there was no written retainer agreement.
 
In April 2014, Lloyd executed an amendment to the Trust naming Knighton as a cotrustee. In September, Lloyd signed forms naming Knighton as the primary beneficiary of five annuities worth $300,000. Knighton submitted a form to the annuity provider requesting a change of address from Lloyd's address to Knighton's home address. Lloyd's financial advisor, Carmello Buscemi, expressed concerns regarding undue influence. In December, Lloyd terminated Buscemi."

"On August 22, 2017, the court filed a statement of decision after a trial. The court imposed surcharges, gave a credit for Knighton's services, and imposed double damages. "[T]he testimony and evidence supports a finding that Lloyd Gross from October 2013 up until the time of his death on February 22, 2016 did not have sufficient mental capacity to enter into a valid contract such as the flat fee arrangement for $220,000 agreed to in October 2013 and to make the change of primary beneficiary for five annuities executed on September 5, 2014."

The trial court's decisions were all upheld by the appellate court.

Storey-Gross et al. v. Knighton, Orange County Superior Court case # 30-2015-00777776.

Location of a Litigant

There is generally no geographical limitation for a participant in litigation. For example, assume there is a pending probate case in Santa Clara County Superior Court. 

The litigant could live in San Jose, the city where the probate court in Santa Clara County is located. Or the litigant could live in Campbell, a city located in the same county as the superior court, i.e. Santa Clara County. Or the litigant could live in Santa Cruz, a city located outside of Santa Clara County but in California. Or the litigant could live in Winnemucca, a city located outside of California but in the United States. It is in Nevada in case you are wondering. Or the litigant could live in Salzburg, a city located in Austria.

All of these locations do not preclude a litigant from participating in a case.

Moreover, a person confined to a fixed location for a set amount of time can still participate in a case. For instance, being an inmate at a California penitentiary is not an insurmountable impediment for a litigant. Obviously there are inherent obstacles, both literally and figuratively, if a litigant is residing in a correctional facility. Still, the fact that the litigant is an inmate does not bar the inmate from participating in a lawsuit. A recent unpublished appellate decision said as follows "Appellant Rodney E. Keim appeals the probate court's order denying his petition requesting an accounting of the Rodney E. Keim Trust" and then later "Rodney Keim is serving a life sentence at California Medical Facility in Vacaville, California." The case originated from El Dorado County Superior Court, case # PP20150156. Mr. Keim's appeal was unsuccessful in case you are wondering. 

While Mr. Keim's appeal was unsuccessful, not every appeal by an incarcerated litigant reaches the same fate. A landmark U.S. Supreme Court decision came from the appeal of a Florida inmate whose petition to the high court was written on prison stationery. His name was Clarence Gideon and a defendant's constitutional right to counsel in criminal cases came from his case, Gideon v. Wainwright, 372 U.S. 335 (1963).