March 9, 2016

Equitable Remedies in Probate Court

When a litigant receives an instruction from a judge, it is always a prudent maneuver to abide by it. The judge does not issue an order for no reason.  Otherwise the litigant can encounter severe consequences as the judge can equitably resolve the matter to their detriment. This brings us to the case of an unfortunate trust litigant from a recently decided unpublished appellate opinion. Prichard v. Pergiovanni, San Bernardino County Superior Court case # PROPS1200335. 

The thrust of the appeal stemmed from this portion of the order:

"The probate court's August 29, 2013 judgment, among other things, directs plaintiff and Frank Pergiovanni to deed their respective interests in the property to defendant. Defendant, in turn, now as sole owner, is to execute a reverse mortgage on the property, and distribute one third of the proceeds to each of his siblings. The judgment provides additional instructions regarding distribution of the remaining Trust assets, and declares that when the distribution of assets in accordance with the judgment has been completed, the Trust shall be deemed dissolved."

Clearly the logical move for Defendant to make was to obtain a reverse mortgage. Did the Defendant subsequently obtain a reverse mortgage? No he did not. The judge was none too pleased..........

"After the August 29, 2013 judgment, the probate court held several hearings with respect to the status of the reverse mortgage, among other issues. Finally, on April 30, 2014, the probate court heard argument on plaintiff's "Motion for Sanctions Against Nicholas Pergiovanni, Jr.," filed December 23, 2013, asking that the court remove defendant as trustee, appoint plaintiff as the sole trustee, and order the assets of the Trust to be liquidated. The probate court granted the motion, ordering that plaintiff be appointed as sole trustee of the Trust, and granting her authority to liquidate all the Trust assets, including the house, which defendant was ordered to vacate." 

Defendant then appealed the decision of the trial judge to order that the property be sold. On appeal, the trial court's decision was upheld. The opinion found that a trial court "may apply general equitable principles in fashioning remedies and granting relief." In re Estate of Kraus (2010) 184 Cal.App.4th 103, 114. Since defendant failed to obtain a reverse mortgage, even though they were ordered to do so, the trial court was free to adopt an equitable remedy. In this case, the equitable remedy was the sale of the home even though defendant had a life estate in the property.