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 This brings us to the case of an unfortunate trust litigant from a recently decided unpublished appellate opinion.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.

Executor of a Will (Letters Testamentary)

A statement I commonly hear, albeit erroneous, is where a person mentions that a relative or friend passed away and they are now the executor after reading their will. However, this hypothetical person is misinformed in terms of California probate law. An executor is only appointed following a court order. Simply by reading a will and seeing you are the nominated executor does not automatically make you the appointed executor of an estate. There is a process in becoming the executor.

In order to become appointed executor of a testator's estate, such person has to petition for probate with the appropriate superior court. If the decedent resided in California, "the proper county for proceedings concerning administration of the decedent’s estate is the county in which the decedent was domiciled, regardless of where the decedent died." Probate Code § 7051. If the testator was domiciled in Monte Sereno, CA but died in Auburn, CA, the proper county to petition for probate would be Santa Clara County not Placer County. Usually determining the decedent's domicile is relatively easy, you just figure out where the decedent lived permanently. Domicile is just a fancy way of saying "permanent residence" or "permanent home." Granted a permanent residence can change over time but you can only have 1 permanent residence at a time. Just try me on this one.

When a person petitions for probate, they submit to the probate court various judicial council forms and a copy of will. Form DE-111, the main document, will ask basic background information about the decedent such as where they resided, if they were married, if they had children, when they passed away, the approximate value of their estate, if they had a will, etc. The judicial council forms can be found here. 

If all the appropriate forms have been correctly submitted, an order for probate will be granted (Form DE-140) and at that point, an executor will be appointed (Form DE-150). If an executor is appointed, DE-150 is completed as letters testamentary. 

Once appointed executor, such person can deal with third-parties on behalf of the decedent's estate. Although third-parties will ask for a copy of letters testamentary as evidence of the executor's authority to act. For instance, a bank will ask for a copy of letters testamentary if the executor desires to access the decedent's account there.         

Following a Court Order

A sure-fire way to get into a legal predicament is to disobey a court order. Failure to abide by a court order is grounds for dismissal of an appeal. The term for this is the disentitlement doctrine. This legal remedy was recently applied in an unpublished opinion involving a misbehaving party from San Bernardino County Superior Court. Blumberg v. Minthorne, Case # PRODS1000744.

Following a bench trial pertaining to a probate matter, a judge ordered the petitioner to file an accounting by a certain date and quit-claim a property to her step-grandson. She failed to do either and in the meantime, filed an appeal. Her appeal was then dismissed because of her inability to comply with both aspects of  the court order. In light of the opinion, it is not hard to see how she failed to comply.

In regards to quit-claiming the property to her step-grandson, the opinion states:

"The second issue is the conveyance of the property. Gloria's conduct with respect to this issue is, to put it bluntly, despicable. She was ordered to quitclaim the property to Adam. She failed to do so. The court set an OSC. On the same day she filed an opposition to the OSC, she recorded a quitclaim to her daughter at 4:10 in the afternoon. The opposition does not mention this, instead suggesting a number of options in lieu of quitclaiming the property to Adam, including staying the transfer, appointing a neutral trustee, or staying transfer upon a reasonable bond. She was utterly dishonest with the court."

In a nutshell, the petitioner was supposed to transfer the property to her step-grandson. Instead she transfers the property to her daughter. Hmmmm.

For reference, "OSC" stands for "order to show cause." This hearing is typically scheduled when something has gone awry in a case and the court needs a status update. If a party has not conducted themselves appropriately, sanctions can be assessed (monetary penalties).

Naturally, the appellate court did not look kindly upon the petitioner's appeal:

"Gloria's conduct since the judgment has frustrated the attempts of the court to legitimately effect its own orders. She has missed court dates, failed to keep her own promises, lacked candor in her communications with the court, and ignored the court's orders. She cannot therefore now seek relief from the appellate court. The disentitlement doctrine applies."

The court of appeal then, not surprisingly, dismissed her appeal.

Jury Trial in a Probate Case?

One of the hallmarks of the American judicial system is the right to have your case tried in front of your peers, i.e. a jury. This right to a jury trial is enshrined in the Seventh Amendment to the U.S Constitution. It says, in its entirety: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law." Since the U.S. Constitution was drafted and ratified in the 18th century, the threshold amount of $20 is obviously not an issue for just about any litigant. Usually litigants request a huge amount as damages instead of an infinitesimal amount. 

As a contemporary example, a criminal defendant such as Patriots TE Aaron Hernandez, who is charged with multiples counts of murder, is entitled to a jury trial. (Hold off on drafting him in your fantasy football pool even if somebody is very insistent that he is a late round bargain). Similarly, a disgruntled patron of In N Out Burger may ask for a jury trial for alleged personal injuries suffered as result of hot coffee being spilled on them.  

Conversely, in the probate context, there is generally no right to a jury trial. Probate Code § 825. Litigants in the probate context almost always have their matter determined by a bench trial. That is, the case is entirely decided by a judge instead of a jury.

For example, assume that a petition is filed in Santa Clara County Superior Court which alleges that the trustee breached a fiduciary duty and the beneficiary is seeking to have them removed. Since there is no jury trial, the litigants do not have to go through the trouble and expense of selecting a jury. However, juries are typically more sympathetic to a litigant's plight than a judge. On balance, since probate litigation can entail technical or complex matters, e.g. the interpretation of an ambiguous clause in a trust, a bench trial is seen by some lawyers as preferable. Most lay people are naturally not well-versed with testamentary language that is written in legalese.