Phillips v. Phillips

Filed 1/13/10 Phillips v. Phillips CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Nevada)

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Appellant Melvin Phillips filed a probate court petition and objection to accounting, challenging actions of his siblings -- defendants Buddy Phillips and Marjorie Woodward (trustees) -- as trustees of a trust (Prob. Code, 16000 et seq.[1]) created by their mother, Beatrice Phillips, and as her attorneys-in-fact under a power of attorney ( 4400 et seq.). After a bench trial, Melvin[2] appeals from the judgment entered in favor of the trustees. We shall conclude that, with one exception, any breach of trust was excusable in the trial courts discretion under section 16440[3] because the trustees acted reasonably and in good faith. The one exception is that the trial court erred in failing to find an inexcusable breach of duty when the trustees took $500 out of a trust payment to Melvin to satisfy a personal debt Melvin owed to Buddy. We shall partially reverse the judgment and remand for the trial court to determine the remedy for that single breach.

FACTUAL AND PROCEDURAL BACKGROUND

In October 2007, almost a year after Beatrices death, Melvin filed a petition to review trustees accounting, determine breach of duty, and restore assets to the trust estate. He later filed an amended petition but withdrew it and filed objections to the accounting filed with the court by the trustees. He challenges actions by the trustees both before and after Beatrices death.

On August 16, 1996, Beatrice signed two documents: (1) a Uniform Statutory Form Power of Attorney ( 4400 et seq.) and (2) the Beatrice Phillips 1996 Trust (the Trust).

The power of attorney would become effective upon Beatrices incapacity, as determined by either of the named agents (attorneys-in-fact) Buddy and Marjorie. The agents were to act jointly and had full powers with respect to real property transactions, trust transactions, and personal and family maintenance.

The Trust named Beatrice herself as Settlor, Trustee, and Beneficiary but, in the event she became unable because of death, incompetency or other cause to serve as trustee, Buddy and Marjorie would be joint successor trustees. Beatrice named her five children (Jack, Melvin, Edward, Buddy and Marjorie) as beneficiaries after her passing. A 1997 amendment reduced Melvins ultimate share by $10,000, to be distributed instead to Marjories daughter Melinda, who lived with Beatrice.

In mid-August 2001, Beatrice suffered a stroke at age 86. Buddy and Marjorie, after consulting with their siblings, determined Beatrice was incapacitated and exercised the power of attorney, with no objection by Melvin. Since Beatrice could no longer live independently, the siblings agreed to move Beatrice to a rehabilitation facility close to Buddys Placer County home, and the trustees sold Beatrices Richmond home.

Although Melvin claims Beatrice never regained coherence, three of his siblings (Buddy, Marjorie, and Jack) testified Beatrice recovered enough to be able to express herself and converse easily and enjoy her familys company. She lived in a residential care facility until her death on November 15, 2006, but enjoyed outings to Buddys house and travel to family reunions and a church event.

In December 2001, a few months after Beatrices stroke, the trustees gave from the trust estate $10,000 to each of Beatrices five children, except Melvins share was reduced by $500, with a note from Buddy saying Mom deducted $500 that Melvin owed for his parents Alaska cruise. Melvin objected. Buddy clarified the debt was owed to Buddy, not Beatrice, because Melvin had failed to honor a prior promise to his siblings to share the expense of sending their parents on a cruise for their 50th anniversary. Buddy said Melvin reneged on his promise when brother Jack found a less expensive trip than Melvins affiliated travel agency was willing to match. Melvins son, an attorney, responded that this happened in 1985, the statute of limitations lapsed, and Melvin withdrew his offer to contribute because he felt obliged to reimburse the cancellation fee incurred by his travel agency.

Thereafter, the trustees made an annual distribution of $10,000 to each of the five beneficiaries until Beatrices death in 2006.[4] After her death, a further distribution was made, and some property remained in the trust at the time of trial.

Buddy testified he did not provide a full annual accounting before his mothers death because he did not understand what he was supposed to do. After his mothers death, he consulted a lawyer and a certified public accountant (CPA). An initial accounting (the subject of Melvins original petition) covered the period from Beatrices 2001 stroke to her 2006 death and was prepared at the direction of attorney Robert Ash (the Ash Accounting). The trustees then filed their FIRST ACCOUNT AND REPORT (the First Account or Harpainter accounting) in two parts -- (1) for the period before Beatrices death, and (2) from her November 2006 death through December 24, 2007).

At trial, Melvin challenged various other actions of the trustees, including (1) keeping for themselves the proceeds of Beatrices annuity; (2) releasing a deed of trust on Buddys South Lake Tahoe property reflecting Beatrices loan to Buddy; (3) removing Beatrices joint interest in Buddys Lake of the Pines property; (4) using trust money to pay for the meals and travel expenses of the trustees and Buddys wife in outings with Beatrice; and (5) using trust money for home improvements on Buddys house.

The trustees adduced evidence that (1) they were the sole beneficiaries of the annuity; (2) before her stroke Beatrice verbally forgave the loan for the South Lake Tahoe property (as she had forgiven loans to other children); (3) before her stroke Beatrice signed a release of her interest in Lake of the Pines which arose only because Buddy as a recent retiree was required by his lender to have Beatrice cosign for the mortgage; (4) the trustees honored Beatrices desire to pay for meals (which averaged $35 monthly) when she instigated the outing; (5) Beatrice wanted to travel for family reunions and church events but could not go alone, and Buddys wife assisted Beatrice with personal hygiene matters; and (6) the home improvements were for Beatrices benefit when she visited Buddys house (a chair lift to move her up and down stairs and a fire pit in the yard where she liked to sit and watch the deer). The trustees were not well versed in the law.

Additional facts appear in our discussion.

The trial court issued a PROPOSED STATEMENT OF DECISION, finding no breach of duty but also stating the statutory rule ( 16440, fn. 3, ante) that, when the court finds a trustee may have violated some fiduciary duties but acted reasonably and in good faith, the court may excuse the trustee from liability. The court said:

The evidence presented in this case was insufficient to demonstrate any intentional or negligent breach of any fiduciary duty. The evidence was overwhelming that the Trustees attempted to perform their duties in the best interests of the testator during her life and the life of the Trust. Therefore, the court finds no breach of fiduciary duty, that the Trustees actions were reasonable, and that there are no assets to restore.[[5]]

The Petitioners primary complaints challenge the nature of [Buddys] real property interests. The Trust included a deed of trust on the Lake Tahoe property until the release of obligation was filed on January 18, 2005. There was insufficient evidence to suggest any wrongdoing on the part of the Trustee in that matter. The evidence did support a finding that the balance of that loan was forgiven by testator, as she had released other loans to other family members at various times. Similarly, Petitioner argued that [Buddys] residence should be part of the estate. There was insufficient evidence to support that claim and there is substantial evidence to support the courts finding that it is not part of the trust estate.

Petitioners challenges to the accounting were not supported by evidence. Petitioners complaint about the failure to file an accounting was remedied by the accounting filed by Respondent. No damage due to the late filing of the accounting was alleged or proven nor is any found.

The court did not make any changes in response to Melvins objections to the proposed statement of decision.

On January 15, 2009, the trial court entered judgment in favor of the trustees, decreeing: (1) Melvins petition was denied; (2) there was no breach of trust and no breach of fiduciary duty by either trustee during the administration of the Trust; (3) Beatrice forgave Buddys loan for the South Lake Tahoe property; (4) the Lake of the Pines property is not an asset of the Trust estate; (5) the proceeds of the Morgan Stanley/Allstate annuity were not inappropriately removed from the Trust estate and paid to the designated beneficiaries; (6) the trustee fees were reasonable; (7) each party is responsible for his or her own attorney fees; (8) Buddy is awarded costs; (9) neither trustee acted in bad faith under section 859;[6] (10) Melvin is not entitled to punitive damages; and (11) the court approved the First Account and Report and ratified, confirmed and approved all acts of the trustees therein set forth.

DISCUSSION

I. Standard of Review

The beneficiary of the trust has the initial burden of proving the existence of a fiduciary duty and the trustees failure to perform it; the burden then shifts to the trustee to justify its actions. (Oates v. City of Lincoln (2001) 93 Cal.App.4th 25, 35.)

Melvin claims his appeal presents only questions of law on undisputed facts, triggering de novo review. However, we shall see this appeal does involve factual disputes, to which we apply a substantial evidence standard. (Penny v. Wilson (2004) 123 Cal.App.4th 596, 603 [substantial evidence review applied to trial courts determination of whether trustee breached duties].) Moreover, an abuse of discretion standard applies to any decision under section 16440 (fn. 3, ante), which gives the trial court discretion to excuse a trustee from liability for breach of trust.

II. Contentions Forfeited

Melvin argues, with respect to various contentions, that the trustees acted in bad faith. Although not acknowledged by Melvin, this presents a substantial evidence question. We shall conclude (as urged by the trustees) that Melvin has forfeited any issue dependent on a good faith or bad faith finding, because Melvins appellate brief distorts the evidence and fails to acknowledge evidence favorable to the trial courts finding that the trustees acted in good faith. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) The reviewing court presumes the evidence supports the trial courts factual findings, and an appellant who seeks reversal is required to set forth in his brief all the material evidence on the point and not merely his own evidence, and unless this is done the error is deemed forfeited. (Ibid.)

For example, Melvin suggests his unawareness of some of the trustees activities demonstrates that the trustees isolated Beatrice to plunder her estate. However, Melvin fails to acknowledge evidence favorable to the judgment, e.g., that (1) Melvin was present and made no objection when the initial decisions were made for the trustees to take over and move Beatrice to Placer County; (2) Melvin had long ago distanced himself from his siblings (perhaps related to an accusation that he sexually abused a sibling); (3) the other siblings maintained a relationship and spent time with Beatrice until her death (as documented in photographs shown to the probate court); and (4) brother Jack testified he believed the trustees took good care of Beatrice.

Moreover, Melvin distorts the evidence. He says the trustees moved Beatrice to a care facility in Auburn to isolate her, so she would agree to anything in order to be around people she knew. However, Melvin cites only (1) his own testimony that Beatrice did not know anyone in Auburn except Buddy and his wife, and (2) Marjories testimony that she or brother Jack came from their homes in other states to stay in Auburn when Buddy and his wife left town for extended trips, because I [Marjorie] didnt feel she [Beatrice] could be left for an extended period without somebody in the family being around, because she relied on her family so much. This is not evidence of bad faith.

Melvin says the trustees allowed Beatrice to direct how trust funds were spent, but if she wanted something for herself or anyone other than the trustees, the trustees would deny her request. However, the cited evidence shows only that Buddy, in describing Beatrices mental capacity, testified that (1) he sometimes said no when Beatrice insisted on going to the hair stylist more than once a week, and (2) when Beatrice wanted to buy Jack a car, Buddy said she would have to buy a car for each child which would cost too much money.

According to Melvin, Buddy claimed it would cost too much to let Beatrice live at the Lake of the Pines property, yet the cost would have been less than the money spent for her care at the assisted living facility plus the expenses of the trustees self-dealing. However, besides failing to explain why self-dealing expenses should enter the equation, Buddy cites no evidence comparing the cost of the facility with the cost of 24-hour care at Lake of the Pines.

We observe it was not necessary for Beatrice to be declared legally incompetent in order for Buddy and Marjorie to handle her affairs. The power of attorney allowed them to take over if either of them believed Beatrice was incapacitated, and the Trust allowed them to take over if Beatrice became unable to serve as Trustee because of death, incompetency, or other cause.

Melvin appears to think bad faith is shown by proving a breach of duty. He quotes from Van de Kamp v. Bank of America (1988) 204 Cal.App.3d 819, which said in a recitation of legal principles that [i]t does not matter that a trustee may have acted in good faith; self-dealing in violation of the duty of loyalty cannot be justified by the good faith of the trustee. [Citations.] (Id. at p. 835.) However, that statement merely said good faith was not a defense to self-dealing. The case said nothing about section 16440, which was enacted two years earlier (Stats. 1986, ch. 820, 40, p. 2783). The case spoke in terms of justification, not excuse, and therefore does not constitute authority that section 16440s discretion to excuse a trustee from liability is inapplicable to breaches involving self-dealing -- even where, as here, the Trust itself prohibited self-dealing by any trustee who was not also the settlor. Moreover, the cited case held that, where it was not a breach of trust for a trustee to self-deposit trust funds, the trustee was permitted to profit from the use of such self-deposited funds. (Id. at pp. 839-840.) Thus, the case does not help Melvin.

Melvin claims bad faith was proven by Buddys response when he was asked at trial why the Trust paid for Marjorie to take a trip to Albany, New York. However, Buddys response was, I cant recall why we would pay Marjorie for the trips. Albany, must have been a reason but that reason escapes me right now. This does not prove bad faith.

Accordingly, we conclude that by failing to report all the evidence fairly, Melvin has forfeited any challenge to the trial courts finding that the trustees acted in good faith, and we disregard Melvins assertions that the trustees acted in bad faith.

We also disregard Melvins insinuation that he is entitled to damages for chronic lateness by the trustees attorney in filing and serving papers. Melvin fails to present this point under a separate heading but buries it, without legal analysis, under a heading that Judge Anderson was informed of the issues and law. Under this heading, Melvin also complains the trial court ignored his objections to the proposed statement of decision, but he fails to explain, and we therefore disregard the matter. (People v. Turner (1994) 8 Cal.4th 137, 214, fn. 19 [reviewing court may disregard contentions inadequately briefed]; Cal. Rules of Court, rule 8.204 [appellate brief must state each point under a separate heading supported by argument], undesignated rule references are to California Rules of Court.)

Melvin has also forfeited any claim of inadequacy in the statement of decision. He says the trial court did not address his objections to the proposed statement of decision, but he fails to provide any factual or legal analysis warranting reversal.

III. Claimed Breaches of Duty

Melvin contends reversal is required due to multiple breaches of the trustees duties.

The remedies of a beneficiary against the trustor are exclusively in equity. ( 16421.) [A] court of equity is not bound down to the strict legal rights of the parties, but will take into consideration all the circumstances in order to arrive at the justice of the case. (Weyant v. Murphy (1889) 78 Cal. 278, 283.)

We shall first address a single breach of duty which compels partial reversal of the judgment. We shall then address the remaining contentions.

A. The $500 Deduction

Melvin contends the trustees breached their duty when they deducted $500 from the $10,000 payment to Melvin for a personal debt owed to Buddy. Melvin complains the trial court abused its discretion by excusing the breach of duty under section 16440 (fn. 3, ante), which gives the court discretion to excuse trustees from liability for breaches of trust if the trustees acted reasonably and in good faith. We shall conclude the deduction constituted a breach of duty that was unreasonable as a matter of law and therefore could not be excused under section 16440.

The parties discuss only the statutes governing trustees. They do not mention the statutes governing attorneys-in-fact under Powers of Attorney. Because the parties do not address the powers and obligations of attorneys-in-fact, we shall confine our discussion to the powers and duties of trustees.

As to a trustees standard of care in administering a trust, section 16040 provides: The trustee shall administer the trust with reasonable care, skill, and caution under the circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument.

The trustee has a duty not to use or deal with trust property for the trustees own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary. ( 16004, subd. (a).)

Although Marjorie does not appear to have gained anything personally, Buddy did. Though not clear, the inference is that Buddy pocketed the $500. This use of his position for personal gain to satisfy a personal debt not involving Beatrice is a clear breach of his duties as trustee, and we see no provision of the Power of Attorney Act which would authorize the deduction. Although section 4232 says a conflict of interest will not necessarily constitute a breach of the attorney-in-facts duty, the attorney-in-fact must be acting for the principal. Here, Buddy and Marjorie were not acting for Beatrice when they took $500 out of Melvins distribution.

Trustee liability cannot be excused under section 16440 (fn. 3, ante), because the action was not reasonable. Any reasonable person should know he cannot use his position as trustee to settle a personal debt with a third party.

The trustees lack of legal sophistication in matters of trust administration would not justify excusing this breach, because the principle that a trustee not act for personal gain is one of common sense. Moreover, the Trust itself, in section 4.08, states, any power provided herein to permit self-dealing between the Trust Estate or other property of the Settlors [Beatrice] and the Trustee may be exercised only by a Trustee who is also a Settlor [i.e., only by Beatrice].

The trustees, citing section 16440 (fn. 3, ante), suggest there is no breach of duty unless they acted in bad faith. We disagree. The statute excuses a breach of duty made in good faith; it does not set up bad faith as a prerequisite to finding a breach of duty.

We conclude the $500 deduction constituted an inexcusable breach of duty, requiring partial reversal of the judgment and remand for the trial court to fashion a remedy and determine whether Marjorie, who did not profit, should be liable.

B. No Annual Accounting/Notices

Melvin complains the trustees failed to comply with statutes requiring annual accountings and notices of action. We see no grounds for reversal.

The trustees argued in the trial court that, under sections 15800[7] and 17200,[8] Melvin had no standing to object about accountings/notices for the years Beatrice was alive, because during a settlors lifetime, a beneficiary who does not hold a power to revoke a revocable trust does not have standing to seek redress of a breach of trust, and the trustees owed a duty to Beatrice only, not to the other beneficiaries. The parties resume this argument on appeal.

Section 15800 says, [e]xcept to the extent that the trust otherwise provides . . . . Here, the Trust itself said, The Trustee shall periodically, at least annually, prepare and deliver to Settlor and each beneficiary mentioned in this Declaration an accounting in writing of the Trustees administration of the trust[] and written approval signed by the settlor or any beneficiary would release the trustee from liability toward that person. (Italics added.) It thus appears the Trust itself imposed a duty for the trustees to account annually to other beneficiaries even during Beatrices lifetime and further contemplated the possibility of liability.

For purposes of this appeal, we conclude Melvin has standing.

Melvin complains the trustees failed to make the accounting annually. He argues the trial court abused its discretion in ruling the trustees had not committed any breach of trust. However, Melvin fails to acknowledge that the trial court said the failure to make annual accountings was remedied by the accounting filed with the court, and [n]o damage due to the late filing of the accounting was alleged or proven nor is any found. Melvin does assert, however, that he was forced to hire a Nevada City lawyer to get an accounting. However, the cited testimony merely indicates that Melvin (whose wife and son are lawyers) made a phone call to a lawyer, Kipp Wordell, who sent a letter demanding an accounting, and the trustees then provided the accounting. Melvin does not demonstrate what, if anything, he paid to the lawyer.

Melvin argues the trustees breached their duty to send notices to beneficiaries required by section 16061.7, subdivision (a)(1)-(2), which says a trustee shall serve a notification when a revocable trust becomes irrevocable or when there is a change of trustee of an irrevocable trust. Melvin claims the Trust became irrevocable when the trustees decided Beatrice was unable to handle her own affairs. He quotes from section 1.03 of the Trust, that the settlor was designated as Trustee but, should she become unavailable to serve due to death, incompetency, or other cause, Buddy and Marjorie were to serve as trustees. Melvin argues the Trust treats incapacity the same as death, and death makes the trust irrevocable, and when the trustees declared Beatrice incapacitated the Trust became irrevocable. However, we see nothing in the Trust precluding Beatrice from resuming her position as Trustee in the event she recovered from her stroke sufficiently to take charge of her own affairs again. We thus reject Melvins argument that the Trust became irrevocable when the trustees first took over for Beatrice.

We conclude Melvin fails to show grounds for reversal based on a failure to provide accountings or notices.

C. Real Property

1. South Lake Tahoe

Melvin complains the trustees breached their duty by removing from the trust estate a $54,500 deed of trust on Buddys South Lake Tahoe real property, securing a loan Beatrice gave to Buddy in 1994 which he did not repay in full. We see no basis for reversal.

Although the trustees assert there was no evidence the Lake Tahoe property deed of trust was an asset of the Trust, the Trust expressly listed as property of the Trust estate, $54,000 Deed of Trust secured by real property [Buddys South Lake Tahoe property].

In January 2005 (before Beatrices death in November 2006), the title company recorded a RELEASE OF OBLIGATION UNDER DEED OF TRUST, stating the obligation secured by the deed of trust was paid in full. Buddy testified his mother verbally forgave the balance owing on that deed of trust sometime after 1998 and before her stroke, and he was surprised to see it listed as a trust asset. Buddy testified (without objection) that Marjorie said she was also surprised, because she knew her mother had forgiven the loan. Buddy asked for the release in order to sell the property to his daughter and son-in-law. Marjorie testified that, before the 2001 stroke, Beatrice said she had forgiven loans made to Buddy and another son and asked if Marjorie minded, since Marjorie had not borrowed any money. Marjorie said she did not mind. Jack, who was in the courtroom during his siblings testimony, testified he had no objections to the trustees actions and believed they took good care of their mother.

On appeal, Melvin fails to acknowledge the power of attorney statutes and fails to offer any legal analysis or authority regarding powers of attorney. He says the statute of frauds (Civ. Code, 1624) requires a transfer of an interest in real property to be in writing. However, there was a writing -- the release recorded at the title companys request. The parties say Buddy recorded the release, but the document itself says recording was requested by the title company. In any event, the power of attorney gave Buddy and Marjorie authority to act with respect to real property transactions. Section 4451, subdivision (c), says the language granting power with respect to real property transactions empowers the agent to release a deed of trust. Section 4232 says an attorney-in-fact does not violate his duty simply by benefitting from acting for the principal or by having conflicting interests. With the evidence that Beatrice forgave the loan, there was no breach of duty under the power of attorney.

Melvin says a writing signed by Beatrice herself was required by the Trust itself ( 1.06) and by statute ( 15401). However, section 1.06 of the Trust merely says the settlor may amend the Trust. Section 15401 says in subdivision (c), that a trust may not be modified or revoked by an attorney in fact under a power of attorney unless it is expressly permitted by the trust instrument. Here, the recording of the release did not modify the trust; at most, it was an act of trust administration.

Melvin argues that, in order for the trustees to be able to transfer the deed of trust out of the trust estate, they were required to file a petition in court under section 850. However, section 850 does not require the filing of a petition; it says, The following persons may file a petition requesting that the court make an order . . . . (Italics added.) Melvin cites section 17200.1, which says, All proceedings concerning the transfer of property of the trust shall be conducted pursuant to the provisions of Part 19 (commencing with Section 850) of Division 2. However, this statute on its face does not compel the filing of a petition but merely directs how proceedings will be conducted in the event a petition is filed (as authorized by section 17200 [trustee may petition court concerning internal affairs of trust]). Melvin cites no authority that required the trustees to obtain court approval before recording the release of the deed of trust.

Melvin suggests his objections to the trustees accountings constituted a petition under section 850 seeking return of trust property, entitling him to double damages for bad faith under section 859. However, he loses on his claim for return of the deed of trust and, as we have explained, he has forfeited any claim of bad faith by failing to acknowledge evidence favorable to the judgment.

Though not expressly argued in this portion of Melvins appellate brief, we consider whether Buddys recording of the release, from which he personally gained, constituted an inexcusable breach of duty. Section 16004 says the trustee has a duty not to use or deal with trust property for the trustees own profit, nor to take part in any transaction in which the trustee has an interest adverse to other beneficiaries. Here, however, the evidence showed Beatrice had forgiven the loan before her stroke and therefore the deed of trust should have been removed from the list of trust assets. Buddy and Marjorie, acting as Beatrices attorneys-in-fact, had the power to execute the release on her behalf under the power of attorney.

As indicated, Melvin argues elsewhere in his brief that a trustees self-dealing can never be excusable. He quotes from Van de Kamp v. Bank of America, supra, 204 Cal.App.3d 819, which said in a recitation of legal principles that [i]t does not matter that a trustee may have acted in good faith; self-dealing in violation of the duty of loyalty cannot be justified by the good faith of the trustee. [Citations.] (Id. at p. 835.) However, that statement merely says good faith is not a defense to self-dealing. It speaks in terms of justification, not excuse, and therefore does not constitute authority that section 16440s discretion to excuse a trustee from liability is inapplicable to breaches involving self-dealing. Moreover, the cited case held that, where it was not a breach of trust for a trustee to self-deposit trust funds, the trustee was permitted to profit from the use of such self-deposited funds. (Id. at pp. 839-840.) Thus, the case does not help Melvin.

Here, the benefit to Buddy came from Beatrices forgiveness of the loan before her stroke. The recording of the release made it official.

We conclude the deed of trust on the Lake Tahoe property affords no basis for reversal of the judgment.

2. Lake of the Pines Property

Melvin complains that, after Beatrices stroke, the trustees in September 2001 recorded a deed that stripped Beatrice of her joint tenancy interest in Lake of the Pines real property she purchased with Buddy in August 2000. Melvin argues on appeal that the trustees were required to file a section 850 petition to obtain court approval to record the deed. We disagree.

After Beatrices stroke in mid-August 2001, the trustees merely recorded a grant deed which she had signed on August 9, 2001 (before her stroke), relinquishing her interest in the property. Moreover, Buddy testified and presented evidence that Beatrice had not paid any money toward the property; she had a joint tenancy interest only because she cosigned the mortgage papers when Buddys mortgage lender required a cosigner due to the fact Buddy and his wife had recently retired. Marjorie testified to conversations she had with her mother that were consistent with Buddys testimony. Although Melvin testified his mother told him that she and Buddy were going to buy the property, that merely presents a factual dispute, and substantial evidence supports the trial courts decision.

D. Annuity

Melvin argues the trustees misappropriated for themselves Beatrices Morgan Stanley/Allstate annuity of $43,550.

Buddy testified he was initially unaware that he and Marjorie were the beneficiaries of the annuity (which explains his initial inclusion of the annuity in the trust assets). When the annuity matured in 2005 and the investment advisor asked Buddy what he wanted to do with it, he said to roll it over. When the annuity matured in 2006, Buddy decided to cash it out and placed the money in the trust. The investment advisor informed him that the annuity was not part of the trust, because the annuity named Buddy and Marjorie in their individual capacities as the sole beneficiaries, and the money belonged to them. Accordingly, the trustees took distributions from the trust account for themselves. Marjorie testified her mother had told her about the annuity before her stroke and said she wanted to do something for Marjorie and Buddy because she (Beatrice) expected they would end up caring for her.

Melvin argues beneficiaries of an annuity could not choose to cash it in while the annuitant (Beatrice) was still alive. However, we question whether Melvin has standing to pursue this claim and, in any event, he cites no legal analysis or authority supporting this proposition. (Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979 [appellate contention is forfeited by failure to present legal analysis/authority].) Melvin merely cites case law prohibiting trustees from self-dealing.

Moreover, Melvin fails to acknowledge that the power of attorney gave Buddy and Marjorie the power to act with respect to annuity transactions. Under section 4457, this language empowered them to [s]urrender and receive the cash surrender value [of an annuity] or rescind, release, or terminate a contract procured by . . . the principal which . . . provides an annuity to either the principal or another person, whether or not the principal is a beneficiary under the contract. ( 4457, subs. (a), (f).)

Melvin claims section 3.01 of the Trust says that, if the trustees were named as beneficiaries in any insurance contract, they were to collect insurance proceeds and return the funds to the trust estate. However, section 3.01 of the Trust says: On the death of Settlor the Trustee shall collect and add to the Trust Estate all insurance proceeds payable to the trustee by reason of such death and all bequests and devises distributable to the Trust Estate under the terms of the last Will of the Settlor. All assets shall be retained in the Trust Estate. This provision addresses life insurance payable on the death of the settlor, which is not at issue here.

Melvin asserts the Trust paid taxes on the annuity proceeds, but his citations to the record do not support this assertion. Moreover, Melvin says the annuity paid $48,776 into the Trust, while Buddy and Marjorie withdrew only $43,550. Thus, Melvin fails to show that Buddy and Marjorie benefitted from the Trusts alleged paying of the taxes.

Melvin also claims that Buddy and Marjorie, by taking the annuity money and by asking the court to approve their act, have contested the Trust in violation of the no contest clauses[9] of the Trust and last will and testament, such that their interests in the Trust should be terminated. Melvin cites section 21300, which says a contest is a court proceeding alleging the invalidity of an instrument, or one or more of its terms, based on lack of due execution. Melvins argument makes no sense because (1) Buddy and Marjorie are merely defending against claims in a court proceeding initiated by Melvin, and (2) Buddy and Marjorie are not claiming invalidity of any trust term based on lack of due execution or any other basis.

We conclude Melvin fails to show reversible error with respect to the annuity.

E. Miscellaneous Expenses

In the portion of his appellate brief devoted to the Statement of Facts, Melvin argues the trust accountings show multiple breaches by the trustees on a variety of matters. We shall consider only the specific points presented in the ARGUMENT section of Melvins appellate brief. (People v. Turner, supra, 8 Cal.4th at p. 214, fn. 19 [reviewing court may disregard contentions inadequately briefed]; rule 8.204 [appellate brief must state each point under a separate heading supported by argument].)

Melvin argues, Each tank of gas, each meal, each trip and any expenditure from Trust Estate that benefited Trustees is a separate breach of trust and is fraud upon beneficiaries. We disagree.

Buddy and Marjorie testified that even after her stroke their mother loved to go out to eat, enjoyed being able to take her family out to dinner, and sometimes objected when Buddy paid the bill. Buddy and Marjorie decided the Trust would pay for the meals when Beatrice instigated the outing. The cost averaged $35 per month. Buddy also took Beatrice to visit her children who lived out of state. The Trust paid the travel expenses of Buddy as well as his wife (who assisted Beatrice in matters of personal hygiene).

Melvin argues the trustees cannot excuse their self-dealing actions by saying they were taking direction from Beatrice, because she was legally incapable of making a decision. However, the power of attorney and the Trust allowed the trustees to take over without Beatrice being legally incompetent. Despite Melvins testimony that Beatrice never recovered the ability to communicate after her stroke, the other witnesses (Buddy, Marjorie, and brother Jack) testified Beatrice did recover the ability to communicate and carry on conversations and enjoy the company of her family. Even assuming for the sake of argument that it was a breach of trust to use Trust money to pay for expenses such as the trustees meals and travel, it clearly falls within the trial courts discretion to excuse the trustees from liability because they acted reasonably and in good faith. ( 16440, subd. (b), fn. 3, ante.)

Section 16440, subdivision (b), as reenacted in 1990 (Stats. 1990, ch. 79, 14, p. 962) codified the good faith exception to general liability in Restatement 2d of Trusts, section 205, comment g, and represents an expansion of the rule in Estate of Talbot, 141 Cal.App.2d 309, 320-27 (1956). In Talbot, liability for appreciation damages was excused on the grounds of good faith, but the trustee was liable for the breach in the amount of the loss to the corpus plus interest. (54A Wests Ann. Prob. Code foll. 16440, p. 163, citing 20 Cal.L.Rev.Comm.Reports 1001, 1939 (1990).)

Ample evidence of reasonableness and good faith exists in the evidence that the trustees took good care of Beatrice, took her on trips to visit relatives, spent time with her at Buddys home (though she continued to live in the care facility), installed a lift chair in Buddys home to enhance her comfort during her visits, and installed a fire pit so Beatrice could continue to enjoy sitting outside to watch the deer. Besides hearing the testimony, the trial court viewed photographs showing Beatrice at family gatherings in her final years. Brother Jack testified he lived out of state but, after his mothers stroke, he came to stay when Buddy and his wife left town for extended periods, during which Jack would take his mother to doctor visits or out to eat (at his own expense). Jack had good conversations with his mother, who was able to communicate rationally.

It was for the trial court to decide whether these expenses benefited Beatrice or whether (as Melvin claims) Beatrice was an incoherent pawn the trustees carted around to justify using Trust money to pay for things they themselves wanted. Melvin fails to show any reversible error in the trial courts determination that the trustees at all times tried to act in Beatrices best interests.

Melvin complains the trustees failed to make productive use of the Trust assets because they paid for unnecessary storage to store Beatrices personal property left over after they sold her home and furnishings. Melvins apparent argument is that the storage cost more than the property was worth. Even assuming breach of trust, the trial court acted within its discretion in excusing the trustees of liability.

Melvin argues the trustees were sloppy in the accountings, with inadequate explanation of some items. Again, he fails to show any abuse of discretion in excusing the trustees from liability.

[A] court of equity is not bound down to the strict legal rights of the parties, but will take into consideration all the circumstances in order to arrive at the justice of the case. (Weyant v. Murphy, supra, 78 Cal. at p. 283.)

We conclude Melvin fails to show any inexcusable breach of trust in the miscellaneous expenses (other than the $500 deduction for the personal debt).

F. Inadequate Explanations

Melvin complains the trustees violated the obligation to explain any unusual items in the accounting ( 1064, subd. (a)(2), in that the trustees accounting included an entry for $15,248, explained only as a reclassification of loan, and an entry for $11,500 with the mere notation, It was assumed this was a deposit to repay amounts taken. However, we disregard this contention because Melvin offers no citation to the record in the argument portion of his brief. (Rule 8.204(a)(1)(C) [appellate brief must support any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears]; Kim v. Sumitomo Bank, supra, 17 Cal.App.4th at p. 979.) Elsewhere in his brief, in his statement of facts, Melvin cites to the record for the $15,248, but the cited testimony does not support Melvins claim that this amount was removed from the Trust.

G. Trustees Fees

Melvin argues the trial court erred in denying his request to reduce or eliminate the trustees fees. We disagree.

Trustee fees are authorized by section 1.03 of the Trust (trustees are entitled to reasonable compensation and reimbursement of expenses) and by statute. ( 15680 [trustee is entitled to compensation in accordance with trust instrument], 15681 [if not specified in trust instrument, trustee is entitled to reasonable compensation], and 15684 [trustees entitled to reimbursement for expenses that were properly incurred in the administration of trust and expenses that were not properly incurred but which benefited the trust].)

The trustees paid themselves $17,500 each in February 2005. After Melvin filed his petition, the Harpainter accounting indicated Marjorie was paid $35,000 as trustees fees. The trustees submitted schedules of their expenses and time.

Melvin argues the trustees do not deserve fees because they breached their duties and mismanaged the Trust. ( 16420 [court may reduce or deny compensation of trustee for breach of trust].) However, Melvin fails to show any inexcusable breach or mismanagement (other than the $500 for Melvins personal debt to Buddy).

Melvin argues the trustees did not keep records of their time and failed to provide documentation justifying the amount of the fees. However, the trustees did provide an accounting of their time and expenses. If Melvin thinks there was something wrong with their accounting, he had the burden on appeal to show what is wrong, other than simply claiming the fees were not documented.

H. Attorney Fees

Melvin argues he is entitled to an award for his attorney fees due to the trustees breaches, and the trustees should be responsible for their own attorney fees. However, it appears the trustees were made responsible for their own attorney fees, because the judgment said, each party is responsible for their own attorney fees.

V. Attorney Fees and Costs for the Appeal

The trustees request that we award them attorney fees and costs for the appeal. They cite section 15642, subdivision (d), which authorizes a court to award attorney fees if it finds a petition to remove a trustee was filed in bad faith. The trustees also cite section 11003, which authorizes an attorney fee award against a party who contests an account in bad faith. However, the trial court made no such finding and declined to award attorney fees for the trial. Since we conclude there was one breach of duty, the petition was not in bad faith.

VI. Summary

We conclude the trial court got it right except for one issue -- the reduction of Melvins distribution by $500 to satisfy a personal debt Melvin allegedly owed to Buddy. This clearly constitutes a breach of fiduciary duty by Buddy and perhaps by Marjorie, who went along with it. Where a reviewing court finds trial court error affecting only one of a great number of distinct and severable issues, the reviewing court may partially reverse the judgment. (Gray v. Cotton (1913) 166 Cal. 130, 139; Gonzales v. City of Santa Ana (1993) 12 Cal.App.4th 1335, 1352; 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, 889-890, pp. 950-951.) Where the appeal is from the whole judgment, the reversal may permit the trial courts determination of certain issues to stand but direct the retrial of a particular issue or issues. (Witkin, supra, at p. 950, citing Gray v. Cotton, supra, 166 Cal. 130.) [T]he appellate courts have power to order a retrial on a limited issue, if that issue can be separately tried without such confusion or uncertainty as would amount to a denial of a fair trial. (Torres v. Automobile Club of So. California (1997) 15 Cal.4th 771, 776.) To require a complete retrial when an issue can be separately tried without prejudice to the litigants would unnecessarily add to the burden of already overcrowded court calendars and could be unduly harsh on the parties. (Ibid.)

Here, the trustees say that if the trial court erred regarding the $500 deduction, the remedy is an additional distribution from the trust to Melvin rather than a personal damage award against Buddy. We leave it to the trial court on remand to determine the appropriate remedy and personal liability, if any, of Buddy and/or Marjorie.

Since the single breach of duty was relatively minor, it would not support Melvins request to reduce or eliminate the trustees fees or to award Melvin punitive damages or attorney fees, and we therefore see no reason to reverse the trial courts decisions regarding those other matters.

DISPOSITION

The judgment is affirmed as to its numbered paragraphs three through 10. The judgment is reversed as to paragraphs number one (that the petition is denied), number two (that there was no breach of trust and no breach of fiduciary duty), and number 11 (approving all acts of the trustees). On remand, we direct that the trial court conduct further proceedings limited to liability and remedy for the $500 breach of duty and enter a new judgment which (1) incorporates the substance of paragraphs three through 10, (2) declares there was no breach of trust or breach of fiduciary duty other than the $500 deduction, and (3) finds a breach in the $500 deduction and fashions a remedy for the breach.

The parties shall bear their own costs on appeal. (Rule 8.278(a)(5).)

SIMS , J.

We concur:

SCOTLAND , P. J.

ROBIE , J.

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[1] Undesignated statutory references are to the Probate Code.

[2] Since several parties share the same surname, we shall refer to all parties by their first name for clarity and ease of reference.

[3] Section 16440 provides, (a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances: [] (1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest. [] (2) Any profit made by the trustee through the breach of trust, with interest. [] (3) Any profit that would have accrued to the trust estate if the loss of profit is the result of the breach of trust.
(b) If the trustee has acted reasonably and in good faith under the circumstances as known to the trustee, the court, in its discretion, may excuse the trustee in whole or in part from liability under subdivision (a) if it would be equitable to do so.

[4] On appeal, the trustees argue the $10,000 checks were not distributions of the Trust estate but rather tax-free gifts made to Beatrices children during her lifetime. However, the May 12, 2007, Trust Accounting No. 1 referred to them as PRELIMINARY DISTRIBUTIONS. The Trust expressly authorized the incapacitated settlors trustee to make payments to beneficiaries in the amount of the annual federal gift tax exclusion, to be deducted from their ultimate distributions after the settlors death.

[5] We agree with Melvins concession that the trial court exercised its discretion under section 16440 to excuse the trustees for any breach of duty.

[6] Section 859 provides: If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to the estate of a decedent, conservatee, minor, or trust, the person shall be liable for twice the value of the property recovered by an action under this part.

[7] Section 15800 provides, Except to the extent that the trust instrument otherwise provides or where the joint action of the settlor and all beneficiaries is required, during the time that a trust is revocable and the person holding the power to revoke the trust is competent: [] (a) The person holding the power to revoke, and not the beneficiary, has the rights afforded beneficiaries under this division. [] (b) The duties of the trustee are owed to the person holding the power to revoke.

[8] Section 17200 provides that a beneficiary may petition the court for redress of a trustees breach of trust [e]xcept as provided in Section 15800 . . . .

[9] The no contest clauses state that if any beneficiary seeks an adjudication that any trust provision is void, that person shall take nothing under the Trust.