Horn v. Horn
Filed 6/26/12 Horn v. Horn CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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opinion has not been certified for publication or ordered published for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
FOURTH APPELLATE DISTRICT
DIVISION TWO
DANAVON HORN,
Plaintiff
and Appellant,
v.
MELBA HORN, as Cotrustee, etc.,
Defendant
and Appellant;
GARY HORN et
al.,
Objectors
and Respondents.
E053148
(Super.Ct.No.
INP10000535)
OPINION
APPEAL from the Superior
Court of
County. Harold W. Hopp,
Judge. Affirmed.
Jackson, DeMarco, Tidus &
Peckenpaugh, M. Alim Malik, Edward A. Galloway and Michael J.
Fairchild; Oldman, Cooley, Sallus, Gold, Birnberg & Coleman, Marc L.
Sallus and Justin Gold for Plaintiff and Appellant.
Thompson & Colegate, Robert B.
Swortwood, Lisa M. Killingbeck, and Susan K. Brennecke, for Defendant and
Appellant.
Nethery & Ofseyer and D. Martin
Nethery for Objectors and Respondents.
I. INTRODUCTION
Plaintiff Danavon Horn
action to remove his mother, defendant Melba Horn, as cotrustee of a family
trust. Danavon contends the trial court
erred in dismissing the action on the basis it lacked subject matter
jurisdiction. Melba and objectors Gary
Horn and Lonna Horn contend the trial court properly dismissed the action under
forum non conveniens principles. Melba
also appeals, contending the trial court erred in finding it had personal
jurisdiction over her. Although we
disagree with the basis for the trial court’s ruling, we nonetheless affirm the
judgment on the ground of lack of personal
jurisdiction.
II. FACTS AND
PROCEDURAL BACKGROUND
Melba is currently 89 years old; she
was married for decades to Dana Horn, who died in November 2010 at the age of
92. Danavon, Gary, and Lonna are their
children.
Dana and Melba amassed assets totaling tens of millions of
dollars. In July 1974, while they were
living in California, they
entered into a revocable trust, the DBH Trust (the Trust), which was
subsequently restated and amended several times. Dana and Melba were the trustees and
beneficiaries, and their children and grandchildren were designated as
remainder beneficiaries.
In January 2010, Melba and Dana added Danavon as cotrustee of the
Trust. In May 2010, Dana became disabled
and moved to a care facility. Melba and
Dana’s 2008 and 2009 federal tax returns indicated they were residents of Texas.
On September 15, 2010, Melba executed documents revoking the
Trust. The Trust agreement
provides: “Trust may be revoked, in
whole or in part, by an instrument in writing signed by either Dana or Melba
and delivered to the Trustees and the other Settlor.” Before executing the revocation, Melba
underwent a mental status evaluation; her physician found her to be of sound
mind, capable of understanding the ramifications of the revocation and of
making her own decisions about her finances and health concerns.
On September 22, 2010, Danavon filed
a petition in the
County Superior Court seeking an order removing or suspending Dana and
Melba as cotrustees of the Trust and appointing Farmers and Merchants Bank as
successor cotrustee on the grounds that Dana had become incompetent and Melba
was the subject of undue influence regarding Trust assets, such that she was
incapable of fulfilling her duties as a trustee.
On September 28, 2010, Danavon filed an ex parte application
for a temporary restraining order to freeze the assets of the trust and to
suspend Melba’s powers as trustee. Gary
and Lonna, as beneficiaries of the Trust, filed an objection to the
proceedings. Through her counsel, Melba
specially appeared at the ex parte hearing and argued that she had not been
personally served and Danavon had no standing because the trust had been
revoked. The trial court ordered the
hearing continued, and the parties stipulated that “all transactions on the
Trust including the effectiveness of any purported revocations are stayed
pending hearing” and “assets are frozen where they are.”
Following additional briefing on the issues of subject matter and
personal jurisdiction, the trial court issued a temporary restraining order
freezing the assets of the Trust until the preliminary injunction hearing and
allowing Melba to pay expenses of the Trust only with Danavon’s consent.
At the preliminary injunction hearing, Melba specially appeared and
testified that in 1997, she and Dana moved from California
to Arkansas, and in 2003, they
moved to Texas. In 2010, Melba resided in her home (an asset
of the Trust) in Texarkana, and
Dana resided in a care facility in Texas.
Since 2003, Melba had signed all
trust checks in Texas. She sometimes conferred with legal and
financial counsel located in California;
those communications took place by telephone or mail from her home in Texas. The certified public accountant for the Trust
traveled from California to Texas
when she needed to meet with Melba and Dana in person.
Melba’s primary residence, owned by
the Trust, is in Texarkana, Texas. The Trust owns a 21,000-acre hunting club, a
1,200-acre farm, and a 350-acre woodland in Arkansas. The Trust also owns two residential
properties, an apartment complex, an office building, and a vacant lot in California. Some of the Trust’s bank accounts are in Texas,
and others are in California. Before attending the hearing, Melba had not
set foot in California since 2005
(according to her trial testimony) or 2007 (according to a declaration she
filed).
Melba testified that after Danavon
was appointed a cotrustee, he began to make demands on her, her attorney, and
her accountants concerning affairs of the Trust. He threatened to fire her long-time
advisers. Melba testified the president
of Farmers and Merchants Bank told her she would have to have Danavon’s
permission to write checks on Trust accounts.
Melba thereafter instituted proceedings in Texas
against Farmers and Merchants Bank.
In August 2010, Danavon went to
Melba’s home in Texarkana and told her he was going to take possession of all
the Trust records, as well as the computers on which some of the records were
stored. Melba asked Barbara Shelton and
her son Gary to move the records.
Melba testified she made her own
decisions. Lonna and Gary “may tell me
what they think, but I discard it, if I don’t agree with them. Because I am going to make my own decisions. I am not going to let anybody else do
that. No way.” She testified that she was “not bashful” and
she thought she was “very competent to handle [the affairs of the Trust].” She testified she had not talked to Gary or
Lonna about revoking the trust.
Following the hearing, the trial
court found that (1) it had personal jurisdiction over Melba; (2) the principal
place of administration of the Trust was in Texarkana, Texas; and (3) it lacked
subject matter jurisdiction over the Trust.
The trial court denied the preliminary injunction and dissolved the temporary
restraining order.
title="">[2]
On October 27, 2010, Melba filed a
motion to quash service of summons on the ground that the California court
lacked personal jurisdiction over her.
The court set an order to show cause
hearing regarding dismissal of the petition.
The parties filed additional briefs on the issue of subject matter
jurisdiction. The trial court found that
the principal place of administration of the Trust was in Texas; the petition
related to issues concerning the Trust as a whole, not to specific property
owned by the Trust in California, and a California court’s exercise of
jurisdiction over the issues would unduly interfere with the jurisdiction of
Texas, which had primary jurisdiction over the administration of the Trust. The trial court entered an order dismissing
the case.
Additional facts are set forth in
the discussion of the issues to which they pertain.
III. DISCUSSION
A. Subject Matter Jurisdiction
Danavon contends the trial court
erred in dismissing his petition for lack of subject matter jurisdiction.
1. Standard of Review
plaintiff has the burden of establishing the facts of jurisdiction by a
preponderance of the evidence (Futuresat
Industries, Inc. v. Superior Court (1992) 3 Cal.App.4th 155, 159), and we
review the trial court’s factual findings under the substantial evidence
standard (Winograd v. American
Broadcasting Co. (1998) 68 Cal.App.4th 624, 632). We accord substantial deference to the trial
court’s decision to stay or dismiss an action based on forum non conveniens,
and we review that decision under the abuse of discretion standard. (Roman
v. Liberty University, Inc. (2008) 162 Cal.App.4th 670, 682 [Fourth Dist.,
Div. Two].)
2. Analysis
Probate Code section 17000, which sets forth the subject matter
jurisdiction of the probate court, provides:
“The superior court having jurisdiction over the trust pursuant to this
part [Probate Code sections 17000-17457] has exclusive jurisdiction of
proceedings concerning the internal affairs of trusts.” Proceedings concerning the internal affairs
of trusts include “[s]ettling the accounts and passing upon the acts of the
trustee, including the exercise of discretionary powers” and “[a]ppointing or
removing a trustee.” (Prob. Code, § 17200,
subd. (b)(5), (10); see also David v.
Hermann (2005) 129 Cal.App.4th 672, 682-683 [under Prob. Code,
§ 17200, subd. (b)(3), superior court had subject matter jurisdiction over
petition challenging validity of living trust based on alleged undue influence,
fraud, or lack of capacity of trustor].)
However, “[w]hen a court upon motion of a party or its own motion
finds that in the interest of substantial justice an action should be heard in
a forum outside this state, the court shall stay or dismiss the action in whole
or in part on any conditions that may be just.”
(Code Civ. Proc., § 410.30, subd. (a).) The California Law Revision Commission
Comments, 54A pt. 1 West’s Annotated Probate Code (2011 ed.) following section
17004 explains: “A determination that a
California court may exercise jurisdiction is not decisive if the exercise
would be an undue interference with the jurisdiction of a court of another
state which has primary supervision over the administration of the trust. [Citations.]
This concept of primary supervision in the context of trust
administration is a special application of the doctrine of forum non
conveniens, which is recognized generally in Code of Civil Procedure Section
410.30.”
Danavon argues that because he is a
resident of California, the court erred in dismissing his petition on the
ground of lack of subject matter jurisdiction/forum non conveniens. In Van
Keulen v. Cathay Pacific Airways, Ltd. (2008) 162 Cal.App.4th 122, 126, the
court stated: “In California, the action
of a non-California resident may be dismissed on forum non conveniens grounds,
but, barring extraordinary circumstances, the action of a California resident
may only be stayed. [Citation.] This is necessary so that the California
court can ‘“protect . . . the interests of the California resident
pending the final decision of the foreign court.”’” (See also Archibald
v. Cinerama Hotels (1976) 15 Cal.3d 853, 858.)
Melba, Gary, and Lonna argue that although a plaintiff’s California
residency is a factor that is accorded substantial weight in the analysis,
other factors may justify dismissal. To
support their argument, they cite Northrop
Corp. v. American Motorists Ins. Co. (1990) 220 Cal.App.3d 1553. Northrop
is no longer good law. That case was
decided under a temporary amendment to Code of Civil Procedure section 410.30,
in effect between 1986 and 1992, which provided that “‘[t]he domicile or
residence in this state or any party to the action shall not preclude the court
from staying or dismissing the action.’”
(See Beckman v. Thompson (1992)
4 Cal.App.4th 481, 487-488.) As the
court in Beckman explained, the
expiration of the temporary amendment by its own terms resulted in a return to
previous law under which “ordinarily an action cannot be dismissed on the
ground of inconvenient forum if the plaintiff is a California resident.” (Id.
at p. 488.)
“[E]xtraordinary circumstances” that might justify the dismissal of an
action brought by a California resident include cases “in which California
cannot provide an adequate forum or has no interest in doing so” as well as
cases “in which the nominal California resident sues on behalf of foreign
beneficiaries or creditors.” (
omitted.) None of those circumstances
exist in the present case. We conclude
that although the trial court could appropriately have stayed the action, the trial court erred in dismissing the action on the basis of forum non conveniens.
B. Personal Jurisdiction
In her appeal, Melba argues the trial court erred in finding that the
California court has personal jurisdiction over her, and lack of personal
jurisdiction provides an alternate basis for affirming the dismissal.
We review the judgment itself, not the trial court’s reasoning (
Ins. Services, Inc. (2006) 137 Cal.App.4th 812, 818, fn. 6), and we affirm
on any legal basis supported by the record regardless of the trial court’s
reasoning (Sarale v. Pacific Gas &
Electric Co. (2010) 189 Cal.App.4th 225, 246).
1. Additional Background
In his petition, Danavon sought to suspend Melba’s powers as cotrustee
and to remove her as cotrustee; to remove Gary as a successor trustee; to
appoint a California bank as temporary cotrustee and as successor trustee; and
to order an accounting for all trust assets.
The bases for the petition included the following allegations:
“20. [Danavon] is informed and
believes that Melba is being unduly influenced by, at least, Lonna Gwen and
Gary. As explained more throughly [
to make very large, abnormal withdrawals from the Trust, and has been assisted
every step of the way by Lonna Gwen, Gary, and/or an attorney who has admitted
to being counsel for all three of them.
[Danavon] is informed and believes that Melba is unable to resist Lonna
Gwen and/or Gary’s influence and is being used by Gary and/or Lonna Gwen to
extract money from the DBH Trust and/or it[]s entities for the benefit of Lonna
Gwen, Gary, and/or their own interests.
“21. [Danavon] is further
informed and believes that Lonna Gwen and Gary have isolated Melba from her
friends and part of her family, and attempted to drive a wedge between
[Danavon] and Melba to undermine a previously loving mother-son relationship.
“22. [Danavon] is informed and
believes that Lonna Gwen and/or Gary are pressuring or unduly influencing Melba
into signing documents, including, but not limited to, powers of attorney which
name one or both of them as agents.”
The remainder of the petition largely concerned Danavon’s attempts to
obtain trust documents and records from various entities and individuals,
including the Trust’s California accounting firm, and set forth examples of
Gary’s and Lonna’s alleged actions to influence Melba.
the hearing on the preliminary injunction, the trial court stated: “I don’t have a problem with the court having
personal jurisdiction over Melba Horn. I
think very clearly she has had long-standing business activities in
California. This arises out of those
long-standing business activities. She
routinely communicates with an accountant, an attorney, a bookkeeper who
work[s] in Riverside County, so it seems clear the Court has personal
jurisdiction over her.” The trial court
further stated: “[Probate Code section
17004] tells the Court that it has jurisdiction over persons on any basis that
is not inconsistent with the United States Constitution. That’s why I pointed out that Melba Horn has
had long-standing, significant contacts with not just the State of California,
but Riverside County for many years.
That’s why I think it is not a personal jurisdiction issue. [¶] I
think it is clear that the Court has personal jurisdiction as expressed in
Probate Code Section 17004 over persons, including Melba Horn.”
In its order denying the preliminary
injunction, the trial court stated that it “has personal jurisdiction over the
parties because each of them has sufficient contacts with California such that
they could reasonably anticipate being haled into court here.”
2. Standard of Review
We review the trial court’s factual determinations giving rise to
personal jurisdiction under the substantial evidence standard. However, we independently review the trial
court’s conclusions as to the legal significance of those facts. (Vons
Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449.)
Probate Code section 17003 provides
that, subject to constitutional limitations, an individual submits personally
to the jurisdiction of California courts by accepting the trusteeship of a
trust having its “principal place of administration” in California. The “principal place of administration” is
defined as the usual place where day-to-day activity of the trust is carried on
by the trustee or the trustee’s representative who is primarily responsible for
the administration of the trust. (Prob.
Code, § 17002.) The trial court
made a factual finding that Texas is the principal place of administration of
the Trust. That finding is supported by
substantial evidence—Melba testified that she signs all Trust checks in
Texas. Although the Trust uses
California legal and accounting advisors, Melba’s communications with them take
place by telephone or mail from her Texas home.
The Trust’s certified public accountant regularly travels to Texas to
meet with Melba in person. Thus, Probate
Code section 17003 does not support personal jurisdiction over Melba.
Danavon argues that Melba’s
“substantial, continuous, and systematic” contacts with this state were
sufficient to support general personal jurisdiction over her. In Cornelison
v. Chaney (1976) 16 Cal.3d 143, our Supreme Court stated: “If a nonresident defendant’s activities may
be described as ‘extensive or wide-ranging’ [citation] or ‘substantial
. . . continuous and systematic’ [citation], there is a
constitutionally sufficient relationship to warrant jurisdiction for all causes
of action asserted against him. In such
circumstances, it is not necessary that the specific cause of action alleged be
connected with the defendant’s business relationship to the forum.” (Id.
at p. 147.) In Cornelison, our Supreme Court held that the following facts were
insufficient to establish general jurisdiction:
The defendant, a truck driver, was a resident of Nebraska who worked as
an independent contractor hauling goods in interstate commerce. For seven years, he had made about 20 trips
per year to California, and he was licensed by the California Public Utilities
Commission as well as by regulatory agencies in other states. (Id.
at pp. 146-147.) While en route to
California to deliver freight and to pick up another load, he collided with a
car in Nevada, killing the driver. The
driver’s wife, a California resident sued the defendant in California. The court concluded that the defendant’s
“activities in California [we]re not so substantial or wide-ranging as to
justify general jurisdiction over him to adjudicate all matters regardless of
their relevance to the cause of action alleged by plaintiff.” (Id.
at p. 148.) The court nonetheless held that
it was proper to exercise limited jurisdiction over the defendant. (Id.
at p. 152.)
Here, Melba had not set foot in California since at least 2007. Although the Trust owns extensive property in
California, Melba’s activities administering the Trust took place in
Texas. We conclude the record provides
no basis for finding general jurisdiction over Melba.
We next examine whether limited jurisdiction was appropriate. The Cornelison
court described limited jurisdiction as follows: “If, however, the defendant’s activities in
the forum are not so pervasive as to justify the exercise of general
jurisdiction over him, then
quality and nature of his activity in the forum in relation to the particular
cause of action. In such a situation,
the cause of action must arise out of an act done or transaction consummated in
the forum, or defendant must perform some other act by which he purposefully
avails himself of the privilege of conducting activities in the forum, thereby
invoking the benefits and protections of its laws. Thus, as the relationship of the defendant
with the state seeking to exercise jurisdiction over him grows more tenuous,
the scope of jurisdiction also retracts, and fairness is assured by limiting
the circumstances under which the plaintiff can compel him to appear and
defend. The crucial
inquiry concerns the character of defendant’s activity in the forum, whether
the cause of action arises out of or has a substantial connection with that
activity, and upon the balancing of the convenience of the parties and the
interests of the state in assuming jurisdiction.” (Cornelison
v. Chaney, supra, 16 Cal.3d at pp. 147-148, fn. omitted.) (See also Snowney
v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062 [setting forth
a three-pronged test under which “‘[a] court may exercise specific jurisdiction
over a nonresident defendant only if:
(1) “the defendant has purposefully availed himself or herself of
forum benefits” [citation]; (2) “the ‘controversy is related to or “arises
out of” [the] defendant’s contacts with the forum’” [citation]; and
(3) “‘the assertion of personal jurisdiction would comport with “fair play
and substantial justice”’” [citations].’
[Citation.]”
The trial court found limited rather than general jurisdiction over
Melba on the basis of her long-standing business activities in California and
her communications with California professionals. “Doing business is doing a series of similar
acts for the purpose of thereby realizing pecuniary profit, or otherwise
accomplishing an object, or doing a single act for such purpose with the
intention of thereby initiating a series of such acts. [Citation.]. . . . The question in each case is whether an
individual has a sufficient relationship to the state arising out of such
business that makes it reasonable for the state to exercise judicial
jurisdiction over the individual as to the particular cause of action. [Citation.]”
(See Judicial Council of Cal., com., reprinted at 14A West’s Ann. Code
Civ. Proc. (2004 ed.) foll. § 410.10, p. 379; see also
46 Cal.App.3d 393, 401.)
Danavon argues that his petition is substantially connected to Melba’s
activities and conduct as a cotrustee of the Trust “where the vast majority of
its assets are located in California.”
However, based on the allegations of the petition, the gravamen of the
lawsuit was whether Melba is competent to continue as a cotrustee and whether
Gary and Lonna have exercised undue influence over her. Thus, the petition concerns Melba’s personal
dignity and autonomy far more than it does the assets or business operations of
the Trust. In this context, the location
of Trust assets and the fact that Melba obtains services from professionals in
California are, for the most part, irrelevant to any controverted issues. Melba’s past lengthy domicile in California
is likewise irrelevant. In
822, 829, our Supreme Court explained:
“[T]he mere fact of past domicile in the state would not subject [the
defendant] to its jurisdiction indefinitely, for a past domicile having no
relationship to the litigation at hand would not afford a reasonable basis for
an assertion of jurisdiction.”
Danavon asserts that Probate Code section 17004 provides a basis for
jurisdiction. That section states: “The court may exercise jurisdiction in
proceedings under this division on any basis permitted by Section 410.10 of the
Code of Civil Procedure.” (Prob. Code,
§ 17004.) Thus, Probate Code section
17004 does not expand the jurisdiction of the court beyond the limits of the
Constitution. We have already
determined, applying the principles discussed in Cornelison, that those constitutional limits do not permit exercise
of personal jurisdiction over Melba under the circumstances of this case
Danavon next relies on the choice of law provision in the Trust
agreement to argue that “Melba . . . necessarily invoked the
protections and benefits of California law by accepting the position of
co-trustee of a trust agreement that
explicitly provides that it is governed by the laws of California.” However, as the trial court aptly pointed
out: “Well, the Texas court can hear the
case and apply California law. I mean,
that’s the standard provision in lots of contracts and but that doesn’t
change—determine the venue necessarily, but the trust didn’t say that any
actions concerning this trust are to be heard in the California court, it
doesn’t say that.” We agree with the
trial court that the inclusion of a choice of law provision in a contract does
not necessarily lead to personal jurisdiction over parties to the
contract. (See, e.g.,
1053, fn. 7 [observing that in civil cases, “jurisdiction and choice of law are
separate questions”].)
Finally, Danavon argues it is “fair
and reasonable” for the California courts to exercise personal jurisdiction
over Melba because, in addition to the factors discussed above, she lived in
this state for more than 60 years, including from the time the Trust was
created in 1974 until 1997, and in 2010 she entered into a contract for
accounting services for the Trust. As
discussed above, Melba’s past residency in California provides no basis for the
current exercise of personal jurisdiction over her in California. She has long since become a resident of
another state. (Owens v. Superior Court, supra,
52 Cal.2d at p. 829.) And while personal
jurisdiction over an action based on a contract she entered into for accounting
services might indeed be appropriate, this is not such an action.
We conclude the trial court erred in finding personal jurisdiction
over Melba. We therefore affirm the
trial court’s dismissal of the action, albeit on a different ground from that
which the trial court relied on. (
Ins. Services, Inc., supra, 137
Cal.App.4th at p. 818, fn. 6; Sarale v.
Pacific Gas & Electric Co., supra,
189 Cal.App.4th at p. 246.)
IV. DISPOSITION
The judgment is affirmed. Danavon shall pay costs to Melba. Gary and Lonna shall bear their own costs.
NOT TO BE PUBLISHED IN OFFICIAL
REPORTS
HOLLENHORST
Acting P. J.
We concur:
KING
J.
CODRINGTON
J.
name="_ftn1" title=""> [1] Because many of the parties share a last
name, we refer to them by their first names for clarity and convenience, and
not intending any disrespect.
name="_ftn2" title=""> [2] We observe that the trial court “ma[de] no
finding on the effect of the purported revocation” of the Trust, and on appeal,
the parties have not briefed any issue concerning the revocation. We likewise do not address the issue.
