Clampett v. Heger
Filed 6/17/13 Clampett v. Heger CA2/7
California Rules of Court, rule 8.1115(a), prohibits courts
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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
EARL A. CLAMPETT, JR.,
Plaintiff and Appellant,
v.
JOEL W. HEGER et al., as
Trustees, etc.,
Defendants and Respondents.
B241142
(Los Angeles
County
Super. Ct.
No. BP113428)
APPEAL from
an order of the
County Superior Court, Michael I. Levanas, Judge. Reversed and remanded with directions.
Law Offices
of Henry N. Jannol, Henry N. Jannol, Neal B. Jannol; Andreos & Andreos, and
George P. Andreos for Plaintiff and Appellant.
Palermo,
Barbaro, Chinen & Pitzer, Philip Barbaro, Jr. for Defendants and
Respondents.
_____________
>
Earl A. Clampett, Jr. appeals from an order entered after
the probate court sustained without leave to amend a demurrer to his petition
seeking to compel trustees Joel W. Heger and Christian M. Heger to make a
distribution under the terms of a trust.
The probate court ruled Clampett, the holder of a durable power attorney
conveyed to him by the trust beneficiary, had no standing as a
his principal’s behalf and, in any event, his request did not conform to the
requirements in the trust. We
reverse.
FACTUAL AND PROCEDURAL BACKGROUND
1. The
Trust’s “Five-or-Five†Clause
Jack Heger and Marion Heger were
married for 27 years until Jack’s
name="_ftnref1" title="">[1] death in April 2008. When Jack died, his sons from a prior
marriage, Joel and Christian, became trustees of his separate property
trust. The trust contained a
“five-or-five clause,†granting Marion,
as Jack’s surviving spouse, the right to request an annual distribution of the
greater of $5,000 or 5 percent of the value of the trust as of the end of the
preceding calendar year. “This request
shall be by a written document specifically referring to this right of
withdrawal during December of each such calendar year. This right of withdrawal is noncumulative, so
that if the Settlor’s spouse does not withdraw, during December of any one
calendar year, the full amount allowed, the right to withdraw the amount not
withdrawn shall lapse at the end of that calendar year.â€
2. Clampett’s
Exercise of the Five-or-Five Clause on His Mother’s Behalf
Marion
suffers from Alzheimer’s disease. On August 25, 2006, prior to Jack’s
death, Marion conveyed to Clampett,
her son from a prior marriage, a general durable power of attorney appointing
him as her attorney-in-fact for all purposes, “effective immediately.â€
On December 3, 2010 Clampett’s lawyer, Geoge
Andreos, sent a letter to Joel and Christian and their counsel “on behalf of Marionâ€
requesting the trustees to “please accept this as a written request for the
payment of 5% of the principal valuation†of the trust “as determined at the
end of the preceding calendar year. (December 31, 2009).†The trustees did not respond.
On January 4, 2011 Clampett, through
Andreos, sent another letter, reminding the trustees of his timely demand on December 3, 2010 and requesting the
trustees’ prompt response.
On January 10, 2011 counsel for Joel and
Christian denied the request, stating in a letter to Andreos, “It is my
understanding that you do not represent Marion Heger, but even if you did, the
trust instrument would not provide for your exercise on her behalf. Therefore, the attempted exercise of the 5 or
5 power does not conform to the requirements of the trust and is
rejected.â€
On January 26, 2011 Andreos responded,
asserting the rejection of Clampett’s demand on Marion’s
behalf was disingenuous and a violation of the trust terms. Andreos asserted the trustees had long known
he represented Clampett, Marion’s attorney-in-fact; indeed the trustees had
previously forwarded accountings of trust assets to him for that reason. Clampett also forwarded to the trustees the
signed durable power of attorney showing his status as Marion’s
attorney-in-fact. The trustees continued
to deny the request.
3. Clampett’s
Petition To Compel Distribution Under the Trust’s Five-or-Five Clause
On May 31,
2011 Clampett filed a petition pursuant to Probate Code sections 17200 and
850
distribution to his mother under the trust’s five-or-five clause. Clampett attached to his petition the trust
document and the correspondence between his counsel and the trustees’ counsel
concerning his timely demand. The
petition also included causes of action for elder abuse, breach of fiduciary
duty and a request for an accounting.
The
trustees demurred to the petition and accompanying causes of action, asserting
the five-or-five power was not properly exercised. According to the trustees, the trust required
Marion to submit her request to exercise her rights under that provision in
writing. Marion never did. The request from Andreos, Clampett’s
attorney, they argued, was insufficient as a matter of law. Marion or Clampett, as her agent and
attorney-in-fact, was required to personally exercise that right, not
Clampett’s attorney. The probate court
agreed with the trustees that Andreos’s effort to exercise the right on behalf
of Clampett was insufficient as a matter of law and sustained the demurrer to
that cause of action without leave to amend.
Because each of the remaining causes of action was premised on a valid
exercise of the five-or-five power under the trust, they, too, failed as a
matter of law.
DISCUSSION
1. Standard
of Review
On appeal from an order
dismissing an action after the sustaining of a demurrer, we independently
review the pleading to determine whether the facts alleged state a cause of
action under any possible legal theory.
(McCall v. PacifiCare of Cal., Inc.
(2001) 25 Cal.4th 412, 415; Aubry v.
Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) We may also consider matters that have been
judicially noticed. (
County Bd. of Supervisors (2010) 48 Cal.4th 32, 42; see
591.) We give the complaint a reasonable
interpretation, “treat[ing] the demurrer as admitting all material facts properly
pleaded,†but do not “assume the truth of contentions, deductions or
conclusions of law.†(
Cal.4th 1, 20 [demurrer tests sufficiency of complaint based on facts included
in the complaint, those subject to judicial notice and those conceded by
plaintiffs].) We liberally construe the
pleading with a view to substantial justice between the parties. (Code Civ. Proc., § 452; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074,
1081.)
Absent
conflicting extrinsic evidence, the
interpretation of a written instrument, including a trust, is a judicial
function subject to de novo review. (
62 Cal.2d 861, 965; Mooney v. County of
Orange (2013) 212 Cal.App.4th 865; Wolf
v. Walt Disney Pictures and Television (2008) 162 Cal.App.4th 1107,
1134.)
2. The
Probate Court Erred in Sustaining the Demurrer Without Leave To Amend
The trust provides that “the
trustee shall distribute to the Settlor’s spouse such amounts as she shall
request from principal, not exceeding in any calendar year the greater†of
$5,000 or 5 percent of the trust property.
“This request shall be by a written document specifically referring to
this right of withdrawal during December of each such calendar year.†Thus, to invoke the five-or-five power, the
trust requires the following:
(1) Marion must request the distribution; (2) the
request must be made in writing; and (3) the request must be made in a
timely manner. All three requirements
were satisfied here.
Clampett,
as Marion’s attorney-in-fact for all purposes, was legally entitled to make the
request on Marion’s behalf; and that request was just as valid as if Marion had
made it herself. (See Prob. Code, § 4261
[“[i]f a power of attorney grants general authority to an attorney-in-fact and
is not limited to one or more express actions, subjects, or purposes for which
general authority is conferred, the attorney-in-fact has all the authority to
act that a person having the capacity to contract may carry out through an
attorney-in-fact specifically authorized to take the actionâ€]; see also Civ.
Code, § 2330 [“[a]n agent represents his principal for all purposes within
the scope of his actual or ostensible authority, and all the rights and
liabilities which would accrue to the agent from transactions within such
limit, if they had been entered into on his own account, accrue to the
principalâ€].) While there are certain
occasions where a general power of attorney is insufficient to bind the
principal (see Prob. Code, § 4264 [general power of attorney may not be
used to create, modify or revoke a trust or make a loan to the attorney-in-fact,
unless expressly authorized in the power of attorney]; Estate of Huston (1997) 51 Cal.App.4th 1721, 1726 [same]),
the petition to suggest, that any of those restrictions on a general power of
attorney applied here.
The trust
itself designates when the holder of rights must exercise them personally. For example, paragraph 2.3 of the trust
states Jack’s powers to amend or revoke the trust are “personal to†him and not
“exercisable by any guardian, conservator, or other person.†No similar limiting language appears in the
five-or-five clause. Indeed, nothing in
the trust document precluded Clampett from acting on Marion’s behalf as her
designated agent in regard to demanding a distribution under this clause.
The
trustees appear to concede this point—that Clampett could have exercised the
power on Marion’s behalf had he submitted
a signed request for distribution—but argue that he did not “sign a requestâ€; his lawyer, Andreos, signed the
letter. Thus, they argue, Clampett
failed to comply with the requirements of the trust. However, nothing in the trust requires
Marion’s signature (or, in her stead, that of her attorney-in-fact). It requires only that Marion make the demand
in a writing documenting her request.
Thus, Marion could have made the request through her own attorney,
provided the request was in writing and made in a timely fashion. The result is no different simply because it
was made by the attorney for Marion’s attorney-in-fact for all purposes.
The
trustees’ reliance on Blanton v.
Womancare, Inc. (1985) 38 Cal.3d 396 (Blanton)
is misplaced. The plaintiff in
for malpractice. The plaintiff’s lawyer
then entered into an agreement with defendants to submit the action to binding
arbitration. After the defendants sought
to compel arbitration, the plaintiff argued she was not bound by her attorney’s
agreement because she had not consented to it.
The Supreme Court held an attorney may not, and has no apparent
authority under the laws of agency to, surrender any substantial right of his
or her client or enter into any contracts affecting the client’s substantial
rights without the client’s consent.
(See id. at p. 407 [“‘[a]bsent
express authority, it is established that an attorney does not have implied
plenary authority to enter into contracts on behalf of his client’â€; “[w]hen a
client engages an attorney to litigate in a judicial forum, the client has a
right to be consulted, and his consent obtained, before the dispute is shifted
to another, and quite different, forum, particularly where the transfer entails
the sort of substantial consequences present hereâ€]; Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1221 [same]; see also
1144, 1147 [“an attorney’s mere assertion of authority to waive a trial de novo
on behalf of his client cannot be relied uponâ€; “[a]dding a party’s signature
line to the stipulation is an obvious preventative measureâ€].)
Unlike the
situation in Blanton, there is no
allegation here that Andreos entered into a contract without his client’s
consent; none of the facts alleged in Clampett’s petition suggest, let alone
establish, an absence of implied or apparent authority on which the trustees
could reasonably rely in rejecting the distribution demand. To the contrary, the petition asserts Andreos
acted at Clampett’s behest and in accordance with the trust’s terms to provide
a timely writing to preserve Marion’s distribution rights and the trustees knew
Andreos was acting as the agent of Marion’s attorney-in-fact. Nothing in the trust documents required
Marion to exercise her five-or-five distribution right personally rather than
through her designated agent.
Accordingly, the court erred in sustaining the demurrer without leave to
amend and dismissing the petition.
DISPOSITION
The order dismissing the
petition is reversed. The matter is
remanded to the trial court with directions to enter an order denying the
trustees’ demurrer and to conduct further proceedings not inconsistent with
this opinion. Clampett is to recover his
costs on appeal.
PERLUSS,
P. J.
We
concur:
WOODS,
J.
ZELON,
J.
Marion and Jack and Jack’s two sons, Joel and Christian, share the same
surname, we refer to them by their first names for convenience and
clarity. (See Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1191, fn.
1; Cruz v. Superior Court (2004) 120
Cal.App.4th 175, 188, fn. 13.)
Code sections 17200 and 850 permit a person to request the court to make
certain orders, including directing a trustee to convey property in compliance
with the terms of a trust instrument and to hold a trustee personally liable if
the failure to do so was in bad faith.
