Dcss v. Brown

• Decision Date: 29 March 2004
• Docket Number: No. B168108,B168108
• Citation: 11 Cal.Rptr.3d 489,117 Cal.App.4th 144
• Court: California Court of Appeals Court of Appeals
• Parties: VENTURA COUNTY DEPARTMENT OF CHILD SUPPORT SERVICES, Plaintiff and Respondent v. Jeffrey C. BROWN, as Trustee, etc., Defendant and Appellant, Stephanie Solace, Plaintiff and Respondent, v. Kenneth Noel Marinos, Defendant.

11 Cal.Rptr.3d 489

117 Cal.App.4th 144

VENTURA COUNTY DEPARTMENT OF CHILD SUPPORT SERVICES, Plaintiff and Respondent v. Jeffrey C. BROWN, as Trustee, etc., Defendant and Appellant, Stephanie Solace, Plaintiff and Respondent, v. Kenneth Noel Marinos, Defendant.

No. B168108

Court of Appeal, Second District, Division 6

March 29, 2004

As Modified on Denial of Rehearing April 28, 2004

Hathaway, Perrett, Webster, Powers Chrisman & Gutierrez, Michael F. Perrett, Jeanne MacCalden Kvale and Greg W. Jones, Ventura, for Defendant and Appellant.

Bill Lockyer, Attorney General, James M. Humes, Senior Assistant Attorney General, Thomas R. Yanger, Supervising Deputy Attorney General, Sharon Quinn, Deputy Attorney General, for Plaintiff and Respondent Ventura County Department of Child Support Services.

Law Office of Hilary Gail Shankin, Hilary Gail Shankin, Ventura, and Coleen P. Gillespie, Oxnard, for Plaintiff and Respondent Stephanie Solace.

No appearance for Defendant.

COFFEE, J.

Kenneth Marinos (Marinos) has seven children. Six are the subject of this appeal. They range in age from 8 to 15, and are from three different relationships. Marinos has failed to pay child support for approximately 15 years. Following the death of his mother, he became entitled to distributions from her trust. The Ventura County Department of Child Support Services (DCSS) and one of the three mothers, Stephanie Solace (Solace), obtained judgments against Marinos for arrearages and ongoing monthly support. DCSS and Solace seek to satisfy the child support judgments from Marinos' interest in the trust. The trustee, Jeffrey C. Brown (appellant) has not satisfied the child support judgment, arguing that the trial court may not compel him to make trust distributions for child support. We disagree and affirm.

FACTS

The mothers of Marinos' minor children are Solace (two minors), Chantel Bunch (three minors) and Sheri Marinos (one minor). On January 30, 1989, Solace obtained a paternity judgment by default against Marinos for the support of her minor twins, Alexander and Nicholas Marinos. The trial court ordered Marinos to pay monthly support of $220 per child and to reimburse DCSS for $4,368 in past due support.

Helen W. Marinos Life Insurance Trust (Irrevocable)

Marinos and his brother, Daniel Marinos, are the sons of Chris and Helen Marinos, both deceased. On June 27, 1990, Helen Marinos (a widow) established the "Helen W. Marinos Life Insurance Trust (Irrevocable)" (the Trust). Helen, as grantor, named her adopted sons, Kenneth and Daniel Marinos, as beneficiaries. The Trust gives the trustee broad powers to manage and disburse funds. It contains a spendthrift provision, designed to keep creditors from reaching trust assets.¹

According to its terms, the Trust is to be divided equally between Helen Marinos' two sons at her death. The shares are to remain in trust and be administered by the trustee to "provide for the proper support, care, maintenance and education of said child." The trustee has discretion to "distribute so much of the net income or principal, or both, of each trust ... to or for the use and benefit of [the beneficiary], at any time and from time to time." Several years later, the guardian ad litem of the minor children obtained a court order modifying the Trust, removing Rodney Minnier as trustee and appointing appellant as successor trustee. Helen, Kenneth and Daniel Marinos consented to the modification. A conservatorship was later established for the person and estate of Helen Marinos. Santa Barbara Bank and Trust was named as conservator of her estate.

Enforcement of Child Support Judgments

Helen Marinos died on November 27, 2002. One month later, Solace filed a complaint for injunctive relief in probate court. She asked the court to enjoin distribution of the Trust proceeds to Marinos, referencing her 1989 child support judgment. Several months later, DCSS filed three petitions in the probate action to enforce money judgments it had recovered on behalf of Marinos' minor children. DCSS sought support for 1) Alexander and Nicholas Marinos, the minor children of Stephanie Solace; 2) Amanda Bonvillian, the minor child of Chantel Bunch; and 3) Damion, Cody and Melony Marinos, the minor children of Sheri Marinos. The petitions also requested the payment of monthly ongoing child support. Appellant filed opposition.

At a hearing concerning the payment of child support, the court indicated its tentative ruling was to order appellant to split the Trust into equal shares for Kenneth and Daniel Marinos (pursuant to the terms of the Trust). As to Kenneth Marinos' share, the court intended to grant the petition by DCSS for the payment of arrearages and to make orders regarding future support payments. Counsel for appellant indicated the Trust had already been equally divided. Appellant stated that Marinos' share of the Trust contained approximately $535,000 in liquid assets. Appellant's counsel indicated that $10,000 had been distributed from the Trust for the payment of Marinos' attorney's fees, by a previous court order. Counsel for Solace disputed this amount, claiming it was higher.

The court ruled that "the proper interpretation of [Probate Code section] 15305[, subdivision] (c) is that it's the policy of the State of California that child support obligations be honored and that a trust beneficiary and trustee — and/or trustee cannot utilize spendthrift clauses in a trust agreement to avoid the requisite payment of child support in the State of California." The trial court, pending final calculations by DCSS, ordered a partial payment to Solace of $40,672.48 in "non-welfare" funds and a partial payment to Chantel Bunch of $31,204.87 in "non-welfare" funds. The trial court specified that the funds due to Sheri Marinos (approximately $74,794.21) were payable directly to DCSS. The trial court awarded ongoing monthly support of $440 to Stephanie Solace; support of $476 per month to Sheri Marinos; and $302 per month to Chantel Bunch. The monthly support payments were to commence July 1, 2003.

DISCUSSION

Appellant reasons that his broad discretion as trustee, combined with the spendthrift clause in the Trust instrument, make Probate Code section 15305² inapplicable to the Trust. Appellant claims that the court may not "override or compel the Trustee's discretion by forcing the Trustee" to pay trust funds in satisfaction of a support judgment. He acknowledges that the court is authorized to order payments from the Trust. He contends, however, that the court's authority is limited to those payments that the trustee has chosen to make in the exercise of his discretion.

Statutory Interpretation

The trial court's statutory interpretation is a question of law which we review de novo. (Harbor Fumigation, Inc. v. County of San Diego Air Pollution Control Dist. (1996) 43 Cal.App.4th 854, 859, 50 Cal.Rptr.2d 874.) When presented with a question of statutory construction, our primary task is to ascertain legislative intent to effect the purpose of the statute. (Allen v. Sully-Miller Contracting Co. (2002) 28 Cal.4th 222, 227, 120 Cal.Rptr.2d 795, 47 P.3d 639.) "We begin by examining the statutory language because it generally is the most reliable indicator of legislative intent. [Citation.] We give the language its usual and ordinary meaning, and `[i]f there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs.' [Citation.]" (Ibid.) If the statutory language is ambiguous, we consider the legislative history and select the construction that comports most closely with the legislative intent. We must promote, rather than defeat, the general purpose of the statute. (Torres v. Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1003, 111 Cal.Rptr.2d 564, 30 P.3d 57.)

Spendthrift, Support and Discretionary Trusts

As background for our statutory interpretation, we briefly address the distinctions between spendthrift, support and discretionary trusts. A spendthrift trust is created when the trust instrument provides that the beneficiary may not assign his interest and the trust is not subject to the claims of creditors. (11 Witkin, Summary of Cal. Law (9th ed. 1990) Trusts, § 165, p. 1017; Rest.2d Trusts, § 152, p. 311.) Under a support trust, the trustee is directed to pay no more than is necessary for the education or support of the beneficiary. (Witkin, supra, § 166, p. 1019; Rest.2d Trusts, § 154, com. a, p. 320.) A discretionary trust directs the trustee to pay whatever amount the trustee sees fit. (Witkin, supra, § 166, p. 1019; Rest.2d Trusts, § 155, p. 323.)

"A true discretionary trust, as it developed in England and as it is recognized in California, involves a discretion to pay over income (or principal) or to withhold it. It is not an abuse of discretion (if there is no improper motivation) for the trustee to pay nothing. [Fns. omitted.]" (Memorandum Relating to Spendthrift and Related Trusts by Professor Russell Niles, consultant to Cal. Law Revision Com., Nov. 6, 1984.) Appellant and Solace characterize the Trust as a spendthrift trust, while DCSS claims it is a discretionary trust. For the purpose of our analysis, it is unnecessary to characterize the type of trust before us. It is undisputed that appellant alone has discretion to make payments from the Trust. Marinos has no right to compel such payments.

Newly Enacted Probate Code Sections 15300-15307

In 1986, the Law Revision Commission recommended enactment of new probate statutes to improve existing law relating to spendthrift trusts. The Commission stated that "California trust law is now a patchwork. The various parts are largely uncoordinated.... [¶] A major purpose of this recommendation is to reorganize and consolidate the scattered provisions of existing law. [Fn. omitted.]" (Selected 1986 Trust & Probate Legislation with Official Comments (Sept.1986) Cal. Law Revision Com., Recommendations, pp....