Teselle v. McLoughlin

• Decision Date: 22 April 2009
• Docket Number: No. C054919.,C054919.
• Citation: 173 Cal.App.4th 156,92 Cal. Rptr. 3d 696
• Court: California Court of Appeals Court of Appeals
• Parties: HELEN BESOTES TESELLE, as Trustee, etc., Plaintiff and Appellant, v. YVONNE McLOUGHLIN, Individually and as Trustee, etc., et al., Defendants and Respondents.

173 Cal.App.4th 156

92 Cal. Rptr. 3d 696

HELEN BESOTES TESELLE, as Trustee, etc., Plaintiff and Appellant, v. YVONNE McLOUGHLIN, Individually and as Trustee, etc., et al., Defendants and Respondents.

No. C054919.

Court of Appeals of California, Third District.

April 22, 2009.

Freeman, D'Aiuto, Pierce, Gurev, Keeling & Wolf, Thomas H. Keeling and Franklin J. Brummett for Plaintiff and Appellant.

Downey, Brand, M. Max Steinheimer and Mathew J. Weber for Defendants and Respondents.

OPINION

BLEASE, J.—

This case illustrates the primacy of the complaint in measuring the materiality of the facts which a motion for summary judgment must address. It involves the relationships of at least four subdivisions of the summary judgment statute. (Code Civ. Proc., § 437c, subds. (b)(1),¹ (2),² (3),³ (p)(2).⁴)

The trial court granted defendants' motion for summary judgment on the ground that plaintiff failed by one day to file a timely opposition statement of disputed material facts. (§ 437c, subd. (b)(2).) It said the failure was "a sufficient ground, in the court's discretion, for granting the motion" pursuant to section 437c, subdivision (b)(3). The court further found that defendants set forth a prima facie case for judgment with their moving papers and evidence. (See § 437c, subd. (p)(2).)

We shall conclude that the late filing of an opposition statement does not violate the policies of subdivision (b)(2) or (3) of section 437c and that, because the moving parties' separate statement (§ 437c, subd. (b)(1)) did not address a material fact in the complaint, it did not assert a prima facie case of entitlement to a summary judgment and did not shift the burden to plaintiff to file an opposing separate statement (§ 437c, subd. (p)(2)).

The parties have interests in or control of the properties of the partnership of two brothers, George and Charles Besotes. As part of their estate planning the brothers established separate trusts that provided for an exchange of the brothers' interests in four real properties owned by the partnership on the death of either partner. One of the properties is known as the Waterloo Road property. It was removed from the exchange provisions by amendment of the George C. Besotes 2000 Revocable Trust (the George trust). Charles died in August of 2002⁵ and plaintiff, as trustee of the George trust, conveyed the Waterloo Road property to the Charles Besotes and Ann G. Besotes 2000 Revocable Trust (the Charles trust) pursuant to the exchange provisions of the unamended George trust.

Plaintiff brought this action against defendants, who have interests in the Charles trust, to recover George's interest in the Waterloo Road property for his heirs on the ground plaintiff mistakenly conveyed it because plaintiff was unaware the George trust had been amended. The operative complaint recites the provisions of the trust amendment and alleges that, as a result, George's interest in the Waterloo Road property "no longer [was] subject to the exchange `agreement' ...." A copy of the trust amendment is attached to plaintiff's initial complaint and is part of defendants' moving papers.

Defendants' answer did not deny the existence of the trust amendment nor deny "that as a result ... the Waterloo Road property was no longer subject to the exchange agreement ...." Rather, it said the latter allegation "contains a legal conclusion to which no response is needed."

On appeal, defendants do not contest the fact of the trust amendment or challenge its legal effect. They base their summary judgment motion on the unamended provisions of the George trust. This violates the fundamental rule that the moving papers shall respond to the "material facts" of the complaint. (§ 437c, subd. (b)(1).) "The purpose of a summary judgment proceeding is to permit a party to show that material factual claims arising from the pleadings need not be tried because they are not in dispute." (Andalon v. Superior Court (1984) 162 Cal.App.3d 600, 604-605 .) "The complaint measures the materiality of the facts tendered in a defendant's challenge to the plaintiff's cause of action." (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381 .)

The trial court granted the motion for summary judgment under section 437c, subdivision (b)(3) because plaintiff was one day late in filing an opposing statement of disputed material facts (id., subd. (b)(2)). However, plaintiff was not obligated to respond to a material fact that was not in dispute. (Assad v. Southern Pacific Transportation Co. (1996) 42 Cal.App.4th 1609, 1614 .) A summary judgment may not be granted when the moving party has failed to "refute [a] tenable pleaded theor[y]." (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 942 .)

Moreover, it was an abuse of discretion for the court to impose a terminating sanction for a mere violation of a procedural rule. (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1364, fn. 16 [63 Cal.Rptr.3d 483, 163 P.3d 160]; Security Pacific Nat. Bank. v. Bradley (1992) 4 Cal.App.4th 89, 98 .) Although plaintiff was one day late in submitting a separate statement of disputed material facts (§ 437c, subd. (b)(2)), the moving party did timely reply (id., subd. (b)(4)), giving the trial court adequate time to consider the matter before the hearing on the motion.

This leaves defendants with the claim that because plaintiff failed to timely file an opposition statement the court was authorized to exercise its discretion under section 437c, subdivision (b)(3) to rule on the basis of the moving party's allegations of undisputed fact, i.e., to recharacterize plaintiff's cause of action. They argue: "If [plaintiff] wanted to argue the alleged trust amendment somehow made the transfer improper, [plaintiff] was required to—but did not—offer that evidence in opposition to [defendants'] Motion." (Italics added.) We disagree.

Defendants' argument assumes that the discretionary provisions of section 437c, subdivision (b)(3) stand alone, unrelated to the other provisions of section 437c. The assumption is incorrect. As noted, section 437c, subdivision (b)(3) is subject to subdivision (b)(1). Moreover, section 437c, subdivision (p)(2) provides that "the party moving for summary judgment bears an initial burden of production [of evidence] to make a prima facie showing of the nonexistence of any triable issue of material fact ...." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 [107 Cal.Rptr.2d 841, 24 P.3d 493] (Aguilar).)⁶ This presupposes the party has fulfilled its obligation to advance a material fact as undisputed. (§ 437c, subd. (b)(1).) Since there was no such fact there was nothing to oppose (id., subd. (b)(3)) and consequently no need for supporting evidence.

For these reasons the trial court abused its discretion in granting a summary judgment to defendants.

Lastly, as to two other causes of action defendants wrongly place the burden on plaintiff. Defendants' burden of production is to show that "`one or more elements of' the [plaintiff's] `cause of action' ... `cannot be established ...' ...." (Aguilar, supra, 25 Cal.4th at p. 850; see § 437c subd. (p)(2).) The burden can be satisfied by a showing that "the plaintiff does not possess, and cannot reasonably obtain, needed evidence ...." (Aguilar, supra, at p. 854.) "If a plaintiff pleads several theories, the defendant has the burden of demonstrating there are no material facts requiring trial on any of them. `The moving defendant whose declarations omit facts as to any such theory ... permits that portion of the complaint to be unchallenged.'" (Hufft v. Horowitz (1992) 4 Cal.App.4th 8, 13 , citation omitted.)

In this case plaintiff seeks evidence in the possession of defendants to establish that they wrongfully appropriated or retained $100,000 of receipts from the brothers' partnership. The purpose of an accounting is to discover evidence, and plaintiff cannot be faulted for having failed to produce what plaintiff did not possess. As to the second claim regarding the wrongful appropriation of $100,000 of the partnership assets, defendants produced no evidence that they had a right to the $100,000. Accordingly, they cannot carry their burden of negating an element of plaintiff's cause of action predicated upon entitlement to the money.

We shall reverse the judgment and direct that the trial court deny the motion for summary judgment.⁷

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff is the sister of two deceased brothers, George and Charles Besotes. Ann Besotes was married to Charles Besotes. Yvonne McLoughlin was Charles's daughter. She is married to James McLoughlin. George Besotes's wife predeceased him. They had no children.⁸

Ann and Charles were married in 1937. At that time Charles and George were working with their father in the produce business. Later, the brothers were in partnership in a boat building business. The partnership also purchased several parcels of real estate.

In late 1999, the brothers went to see their attorney for estate planning. Part of their discussion included the division of their real property. The trust eventually created for Charles and Ann (the Charles trust) is not a part of the record, but the treatment of the real property is reflected in the George trust. Article five, paragraph C of the George trust provides as follows: "Upon the death of either the settlor or Charles Besotes, the trustee shall exchange with the trustee of the Charles Besotes and Ann G. Besotes 2000 Revocable Trust, real properties of each trust as follows: The trustee of the George C. Besotes 2000 Revocable Trust shall deed to the trustee of the Charles Besotes and Ann G. Besotes 2000 Revocable Trust all of the settlor's interest in the real properties located at 1937 and 1945 N. Wilson Way ..., 1936 and 1938 Auto Avenue ..., and 2605, 2615, and 2621 Waterloo Road ..., all in Stockton, California. Simultaneously, and as consideration for the transfer, the trustee of the...