Capra v. Capra

• Decision Date: 22 December 2020
• Docket Number: C084032
• Citation: 58 Cal.App.5th 1072,273 Cal.Rptr.3d 402
• Court: California Court of Appeals Court of Appeals
• Parties: Lucille CAPRA et al., Plaintiffs and Appellants, v. Thomas CAPRA, Defendant and Appellant.

58 Cal.App.5th 1072

273 Cal.Rptr.3d 402

Lucille CAPRA et al., Plaintiffs and Appellants,

v.Thomas CAPRA, Defendant and Appellant.

C084032

Court of Appeal, Third District, California.

Filed December 22, 2020

As Modified January 15, 2021

Certified for Partial Publication.^*

Parker Ibrahim & Berg, Kathleen Mary Kushi Carter, Irvine, and Heather P. Karl, Costa Mesa, for Plaintiffs and Appellants.

Law Offices of Emanuel Barling, Jr., and Emanuel Barling, Jr., Woodland Hills, for Defendant and Appellant.

HULL, J.

In this action, heirs contest rights to a family cabin and a federal use permit authorizing the cabin on federal land. Plaintiffs allege the defendant is wrongfully claiming sole ownership of the cabin and permit and is threatening to sell the property. Three actions taken by the trial court are the subject of this appeal: (1) the court sustained the defendant's demurrer without prejudice and dismissed the action solely based on lack of jurisdiction; (2) it denied plaintiffs’ motion to disqualify defendant's attorney; and (3) it denied plaintiffs’ application for injunctive relief filed while this appeal was pending. Plaintiffs contend the trial court erred in each instance. In his cross-appeal, defendant contends the trial court erred by not dismissing the action with prejudice.

We reverse in part and affirm in part, and we remand for further proceedings. We hold (1) the trial court had jurisdiction to try this matter; (2) the court did not abuse its discretion when it denied plaintiffs’ motion to disqualify counsel; and (3) plaintiffs’ application for injunctive relief pending this appeal is now moot. An application for injunctive relief and defendant's arguments for dismissing with prejudice may be considered by the trial court on remand.

FACTS AND PROCEDURAL HISTORY

A. Factual Background

"On demurrer review, we accept the truth of material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice." ( State Dept. of State Hospitals v. Superior Court (2015) 61 Cal.4th 339, 346, 188 Cal.Rptr.3d 309, 349 P.3d 1013.)

In 1948, Frank R. Capra (Frank Sr.) and his wife Lucille (Lucille Sr.) acquired a house built on federal land in June Lake, Mono County. (We refer to the Capra parties and relatives by their first names to avoid confusion.) The parties refer to the house as "the cabin." Frank Sr. and his wife also obtained a use permit from the United States Forest Service to use the land for a recreational residence. They used the cabin as a summer home for themselves and their children. Later, their grandchildren and great-grandchildren also enjoyed spending summers at the cabin. The use permit was renewable every 20 years.

In 1974, Frank Sr. and Lucille Sr. organized the Capra Family Trust. The trust property consisted of the sum of $100 and any other property which by inter vivos transfer or will would be conveyed to the trust.

Lucille Sr. died in 1984, and ownership of the cabin and the permit passed to Frank Sr. After his wife's death, Frank Sr. confirmed the trust and named his children, Frank Capra Jr. (Frank Jr.), plaintiff Lucille Capra (Lucille), and defendant Thomas Capra (Thomas) as successor trustees of the trust. He also amended the trust declaration to state that upon his death, the residue of his share of the trust "shall be distributed to his children, Frank Capra, Jr., Lucille [Capra] and Thomas Capra, in equal shares ...." Prior to this amendment, the trust declaration had stated that upon Frank Sr.’s death, the residue of his share of the trust was to be divided into three equal shares "which shall constitute separate trusts" for each of the Capras’ three children, and the shares were "to be held in trust" for each beneficiary's lifetime. The amended declaration omitted reference to the residual property being held in trust for the three children.

Frank Sr. died in 1991. Probate of his estate began that year in the Riverside County Superior Court, Indio Branch, sitting in probate.

Frank Sr. had owned all the shares of Frank Capra Productions, Inc. (FCP). After his death, his shares were distributed in equal parts to Frank Jr., Lucille, and Thomas. Thomas has been the president of FCP since 1993.

In 1992, Frank Jr. and Thomas attempted to transfer the Forest Service permit to themselves and Lucille as trustees of the trust, but the Forest Service would not allow three names to be on the permit. The Forest Service would allow only an individual or a married couple to be named on the permit.

The three siblings decided it made sense for Thomas to be the trustee listed on the permit because Lucille was not living in California. Plaintiffs allege that Lucille and Frank Jr. "agreed to forego their rights to act as the representative on the Permit and allowed Thomas to be the representative Trustee named on the Permit." In October 1992, the Forest Service placed Thomas's name on the permit. The permit was renewed in 2008 in Thomas's name.

On May 26, 1993, the Riverside County probate court settled Frank Sr.’s estate and ordered final distribution. Pursuant to Frank Sr.’s will, the court ordered that all of Frank Sr.’s residual property be transferred to Frank Jr., Lucille, and Thomas as trustees of the Capra Family Trust. This property included the cabin and the permit. (The probate court misidentified the trust as the "Frank R. Capra and Lucille R. Capra Trust dated December 14, 1981." The correct name is "The Capra Family Trust," dated November 25, 1974 and later amended, among other times, on December 14, 1981.)

Frank Sr.’s children and grandchildren continued to spend time at the cabin after Frank Sr.’s death. FCP paid for the cabin's maintenance, including property taxes, Forest Service bills, utilities, phone and cable bills, insurance, furnishings, landscaping, repairs, and cleaning.

In 2001, Lucille transferred her interests in the cabin and the permit to her personal trust. Frank Jr. died in 2007 intestate in North Carolina. His estate passed to his wife and his three children, two of whom are plaintiffs in this action: Frank III and Jonathan.

In 2011, Thomas told Lucille that FCP was no longer generating enough income to pay all the cabin's costs. He asked Lucille to begin contributing money to help defray the expenses. Once that year, he asked her to send $2,400 to FCP's accountant to help cover the costs. Thomas and his wife, defendant Kris, occasionally paid for the expenses with their personal funds and were reimbursed by FCP.

At some point, Thomas established a bank account with Bank of America to use for paying the cabin's expenses. He referred to the account as the "lake house account" or "lake account." He also told Lucille that he had left $50,000 in a trust to fund the cabin's expenses until all of Frank Sr.’s grandchildren could decide what they wanted to do with the cabin.

In 2012, Thomas continued to represent to Lucille that the cabin belonged to the entire family. That year, he asked Lucille, Jonathan, and Frank III to deposit money into the Bank of America account to fund the cabin. He and Lucille, as officers of FCP, agreed to use the money to fund the cabin. Lucille sent $6,000 to the accountant for that purpose.

In 2013, Thomas paid salaries to FCP's officers instead of dividends to its shareholders because he and Lucille were using their salaries to fund the cabin. He also represented to Lucille that Jonathan and Frank III were part owners of the cabin. Thomas began teaching his son and another nephew the operations of FCP and the cabin so they could assume those duties when he was no longer able to fulfill them.

In July 2015, Thomas asked Lucille for $25,000 to cover cabin expenses for the years 2013-2015, and he instructed her to send the check to FCP's accountant.

In September 2015, Thomas declared that he owned the cabin and the permit exclusively, and that the plaintiffs had no right or interest in either. He asserted the right to deny anyone access to the cabin. He closed the Bank of America account and withdrew all its money, claiming it belonged to him. He changed the door locks and asserted exclusive control over all personal property at the cabin. He has not provided access to the cabin to plaintiffs, and in some instances, he has banned others from the property.

Plaintiffs allege that Thomas is threatening to sell the cabin, abandon the permit, and keep all sale proceeds without their consent and the consent of other legal owners.

B. Litigation

Plaintiffs filed this action in Los Angeles County Superior Court on February 5, 2016. Thomas and his wife, defendant Kris Capra, reside in Los Angeles County. Thomas threatened to move for sanctions if the case was not transferred to Mono County. Plaintiffs entered into a stipulation transferring the case there.

1. Motion to disqualify Thomas's attorney

In September 2016, plaintiffs filed a motion to disqualify Thomas's counsel, Emanuel Barling, Jr., from representing Thomas. They claimed Barling was FCP's past and current corporate counsel. He also had represented FCP shareholders, including plaintiffs, in many legal matters. And he had provided legal counsel to Frank III for at least 10 years. The trial court denied the motion, finding no evidence of concurrent representation and no evidence that Barling had represented the plaintiffs or had a relationship with them. Plaintiffs filed an appeal from this order.

2. The Sustained Demurrer

Plaintiffs filed their second amended complaint on September 12, 2016. Thomas filed his third demurrer. The trial court sustained the demurrer without prejudice. The court decided it did not have jurisdiction to try this matter, believing that the Riverside County Superior Court had exclusive jurisdiction under Probate Code section 17000 to try this matter since Frank Sr.’s estate was probated in that court and the probate court had ordered the cabin and the permit to be transferred to the trust. The court did not...