Estate of Barthelmess

• Decision Date: 17 February 1988
• Docket Number: No. D006094,D006094
• Citation: 243 Cal.Rptr. 832,198 Cal.App.3d 728
• Court: California Court of Appeals Court of Appeals
• Parties: ESTATE OF Evelyn B. BARTHELMESS, Deceased. George C. WETZEL, as Executor, Petitioner and Respondent, v. Kaylyn MALLETTE, Objector and Appellant; Karl Barthelmess et al., Claimants and Respondents.

Page 832

243 Cal.Rptr. 832

198 Cal.App.3d 728

ESTATE OF Evelyn B. BARTHELMESS, Deceased.

George C. WETZEL, as Executor, Petitioner and Respondent, v. Kaylyn MALLETTE, Objector and Appellant;

Karl Barthelmess et al., Claimants and Respondents.

No. D006094.

Court of Appeal, Fourth District, Division 1, California.

Feb. 17, 1988.

As Modified on Denial of Rehearing March 14, 1988.

Eugene J. Gorrow, Higgs, Fletcher & Mack, Vincent E. Whelan and Richard E. Showen, San Diego, for objector and appellant

Ferguson, Newburn & Watson, LaJolla, for respondents Karl and Kurt Barthelmess.

Carl Fabian, San Diego, for petitioner and respondent Wetzel.

TODD, Associate Justice.

Kaylyn Mallette appeals an order confirming the sale of residential real property upon the petition of George C. Wetzel, executor of the estate of Mallette's deceased mother, Evelyn B. Barthelmess. ¹ Mallette seeks to overturn the sale to third party purchasers and to have the residence distributed to herself and her two brothers in kind as tenants in common under the basic distribution provision in Barthelmess' will giving the estate to the three children share and share alike.

Mallette challenges the order confirming the sale on the grounds (1) PROBATE CODE SECTION 582² prohibits a sale after expiration of the period to file claims where the sale is not required to pay debts as was the case here, (2) the evidence does not support the allegations of the petition or the court's finding the sale was for the best interest of the estate, (3) the court abused its discretion by confirming the sale after Mallette overbid the purchaser in the required amounts at the confirmation hearing and (4) the part of the confirmation order directing that escrow may close 30 days from the date of the order is contrary to law and constitutes reversible error.

Finding no merit in Mallette's contentions, we affirm. However, we do not find the appeal to be frivolous and thus do not impose sanctions as requested by Wetzel, whose brief and sanctions request is joined in by Mallette's brothers, Karl and Kurt Barthelmess.

FACTS

After Evelyn B. Barthelmess' death July 9, 1986, Wetzel was duly appointed executor and letters testamentary issued August 7, 1986. Evelyn B. Barthelmess' will contains no powers of the executor, such as the power of sale. Her estate consists of both real and personal property. The real property, Evelyn B. Barthelmess' residence in San Diego, was incapable of being legally divided by a partition in kind. In addition, the estate was of insufficient size to permit distribution of the residence to one beneficiary and division of the remaining assets between the two other beneficiaries in order to effect an equal distribution to each of them as the will required.

On November 18, 1986, Wetzel filed a notice of sale of real property at private sale with respect to the residence. The notice of sale set forth terms of the sale, including that it was to be a cash sale with 10 percent of the amount bid to accompany the offer and the balance to be paid on confirmation of sale by the court. The notice of sale specified that bids or offers must be in writing and would be received at the office of Wetzel's attorney or could be filed with the court clerk or with Wetzel at any time after first publication of the notice and before making the sale.

On December 10, 1986, Wetzel accepted a written bid from third parties conforming to the terms of the notice of sale. The bid was for $175,500, $10,500 more than the appraised value, and was accompanied by a certified check for $17,500. On December 11, 1986, Wetzel petitioned the court for Before the hearing on the petition to confirm the sale, Mallette filed a petition to declare invalid the private sale and for preliminary distribution, and an objection to the private sale. The petition and the objection, among other things, cite section 582 and seek to invalidate the sale on the basis the sale occurred after the four-month period for filing creditors' claims expired and was not necessary to pay debts of the decedent or expenses of administration. The prayer of the petition, in addition to requesting partial distribution of 85 percent of the securities as well as general relief, asks the court to enter an order:

confirmation of the sale and the matter was set for hearing on February 4, 1987.

"1. Declaring the private sale of real property by the executor held on December 10, 1986 invalid; AND

"2. Directing the executor to make a preliminary distribution of the assets of the estate to the residuary devisees and lagatees at this time, to the following extent:

"a. Deliver possession of all of the real property owned by the estate to the residuary devisees, as tenants-in-common, ..."

The petition incorporates the objection in which Mallette avers the residence is the "family homestead" and served as her home and principle residence for the eight years immediately preceding her mother's death. Mallette was still living in the residence pursuant to a lease executed before her mother's death and expiring November 30, 1987. Mallette's objection states, in part:

"It is my intention to purchase the undivided interests of my brothers in this real property from them at such time as it is distributed to us by the executor from the assets of the estate, with the court's approval, and to continue to reside there with my husband indefinitely and occupy it as my principal and only residence."

In response to Mallette's petition and objection, Wetzel filed declarations of Mallette's brothers, Kurt and Karl Barthelmess, expressing their desire to have the residence sold rather than having it distributed to the three beneficiaries as Mallette's petition requested. The brothers state the reason for this desire is the three beneficiaries reside in different locations throughout the United States and numerous difficulties and conflicts are very likely to arise in maintaining this property as tenants in common.

At the February 4, 1987, hearing on the petition to confirm the sale, the court heard extensive argument before it confirmed the sale and denied Mallette's petition to declare the sale invalid. The court expressly ruled the sale was for the best interests of the estate and the court was not precluded by section 582 from proceeding to confirm the sale. The court said that necessity to pay debts or expenses of the estate was not a controlling factor in its decision.

Also during the hearing, Mallette made an oral bid in the minimum overbid amount of $184,775, cash. As the 10 percent down payment Mallette tendered a portion of her share of the preliminary distribution the court ordered during the hearing. Citing section 785.1, ³ Wetzel indicated the offer was not acceptable. The court denied Mallette's request for a one-day continuance to obtain funds for a cash down payment and confirmed the sale to the third party purchasers for $175,500. Mallette undertook numerous proceedings, all unsuccessful to date, to overturn the confirmation of the sale.

DISCUSSION

I

Mallette contends the probate court breached its legal duty and thus committed reversible error when it failed to apply section 582, which prohibits a sale of real property made after the period for filing claims where, as here, the sale was not required to pay debts. The contention is unmeritorious.

Section 582, contained in an article of the Probate Code generally dealing with the powers and duties of personal representatives, provides:

"When the time to file or present claims has expired, the executor or administrator must deliver possession of the real property to the heirs or devisees, unless the income therefrom for a longer period or a sale thereof is required for the payment of the debts of the decedent."

Section 581 grants the personal representative the right to possession of all the decedent's real and personal property and, among other things, provides:

"After the time to file or present claims has expired [the personal representative] is not entitled to recover the possession of any property of the estate from any heir who has succeeded to the property in his possession, or from any devisee or legatee to whom the property has been devised or bequeathed, or from the assignee of any such heir, devisee or legatee, unless he proves that the same is necessary for the payment of debts or legacies, or of expenses of administration already accrued, or for distribution to some other heir, devisee or legatee entitled thereto."

It is readily apparent that sections 581 and 582 concern the subject of the personal representative's right to possession of the assets of the estate. (See § 300.) The sections establish the existence and duration of the right to possession held by the personal representative. References to the expiration of the claims filing period pertain to the duration of the right to possession, not to the power of the personal representative to effect a sale subject to confirmation of the court. In Estate of Bazzuro (1911) 161 Cal. 71, 75, 118 P. 434, the court points out that the predecessor to section 581 "does not purport to limit or affect the power of the court to order a sale: ...."

Separate provisions authorize and control the sale of estate property. (See §§ 754, 758, 785.) Section 754 provides, in part:

"[W]hen it is for the advantage, benefit, and best interest of the estate and those interested therein that any property of the estate be sold, the executor or administrator may sell the same, either at public auction or private sale, using his discretion as to which property to sell first, except as provided by Sections 750 and 751 of this code."

Concerning Mallette's argument there is no necessity to sell the residence in order to pay debts, that simply is not a relevant consideration in determining the propriety of the sale in this case. The sale may be upheld on the basis of the finding it was in the best interest of the estate within...