Estate of Beard, In re

• Decision Date: 26 April 1999
• Docket Number: Nos. A072114,A074710,s. A072114
• Court: California Court of Appeals Court of Appeals
• Parties: , 99 Cal. Daily Op. Serv. 2993, 1999 Daily Journal D.A.R. 3851 ESTATE OF Lonnie R. BEARD, Deceased. Merle Cables, as Executor, etc., Petitioner and Respondent, v. Lottie Ann Beard, Objector and Appellant. Estate of Lonnie R. Beard, Deceased. Lonnie Richard Beard III et al., Petioners and Respondents, v. Lottie Ann Beard, Objector and Appellant.

Page 276

84 Cal.Rptr.2d 276

71 Cal.App.4th 753, 99 Cal. Daily Op. Serv. 2993,

1999 Daily Journal D.A.R. 3851

ESTATE OF Lonnie R. BEARD, Deceased.

Merle Cables, as Executor, etc., Petitioner and Respondent, v. Lottie Ann Beard, Objector and Appellant.

Estate of Lonnie R. Beard, Deceased.

Lonnie Richard Beard III et al., Petioners and Respondents, v. Lottie Ann Beard, Objector and Appellant.

Nos. A072114, A074710.

Court of Appeal, First District, Division 3, California.

April 26, 1999.

John T. Larson, Esq., Eureka, Deborah A. Boyd, Esq., for appellant.

Michael F. Malloy, Esq., Catherine M. Koshkin, Esq., Janssen, Malloy, Marchi, Needham, Morrison & Koshkin, Eureka, for Lonnie Richard Beard III.

Francis B. Mathews, Esq., Mathews & Kluck, Eureka, for Merle Cables.

McGUINESS, P.J.

Decedent Lonnie R. Beard died on September 11, 1986. Since that date, his heirs have fought each other unremittingly over the disposition of his estate. In these consolidated appeals, decedent's widow and pretermitted heir, appellant Lottie Ann Beard, seeks to overturn and vacate no fewer than six separate orders and decisions of the probate court. She contends that orders (1) approving the fourth annual account, (2) approving the fifth annual account, and (3) for delivery to her of an Individual Retirement Account, as well as (4) a judgment approving and confirming the statement of decision of a special referee, are all fatally defective and must be vacated because they were in conflict with earlier orders approving the parties' compromise and settlement agreement, and were instead based on (5) allegedly void orders setting aside the earlier orders arising from the settlement. In addition, appellant contends (6) there is insufficient evidence in the record of the actual financial condition of the estate to support or justify the probate court's most recent order granting a preliminary distribution of part of the estate. We disagree with appellant's contentions, and therefore affirm the orders appealed from.

I. FACTUAL AND PROCEDURAL BACKGROUND

The probate of this estate has been inordinately complicated, rivaling in its lengthy delays and convolutions the interminable chancery case of Jarndyce v. Jarndyce described by Charles Dickens in his novel Bleak House. ¹ Unfortunately, as in Jarndyce, resolution of the issues raised by this appeal require this court once again to review the confusing events that have led the unhappy parties to this point.

Decedent Beard was survived by appellant and his two adult children, respondents Lonnie Richard Beard III and Jennifer A. O'Day (the Beard children). He had previously been married to Nancy Beard (the former wife). The final judgment of dissolution terminating that marriage had been entered in February 1986, and decedent married appellant soon thereafter. However, litigation was still pending with respect to the characterization and division of the property of decedent and his former wife at the time of his death. Decedent's will, which was executed in September 1985, had not been changed to take account of his new marriage. This will left decedent's entire estate to his two children in equal shares, with the exception of a specific bequest of 20 percent of the Beard Office Equipment Company (Beard Company) to Jack L. Johnson (Johnson), and named respondent Merle Cables as executor (the executor). Appellant was not mentioned in the will.

After decedent's death, appellant filed a "Petition to Determine Heirship" requesting that she be held to be a pretermitted heir and granted a family allowance before final inventory. There was no opposition to these requests, and they were granted by the probate court. In its initial preliminary distribution, the court granted the executor's request for distribution of 20 percent of the capital stock of the Beard Company to Johnson.

In October 1988, the parties undertook settlement negotiations and a compromise (the Compromise Agreement) was reached. The parties entered into a stipulation on the record in open court (the original Settlement), and on October 28, 1988, the court issued and filed a written "Order Approving Compromise and Settlement" (the original Settlement Order), prepared and drafted by the executor's attorney. On November 21, 1988, appellant filed a motion to set aside the original Settlement Order, alleging it had been obtained through extrinsic fraud and did not accurately reflect the actual agreement of the parties. Through their attorneys, the Beard children filed papers concurring with appellant that the order did not accurately reflect the parties' actual agreement in certain respects. At a hearing on December 2, 1988, counsel reached an agreement on the terms of an "Amended Order Approving Compromise and Settlement" (the Amended Order) as drafted by appellant's attorney. The Amended Order was expressly approved as to form by all parties, signed by the court and filed on that date.

Among other things, the Amended Order provided that appellant would receive "by way of partial distribution" real property known as the Wetlands, an apartment complex, an individual retirement account at Shearson Lehman Company (the IRA), and $8,000 in cash. The Wetlands and apartments were to be charged against appellant's ultimate distributive share of the estate "at their appraised value," and the amount of the IRA was to be charged against her share of the estate at 75 percent of the value of the IRA at the time of distribution. The executor was ordered to "file a petition for preliminary distribution in the estate to transfer" all of these assets to appellant. In addition, appellant's attorney was ordered "to prepare an order for distribution of the ... IRA account" to appellant. In return, appellant was to (1) dismiss all of her pending appeals in the probate proceedings; (2) drop her motion for recusal of the executor's attorney; (3) dismiss her petition for a probate homestead with prejudice; and (4) expunge a lis pendens she had filed against the estate.

On December 2, 1988, pursuant to the petition of the executor's attorney and the terms of the Amended Order, the court entered an "Order for Preliminary Distribution." The Order for Preliminary Distribution (1) directed the distribution to appellant of (a) the $8,000 in cash, (b) the Wetlands and the apartments "at the value appraised by the inheritance tax referee" of $60,000 and $464,000, respectively, and (c) the IRA, charged against appellant's ultimate distributive share of the estate at 75 percent of the amount in the account at the time of distribution; (2) ordered that each of the three heirs (appellant and the Beard children) would receive as their ultimate distributional right one-third of the net estate, adjusted for the value of the properties they received in this preliminary distribution; (3) ordered appellant to dismiss with prejudice her appeal then pending; and (4) ordered that certain personal property in appellant's possession be treated as her separate property, including an automobile, and directed the executor to dismiss with prejudice his action to recover that property.

Unfortunately, this Order for Preliminary Distribution apparently incorporated some of the language of the original Settlement Order rather than that of the Amended Order. Consequently, among other things, the Order for Preliminary Distribution omitted mention of the December 2, 1988, date for turning over the Wetlands and the apartments to appellant. As a result, the executor settled his account of the income from the apartments to appellant as of December 16, 1988, rather than from the December 2, 1988, date specified by the Amended Order. Also on December 16, 1988, the court ordered the appointment of a court commissioner for the purpose of executing a dismissal of appellant's pending appeal before this court (No. A040715).

Although appellant had agreed and was ordered to dismiss all appeals pending in the estate proceedings, she did not do so. ² Upon learning the executor had caused the dismissal of the appeal, appellant had the appeal reinstated. On February 9, 1989, she filed a motion to set aside both the original Settlement Order and the Amended Order alleging extrinsic fraud, based on the executor's two-week delay in accounting for the income from the apartments. The executor filed opposition to the motion. On March 7, 1989, the court ruled there was no reason to set aside the parties' previous settlement, since the only problem was their failure to execute the agreed disposition in a timely fashion. The court ordered all parties to cooperate in ending the litigation by executing the necessary documents and complying with their previous agreements on or before March 21, 1989. Appellant appealed that ruling, as well as both the December 2, 1988, Order for Preliminary Distribution and the December 16, 1988, order appointing a court commissioner to execute the dismissal of her pending appeal.

On June 2, 1989, the court entered an order distributing the contents of the IRA to appellant, and charging her 75 percent of the value of the IRA against her share of the proceeds of the estate. In October 1989, the Beard children petitioned the court for elimination of appellant's monthly family allowance of $2,500, on the grounds the preliminary distribution of the estate and ongoing estate and litigation-related expenses had rendered it difficult for the estate to continue making that monthly payment. Appellant opposed the request, and filed her own petition for an increase in her family allowance to the sum of $13,256.48 per month. By order filed April 11, 1990, the court denied both of these opposing requests that appellant's family allowance be eliminated or increased. Instead, the court ordered the executor to continue paying appellant her family allowance of $2,500 per month and to reimburse her for all delinquent amounts.

On June 15, 1990, the Beard children filed a motion to set aside...