Estate of Friedman

• Decision Date: 17 December 1979
• Citation: 161 Cal.Rptr. 311,100 Cal.App.3d 810
• Court: California Court of Appeals Court of Appeals
• Parties: Estate of Eudice L. FRIEDMAN, Deceased. Joyce D. GRUNAUER, Petitioner and Appellant, v. Daniel FRIEDMAN, Respondent. Civ. 57228.

Page 311

161 Cal.Rptr. 311

100 Cal.App.3d 810

Estate of Eudice L. FRIEDMAN, Deceased.

Joyce D. GRUNAUER, Petitioner and Appellant, v. Daniel FRIEDMAN, Respondent.

Civ. 57228.

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

Dec. 17, 1979.

Kindel & Anderson, Paul L. Freese and William E. Johnson, Los Angeles, for petitioner and appellant.

Arthur J. Crowley and Ben Levin, Los Angeles, for respondent.

LILLIE, Acting Presiding Justice.

Joyce Grunauer, daughter of decedent Eudice Friedman and a beneficiary under decedent's will, filed a petition in the probate proceeding for determination of interests under the will and for interpretation of the will. (Prob.Code, § 1080.) The petition sought a determination whether Joyce's filing of a complaint for damages, a constructive trust and other relief against Daniel Friedman, decedent's surviving husband, would violate the in terrorem clause of the will and if so, which rights and interests under the will would thereby be forfeited. The court made an order determining that petitioner's filing of the proposed complaint would constitute a violation of the in terrorem clause. ¹ Petitioner appeals from the order. ²

Appellant contends that enforcement of a forfeiture for violation of an in terrorem clause is barred by the prohibition against forfeiture contained in Civil Code section 3369. ³ In support of this contention, appellant cites a law review article in which the author concludes that such a rule should be adopted in California. (Selvin, Comment: Terror in Probate (1964) 16 Stan.L.Rev. 355, 366-368.) Even if we agreed with the reasons advanced by the author for the rule which he proposes, we would not be free to apply it in this case. Our Supreme Court has repeatedly declared that a provision in a will providing for forfeiture of a legacy in the event of a contest of the will by the legatee is not contrary to public policy, is valid and binding upon the legatee, and is to be given effect according to the intent of the testator. (Lobb v. Brown (1929) 208 Cal. 476, 484, 281 P. 1010; In re Kitchen (1923) 192 Cal. 384, 389, 220 P. 301; Estate of Bergland (1919) 180 Cal. 629, 633, 182 P. 277; Estate of Miller (1909) 156 Cal. 119, 121-122, 103 P. 842; Estate of Hite (1909) 155 Cal. 436, 439-441, 101 P. 443.) This principle has been consistently applied by the intermediate appellate courts of this state. (See, e. g., Estate of Kazian (1976) 59 Cal.App.3d 797, 801, 130 Cal.Rptr. 908; Estate of Basore (1971) 19 Cal.App.3d 623, 630, 96 Cal.Rptr. 874; Estate of Goyette (1968) 258 Cal.App.2d 768, 772, 66 Cal.Rptr. 103; Estate of Zappettini (1963) 223 Cal.App.2d 424, 427, 35 Cal.Rptr. 844; Estate of Dow (1957) 149 Cal.App.2d 47, 53, 308 P.2d 475; Estate of Fuller (1956) 143 Cal.App.2d 820, 824, 300 P.2d 342; Estate of Howard (1945) 68 Cal.App.2d 9, 11, 155 P.2d 841; Estate of Markham (1941) 46 Cal.App.2d 307, 314, 115 P.2d 866.) We, likewise, are bound to follow it. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937; Reed v. California Coastal Zone Conservation Com. (1975) 55 Cal.App.3d 889, 892, 127 Cal.Rptr. 786; Fortenberry v. Weber (1971) 18 Cal.App.3d 213, 224, 95 Cal.Rptr. 834; Walker v. Capistrano Saddle Club (1970) 12 Cal.App.3d 894, 900, 90 Cal.Rptr. 912.) "It is not for us to inquire what the law ought to be when the Supreme Court has emphatically informed us what the law is." (Orange County Water District v. City of Riverside (1959) 173 Cal.App.2d 137, 165-166, 343 P.2d 450, 465.)

II

Appellant next contends that her proposed complaint does not violate the in terrorem clause of her mother's will. ⁴

That clause provides in pertinent part: "If any devisee, legatee or beneficiary under this Will or any legal heir of mine or person claiming under any of them shall contest this Will or attack or seek to impair or invalidate any of its provisions, or conspire with or voluntarily assist anyone attempting to do any of these things, in that event I specifically disinherit such person, and all legacies, bequests, devises and interests given under this Will to that person shall be forfeited as if such person predeceased me and shall augment proportionately the shares of my estate going under this Will to or in trust for such devisees, legatees and beneficiaries as shall not have participated in such acts or proceedings . . . ."

Appellant's proposed complaint arose out of the following circumstances. Eudice, appellant's mother, simultaneously executed a marital trust, a family trust and a will. At that time she was married to Friedman and appellant was the only surviving child of her prior marriage, her first husband (appellant's father) having predeceased her; appellant had three children. The pertinent provisions of each of the instruments were as follows:

Marital trust : Eudice was the trustor and the trust estate consisted of her separate property; she and Friedman were cotrustees; during her lifetime she was the sole beneficiary; on her death Friedman became the sole beneficiary and certain specified property was to be distributed to him; in addition, he was given the power to appoint all or any part of the trust estate which remained undistributed at the time of his death; in the event he failed fully to exercise the power of appointment, the trust estate was to be distributed to the trustee of the family trust.

Family trust : Eudice was the trustor and the trust estate consisted of her separate property; she and Friedman were cotrustees; during her lifetime she was the sole beneficiary; upon her death appellant became the life income beneficiary and the trustee was given the power to invade the trust principal to meet her needs or those of her children; on appellant's death, each of her children (or the issue of a deceased child) was to receive an equal share of the trust estate, with the net income thereof to be distributed to him until he reached the age of 35, when he was to receive his share of the principal.

Will : Appellant was given a bequest of $50,000; Friedman, as surviving trustee of the marital trust, was given certain specified property to be added to the corpus of that trust; the residue of the estate was given to the trustee of the family trust for inclusion in the corpus of that trust; all federal estate taxes and all inheritance and succession taxes were to be paid out of the residue; if the residue was insufficient to pay all of such taxes, the unpaid amounts thereof were to be paid out of the corpus of the family trust. The will included the no-contest clause previously set forth herein.

Appellant's proposed complaint against Friedman is framed in six causes of action. The first cause of action alleges: when appellant's father died, he had amassed an estate of approximately $6,000,000; he and Eudice agreed that they would pass to their children (appellant and her brother) the great residue of their fortune, and they executed mutual wills reflecting that agreement; after the death of her brother, appellant, the sole surviving child, was the "natural, intended and named recipient" of the family's fortune; following the death of appellant's father and the vesting of the fortune in Eudice, defendant Friedman, an insurance salesman and purported estate planner, appeared and began to work his way into Eudice's confidence; at that time and throughout the ensuing years, she was especially dependent upon others for guidance and assistance; after Eudice married Friedman, he succeeded in convincing her that she had not been well served by her prior legal advisers and that she should have trusts and other instruments prepared by new attorneys; he led Eudice to believe that her estate plan thereby would be improved without defeating appellant's expectations; in reliance on Friedman's representations and as a result of the trust and confidence she reposed in him, Eudice met with attorneys selected by Friedman; because of her general dependence on his honesty, she was incapable of critically and independently judging the problems of values, titles and taxes or the legal and trust work being performed by Friedman purportedly for her benefit and her family interests; Friedman exercised duress to overcome Eudice's uncertainty and reluctance by threatening to leave her, knowing she had cancer; by reason of such duress, she was induced to execute the will, the marital trust and the family trust; the will defeats appellant's expectations established prior to her father's death; the marital trust is inequitably overfunded and gives Friedman control of the bulk of the family's fortune; the family trust, while ostensibly creating benefits for appellant and her children, is a "mirage" because the death taxes threaten to deplete the assets of that trust, leaving Friedman with almost the entire estate and appellant with little or nothing; the value of the family's fortune appropriated by Friedman is estimated to be in excess of $5,000,000. ⁵ By her proposed complaint, appellant seeks compensatory damages of $5,000,000, punitive damages of $1,000,000, the imposition of a constructive trust upon all assets of the estate obtained by Friedman through the trusts or the will, a constructive trust upon the power of appointment given him by the marital trust, and an order restraining him from exercising such power.

Whether there has been a contest within the meaning of the language used in a no-contest clause is to be determined according to the circumstances in each case. (Estate of Basore, supra, 19 Cal.App.3d 623, 631, 96 Cal.Rptr. 874; Estate of Fuller, supra, 143 Cal.App.2d 820, 824, 300 P.2d 342.) The word "contest" as used in a no-contest clause means any legal proceeding designed to result in the thwarting of the testator's wishes as expressed in his will. (Estate of Holtermann (1962) 206 Cal.App.2d 460, 470, 23 Cal.Rptr. 685; Estate of Howard, supra, 68 Cal.App.2d 9, 11, 155 P.2d 841.) We...