Estate of Lindstrom

Decision Date24 April 1987
CourtCalifornia Court of Appeals Court of Appeals
PartiesESTATE OF Esther A. LINDSTROM, Deceased. (Two Cases) Howard K. HALL, Petitioner and Respondent, v. Owen Wayne HOPKINS et al., Contestants and Appellants. Owen Wayne HOPKINS et al., Petitioners and Appellants, v. SAN DIEGO TRUST & SAVINGS BANK, as Trustee, etc., Claimant and Respondent. D004069.
Barwick & Knowlton, Robert W. Knowlton and David L. Bain, Lemon Grove, for appellants

Alden J. Fulkerson, San Diego, for respondent.

[191 Cal.App.3d 378] TODD, Associate Justice.

We hold here that a will cannot modify or revoke an inter vivos trust absent specific conformance with the amendment/revocation provisions of the trust.

This appeal arises out of a consolidated court trial concerning an inter vivos trust established by Esther A. Lindstrom and Mrs. Lindstrom's estate. Owen Wayne Hopkins, Martha Hopkins, Deanna Mikulas, Edith Kendall and Stagecoach Health Club, Inc. (hereafter referred to as Appellants-Trust) appeal the trust proceeding and Owen Wayne Hopkins and Martha Hopkins (hereafter referred to as Appellants-Estate) appeal the estate proceeding.

Respondent Howard Hall filed a petition for probate of Mrs. Lindstrom's last will dated February 27, 1984. Appellants-Estate filed a contest. Appellants-Trust were named beneficiaries under Mrs. Lindstrom's inter vivos trust dated February 23, 1982. They filed a petition for instructions to the trustee under Probate Code section 1138.1, subdivision (a)(4). 2 The petition sought distribution of the trust assets in accordance with the provisions of the trust. The trial court declared their beneficial shares forfeited pursuant to an in terrorem clause in Mrs. Lindstrom's will. The trial court also admitted to probate the February 27, 1984 will. Both sets of appellants appeal.

FACTS

On February 23, 1982, Esther Lindstrom, a widow with no children, executed (1) a revocable inter vivos trust naming Crocker National Bank as trustee and (2) a will with a standard "pour over" provision giving all of her estate (not already in the trust) to the trustee of the trust. Mrs. Lindstrom was the lifetime beneficiary of all income and principal of the trust. The trust named the following remaindermen beneficiaries: "Owen Wayne Hopkins and Martha Hopkins, equally, or to the survivor, all real property and mining interests." The residue was divided as follows:

"Owen Wayne Hopkins and Martha Hopkins, equally, or to the survivor, Seventy (70%) per cent;

"Margaret Keller, Three and One-Third (3 1/3%) per cent;

"Edith Kendall, Ten (10%) per cent;

[191 Cal.App.3d 379] "Deanna Mikulas, Ten (10%) per cent;

"Lucille Hoffman, Three and One-Third (3 1/3%) per cent;

"Stagecoach Health Club, Inc., Three and One-Third (3 1/3%) per cent."

At the time of execution of these documents, Mrs. Lindstrom lived with the Hopkins; they had known her for 14 years. In September 1982, Mrs. Lindstrom had a falling out with the Hopkins and moved to a house she owned in La Mesa. On December 22, 1982, Mrs. Lindstrom wrote Crocker Bank that she wanted to change her trustee to San Diego Trust & Savings Bank. On January 21, 1983, two Crocker trust officers visited Mrs. Lindstrom at her La Mesa house, and after the meeting, Mrs. Lindstrom signed a letter rescinding her December 22nd letter.

While living at the La Mesa house, Mrs. Lindstrom was frequently visited by Howard Hall and his mother, Omega Ceccacci. Ceccacci owned a house in Dulzura located next to a cottage owned by Mrs. Lindstrom. In April 1983, Mrs. Lindstrom moved from her La Mesa house to her Dulzura cottage.

On June 29, 1983, Mrs. Lindstrom again wrote Crocker Bank to change her trustee, and subsequently Crocker Bank sued Mrs. Lindstrom. That lawsuit, in part, raised the issue of whether Mrs. Lindstrom had the mental capacity to change trustees.

In November 1983, the superior court ruled that in December 1982 and July 1983, Mrs. Lindstrom had the capacity to contract, and, therefore, the change in trustee to San Diego Trust & Savings Bank effectuated by the June 29th letter was valid. The ruling was not appealed.

During the pendency of the litigation with Crocker Bank, Mrs. Lindstrom executed the first of two codicils to her will and the first of three amendments to her inter vivos trust.

On February 27, 1984, Mrs. Lindstrom executed a new will that revoked all former wills. Mrs. Lindstrom died September 15, 1984.

None of the three trust amendments was delivered to the trustee during Mrs. Lindstrom's lifetime as required by the trust instrument. Accordingly, the trial court in the instant case ruled all three trust amendments were invalid. No one contests that ruling. The trial court also found the February 23, 1982 trust document to be the valid inter vivos trust of Esther Lindstrom. That ruling, too, is uncontested.

[191 Cal.App.3d 380] Little else in this acrimonious consolidated action has been uncontested. The record of the pretrial manuvering consists of five volumes--some 1,300 pages--and includes two requests for removal of attorneys for conflicts of interest, as well as an almost-unheard-of attempt by a terminated law firm associate who worked on the case for a while to place a lien for claimed attorney fees on the decree of distribution rendered in the case.

The trial court admitted the February 23, 1982 will into evidence and proceeded to test the validity of the First Codicil. After six days of testimony in which the evidence about Mrs. Lindstrom's testamentary capacity was limited to a six-month period--the previous three months and the following three months--surrounding the August 17, 1983 execution date, the trial court ruled the First Codicil was valid.

The trial court also ruled that an attack on the trust was an attack or contest of the will and triggered the in terrorem clause of the will. The court ruled that both sets of appellants were covered under the in terrorem clause.

When the trial reconvened the following month, Appellants-Estate withdrew their contest of the Second Codicil and of the last will dated February 27, 1984. The trial court then admitted to probate the February 27, 1984 will.

The trial court ordered the trustee to hold in trust Mrs. Lindstrom's trust assets and estate assets and to divide them in two parts: (a) Alaska property, 3 and (b) California property. Pursuant to a stipulation presented to it, the court instructed the trustee to distribute the Alaska property in equal shares to Mrs. Lindstrom's seven heirs-at-law and to distribute the California

property to the five devisees in Mrs. Lindstrom's last will of February 27, 1984, and the sole trust remainderman who had not joined any contest

DISCUSSION

Appellants appeal on the grounds that the trial court made the following errors: (a) failed to issue statements of decision; (b) exceeded its jurisdiction in interpreting the in terrorem clause and other provisions of the will; (c) improperly ruled that Mrs. Lindstrom was not subject to undue influence when she executed her codicils and last will; (d) improperly participated in settlement discussions; and (e) improperly expanded the application of the in terrorem clause to cover an inter vivos trust.

[191 Cal.App.3d 381] For the reasons which follow, we have concluded only the final contention has merit. Accordingly, we will first take up the issues surrounding the in terrorem clause.

I *

II

Mrs. Lindstrom's will dated February 23, 1982, contained the following provision:

"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 those things, in that event I specifically disinherit each such person and all legacies, bequests, devises and interests given under this Will to that person shall be forfeited and shall augment proportionately the shares of my estate going under this Will."

Since the First Codicil and the Second Codicil republished the February 23, 1982 will, the above in terrorem clause was incorporated in the codicils. 5

An in terrorem clause creates a condition upon bequests provided in a will which is enforced in California (see Estate of Basore (1971) 19 Cal.App.3d 623, 630, 96 Cal.Rptr. 874). Whether there has been a contest within the meaning of a particular no-contest clause depends upon the particular case and the language used. (Estate of Kazian (1976) 59 Cal.App.3d 797, 802-803, 130 Cal.Rptr. 908; Estate of Watson (1986) 177 Cal.App.3d 569, 572, 223 Cal.Rptr. 14.) Determination of whether a prohibited contest has occurred must be made on a case-by-case basis. (Ibid.)

Here, the trial court ruled appellants' beneficial shares under Mrs. Lindstrom's inter vivos trust were forfeited under the in terrorem clause of her will. In making this ruling, the trial court relied on three preliminary conclusions it had reached: (1) that Mrs. Lindstrom's will consisted of her inter vivos trust and her last will and testament; (2) that the in terrorem clause of her will, by virtue of its wording, applied to the inter vivos trust as well as to the will; and (3) that the will effectively amended the inter vivos trust. Each of these bases was flawed, leading the trial court to an erroneous result in this case. Much like a house of cards or a house built on a foundation of sand rather than rock, neither the entire structure nor the individual components can support the weight of the unsturdy premises. We will take up the faulty premises one by one.

A.

The trial court's first premise--that the inter vivos trust was part of her will--appears to be based on evidence of Mrs. Lindstrom's apparent state of mind in executing the various documents. Attorney ...

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