Jeter v. Callahan
| Decision Date | 17 April 2023 |
| Docket Number | D080518 |
| Parties | GWENDOLYN JETER, Plaintiff and Appellant, v. ANNIE CALLAHAN, as Trustee, etc., et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Bernardino County No. PROPS0900100, Stanford E. Reichert, Judge. Affirmed as modified.
Michelle D. Strickland, for Plaintiff and Appellant.
No appearances for Defendants and Respondents.
Gwendolyn Jeter appeals the probate court's order determining the identities and distributional shares of the beneficiaries of a trust originally set up by her grandmother. She contends an amendment of the trust made after her grandmother died that changed the beneficiaries is void, and the court erroneously construed the amendment in identifying the beneficiaries and their shares. We modify the order to correct the identification and distributional share of each beneficiary and affirm the order as modified.
Alberta Lewis had six children: Annie, Lillie, Rosie, Artice, Bertha, and John. Through a series of deeds recorded between 1985 and 1994, Alberta and Lillie took title as joint tenants to a multi-unit dwelling and an adjacent vacant lot in the City of Redlands (the Redlands property). In 1996, Alberta set up a living trust in her name and put into the trust her interest in the Redlands property,[1] three parcels of real property in Texas, and various items of personal property. She designated her six children as cotrustees and beneficiaries. The trust instrument provided Alberta would receive all income and profits of the trust property during her lifetime, and upon her death "the co-trustees shall distribute the trust property outright to the beneficiaries," with the real property to be "divided equally among [the] beneficiaries" and the personal property to be divided as stated in the trust instrument. Alberta died in 1999.
In 2008, John filed a civil action for partition and sale of the Redlands property. By that time, Rosie and Bertha had died. Lillie filed an answer in John's action and also filed in the probate court a petition regarding the internal affairs of a trust and a petition to establish another's claim of ownership to property. John filed objections to Lillie's petitions. The partition action and probate proceedings were consolidated in the probate court. After multiple hearings and settlement conferences, a settlement was reached on December 10, 2009, and recited on the record. The probate court stated it would not dismiss the proceedings "until notice of proposed action goes through and settlement agreement is signed." No transcript reciting the terms of the settlement or settlement agreement is in the record. On February 8, 2010, Annie and Bertha's daughter each filed a consent. According to Gwendolyn, one of Rosie's sons was "present at one time or another during the proceedings but did not [want to] participate."
To implement the settlement, Lillie filed a petition to amend Alberta's trust on February 10, 2010. According to the petition, under the settlement John would be paid $45,000 for his interest in the Redlands property, and the portion of the property Alberta had put in trust would be put back in trust with Lillie, Artice, and Annie as co-trustees and beneficiaries until the last of them died, when the property would be liquidated and the proceeds distributed to Alberta's then-living grandchildren. Lillie prayed for an order amending Alberta's trust to include these changes and an order confirming her ownership of one-half of the Redlands property as a tenant in common with the co-trustees of the trust. Lillie agreed to pay the trust rent to occupy the property and one-half of the property expenses. Artice joined in Lillie's petition. Annie filed objections to Lillie's petition and her own petition for injunctive relief.
The probate court held multiple hearings on Lillie's petition to amend Alberta's trust and Annie's petition for injunctive relief, at some or all of which Lillie, John, Artice, one of Artice's daughters, Annie, two of Annie's daughters, and Bertha's daughter appeared. The court ultimately denied Annie's petition for injunctive relief, dismissed her objections to Lillie's petition to amend the trust, and granted Lillie's petition. By order filed August 4, 2011 (the 2011 Order), the probate court ruled: (1) the interests of John and his heirs, beneficiaries, or assigns in the trust were terminated; (2) Lillie, Annie, and Artice were named co-trustees and beneficiaries; (3) Lillie's one-half ownership interest in the Redlands property was confirmed; (4) Lillie must pay reasonable rent for occupancy of the portion of the Redlands property held in trust and one-half of the property expenses; (5) upon the death of the last to die of Lillie, Artice, and Annie, the trust assets shall be liquidated and the proceeds distributed to Alberta's then-living grandchildren except the children of John, who were excluded from any distribution; (6) upon sale of the Redlands property, a $45,000 lien held by Artice and her husband must be paid in full before any distributions are made to beneficiaries, heirs, or successors in interest; (7) Lillie and Artice were entitled to reimbursement from the trust for the attorney fees incurred in prosecuting the petition to amend the trust; and (8) to sell the property, Lillie, Annie, and Artice would have to agree and file a petition to reform the trust.
In 2019, after Artice and Lillie had died, Lillie's daughter Gwendolyn filed in the probate court a petition to terminate Alberta's trust. In the operative amended petition, Gwendolyn alleged her mother had died intestate and left her and her brother as heirs. She asked the probate court to terminate the trust, order the Redlands property sold, and distribute the proceeds of the sale of the trust portion of the property per stirpes in one-third portions to the children of Annie, Artice, and Lillie.[2] Annie filed an objection to the petition. One of Artice's daughters appeared at a hearing and made an objection to the petition. The court instructed her to serve and file a written objection, but she did not.
The probate court set an issues conference. Gwendolyn filed a statement in which she raised, among other issues, whether the 2011 Order validly amended Alberta's trust after it became irrevocable upon her death and, if it did, who were the beneficiaries under that order. At the issues conference, the court ruled the 2011 Order was valid and would be enforced. The court set a briefing schedule on the issues of the identities of beneficiaries and their respective interests. In her brief, Annie contended all of Alberta's grandchildren except the children of John were contingent beneficiaries. In her brief, Gwendolyn contended: (1) only the children of Annie, Artice, and Lillie were entitled to inherit, and each set of children should receive a per stirpes share of one-third; or, alternatively, (2) all of Alberta's grandchildren except the children of John were entitled to inherit, and each set of grandchildren should receive a per stirpes share of one-fifth.
The probate court issued an amended tentative ruling on its interpretation of the 2011 Order. The court tentatively ruled the Redlands property must be sold when Annie, Artice, and Lillie have all died; and after the priority payments specified in the 2011 Order are made, the remaining proceeds of the sale of the trust portion of the property must be paid in equal shares to all of Alberta's then-living grandchildren except John's children. In response, Gwendolyn filed a brief objecting to distribution of proceeds to the grandchildren in equal shares rather than per stirpes shares, objecting to the postponement of the sale of the Redlands property until Annie dies as an unlawful restraint on alienation, and asking the court to allow her to sell the property. Artice's daughter filed a brief agreeing with the amended tentative ruling.
The probate court held a hearing on October 4, 2021, at which Gwendolyn, Annie, Artice's daughter, and Rosie's three children appeared through their attorneys. Annie had no opinion on the court's amended tentative ruling, and Artice's daughter and Rosie's children agreed with it. Gwendolyn disagreed, again objecting to equal distributions to Alberta's grandchildren and insisting on per stirpes distributions. After hearing argument, the court stated it would issue a written decision and did so on October 12, 2021 (the 2021 Order). The court determined: (1) the 2011 Order was "clear on its face" and "the basis for res judicata and collateral estoppel"; (2) under the 2011 Order, the Redlands property "must be sold when Annie, Artice, and Lillie have ALL DIED"; (3) when the property is sold, after the priority payments specified in the 2011 Order are made, "the remaining trust proceeds go to all Alberta's then living grandchildren except to the descendants of [John]"; (4) there are 18 grandchildren who are beneficiaries, whom the court listed by name; and (5) the grandchildren are to "receive their distributions (inheritance) in kind, that is, 18 equal shares."
Gwendolyn appealed the 2021 Order.[3]
Gwendolyn contends the 2011 Order on which the probate court based its rulings in the 2021 Order is void because it violated the due process rights of Alberta's grandchildren. Gwendolyn also contends the 2011 Order has no preclusive effect. She contends the 2021 Order unreasonably restrains her right to partition and sell the Redlands property. Gwendolyn also contends the 2021 Order erroneously directs the proceeds of the eventual sale of the...
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