Lehman v. Price, G039127 (Cal. App. 5/4/2009)
| Decision Date | 04 May 2009 |
| Docket Number | G039127. |
| Parties | JOAN PRICE LEHMAN et al., Cross-complainants and Appellants, v. REBECCA A. PRICE, Cross-defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Appeal from a judgment of the Superior Court of Orange County, No. 05CC13452, W. Michael Hayes, Judge. Affirmed.
Thomas N. Jacobson for Cross-complainants and Appellants.
Rebecca A. Price, in pro. per., for Cross-defendant and Respondent.
Joan Price Lehman, Thomas Price, William Price, and Peter Price appeal from a judgment on their cross-complaint against Rebecca A. Price (formerly Rebecca A. Scales) who was married to Lehman's father, Richard M. Price.1 Prior to his death, Price filed a petition for dissolution of his marriage to Scales. After having received a $411,000 settlement payment from Price's trust, Scales sued Lehman claiming she had a further interest in the trust's remaining assets. Lehman's cross-complaint alleged Scales' suit constituted a breach of contract and a violation of the trust's no contest clause. The trial court entered judgment ruling against Scales on her complaint and against Lehman on the cross-complaint.
Both Scales and Lehman appealed the judgment. Scales' appeal was dismissed after she failed to file an appellant's opening brief, despite having been granted numerous extensions, and remittitur was issued as to her appeal. On her appeal, Lehman contends Scales should have been ordered to forfeit all payments she received from the trust and damages should have been awarded due to Scales' breach of contract. We find no grounds on which to disturb the trial court's judgment and affirm.
Price, a widower, and Scales, a divorcee, were married March 31, 2001. Price was about 80 years old; Scales was 54 years old. Price had assets valued at over $3 million; Scales had assets worth around $300,000. A premarital agreement was signed by them on March 29, 2001 (the Premarital Agreement). Scales was represented by independent counsel in negotiating and executing the Premarital Agreement. The Premarital Agreement recited that Price and Scales both had adult children from their prior marriages. The Premarital Agreement contained each party's disclosure of their assets and liabilities at the time of marriage, which they agreed would remain separate property.
The Premarital Agreement recited that Price and his first wife's assets had been placed into two trusts: a family trust for the benefit of Price's children (i.e., Lehman and her brothers), that became irrevocable upon his first wife's death; and a spousal trust over which Price had control. Scales waived any interest in the family trust. Price and Scales agreed that after their marriage, Price would transfer all the assets in the spousal trust into a new revocable living trust to be called the Richard M. Price and Rebecca A. Price Trust (hereafter the Trust).
The Premarital Agreement provided if Price and Scales were still married at the time of Price's death, Scales would be the sole beneficiary of the Trust. If, however, prior to Price's death a petition for dissolution of marriage, legal separation, or annulment was filed by either, Scales would receive a lump sum payment of $211,000 as settlement of her property rights, plus upon Price's death, she would receive a distribution from the Trust of $100,000 for each year they had been married.
On October 10, 2001, Price as trustor established the Trust, and transferred the assets from the spousal trust—approximately $1.1 million in value—to the Trust. The Trust contained distribution provisions consistent with the Premarital Agreement—i.e., if still married, Scales got it all, but if a petition for dissolution of their marriage had been filed before Price's death, Scales would receive $211,000, plus $100,000 for each year they were married, and the rest of the Trust was to be distributed to Price's children (i.e., Lehman).
The Trust contained a no contest provision that stated as follows:
Although the Trust originally designated Price as trustee and Scales as successor trustee, an amendment dated June 2003, named Lehman as successor trustee. At trial, Scales contended the amendment was a forgery. Price also executed a pour-over will bequeathing the residue of his estate to the Trust and naming Lehman as executor.
Price and Scales separated in January 2004. On March 15, 2004, Price filed a petition for dissolution of his and Scales' marriage. At trial, Scales contended Price's signature on the petition was a forgery.
On October 30, 2004, Price and Scales executed a marital settlement agreement (the Marital Settlement Agreement), which stated it was intended as a complete settlement of their rights and obligations arising out of the marriage. The Marital Settlement Agreement stated there was no community property acquired during the marriage, and all property listed in the Premarital Agreement as separate property remained separate property. They acknowledged that of the $211,000 Price owed Scales pursuant to the Premarital Agreement, he had already paid her $100,000. Price reaffirmed the Trust provision that upon his death, Scales was entitled to receive from the Trust $100,000 for each year they were married. The parties waived all rights to spousal support and released each other from all further claims. At trial, Scales asserted she only signed the Marital Settlement Agreement with the understanding she and Price would be reconciling.
Price died on December 25, 2004. On May 11, 2005, Scales signed a document called "Receipt on Distribution and Release of Trustee" (the Release of Trustee Agreement). She acknowledged having received from Lehman, as trustee of the Trust, $311,000 (the remaining $111,000 divorce payment, plus $200,000 for two years of marriage to Price). Scales acknowledged the amount paid constituted payment in full of all sums due to her pursuant to the provisions of the Premarital Agreement and the Trust. Scales released Lehman personally and as trustee of the Trust, and Price's estate from all claims. She specifically waived all rights under Civil Code section 1542.
On December 23, 2005, Scales, in propria persona, filed an unintelligible breach of contract complaint against Lehman. By May 12, 2006, Scales had retained counsel and a first amended complaint was filed. The first amended complaint named Lehman (and her brothers), as individuals (i.e., the action was not against Price's estate and did not name Lehman in any representative capacity). Scales alleged she had a legal and/or equitable interest in the assets of the Trust beyond the payment she had already received, and following Price's death, Lehman and her brothers had improperly taken control of and disposed of the Trust's assets. Scales' complaint contained causes of action for fraud, unjust enrichment, constructive trust, accounting, and declaratory relief. At trial, Scales contended she was entitled to all the assets in the Trust because she was still married to Price and was still the rightful successor trustee of the Trust.
Lehman filed a cross-complaint against Scales containing two causes of action. The first was for breach of contract alleging Scales' action constituted a breach of the Marital Settlement Agreement between Price and Scales. The second was for breach of the no contest clause contained in the Trust. Lehman alleged Scales' action constituted a challenge to Price's estate plan, and thus, she must forfeit the entire $411,000 that was paid to her.
A three-day court trial took place at which Scales represented herself. After Scales rested her case, Lehman made a motion for judgment under Code of Civil Procedure section 631.8, which was denied. Counsel for Lehman then indicated he would need about one day to present evidence on Lehman's cross-complaint, but when the court commented, "could I send you a clearer message about what I'm about to do?" counsel stated Lehman would rest too. The court then asked, Counsel replied he did not feel pressured and emphasized to the court that, "On my . . . own free will and volition, [I am] telling you that we will rest and I'm prepared to do a closing argument." The court asked counsel if he wanted a few moments to discuss the matter with his clients, and a short recess was taken. Counsel returned and informed the court Lehman understood there had been no promises as to how the court intended to rule, and of her and counsel's "own free will[,]" they wanted to rest without presenting further evidence.
The trial court then explained to the parties it tentatively intended to rule in favor of Lehman on the complaint and in favor of Scales on the cross-complaint. The court then inquired of Lehman's counsel if he felt "sandbagged," and if, in view of the court's tentative ruling, Lehman wanted...
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