Morgan-Perales v. Savage
Decision Date | 08 March 2017 |
Docket Number | G052317 |
Parties | LISA MORGAN-PERALES, Plaintiff and Respondent, v. BONI SAVAGE, as Trustee, etc., Defendant and Appellant. |
Court | California Court of Appeals |
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINIONAppeal from a judgment of the Superior Court of Orange County, Richard W. Leusebrink, Judge. Affirmed in part, reversed in part, and remanded for further proceedings. )
Law Firm of David Dunlap Jones and David D. Jones for Defendant and Appellant.
Fullerton, Lemann, Schaefer & Dominick and Thomas W. Dominick for Plaintiff and Respondent.
* * * Defendant and appellant Boni Savage (Boni),1 as trustee of the Savage Family Trust (Trust), appeals from a judgment that (1) surcharged her interest in the Trust $195,200 based on her failure to pay rent during a six-year period her family lived in the home that was the Trust's primary asset; (2) awarded her a diminished portion of the compensation she sought for acting as the Trust's trustee and as her father's agent under a durable power of attorney; (3) awarded plaintiff and respondent Lisa Morgan-Perales attorney fees for challenging Boni's performance as trustee; and (4) denied Boni the attorney fees she incurred in defending this lawsuit.
We reverse in part, affirm in part, and remand for the trial court to conduct further proceedings. We reverse the court's decision to surcharge Boni $195,200 and direct the court to amend the judgment to reduce the surcharge to $88,050. Boni had no obligation to pay rent while living in the home during her father's lifetime. The obligation to pay rent arose only after Morgan-Perales's interest in the home vested upon the death of Boni's father.2 As explained below, we affirm the award of trustee compensation to Boni because the court acted within its discretion in reducing the amount she requested.
We reverse Morgan-Perales's attorney fee award because insufficient evidence supports her fee request. Finally, we reverse the trial court's decision denying Boni attorney fees and remand for the court to reconsider her request. The factors the court considered in denying Boni's request necessarily included the court's rent surcharge against Boni's interest in the Trust and the court's attorney fee award toMorgan-Perales. Based on our decision to overturn those determinations, the court must reconsider Boni's request based on the totality of the circumstances as they exist following this opinion.
Richard and Virginia Savage were the settlors and original trustees of the Trust. The assets they placed in the Trust included their family home located on Huntridge Avenue in Santa Ana, California (Huntridge Property), their personal property, their investments, and their bank accounts. Richard and Virginia had four children: Gary Glen Savage, Jacquelyn Lynn Savage, Boni Savage, and Daniel Richard Savage.
Richard became the Trust's sole trustee when Virginia died in December 2006, and Jacquelyn succeeded Richard as trustee when Alzheimer's disease incapacitated him during 2007. Gary predeceased Virginia and both Jacquelyn and Daniel died on the same day in March 2008, leaving Boni as the only surviving child of Richard and Virginia. Upon Jacquelyn's death, Boni succeeded her as the Trust's trustee, and she also became Richard's agent under a durable power of attorney. Gary and Daniel never had any children, but Jacquelyn was survived by her only child, Morgan-Perales.
When Jacquelyn and Daniel died, they lived with Richard in the Huntridge Property and had done so for several years without paying any rent. Following those deaths, Boni moved Richard into her nearby home because she did not want him to be alone. In April 2008, she moved Richard into Sunflower Gardens, a home and care facility for patients with Alzheimer's disease. After Boni moved Richard out of the Huntridge Property, it sat vacant until December 2008 when Boni's son moved into the home. In March 2009, Boni, her husband, and their other children also moved into the Huntridge Property after Boni lost her job. They lived at the property until the Trust sold it in March 2015. Boni paid the Trust $500 in rent in April 2009, but made no otherrental payments during the time she lived at the Huntridge Property because of "money problems."
Boni frequently visited Richard at Sunflower Gardens and twice a week she would take him on drives to San Diego where they enjoyed picnic lunches. Boni also kept in regular contact with Richard's doctors and caregivers, made most decisions regarding his health and welfare, and picked up Richard's prescriptions for him. As trustee, Boni prepared tax returns for Richard, paid his bills, interacted with his investment professionals, made trips to the bank and ran other errands, and helped improve the Huntridge Property. Boni hoped eventually to move Richard back into the Huntridge Property, but he was never able to do so. Richard died in May 2012.
When Richard died, the Trust's assets included the Huntridge Property valued at approximately $600,000, an Orange County Credit Union account with a balance of nearly $99,000, a Bank of America account with a balance of nearly $25,000, and an automobile and miscellaneous personal property valued at approximately $5,000. Under the Trust's terms, a 50 percent interest in this property passed to Boni as Richard and Virginia's only surviving child, and a 50 percent interest passed to Morgan-Perales as the only child of Richard and Virginia's children who predeceased Richard.
A few days after Richard's death, Boni distributed $50,000 from the Orange County Credit Union account to Morgan-Perales as her share of that account, but did not divide any other Trust assets or otherwise inform Morgan-Perales about the Trust's status. For example, in July 2012, Boni received a nearly $8,000 tax refund for Richard, but she did not provide any of those funds to Morgan-Perales or otherwise notify her about the refund.
In June 2013, Morgan-Perales asked Boni about the Trust's status and proposed several options for disposing of the Huntridge Property, including selling the property to a third party, Boni purchasing Morgan-Perales's interest, and Boni paying Morgan-Perales half the fair market rental value until the property was sold. Boni did notrespond. In July 2013, Morgan-Perales hired an attorney who wrote Boni and asked for an accounting for her administration of the Trust, including all receipts and other source documents. Boni did not provide the requested accounting, but a few weeks later she distributed half of the remaining balance from the Bank of America account to Morgan-Perales. In August 2013, Morgan-Perales's attorney again wrote Boni and asked for an accounting of the Trust. In October 2013, Boni responded by providing the Trust's bank statements and some receipts, but she did not provide an accounting. Throughout this period, Boni repeatedly asked Morgan-Perales to come to the Huntridge Property to claim her mother's belongings and help clean out the property, but Morgan-Perales did not do so.
In January 2014, Morgan-Perales filed the underlying petition seeking (1) Boni's removal as the Trust's trustee; (2) appointment of a new trustee; (3) an accounting; and (4) damages for Boni's breach of the Trust. Morgan-Perales alleged Boni breached the Trust by failing to provide an accounting, failing to distribute the Trust's assets, failing to make the Huntridge Property productive, using the Huntridge Property for her own and sole benefit, and misappropriating the remaining Trust assets. When she filed this action, Morgan-Perales also recorded a lis pendens against the Huntridge Property.
Boni answered Morgan-Perales's petition and filed an accounting for the trust covering the period from March 31, 2008 to May 31, 2014. The accounting reported the Trust had assets valued at $865,000, including (1) the Huntridge Property that was valued at $750,000; (2) $110,000 in cash that already had been distributed equally; and (3) $5,000 in personal effects that the Trust continued to hold. The accounting requested $97,500 in trustee compensation for Boni based on 1,300 hours she expended as trustee and a $75 hourly rate. Finally, the accounting reported Boni had used Trust funds to pay a variety of personal expenses that she characterized as Trust loans, but she also had used her personal funds to pay certain Trust expenses. Boni claimed she had repaid some ofthe loans she took from the Trust and the net result of these transactions was a credit in her favor. Morgan-Perales filed objections to Boni's accounting.
In March 2015, the trial court conducted a one-day bench trial regarding the petition, accounting, and objections. At the start of trial, Morgan-Perales withdrew her request for an accounting and to replace Boni as the Trust's trustee because Boni had provided an accounting and the sale of the Huntridge Property to a third party was in escrow. The parties agreed the only remaining issues for the court concerned the amount of rent Boni should pay for the time her family lived at the Huntridge Property and the amount of Boni's trustee compensation.
The parties also stipulated to the following facts: (1) the fair market rental value for the Huntridge Property from December 1, 2008 to March 1, 2015 was $195,200; (2) Morgan-Perales was entitled to half of the tax refund received in July 2012; (3) Boni borrowed $10,800 from the Trust for personal expenses, and repaid $1,850; (4) Boni paid $18,000 in...
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