Murphy v. Murphy
| Decision Date | 26 June 2008 |
| Docket Number | No. A115177.,A115177. |
| Citation | 164 Cal.App.4th 376,78 Cal. Rptr. 3d 784 |
| Court | California Court of Appeals Court of Appeals |
| Parties | WILLIAM J. MURPHY, JR., Plaintiff and Respondent, v. MAUREEN MURPHY, Individually and as Trustee, etc., Defendant and Appellant. |
Hanson Bridgett Marcus Vlahos & Rudy, David W. Baer and S. Anne Johnson for Defendant and Appellant.
The Huster Law Group, Thomas Huster and John K. Huster for Plaintiff and Respondent.
Pursuant to Probate Code section 2580 et seq.,1 a person subject to a conservatorship may invoke the jurisdiction of the probate court to execute a testamentary instrument. The probate court has discretion, circumscribed by the statutory scheme, to order a "substituted judgment" that authorizes a conservator on behalf of a conservatee to take necessary or desirable action to facilitate estate planning, when a reasonably prudent person in the conservatee's position would do so. In 2003, the probate court issued such an order on behalf of William J. Murphy,2 the father of the two parties. The probate court's order authorized William's conservator to execute a living trust and pour-over will implementing an estate plan that effectively disinherited William's son, William J. Murphy, Jr. (respondent). In 2004, following William's death, respondent sued his sister, Maureen Murphy, individually and as trustee of the William J. Murphy Revocable Living Trust (appellant), alleging breach of an oral contract, undue influence, intentional interference with contract, and fraud.3 Following a lengthy trial, the court issued a judgment in favor of respondent imposing a constructive trust over one-half of William's real and personal property in existence on the date of his death.
Appellant raises a host of challenges to the probate court's ruling. We conclude, as a matter of first impression, that the instant action is barred by principles of collateral estoppel, and reverse.
On December 24, 1962, Elaine and William executed holographic wills, each leaving their entire estate to the surviving spouse to do with as he or she saw fit. The wills do not mention their children. Elaine died in January 1999.
On September 20, 2000, William executed a holographic will that devised the family home on Stonecrest in San Francisco and a home on 32nd Avenue in San Francisco to appellant, a vacation home on the Russian River to respondent, one-third of the residue of his estate to respondent and two-thirds of the residue of his estate to appellant. William's will designated both parties as executors of his estate.
On June 18, 2001, William executed a holographic will devising his entire estate to appellant and $1 to respondent.
On July 3, 2001, William executed "The William J. Murphy Revocable Living Trust Agreement" (hereafter living trust), appointing appellant successor trustee, and leaving his estate to appellant and $1 to respondent. On July 13, 2001, William executed a pour-over will, directing his estate to be distributed pursuant to the living trust, and appointed appellant executor.
In 2003, William's living trust and pour-over will were reexecuted by conservator Debra Dolch for William, as trustor, nunc pro tunc as of July 3, 2001, pursuant to the probate court's substituted judgment order. The terms of the living trust executed by Dolch were identical to William's July 3, 2001 living trust. In April 2004, appellant executed the living trust, as trustee.
Elaine and William were married in 1949. In 1991, when Elaine became ill, appellant moved back into the family home where William and Elaine resided. At the time of Elaine's death in 1999, William was 74 years old and a practicing attorney. Some persons involved with him expressed concern that he became depressed after Elaine's death and never fully recovered. In April 2001, William suffered a debilitating stroke.
On June 15, 2001, following William's stroke, at respondent's request and nomination, Dolch, a private professional conservator, petitioned the probate court for appointment as conservator of William's person and estate. Respondent's declaration attached to the petition reflects a history of discord between appellant and respondent. It states respondent nominated Dolch to act as conservator out of concern that appellant was "isolating and may be unduly influencing [William] in his condition of reduced capacity as he is recovering from his stroke." Respondent's declaration further states the following: While William was hospitalized for his stroke, appellant falsely accused respondent of physically abusing William; appellant "may" have imposed her will upon William, who cancelled an agreement for respondent to accompany William and physical therapists to inspect William's residence; due to appellant's "gate keeping," respondent did not receive calls from William; appellant took over William's law office and terminated the employment of William's paralegal assistant; appellant "may" have wrongly informed William that respondent did not want to be present during William's stroke recovery process; and appellant had the locks changed at the Stonecrest home and attempted to change the locks at William's law office without William's knowledge. Respondent's declaration also noted that William was to receive more than $800,000 from a trust of which Dolch was the trustee, and Elaine's jewelry, valued at more than $300,000, was in William's possession, and William was unable to protect and manage these assets.
On June 22, 2001, Dolch was appointed temporary conservator of William's estate.
The December 3, 2001 report by probate court investigator Cynthia Jones stated she interviewed William on October 5, 2001, after which she determined his care arrangements appeared adequate without a conservatorship of the person, but William was unable to manage his own financial resources and resist fraud or undue influence. The report also noted that William did not consent to the establishment of the conservatorship. William said if it were determined a conservator was necessary, he did not consent to Dolch serving as the conservator, and instead, "[I]t would be [appellant]." The report noted that the initial request for a conservator arose from concerns that appellant could be unduly influencing William and isolating him for her own financial benefit. The report stated, "[William] strongly rejects these concerns and the allegations set forth in the moving papers." He consented to appointment of a temporary conservator of his estate to close out his pending cases and to complete the estates of two decedents from which he will inherit and pay off a sizeable personal debt, but "staunchly oppose[d]" continuing the conservatorship thereafter.
The "General Background Information" section of the report stated that after William's stroke, respondent and some of William's longtime employees became suspicious that appellant was isolating William and alienating him from other family members and friends in order to increase his dependence on her. Respondent and others accused appellant of failing to keep the family home clean and habitable and to provide proper meals to William. Respondent and appellant accused each other of abuse. Appellant accused respondent of physically abusing William while he was hospitalized following his stroke, and in the past, coming to the family home drunk and "`roughing people up.'" The report stated that declarations by William's former secretary and paralegal described appellant as abusing drugs and prescription narcotics, and as attempting to control William's law office and the disposition of his cases after his stroke. The report stated that problems with William's personal and business financial affairs developed over years of poor management, while some were linked to his stroke.
The report noted that during Jones's private interview with William he was able to state the general nature and extent of his assets and was aware of his debts. William said appellant had been a great help to him and that he did not know what he would do without her. He insisted that appellant had not interfered with any of his social relationships and he still saw his friends. William said he was angry with respondent for making the conservatorship referral and said, "`[Respondent] brought the family business public and he tried to make me look incompetent.'"
The report noted that during Jones's interview with Dolch, Dolch expressed concern about "[appellant] and her motives." Dolch felt strongly that an independent conservator was necessary to handle William's financial affairs and close out his law practice and had "continuing concerns about [appellant] and the issue of the management of the remainder of the estate."
According to the report, respondent said that after William's stroke appellant began to exert increasing control over William's personal life and business, and did not want respondent to assist with managing William's law practice or learn of a large inheritance William was to receive. Respondent expressed concern about William being susceptible to appellant's influence due to depression that began when Elaine died, William's increasing cognitive problems and increased isolation by appellant, and the stroke, which made William more dependent on appellant.
The report noted that appellant said the conservatorship was unnecessary and was the result of respondent's attempts to interfere with her and William's lives. She denied ever isolating William or trying to influence or control him, said she had not consumed alcohol in years and denied there was ever any legitimate concern about the condition of the home or her care of William.
The report stated that a neuropsychological evaluation by Dr. Abraham Nievod concluded that William's...
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