Piazzi v. Laffey

• Decision Date: 10 May 2023
• Docket Number: B305695
• Parties: DIANE E. PIAZZI, Plaintiff and Appellant, v. GERALD LAFFEY, JR., as Successor Trustee, etc., Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

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DIANE E. PIAZZI, Plaintiff and Appellant, v. GERALD LAFFEY, JR., as Successor Trustee, etc., Defendant and Respondent.

B305695

California Court of Appeals, Second District, Fourth Division

May 10, 2023

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No BP157757, Daniel Juárez, Judge. Affirmed.

Nelle S. Paegel, for Plaintiff and Appellant.

Law Offices of Keith S. Walker and Keith S. Walker, for Defendant and Respondent.

DAUM J.

INTRODUCTION

In this probate case, appellant Diane Piazzi petitioned to invalidate trust amendments made by her late mother, Evelyn Piazzi. Diane alleged that Evelyn lacked capacity to amend the trust and that she did so because she was unduly influenced by respondent Gerald Laffey (Evelyn's nephew) and other relatives. The case was tried to the probate court. The court granted a motion for judgment in Gerald's favor after Diane's case-in-chief. We affirm. Diane's failure to prove her claims is well supported by substantial evidence and we reject Diane's other arguments on appeal.

PROCEEDINGS BELOW

A Diane Petitions to Invalidate the Trust Amendments

Due to disabilities, Diane receives means-tested public benefits. In June 1991, Diane's mother Evelyn created the Revocable Living Trust of Evelyn C. Piazzi. Through special needs trust provisions, the trust expressed Evelyn's intent that after her death, the trust estate would be used to supplement Diane's means-tested benefits without disqualifying her from continuing to receive them. In March 1999, Evelyn executed a first amendment to the trust, which deleted the special needs trust provisions and provided for the estate to be distributed directly to Diane after Evelyn's death.

In November 2002, Evelyn executed the second trust amendment, the heart of the parties' dispute. In lieu of a direct distribution to Diane, the amendment reinstated provisions to supplement and safeguard Diane's receipt of public benefits after Evelyn's death. It gave the successor trustee discretion to terminate the trust if the trust's existence or any related change in law would otherwise disqualify Diane from receiving any public benefits.

The amendment designated respondent Gerald and his mother (Evelyn's nephew and sister, respectively) as successor trustees.

Between June 2004 and September 2007, Evelyn executed three further trust amendments, adding one of Gerald's sisters (Evelyn's niece) as a third successor trustee.

Evelyn died in September 2014. In November 2014, Diane petitioned the probate court to invalidate the 2002 amendment and each subsequent amendment (collectively, the Trust Amendments). In May 2016, Diane filed her operative fourth amended petition, naming Gerald, his mother, and two of his sisters as defendants.

In Diane's first cause of action, she sought declaratory relief to invalidate the Trust Amendments on the grounds that: (1) the Trust Amendments were inconsistent with Evelyn's intent to provide for Diane after her death; (2) Evelyn lacked capacity to execute the Trust Amendments at the time she signed them; and (3) the Trust Amendments were the product of undue influence exerted on Evelyn by Gerald and his relatives. Diane also alleged, in passing, that the copies of the Trust Amendments in the parties' possession could not be authenticated as accurate copies of the originals.

In Diane's second cause of action, for breach of trust pursuant to Probate Code section 16400,^[1] she alleged that with Gerald's encouragement and assistance, Gerald's mother and sisters committed theft and other crimes during a visit to Evelyn's home "the week prior to Evelyn's death." Diane did not allege that any defendant was the trustee at any time prior to Evelyn's death.

B. The Court Declines to Adjudicate Diane's Second Cause of Action

Gerald demurred to Diane's fourth amended petition. In September 2016, the probate court (Judge William Barry) held a hearing on the demurrer. The court concluded that Diane had pled sufficient facts to support a claim for declaratory relief on her first cause of action. The court concluded that the second cause of action could not be pursued in the probate court, because Diane had not pled a breach of trust. The alleged theft at Evelyn's residence and other claimed misconduct occurred before any defendant became a trustee (with the exception of an allegation concerning Gerald's efforts to access trust funds, which the court found did not allege misconduct). Thus, concluded the probate court, while Diane might be able to pursue a civil action based on the facts alleged in the second cause of action, she could not pursue a probate action.

Although the probate court stated on the record that it would not adjudicate the second cause of action, the court believed that it was obligated for procedural reasons to overrule Gerald's demurrer as to that cause of action. In his moving papers, Gerald demurred to the entire petition, not to the separate causes of action. Since the court overruled the demurrer to the first cause of action, it believed it was improper to sustain a demurrer to the second cause of action given the way Gerald presented the demurrer. The probate court made clear that it was overruling Gerald's demurrer to the second cause of action only because of this procedural issue. The court stated that Diane was "on notice" that it was "not going to adjudicate a civil action in the context of this probate case."

The court directed Gerald's counsel to prepare a proposed order containing its rulings. However, Gerald's counsel did not immediately comply. In January 2017, during an unrelated hearing, the court renewed its directions to Gerald's counsel to prepare a proposed order. The court specified that the proposed order should reflect the court's prior determination that it would not adjudicate any allegation that a defendant breached the trust at a time when the defendant was not the trustee.

On March 24, 2017, the probate court signed and adopted a proposed order submitted by Gerald's counsel as the final order overruling Gerald's demurrer. The order stated that because "there is no allegation in the Fourth Amended Petition that any of the Respondents was serving as Trustee at the time of the acts complained of," Diane's second cause of action "may not be litigated in this proceeding" and "will not be adjudicated at such time as this matter comes on for trial." The order contained a proof of service, which stated that on March 15, the proposed order had been served on Diane's counsel by overnight mail to her address of record.^[2]

At trial in July 2019, the probate court (Judge Daniel Juárez) precluded Diane from litigating her second cause of action, relying on Judge Barry's March 24, 2017 order that the second cause of action would not be adjudicated. Diane's counsel objected that she had not received notice of the March 2017 order, but the court overruled the objection.

C. Diane Presents Her Case-in-Chief

Diane presented her case-in-chief at trial. Diane testified that after Evelyn's husband died in 1991, Evelyn began gambling regularly and stopped keeping food in her home, opting to eat out instead. Diane further testified that Evelyn had shingles in 1992 and subsequently suffered hearing loss.

Two friends of Evelyn's testified that Evelyn always kept her house extremely clean and orderly. Neither friend, however, viewed Evelyn's cleanliness as a symptom of obsessive-compulsive disorder (OCD) or observed any decline in Evelyn's mental faculties.

Gerald testified that he never observed any sign of OCD in Evelyn. Evelyn had a very close relationship with Gerald's mother (Evelyn's sister). Gerald had promised Evelyn that after her death, he would take good care of Diane.

Attorney Denise Kristof testified that she drafted the Trust Amendments. She explained that Evelyn's purpose in executing the 2002 amendment was to ensure that after her death, Diane would be taken care of and would continue receiving public benefits. Evelyn had "unwavering trust" that Gerald and his mother would care for Diane.^[3] Kristof further testified that she was present when Evelyn executed the Trust Amendments and that she never had reason to doubt Evelyn's capacity.

Evelyn kept the original versions of the Trust Amendments (which were not produced at trial). Kristof testified that she had kept unaltered copies, which she had emailed to Diane in the wake of Evelyn's death. She testified that a copy of the 2002 amendment admitted into evidence as exhibit A-but omitted from the appellate record-appeared to be an authentic copy of the original.^[4] Diane called a forensic document examiner, Patricia Fisher. Fisher testified that she had examined Gerald's copies of the Trust Amendments, which were separately admitted into evidence. Fisher testified that various pages of Gerald's copies bore marks-such as those left by staplers and hole punches-indicating that the documents had been disassembled, copied, and reassembled multiple times. On this basis, Fisher opined that Gerald's copies had been "altered." However, Fisher did not compare Gerald's copies to Kristof's to determine whether any content had been changed. Indeed, Fisher declined to express any opinion regarding whether Gerald's copies of the Trust Amendments had been altered in content. She explained: "That's not what I do as a document examiner."

Financial advisor Stephen Courtney testified that he handled investments and taxes for Evelyn. Although Evelyn acted against his investment advice on one occasion, he never had reason to question Evelyn's capacity. He stated that Evelyn was very organized and understood all of their tax discussions.

D. The Court Grants Gerald's Motion for Judgment

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