Remsen v. Lavacot

• Decision Date: 30 January 2001
• Citation: 87 Cal.App.4th 421,104 Cal.Rptr.2d 612
• Court: California Court of Appeals Court of Appeals
• Parties: (Cal.App. 4 Dist. 2001) ALICIA REMSEN et al., Plaintiffs and Appellants, v. CAROL E. LAVACOT et al., as trustees, etc., Defendants and Appellants. G025009 Filed

104 Cal.Rptr.2d 612 (Cal.App. 4 Dist. 2001)

ALICIA REMSEN et al., Plaintiffs and Appellants, v. CAROL E. LAVACOT et al., as trustees, etc., Defendants and Appellants.

G025009

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

Filed 1/30/01; part. pub. order 2/28/01 (see end of opn.)

Appeals from orders of the Superior Court of Orange County, James A. Jackman, Judge. Affirmed in part and dismissed in part.

(Super. Ct. No. A156574)

Law Offices of John H. Mitchell and John H. Mitchell; Law Offices of Mitchell Samuelson and Mitchell Samuelson for Plaintiffs and Appellants.

Carol E. Lavacot for Defendants and Appellants.

SILLS, P. J.

OPINION

Alicia and Greg Remsen, brother and sister and beneficiaries under the trust of their great-grandparents, appeal from the order of the probate court reconsidering its previous ruling that they were entitled to interest on their cash bequests and entering a new ruling that no interest was due. The trustees appeal from the probate court's order that the Remsens' petitions did not violate the trust's no contest clause. The Remsens moved to dismiss the trustees' appeal for untimeliness.

We affirm the order denying interest and grant the motion to dismiss.

In 1983 Willard and Ruth Cain created a revocable inter vivos trust. At the time, they owned 3.7 acres of beachfront property in Laguna Beach, which they believed was worth over $10 million. The Cains decided to leave $1 million to their daughter; $300,000 to a friend; $200,000 to a cousin; $100,000 to each of their seven great-grandchildren; and the remainder to the principal beneficiaries, their four grandchildren. The terms of the trust provided distribution of the trust assets was not to be made until after all debts, taxes and administration expenses were paid.

Willard and Ruth passed away in August 1987 and January 1988, respectively. The Cains' granddaughter, Carol Lavacot, and her husband, Robert Lavacot, served as co-trustees. The trustees gave the beneficiaries copies of the trust and said the trust money would not be available until the Laguna property was sold and all the taxes were paid. After approximately a year had passed, the trustees held a meeting with the beneficiaries to update them on the status of the trust and advised them that the Laguna property had not yet been sold.

In November 1990, the Cains' great-granddaughter, Alicia Remsen, filed a petition demanding the trustees distribute her $100,000 inheritance. The trustees explained to the court that the trust funds could not be distributed because they were having difficulty selling the Laguna property. All offers to purchase had been contingent on the estate securing a city-approved tract map, which could not be obtained until the estate received: (1) approval from the Laguna Beach Planning Commission, who currently had concerns about the size and number of lots to be created; (2) approval from the City Counsel; (3) resolution of claims made by State Lands Commission seeking lateral public access across the public trust tidelands located within the property; (4) an agreement with the Coastal Commission, who wanted vertical access for the public from Pacific Coast Highway to the coastal portions of the property; (5) an agreement with the County of Orange, who demanded access to the beach for its emergency and trash vehicles; and (6) resolution of a lawsuit filed by an adjacent owner to quiet title to a claimed easement. The court denied Alicia's petition.

Six years later, the trustees sent Alicia a letter stating escrow had "finally open[ed] on the trust property. The sale price is $5,200,000. At the close of escrow, there will be $3, 200,000 paid with the remainder financed by us at a rate of 8%. [] Unfortunately, the IRS will take its cut which amounts to almost $2,000,000 and the State of California their cut, the amount not determined as yet. There are also administration costs that must be paid which also are, as yet, undetermined. As you can see, it will take some time to figure this all out. [] [When escrow closes, our] plan is to get everyone together for a meeting . . . and hopefully, distribute a percentage of your inheritance at that time."

Alicia received another letter from the trustees in January 1997 stating escrow had closed on the Laguna property but the trust received very little cash from the sale due to death taxes owed and closing costs. The trustees said they had applied for "an overpayment reimbursement from the IRS" and expected to be able to make a distribution when it arrived in a few months.

Alicia replied with a letter requesting documentation of the trust's assets and liabilities and a complete accounting. In April 1997, the trustees informed her she could have any information she wanted regarding the trust, but they did not want to deplete trust resources to have the volumes of documents photocopied. They invited Alicia to make an appointment and view the documents at their accountant's office. The trustees said they were planning to give Alicia her inheritance, "minus the expenses incurred to fight her lawsuit," as soon as the money became available.

Apparently Alicia and her brother Greg decided they could not wait any longer. On November 4, 1997, they filed a petition to direct the trustees to give them $100,000 each, plus interest from July 1, 1989, and attorney fees. They asked for an accounting and requested that Alicia's distribution not be reduced by costs incurred by the trust in defending against her 1990 petition.

In an effort to settle the case, the trustees sent Alicia a check for $85,000 and a letter stating the remainder would be delivered in proportioned amounts as soon as the trustees received payments from the buyer of the Laguna property. They also included a $85,000 check for her to give to Greg. Four months later, counsel for the Remsens informed the trustees that they were not interesting in settling the lawsuit and wanted to be paid the rest of their inheritance plus interest.

In June 1998 the trustees filed an application seeking a determination that Alicia's petition in 1990 and the current petition qualified as "contests." The trustees' application and the Remsens' 1997 petition were heard together on July 31, 1998. After considering the parties' arguments, the court issued two minute orders. The first granted the Remsens' petition, stating, "Court finds $100,000 cash bequests to be 'general pecuniary devise[s]' entitled to earn interest after [one] year, if not yet distributed; payment of earned interest depends on estate ability. [] Court finds no authority for trustee to deduct atty. fees for cost of past trust litigation." The minute order also provided: "Csl Samuelson to prepare order." The second minute order denied the trustees' application, stating, "[The] court finds no violation of [the trust's] in terrorem clause . . . . "

On August 6, 1998, the trustees filed motions to reconsider both rulings. Four days later, they filed a petition for instructions, informing the court that if interest was due on the cash bequests, no money would be left for the remainder primary beneficiaries (the grandchildren). The Remsens filed opposition to the motions for reconsideration and a response to the petition for instructions.

On September 4, 1998, the court heard the motions and petition and issued three minute orders. The first, relating to the no contest petition, stated, "Motion denied. [] No new ruling or new facts; no change in 7-31-98 ruling." The second order, relating to the characterization of the cash bequests as general pecuniary devises, stated, "Court announced a tentative ruling, heard argument re court's jurisdiction to reconsider its ruling, and took issue and motion under submission." In the third order, apparently made later that same day, the court stated, "Motion to reconsider ruling made on 7/31/98 that devise to Alicia and Greg Remsen is general pecuniary rather than specific. Having taken the issue of the court's jurisdiction to reconsider its 7/31/98 ruling for the above motion [under submission], the court now rules as follows: The court has determined it has the authority to reconsider its ruling on interest. [The Remsens' counsel] is given ten days to file a brief on whether the court should remove the interest payment on the distribution . . . . The above motion for reconsideration will be deemed submitted on 9/18/98; the petition for instructions will continue to trail the motion ruling."

The Remsens filed a brief arguing the court did not have jurisdiction to consider the matter because the trustees' motion for reconsideration failed to state new or different facts, circumstances or law, as required by Code of Civil Procedure section 1008. The trustees filed a response, arguing the requirements of section 1008 did not apply to interim orders, which was the case here. The trial court agreed and on November 5, 1998 determined it had jurisdiction to modify its prior findings. It issued a minute order stating, "[The] court hereby modifies its previous order to the extent that it ordered interest on the various bequests and instead, orders that principal only be paid. . . . The Court [has] jurisdiction to do so in light of the fact that a final (appealable) order was never made. . . . The Petition for instructions . . . is granted consistent with the above."

On January 15, 1999, the court signed an order prepared by the Remsens' counsel and reflecting a hearing date of November 4, 1998, which stated: "On September 18, 1998, the Court took the matter under submission . . . . [] Having reconsidered its previous order granting interest on the bequest to the various beneficiaries herein and good cause appearing therefor, the Court hereby modifies its previous order to the extent that it ordered interest on the various bequests and instead, orders that principal only be paid." It also signed a separate order prepared by ...