Richert v. Colvin
| Decision Date | 11 October 2022 |
| Docket Number | F082620 |
| Parties | SHIRLEY R. RICHERT, Plaintiff and Respondent, v. KERRY COLVIN, Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Kern County No BPB-20-002505. Andrew Kendall, Commissioner.
Law Offices of Young &Nichols and Michael R. Young, for Defendant and Appellant.
Van Sciver Law and Kurt Van Sciver, for Plaintiff and Respondent.
Appellant Kerry Colvin (Colvin) appeals from a March 15, 2021 order of the Kern County Superior Court, sitting in probate, in which it determined it had personal jurisdiction over Colvin in connection with a petition for (1) breach of fiduciary duty (2) removal of trustee; (3) accounting and (4) imposition of constructive trust (petition) brought by Colvin's sister respondent Shirley R. Richert aka Teddy Richert (Richert).[1]We affirm.
Except for certain procedural facts pertaining to the issues on appeal, the facts recited in this opinion are drawn primarily from allegations contained in Richert's verified petition and petition supplements; declarations from Richert and her counsel; documents contained, and authenticated in, the petition paperwork; and statements made by Colvin's counsel in briefing to this court.
Colvin and Richert are the offspring of Shirley A. Arnold (mother). Mother had a third child, Albert R. Colvin, who is deceased.
On December 10, 2010, mother and Colvin, as trustors, created (trust). Mother and Colvin each contributed to the trust their interests in separately-owned real property (separately-owned trust real property), and jointly-owned real property[2] (jointly-owned trust real property) (collectively, trust real property). The trustors also contributed miscellaneous personal property to the trust. Under the terms of the trust, their respective trust contributions were to "remain the separate property of each Trustor."
The trust further provided, The trust also provides, in part: "This trust shall be administered in the State of California and the validity, construction and all rights under this Declaration of Trust shall be governed by the laws of that state."
Mother and Colvin were the sole, vested beneficiaries of the trust during their joint lifetimes and, during that time, enjoyed the ability to apply both principal and income toward their respective benefits. The trust provided that, upon the death of either mother or Colvin, the assets of the trust were to be divided into two sub-trusts-Decedent's Trust A (consisting of assets contributed to the trust by the deceased trustor) and Survivor's Trust B (consisting of assets contributed to the trust by the surviving trustor). From that point forward, Decedent's Trust A would be "irrevocable and not subject to amendment."
Upon the deceased trustor's death and funding of Decedent's Trust A, the surviving trustor would be obligated to use assets of Decedent's Trust A to (1) distribute to the deceased trustor's designated beneficiaries any special gifts of tangible separate property duly made by the deceased trustor; and (2) pay "all expenses of last illnesses, funeral costs and other just debts of the deceased Trustor," along with all "attorney's fees, accountancy fees, taxes and all other necessary and reasonable costs and expenses that accrue to the trust by reason of the death of the deceased Trustor." Thereafter, the surviving trustee, during his or her lifetime, would continue to be entitled to use the income-but not the principal-from Decedent's Trust A for his or her own benefit.
Upon the death of the surviving trustee, the remaining assets of Decedent's Trust A would be distributed to persons designated in the trust instrument as beneficiaries of the first deceased trustor, and the assets of Survivor's Trust B would be distributed to persons designated in the trust instrument as beneficiaries of the surviving trustee.
Mother designated Richert as one of her beneficiaries.
During the first several years of the trust's existence, mother and Colvin served as co-trustees of the trust. At some unspecified point in time, mother was declared incompetent. On October 31, 2014, Colvin recorded an affidavit change of trustee in which he gave notice that mother was "no-longer able to act as a Co-Trustee," and that he consented to serve as sole trustee of the trust. Mother passed away several years later on July 30, 2019.
On June 29, 2020, Richert filed her petition alleging Colvin committed various violations of fiduciary duty by wrongfully converting trust assets to his own use and benefit. Richert seeks "remedies under Probate Code section 16420,[3] including repayment to the [trust] of all funds and other assets wrongfully taken"; removal of Colvin as trustee of the trust; an accounting of trust transactions and assets; a constructive trust over assets wrongfully converted; and an award of attorney's fees and costs.
Specifically, Richert alleges that (1) in 2015, Colvin, acting in his capacity as sole trustee of the trust, transferred title to certain jointly-owned trust real property to an entity known as Donated Investments. Richert was uncertain as to the amount of consideration received for the transfer but contends 50 percent of the consideration should have been transferred to Decedent's Trust A; (2) in 2018, Colvin transferred title to five of the trust real properties to himself, personally;[4] (3) in 2018, Colvin sold one of the jointly-owned real properties to a third party for $250,000, 50 percent of which should have been transferred to Decedent's Trust A; and (4) in 2019, Colvin sold one of mother's separately-owned trust real properties to a third party. Richert alleges she did not know what happened to the proceeds from the sale, but all of those proceeds should have been transferred to Decedent's Trust A. Richert alleges, on information and belief, that Colvin "used funds from the Trust for the benefit, improvement, and maintenance of his real properties, to the detriment of the Trust." Richert further contends that when she raised the issue of the aforementioned transfers to Colvin, Colvin "purported to transfer the properties back to the Trust by way of a deed recorded December 12, 2019."
In his opening brief, Colvin admits that, at the time of mother's death, the trust contained two separately-owned trust real properties owned by mother (including one property located on Stockton Street in Bakersfield, California) and three jointly-owned Trust real properties in which mother had "an undivided one-half interest." Colvin further admits that after mother passed away, he "sold the Stockton Street property and several of the properties in which [mother] owned an undivided one-half interest." Colvin acknowledges that "[t]he net proceeds of sale received from the sale of the [aforementioned] properties [were] to be held in trust and not invaded by [him] or used by him as the beneficiary of the trust during his lifetime"; and that he "was only entitled to the net income earned on [mother's] assets, either in kind or cash."
On September 23, 2020, Richert served Colvin with a copy of the petition and a "Notice of Hearing-Decedent's Estate or Trust" (notice of hearing) for a hearing on the petition. (Unnecessary capitalization omitted.) Service was by U.S. Postal Service mail and was directed to Colvin at his business address in Bakersfield, California. The hearing was set for October 23, 2020.
On October 21, 2020, Richert filed a supplement to her petition. In it, Richert alleges, among other things, that Colvin "absconded with the principal of [Decedent's] Trust A"; that she (i.e., Richert) is a remainder beneficiary of Decedent's Trust A; and that she "has standing to protect her vested interest in the trust corpus."
The next day, October 22, 2020, Richert filed a second supplement to her petition. Among the additional facts alleged in this second supplement to the petition was that there was "no pending probate[s] for [beneficiaries] Albert Colvin or Joseph Richert," and that said individuals' heirs "received notice."
On October 23, 2020, the hearing on the petition went forward. In the minute order that issued (October 2020 minute order) the probate court indicated Richert and her attorney were the only ones who appeared at the hearing, and that both stipulated to the matter being heard by Commissioner Andrew Kendall (commissioner). The court noted it was advised "the potential objecting party [i.e., Colvin] is being represented by Michael Young and may be residing in Thailand." The court ordered "that notice be given to Attorney Michael Young" and that Richert "re-notice the business address in Bakersfield and continue to investigate and give mail notice to the address in Thailand." The court also ordered "an accounting from the trust from [October 5, ]2014 to the date the order is issued" and directed Richert's counsel "to prepare [the] order after hearing and [to] give notice." The court continued the hearing to December 4, 2020, to determine the status of the accounting, and to "consider suspending or removing the trustee ... if there is no appearance in court to explain the status of the accounting." The court issued an order...
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