Royals v. Lu

• Decision Date: 18 July 2022
• Docket Number: A160985
• Citation: 81 Cal.App.5th 328,296 Cal.Rptr.3d 854
• Parties: Lisa ROYALS, as Trustee, etc., Plaintiff and Respondent, v. Meng Jing LU, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

81 Cal.App.5th 328

296 Cal.Rptr.3d 854

Lisa ROYALS, as Trustee, etc., Plaintiff and Respondent,

v.Meng Jing LU, Defendant and Appellant.

A160985

Court of Appeal, First District, Division 4, California.

Filed July 18, 2022

Certified for Partial Publication.^*

Law Offices of X. Young Lai and X. Young Lai, for Defendant and Appellant.

Hartog, Baer & Hand, Andrew R. Verriere, Orinda, and Amanda E. Sherwood, for Plaintiff and Respondent.

STREETER, Acting P. J. Meng Jing Lu appeals from a pretrial right to attach order (RTAO) issued against her and in favor of Lisa Royals under section 15657.01 of the Elder Abuse and Dependent Adult Civil Protection Act (the Elder Abuse Act or the Act) ( Welf. & Inst. Code, § 15600 et. seq. ).

The underlying dispute in this probate action centers on the testamentary intent and capacity to make certain estate planning decisions of Royals's late father and Lu's late husband, Chambers Daniel Adams, who died at age 99. By petition and cross-petition, Royals and Lu pursue competing claims of financial elder abuse. Each alleges that the other engaged in a scheme to manipulate Adams in his waning years, with the objective of enriching herself at the expense of the other's expected inheritance.

The primary question raised by the appeal, presented as a matter of first impression, is whether the prospect of punitive recovery on a financial elder abuse claim—in the form of exemplary damages or statutory penalties—may be secured by the extraordinary remedy of pretrial attachment. In the published portion of this opinion, we answer that question no.

A financial elder abuse claimant may obtain an attachment for potential compensatory damages and an award of attorney fees and costs associated with those damages, but only if the request for it complies with all applicable provisions of the statutory scheme governing pretrial attachments (the Attachment Law) ( Code Civ. Proc., § 481.010 et. seq. ). We conclude that Royals's attachment application did not comply with four provisions of the Attachment Law, namely that an attachment request (i) must be supported by competent evidence (id. , § 482.040), (ii) must rest on an attachable "amount" (id. , § 484.020, subd. (b)), (iii) must be based on a claim "upon which an attachment may be issued" (id. , § 484.020, subd. (a)), and (iv) must be measured by the defendant's claimed "indebtedness" to the plaintiff (id. , § 483.015, subd. (a)(1)).

No attachment was warranted here, for any of the relief requested, because Royals failed to support her prayer for compensatory damages with competent evidence. ( Code Civ. Proc., § 482.040.) And to the extent she sought an attachment for prospective recovery of punitive damages and statutory penalties in addition to compensatory damages, her attachment request also failed to comply with some or all of the attachable amount (id. , § 484.020, subd. (b)), attachable claim (id. , § 484.020, subd. (a)), and claimed indebtedness (id. , § 483.015, subd. (a)(1)), requirements. Accordingly, the RTAO will be reversed.

I. BACKGROUND

After Adams passed away October 14, 2019, Royals became the successor trustee and sole beneficiary of the Adams Trust (the Adams Trust or the Trust), a living trust established in the early 1990's by Adams and his former wife of 56 years, Cornelia Adams, who passed away in 2008.¹ Lu, Adams's second wife, was 59 years old when she married Adams, then 95 years old, in 2015. According to Lu, Royals never accepted the marriage and saw it as a threat to her inheritance. Royals alleges that Adams intended to leave none of his assets to Lu. Lu denies that allegation and claims Adams intended to provide for her support by depositing certain funds in certain accounts under Lu's control outside of the Trust.

A. Petition, Demurrer, and Motion To Strike

Once Royals became trustee of the Adams Trust following her father's death, she filed a verified petition against Lu for return of trust assets, for breach of spousal fiduciary duty, and for financial elder abuse.² According to the petition, Adams had no need for cash late in his life, but nonetheless suddenly encumbered his home in Orinda with a second mortgage, sold a vacation property in Sea Ranch, and deposited the proceeds into accounts controlled by Lu. Royals alleged that, contrary to Adams's testamentary intent, the proceeds from the Orinda second mortgage and from the Sea Ranch sale are actually assets of the Adams Trust. Adams diverted these funds from the Trust, Royals alleged, while acting under the undue influence of Lu and in a state of cognitive decline. In essence, Royals's theory is that her father intended to leave all assets of his estate to her and nothing to his wife, Lu, but that Lu thwarted his plan by misappropriating his assets before his death.

Royal's petition alleged on information and belief that the total amount of the misappropriated funds was "at least $1,095,000." In addition to recovery of that amount, her third cause of action for financial elder abuse sought punitive damages, trebled under Civil Code section 3345, subdivision (b)³ plus attorney fees and costs. She made no mention of any other basis for relief in her financial elder abuse cause of action, but in her general prayer for relief on all causes of action she included a demand under Probate Code section 859⁴ for double the value of her compensatory damages.

B. Application for a Writ of Attachment

On the same day Royals filed her petition, she applied for a pretrial writ of attachment in the amount of $3,440,000. Her attachment application, filed on Judicial Council form AT-105, checked a box indicating that "the facts showing [she] is entitled to a judgment on the claim up on [sic ] which the attachment is based are set forth with particularity in the [¶] ... verified complaint." Other than that, there was no evidentiary support for the requested attachment. Nor was there any explanation detailing why she sought an attachment in the amount of $3,440,000, how she calculated that amount, or what the amount was based upon.

Lu made a detailed evidentiary showing in opposition to the RTAO. She submitted seven declarations, including her own. These declarations, collectively, describe Adams's courtship of Lu, which began in 2011, several years before their marriage; Lu's decision to move from Las Vegas to Orinda to cohabitate with Adams; his proposal of marriage and her decision to accept the proposal in 2015; and the observations of people who knew the couple about the genuineness of Adams's affection for Lu and the transformation in his demonstrated level of contentment after he met her late in his life.

Lu attached to her declaration 32 documentary exhibits, including extensive, detailed correspondence between Royals and Adams discussing his testamentary intent. Also included in this opposition evidence are statements from Adams's doctor, dentist, a real estate broker and others who dealt with him in the year before he died, all of whom attest to his full cognitive acuity until his death, despite his physical decline. Suffice it to say that the portrayal of Adams that we glean from Lu's evidence opposing the issuance of a writ of attachment—showing his mental condition in his final years, his intentions in disposing of his property after his death, and his desire to make financial provision for Lu—contrasts sharply with the portrayal of Adams that Royals offers in her petition.

Some of the evidence Lu presented in opposition to Royals's attachment application suggests that, because Adams made gifts to Lu during his lifetime, the Adams Trust does not encompass all of the assets Royals now claims are assets of the Trust. It also suggests that Adams was, in fact, in need of cash to put aside in accounts outside the Adams Trust for Lu's benefit; that he told Royals she could expect to inherit the Orinda home subject to any encumbrances put on it; and that he felt Royals and her husband were sufficiently well off that they might wish to consider a second home other than the home in Sea Ranch. In its totality, this evidence suggests, contrary to Royals's allegations, that Adams did not intend to leave all of his assets solely to Royals, and that instead he wished to leave enough to Lu so that she could support herself after his death.

As shown by various handwritten notes and emails exchanged between Adams and Royals, and a few from Adams to Lu, there appear to have been unresolved disagreements between father and daughter over two issues: (1) Adams's desire to leave money to Lu for Lu's support following his death, a plan Royals apparently declined to assist him in carrying out; and (2) Royals's request that she be allowed to become co-trustee of the Adams Trust during Adams's lifetime, an entreaty Adams firmly rejected, with reminders to her that he wished to remain in full control of his assets until he died. If these communications are credited, this is a man who insisted upon his financial autonomy to the end, and in his late nineties showed an ability to engage in fairly sophisticated financial planning.⁵

In both tone and substance, it is striking how rational and cogent Adams's writings are, while also displaying a mixture of sanguine acceptance of his coming demise and a level of irritation that seems to stem from disagreements with Royals. Adams felt neglected by Royals, he explained to her, and he was upset with her for arranging to have him sign two testamentary instruments—an amendment to the Trust, and a will—that he later concluded failed to reflect his true testamentary intent. He told Royals these two instruments had been drafted by a lawyer he believed was pursuing her interests, not his, and he seems to have decided to sell the Sea Ranch property only after trying, and failing, to enlist Royals's help in funding the accounts he wished to leave for Lu's benefit.⁶

Royals lodged objections to the declarations and documentary exhibits submitted by Lu in opposition to...