Johanson v. Johanson CA2/6 ( 2023 )

Filed 1/19/23 Johanson v. Johanson CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
DONNA JOHANSON, 2d Civ. No. B317107
(Super. Ct. No. 56-2021-
Plaintiff and Respondent, 00559092-PR-OP-OXN)
(Ventura County)
v.
JOHN ERIC JOHANSON et
al.,
Defendants and Appellants;
DAVID A. ESQUIBIAS, as
Trustee, etc.,
Respondent.
A mother is the sole life beneficiary of a family trust. Her
four adult children are the cotrustees and remainder
beneficiaries. Mother petitioned the probate court pursuant to
Probate Code1 section 17200 to compel the trustees to fulfill their
All statutory references are to the Probate Code unless
1
otherwise indicated.
duties under the trust. She requested that the trustees be
suspended and that a neutral interim trustee be appointed in
their place. The court granted her petition and granted the
petition of interim trustee to administer the trust as if no appeal
were pending. We affirm both orders.
FACTS
The Trust
N. Eric Johanson (Settlor) executed a living trust in
September 1997. Settlor was married to Donna Johanson. They
have four adult children, John, 2 Kurt, Lauren, and Neil (the
Children). During his life, Settlor was the sole trustee. He died
on May 20, 2020. Donna and the Children became successor
cotrustees.
During her life, Donna is the sole beneficiary of the trust.
Under the terms of the trust, 100 percent interest in the family
residence is to be conveyed to Donna; the trust is to pay 50
percent of the taxes and maintenance on the residence; Settlor’s
tangible personal property is to be transferred to Donna; and
income distributions are to be made for her health, maintenance,
and support. After Donna’s death, the Children are the
remainder beneficiaries.
Donna’s Petition
On October 20, 2021, Donna petitioned the probate court to
compel the trustees to provide information (§ 17200, subd.
(b)(7)(B)), to compel the trustees to account (id., subd. (b)(7)(C))
and to instruct the trustees to follow the terms of the trust. (Id.,
subd. (b)(12).)
2 For the sake of clarity, we sometimes refer to the parties
by their first names. No disrespect is intended.
2
Donna alleged that the Children, as controlling trustees,
have failed to transfer the residence to her; have failed to pay for
50 percent of the taxes and maintenance on the residence; have
failed to transfer Settlor’s tangible personal property to her; and
have failed to keep her reasonably informed about the trust by
withholding information from her.
Donna also alleged that the root of the problem is that the
Children have abdicated their responsibilities as controlling
trustees to an unrelated third party, Justin Greene. Greene is
chief financial officer of the family business, Johanson
Dielectrics, Inc. Donna alleged that Greene acts as the de facto
sole trustee, making all material decisions about the trust and its
assets without her consent or approval. The Children refuse to
communicate with her about the trust and do not include her in
any meetings about trust issues. In fact, she received a letter
from the Children’s counsel demanding that she not speak to
them about the trust.
Donna through her counsel wrote letters demanding that
she receive the income to which she is entitled; that the residence
be transferred to her; that she be provided information and
documents including a list of trust assets, valuations, annual
income, financial statements, and tax findings; and that the
Children provide a formal accounting pursuant to section 16000.
The Children’s counsel replied that the trust had retained an
accounting firm to prepare tax filings, identify assets of the trust,
and obtain values for those assets. But Donna and her
accountant were refused access to the accounting firm.
Donna prayed that the Children as controlling trustees be
ordered to provide a list of trust assets and evaluations; file a
complete accounting with the court; pay her the income and
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principal to which she is entitled; transfer title to the residence;
pay 50 percent of the residence taxes and maintenance; distribute
Settlor’s personal property to her; terminate the role of Greene in
the administration of the trust; and to cooperate and
communicate with her in the administration of the trust.
A hearing on Donna’s petition was set for December 9,
2021.
Children’s Objections and Responses
The Children responded that they had removed Donna as
cotrustee and installed Greene in her place. Thus, Donna has no
right to demand information as a cotrustee. The Children have
provided Donna all the information to which she is entitled. The
Children stated that the trust waived the requirement of a formal
accounting. In addition, Settlor kept abysmal records and the
Children are currently attempting to determine what assets and
liabilities are in the trust.
As to support payments from the trust, the Children state
that the trust is divided into two sub-trusts, a credit shelter
trust, and a marital trust. The credit shelter trust is funded first
to the extent of the federal estate tax exemption. Any amount
over that, which would be subject to estate tax, would go into the
marital trust. Because the amount in the credit shelter trust
does not exceed the estate tax exemption, the marital trust is not
funded. Disbursements from the marital trust are mandatory,
but disbursements from the credit shelter trust are discretionary.
Donna has not provided the Children any evidence of need.
As to transfer of the residence to Donna, the Children state
they have already taken steps to do so.
As to the transfer of Settlor’s tangible personal property to
Donna, the Children state that Settlor made substantial gifts of
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his personal property to others during his lifetime. In addition,
Settlor purchased personal property for entities with funds that
belonged to those entities. The Children are currently trying to
identify what personal property belonged to Settlor at the time of
his death. Donna is refusing to cooperate and is preventing the
Children from identifying and valuing the personal property
Settlor owned at his death.
As to the role of Greene, he is the manager and officer in
numerous entities that are independent of the trust and cannot
be challenged by a petition to administer the trust. The Children
denied they have ceded control over the trust to Greene. Greene
has acted as their agent under specific instructions to perform
ministerial duties for the trust.
Finally, as to Donna’s demand that the Children be ordered
to cooperate and communicate with her in all matters relating to
the trust, Donna is no longer a trustee. The trustees are required
to keep a beneficiary informed only as to matters relating to her
interest in the trust. The trustees have answered all of Donna’s
requests for information.
Donna’s First Supplemental Petition
On December 2, 2021, Donna filed what she characterized
as a first supplemental petition (Supplement). She accused the
Children as cotrustees of self-dealing designed to minimize the
value of the trust for their own benefit. She also accused them of
retaliating for filing her petition by removing her as trustee and
terminating her employment with a Johanson entity. She
requested that the Children be suspended as cotrustees and a
professional fiduciary be appointed in their place.
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Response to Supplement
The Children denied any self-dealing. They said that
Donna was properly removed as trustee under the terms of the
trust. They said Donna’s employment was terminated by a
Johanson entity not under control of the trust because she did not
work. Donna has not shown cause to suspend them as trustees.
Ruling
The Children did not request an evidentiary hearing in
their opposing papers. As the hearing on the petition was
ending, the Children for the first time requested an evidentiary
hearing. The probate court denied the Children’s request. The
court stated that it already had extensive paperwork and that the
matter should be resolved without delay.
The probate court granted Donna’s petition and ordered the
relief she sought, including the suspension of the Children as
trustees. The court appointed attorney David Esquibias, who
happened to be in court that day, as interim trustee.
The Children appealed the order which was entered on
December 16, 2021.
Section 1310, Subdivision (b) Petition
Esquibias filed an ex parte petition pursuant to section
1310, subdivision (b), to allow him to exercise the powers of
trustee as if no appeal were pending. The Children opposed the
petition on the grounds that there was no imminent risk of loss or
other emergency that would justify granting the petition.
At the hearing on the ex parte petition, the Children
complained that Donna’s original petition did not request a
suspension of the trustees and they did not have an adequate
amount of time to respond to her Supplement. The probate court
replied, “The order I made was more of a sua sponte order given
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the facts of the case as I understood them at the time of the
hearing.”
The probate court granted Esquibias’s petition.
DISCUSSION
I.
Appealability
Donna3 contends that the probate court’s order of December
10, 2021, granting her petition, is not appealable, and the order
granting the section 1310, subdivision (b) petition was not
appealed.
December 10, 2021, Order
Donna’s petition was brought under section 17200, allowing
a trustee or beneficiary of a trust to petition the court concerning
the internal affairs of the trust. Section 1304, subdivision (a)(1)
provides that a final order under section 17200 is appealable
except, “[c]ompelling the trustee to submit an account or report
acts as trustee.”
Donna argues that the order of December 10, 2021,
requires the trustees to submit an account, and is not final in
that it only suspends, does not terminate, the trustees. But other
aspects of the order are final, such as the transfer of the
residence, the payment of taxes and maintenance on the
residence, and the removal of Greene from the trust.
Donna and the Children have fully briefed all of the issues
on appeal. Given the mixed nature of the order’s appealability,
the best solution is to exercise our discretion to treat the
3 Except as the context indicates otherwise, hereafter,
“Donna” includes Esquibias, who are co-respondents in this
appeal.
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attempted appeal of the unappealable portions of the order as a
writ petition. (See Olson v. Cory (1983) 35 Cal.3d 390, 400-401.)
Section 1310, Subdivision (b) Petition
Donna concedes that the order granting the petition under
section 1310, subdivision (b), allowing the interim trustee to act
as if there were no appeal, is appealable. But she points out that
the Children did not appeal that order. The nature of the appeal
refers only to the December 10, 2021, order granting Donna’s
petition.
But courts have liberally construed notices of appeal to
include closely related orders where there is no prejudice to the
respondent. (See In re Madison W. (2006) 141 Cal.App.4th 1447,
1450 [notice of appeal from order terminating parental rights
construed to include order denying Welf. & Inst. Code, § 388
petition]; Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 998
[notice of appeal from judgment construed to include an appeal
from a later award of attorney fees].)
Here the section 1310, subdivision (b) order is a constituent
part of the December 10, 2021, order. Someone must administer
the trust while the appeal is pending. In addition, there is no
prejudice to Donna. Her brief fully responds to the substantive
issues raised by the Children on appeal. In fact, Donna prevails.
We liberally construe the notice of appeal to include the section
1310, subdivision (b) order.
II.
Due Process
The Children contend that the December 10, 2021, order
granting Donna’s petition in full denied them due process.
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Notice
The Children point out that due process applies to a
proceeding to suspend a trustee. (Citing Schwartz v. Labow
(2008) 164 Cal.App.4th 417, 429.) The Children also point out
that a petition made under section 17200 requires at least 30
days’ notice to all trustees prior to the hearing. (§ 17203, subd.
(a).)
The Children’s argument is based on the claim that
Donna’s Supplement was not supplemental to her original
petition but was in fact an amended petition. An amended
petition requires the same notice as the pleading it amends. (Cal.
Rules of Court, rule 7.53(a).) A supplement to a pleading does
not require additional notice. (Id. at rule 7.53(b).)
“‘Amendment to a pleading’ means a pleading that
. . . alleges facts or requests relief materially different from the
facts alleged or the relief requested in the modified pleading. An
amendment to a pleading does not restate or supersede the
modified pleading but must be read together with that pleading.
“‘Supplement to a pleading’ and ‘supplement’ mean a
pleading that . . . does not allege facts or request relief materially
different from the facts alleged or the relief requested in the
supplemented pleading. A supplement to a pleading may add
information to or may correct omissions in the modified
pleading.” (Cal. Rules of Court, rule 7.3(4) & (5).)
The Children argue that because Donna’s Supplement
requests different relief, the suspension of the trustees, it is in
fact an amended petition for which they did not receive adequate
notice.
But the Children fully responded to Donna’s original
petition and what she characterized as her supplemental
9
petition. The Children raised no objection to a lack of notice
either in their responding papers or at the hearing on the
petition. Had the Children done so in a timely manner, it is
entirely possible that the probate court would have granted a
continuance. The Children have waived the issue. (Hepner v.
Franchise Tax Bd. (1997) 52 Cal.App.4th 1475, 1486 [even a
constitutional right must be raised in the trial court to preserve
the issue on appeal].)
Moreover, the Children fail to show prejudice. In order to
obtain a reversal, appellant must show it is reasonably probable
they would have obtained a more favorable result absent the
error. (Coastside Fishing Club v. California Fish & Game Com.
(2013) 215 Cal.App.4th 397, 428.)
The Children fully responded to Donna’s petitions. They
point to nothing that more notice would have done to aid their
cause. The facts call out for a neutral third party to step in as
trustee.
Donna, as the life beneficiary, and the Children, as the
remainder beneficiaries, have an obvious conflict of interest. The
conflict was heightened when the Children removed Donna as
trustee, excluding her from any voice in the management of the
trust, leaving the Children in charge. There is a conflict between
Donna and the Children as to what property belongs in the trust,
what property belongs to others outside the trust, and what
property should be distributed to Donna free of the trust. The
Children have been unwilling or unable to provide an accounting.
They even denied that Donna is entitled to an accounting. Even
such a simple, straight-forward matter as transferring title to the
residence to Donna is enmeshed in delay and controversy.
Whether the acrimony that exists between Donna and the
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Children is Donna’s fault, the Children’s fault, or a combination
of both, a solution was necessary. The suspension of the Children
as trustees and the appointment of a neutral interim trustee is
the obvious answer. The Children point to nothing in the record
to show they would have achieved a more favorable result had
they more notice.
Opportunity To Be Heard
The Children contend they were deprived of a meaningful
opportunity to be heard.
The Children complain that the trial court issued its
tentative decision suspending them as trustees based solely on
Donna’s moving papers, without giving them time to respond. At
the hearing, the probate court initially stated there is no
response. Then the court immediately corrected itself and stated
there is a response. Before the final ruling, the court stated that
it reviewed the objections and responses.
The probate court’s tentative decision is just that,
tentative. The parties are not prejudiced. The court can change
its mind. Before the final ruling, the court stated it reviewed the
Children’s objections and responses. The Children point to
nothing in the record to show the court did not. The Children
were not deprived of a meaningful opportunity to be heard.
The Children’s reliance on Cleveland Board of Education v.
Loudermill (1985) 470 U.S. 532 is misplaced. In the first of two
consolidated cases, a school security guard was dismissed on the
ground that he failed to disclose a prior felony conviction on his
job application. In the second case, a school bus mechanic was
dismissed because he failed an eye examination. Both employees
were civil servants who could only be terminated for cause and
were entitled to post-termination hearings. The court held that
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the state’s civil service law made the parties’ employment a
property interest. The due process clause requires a hearing
before a person is deprived of property. (Id. at p. 542.) Here the
Children received a hearing before they were suspended as
trustees.
No Abuse of Discretion
The Children contend the trial court abused its discretion
in suspending them as trustees and appointing a stranger as sole
trustee.
The Children point out that they were made trustees under
the provisions of the trust. They cite Estate of Bothwell (1944) 65
Cal.App.2d 598, 604, for the proposition that the plan of the
settlor must be followed and may not be departed from merely
because it is considered unwise.
But the plan of the Settlor was not being followed. The
plan was not to remove Donna as trustee. The plan was not to
have conflict over what property belonged in the trust. The plan
was not to delay the filing of an accounting and a complete estate
tax return. The plan was not to have such chaos that the simple
matter of the transfer of the residence could not be accomplished
without delay and rancor. It is precisely because the Children as
trustees were unwilling or unable to follow Settlor’s plan that the
probate court suspended them and appointed a neutral trustee.
There was no abuse of discretion.
The Children argue that the probate court abused its
discretion by refusing to hold an evidentiary hearing. But the
court explained that it already had extensive paperwork, and it
was concerned that the matter should be resolved without delay.
The Children’s opposition to Donna’s petition included
documentary evidence and affidavits. They did not request an
12
evidentiary hearing in their opposing papers. In addition, they
made no offer of proof as to what other evidence they would have
presented at an evidentiary hearing. The Children cite no
authority allowing them to elect to proceed by affidavits and then
make a belated demand for an evidentiary hearing when it
appears the probate court is about to rule against them. In any
event, the Children’s failure to make an offer of proof in the
probate court precludes consideration on appeal of an allegedly
erroneous exclusion of evidence. (Shaw v. County of Santa Cruz
(2008) 170 Cal.App.4th 229, 282.)
III.
The Probate Court Properly Granted Powers to Interim Trustee
The Children contend the probate court improperly granted
the interim trustee the power to act as if no appeal was pending.
Section 1310, subdivision (b) provides in part:
“Notwithstanding that an appeal is taken from the judgment or
order, for the purpose of preventing injury or loss to a person or
property, the trial court may . . . appoint a . . . temporary trustee,
to exercise the powers, from time to time, as if no appeal were
pending.”
The Children cite Sterling v. Sterling (2015) 242
Cal.App.4th 185, 199 (Sterling), for the proposition that section
1310, subdivision (b) requires a “‘showing of risk of imminent
injury or loss.’” The Children argue that Esquibias has failed to
make such a showing.
Section 1310, subdivision (b) does not expressly require a
showing of “imminent” injury or loss. That requirement comes
from Gold v. Superior Court (1970) 3 Cal.3d 275. In Gold, a
conservator was ordered to pay attorney fees. Instead of paying,
the conservator appealed the order. The probate court held him
13
in contempt. The conservator argued that the appeal terminated
the probate court’s jurisdiction. The attorney real party in
interest argued that a statute similar to section 1310, subdivision
(b) applied to allow the court to proceed as if no appeal was
pending. Our Supreme Court rejected the argument holding that
the statute must be narrowly construed to apply “only to the
exceptional case involving a risk of imminent injury or loss.” (Id.
at p. 281.) The court concluded that the case does not fall within
the statutory exception to the rule that an appeal deprives the
probate court of jurisdiction.
In Sterling, the Court of Appeal determined that the
trustee had made the required showing where the trustee showed
a risk of a substantial loss if the trustee could not timely
complete the sale of a trust asset. (Sterling, supra, 242
Cal.App.4th at p. 199.)
The Children cite no case that discusses the application of
section 1310, subdivision (b) to the circumstances here, where all
trustees have been suspended. Nevertheless, we conclude the
circumstances show a risk of imminent injury or loss. As the
probate court stated: “So let’s assume that there is an appeal and
for the next year and a half it’s in process. Who pays the bills on
the house? [W]ho pays the property taxes? [W]ho pays the
utilities on the real estate assets? [A]nd your client is suspended
and Ms. – – Mr. Esquibias is unable to do anything.”
An interim trustee needs the power to act while the appeal
is pending. The probate court did not err in granting Esquibias
that power.
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DISPOSITION
The orders of the probate court are affirmed. Costs are
awarded to respondents.
NOT TO BE PUBLISHED.
GILBERT, P. J.
We concur:
YEGAN, J.
BALTODANO, J.
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Roger L. Lund, Judge
Superior Court County of Ventura
______________________________
Enenstein Pham & Glass, Teri T. Pham, Matthew Rosene,
attorneys for Defendants and Appellants.
Law Offices of Mary P. Kulvinskas and Mary P.
Kulvinskas; Nevers, Palazzo, Packard, Wildermuth & Wynner
and Michael S. Wildermuth for Plaintiff and Respondent Donna
Johanson.
Law Office of David A. Esquibias and David A. Esquibias
for Respondent David A. Esquibias.
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