Conservatorship of Presha ( 2018 )


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  • Filed 8/22/18
    CERTIFIED FOR PUBLICATION
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    FOURTH APPELLATE DISTRICT
    DIVISION TWO
    Conservatorship of the Person and Estate
    of LORRAINE PRESHA.
    CHRISTIE DAVIDSON, as
    Conservator, etc.,                                E066177
    Petitioner and Appellant,                (Super.Ct.No. RIP094861)
    v.                                                OPINION
    GEORGE G. HOLMAN et al.,
    Objectors and Respondents..
    APPEAL from the Superior Court of Riverside County. Thomas H. Cahraman,
    Judge. Affirmed.
    Horspool & Horspool and Karin E. Horspool for Petitioner and Appellant.
    No appearance for Objectors and Respondents.
    Petitioner and appellant Christine Davidson was the court-appointed conservator
    of the person and estate of Lorraine Presha from 2009 to 2015. Presha died in March
    2015. In June 2015, Davidson filed a combined petition for (1) approval of the sixth
    1
    and final accounting, and (2) conservator’s fees. Davidson sought conservator’s fees in
    the amount of $12,621.60. The probate court ordered conservator’s fees in the amount
    of $7,000.
    Davidson contends the trial court erred by (1) examining Davidson’s billing
    practices; (2) utilizing its finding that Davidson’s billing practices were improper when
    ruling upon Davidson’s petition for compensation; (3) vitiating the finality of prior
    cases for which Davidson served as the conservator; and (4) not utilizing the
    enumerated factors when ruling on her petition for compensation. We affirm the
    judgment.
    FACTUAL AND PROCEDURAL HISTORY
    A.     PETITION
    In 2009, Davidson was appointed by the probate court to be the conservator of
    the person and estate of Presha. Presha died in March 2015. Davidson was a
    professional fiduciary. Davidson petitioned the probate court for conservator’s fees in
    the amount of $12,621.60 for the period of June 2, 2014, through March 31, 2015.
    B.     SEPTEMBER 2015 HEARING
    On September 24, 2015, the probate court held a hearing on Davidson’s petition
    for fees. The probate court explained it had not gone through every entry in Davidson’s
    bill, but it had concerns with some of the entries it had reviewed. The probate court
    said, “Page 17 of Ms. Davidson’s bill, ‘Received, reviewed, and filed. Notice of
    changes from Security Bank, re in form of changes in bank fees, terms, and effective
    date, two-tenths of an hour at $60 an hour, $12.’ [¶] Well, in reading billings like this,
    2
    the Court doesn’t want to be petty or feel petty, but we all get that little slip of paper
    once in a while from the bank that says, ‘We have exciting new changes to the terms of
    your account.’ And then you look at it and what they have done is increased the
    punishment for a bounced check from $20 to $22. We all glance at those papers and we
    throw them away. Why this estate has to pay $12 for glancing at that and throwing it
    away is a big question.”
    The probate court went on to question why fees were being charged for
    confirming that a bank statement went to the correct mailing address when it was clear
    Davidson received the bank statement. The court questioned why Davidson charged for
    meeting with a financial advisor to discuss how laws related to the “Affordable Care
    Act” taxes would affect her clients. The court explained that it is beneficial to be
    educated, but that is not the type of activity that should be billed to a client. The court
    said, “I wonder if this appears in 30 clients’ billings or a hundred clients’ billing[s].”
    The court said, “I worry about this. It’s a hypothesis that makes me worry. I’m not sure
    that there’s something going on. I’m not sure, but it’s concerning when you read this.”
    The court questioned Davidson’s charge for 24 minutes for taking a check to the
    bank. The court asked, “Is that the only check she took the bank? Or did she take a
    hundred checks from a hundred clients? In which case, it was four hours billed if you
    add them all up, and did it take four hours to go to the bank? Or did she do the
    foolishness of taking this [one] check[?]”
    Davidson’s attorney, J. David Horspool, said, “The problem is obviously, if I
    knew this was an issue, I would have Ms. Davidson here to address it.” Horspool said,
    3
    “I would submit that if you go back and look at all the other billings Ms. Davidson has
    submitted on other files, you will see similar entries, which have previously been
    approved by the Court.”
    The probate court said, “It’s under submission. I will either do something in my
    office or I will reset it so she can be heard. If you tell me you prefer it to be reset
    instead of doing it that way, I will just reset it. I’ll do it either way you want.”
    Horspool said, “If the Court is going to reduce her fee, give us a tentative, and set a
    court hearing. If we are willing to just accept it, then we’ll let the probate examiners
    know and submit a revised order.” The probate court agreed, saying, “[T]he fees of the
    conservator [are] under submission. The Court will proceed by tentative decision and
    then set for hearing if requested.”
    C.     INQUIRY
    In November 2015, the probate court issued a minute order reflecting, “The order
    taking the fees of conservator under submission is vacated. The court has expanded its
    inquiry pursuant to the statutory au[thority] set forth in [subdivision] (d) of section 2620
    of the Probate Code[1] and believes that the testimony of Ms. Davidson is important to
    decide the issue of fees.” The court scheduled a hearing for December 15, 2015.
    D.     DECEMBER 2015 HEARING
    At the hearing on December 15, the probate court explained that it would not
    have Davidson testify that day, as a courtesy, because the court had new information to
    1 All subsequent statutory references will be to the Probate Code unless
    otherwise indicated.
    4
    discuss. The court explained that under section 2620, subdivision (d), the court “took
    the step of having [its] staff look [at] and submit to [the court] some accountings in
    other cases.”
    The court said, “And so we studied 15 cases of Ms. Davidson in San Bernardino
    and Riverside counties. And, for instance, the telephone call of September 6th, 2013,
    there were eight disabled people in eight separate cases billed two-tenths of an hour for
    receiving telephone calls from representatives from Security Bank . . . ; so 1.6 hours
    [were] billed if you count all of these disabled people for that call. [¶] Now, it may be
    that six different offices of Security Bank were used or eight different offices were used
    and it was eight different phone calls. I don’t know.”
    The probate court pointed to a similar issue with a charge for traveling to
    Security Bank and meeting with a manager. Eight clients were billed for a total of 3.6
    hours. The court explained it was possible the meeting and travel lasted 3.6 hours, so
    each client was billed proportionally, but the court was uncertain. The court explained,
    “And it goes on and on like this.” The court cited a conference call that was billed to
    eight clients for a total of 1.8 hours, another bank meeting that was billed for a total of
    5.4 hours, and a telephone call that was billed to 10 clients for a total of two hours.
    The court said, “But once we did this study, it seemed like something might be
    deeply wrong.” The court continued, “[W]hen we studied 15 cases and it looks very
    much like there’s redundant billing of eight different people who are absolutely helpless
    [and/or] incompetent, that one phone call seems to have been made that two-tenths of an
    hour and eight different people got charged for it, if that’s not what happened I really
    5
    am going to want to know. [¶] . . . I’m really hoping there’s some other explanation.
    But tentatively it looks pretty bad.”
    The court recessed the case and then recalled it so Davidson would have time to
    consider the court’s comments. Horspool explained that only three of the charges cited
    by the court were part of the current bill, while others were part of old bills that had
    already been approved. Horspool said, “I think the Court is reading Subsection (d)
    Section 2620 too broadly.”
    The court responded, “I really disagree. I think that if dishonest billings were
    made in other cases, it’s absolutely something that should be considered in this case.
    The Court can look at anything under that subsection to see if a fiduciary is truly putting
    [the] interest of these disabled people ahead of her own interest.” The court explained
    that Davidson’s bills from other cases are “all evidence that can be taken into account as
    to whether the fee request in this case is reasonable and as to whether disciplinary
    proceedings should be recommended by somebody interested in this case based upon all
    this.”
    The probate court ordered Davidson to respond to the court’s concerns, via a
    declaration, within 30 days. The probate court’s order provided citations of the 15 cases
    and the possible duplicative charges.
    E.     RESPONSE TO THE ORDER
    Davidson filed a verified response to the probate court’s order. Davidson
    asserted her fees were reasonable. Davidson asserted the accountings were approved in
    the 15 other cases cited by the probate court. Davidson wrote, “It is unclear to
    6
    [Davidson] under what authority the court has [sic] to go back and review approved
    accountings and fee petitions, especially ones approved in another Court, and question
    [Davidson] about her billing entries in those cases. As those matters are not before this
    Court, and have been previously approved by this Court and other courts, [Davidson’s]
    position is that she is not required to address any of the other billing entries that do not
    pertain to her current fee petition, especially since they have already been approved.”
    Further, Davidson argued section 2620, subdivision (d), applied only to accountings, not
    to petitions for conservator’s fees.
    F.     JANUARY 2016 HEARING
    The court held a hearing on January 27, 2016, concerning Davidson’s response to
    the court’s order. The court asked if Davidson intended to offer evidence, such as
    Davidson’s testimony. Horspool said he did not intend to provide further evidence
    because Davidson’s testimony would be similar to the verified response.
    The court said it would like to know, for the aggregate 8.4 hours that were billed
    for a conference with a banker, how many hours Davidson would testify she spent at the
    bank and traveling for the conference. The court asked Horspool, “Do you want her to
    tell me that, or do you want me to reach my own conclusions based on what I have?”
    Horspool responded, “Your Honor, she really doesn’t have anything more to say.” The
    court took the matter under submission.
    G.     TENTATIVE RULING
    In March 2016, the probate court issued a tentative ruling. The court approved
    conservator’s fees in the reduced amount of $7,000. The court wrote, “Pursuant to
    7
    subsection (d) of section 2620 of the Probate Code, the court finds that there were
    ‘material errors’ in the portion of the accounting that consists of conservator’s billing,
    and that the severity level of the errors is substantial.”
    The court concluded that appellate cases provided authority for a probate court to
    raise objections to fee petitions on the court’s own motion. The probate court took
    judicial notice of the 15 cases cited in its December 2015 order. (Evid. Code, § 452,
    subd. (d).) The court explained that Probate Code section 2620, subdivision (d), permits
    the court to consider “any information” when determining the accuracy of an
    accounting, and therefore, the court reasoned it could rely upon judicially noticed court
    records. The court explained that the court records were evidence of habit or custom.
    (Evid. Code, § 1105.)
    The court explained that Davidson’s response to the court’s order failed to
    disclose the actual time she spent on any of the allegedly duplicative entries. The
    probate court found Davidson charged multiple clients for the same act without
    prorating the time among the clients and that she had overcharged Presha by assigning
    too much time to certain tasks, e.g., charging for 24 minutes to read a CalPers statement
    and make a checkbook entry. The probate court also faulted Davidson for performing
    many of the clerical tasks herself, rather than using a less expensive office assistant for
    such tasks. The probate court found Davidson’s “practice of billing multiple clients for
    the same task was no accident, but rather a true business habit.”
    The probate court explained that to the extent Davidson’s bills appeared
    wrongful due to ambiguities in the bills, then the resolution of the ambiguity would be
    8
    made against Davidson because Davidson was responsible for creating the ambiguity.
    In regard to Davidson’s argument that section 2620 does not apply to a petition for
    conservator’s fees, the probate court wrote, “This breathtaking assertion falls flat, if
    only because the prayer of this particular accounting requests that [Davidson’s] bill be
    paid.” The probate court concluded $700 per month would adequately compensate
    Davidson, plus an additional $700 for the time spent on tasks related to Presha’s death.
    H.     RESPONSE TO THE TENTATIVE RULING
    Davidson filed a verified response to the probate court’s tentative ruling.
    Davidson asserted the probate court misapplied section 2620, subdivision (d), because
    the subdivision applies to accountings, not to petitions for conservator’s fees. Davidson
    argued the petition for fees was not part of the accounting. Davidson asserted that if she
    had paid herself during part of the accounting period, then section 2620 might apply, but
    because Davidson’s fees were not included in the accounting, it was improper to apply
    section 2620 to Davidson’s request for conservator’s fees. Davidson asserted that her
    request for fees, in the prayer portion of the accounting approval petition, did not mean
    her fee request was part of the accounting. Davidson accused the probate court of
    “attempting to bootstrap the fee petition [in]to the accounting to justify it’s [sic]
    actions.” Davidson asserted the probate court “acted outside the scope of its authority
    by reviewing 15 other non-related cases to determine what the court believed was just
    and reasonable compensation in this case.”
    Davidson argued, “it was inappropriate for the court to initiate it’s [sic] own
    investigation into [Davidson’s] billing practices.” Davidson asserted the probate court
    9
    failed to provide her adequate notice of its intent to take judicial notice of the 15 cases.
    Further, Davidson asserted the probate court misunderstood her billing practices.
    Davidson explained that entries included not only the stated activity but also the related
    follow-up activity. For example, a meeting at the bank for which 11 clients were
    charged .70 of an hour included the meeting and follow-up activities related to the
    meeting. Davidson contended the probate court reduced Davidson’s fees to $700 per
    month so as to punish Davidson for her alleged misdeeds.
    I.     STATEMENT OF DECISION AND ORDER
    The probate court adopted the tentative ruling as its statement of decision, with
    two additions. First, in regard to the assertion that the probate court failed to provide
    notice of its intent to take judicial notice of the 15 cases, the probate court explained
    that it issued an order requiring a response, then held a hearing, and then issued a
    tentative ruling reflecting its intent to take judicial notice of the 15 cases. The probate
    court asserted Davidson was provided sufficient notice of the court’s intent to take
    judicial notice of the cases.
    Second, in regard to the argument that the probate court reduced Davidson’s fees
    for the purpose of punishing Davidson, the court explained that Davidson’s fee request
    was excessive and reflected improper billing practices. The probate court concluded
    that $700 per month was fair compensation for the services rendered given the lack of
    reliable information provided by Davidson. The court issued an order granting fees to
    Davidson in the amount of $7,000.
    10
    DISCUSSION
    A.     SECTION 2620
    1.     STATUTORY INTERPRETATION
    Davidson contends section 2620 does not permit the probate court to examine a
    conservator’s billing practices.2
    We apply the de novo standard when interpreting a statute. “[W]e begin by
    examining the statutory language, giving the words their usual and ordinary meaning. If
    there is no ambiguity, the plain meaning of the language governs.” (Hopp v. City of Los
    Angeles (2010) 
    183 Cal.App.4th 713
    , 717.)
    Section 2620, subdivision (d), provides, in relevant part, “Each accounting is
    subject to random or discretionary, full or partial reviews by the court. The review may
    include consideration of any information necessary to determine the accuracy of the
    accounting.” The plain language of the subdivision reflects that it applies to an
    accounting in that the statute plainly uses “accounting,” as opposed to a more generic
    term, such as “petition.”
    The contents of an accounting include any property on hand at the beginning of
    the accounting period, the value of any assets received, the amount of any income, any
    gains on sales, the amount of any disbursements, any losses on sales, any distributions,
    2  At the initial hearing on Davidson’s petition for compensation, Horspool said
    to the probate court, “I would submit that if you go back and look at all the other
    billings Ms. Davidson has submitted on other files, you will see similar entries, which
    have previously been approved by the Court.” Thus, Horspool invited the probate court
    to examine Davidson’s other petitions for compensation. Nevertheless, we will address
    the merits of Davidson’s contention.
    11
    and any property on hand at the end of the accounting period. (§ 1061.) A
    conservator’s fees are not included on the list of items that are contained in an
    accounting.
    Moreover, section 1064 pertains to the contents for a petition for approval of an
    accounting, while section 2640 pertains to a petition for conservator compensation.
    Thus, the law considers such petitions to be separate documents, and a conservator’s
    fees are not included in an accounting. Accordingly, a petition for approval of an
    accounting does not include conservator’s fees and an accounting does not include
    conservator’s fees. Because section 2620, subdivision (d), applies to an accounting, it
    does not apply to a petition for conservator compensation.
    The probate court concluded section 2620, subdivision (d), could apply in this
    case because Davidson filed one petition in which she combined (1) the request for
    approval of the accounting, with (2) the request for conservator’s fees. Section 2620
    plainly applies to an accounting, as discussed ante. Davidson inartfully drafted her
    petition by combining two petitions into one. (§§ 1064, 2640.) Davidson’s inartful
    drafting does not transmute her compensation request into an accounting. In sum,
    section 2620 does not support the probate court’s procedure in this case.
    2.     HARMLESS ERROR
    We examine whether the probate court’s reliance on Probate Code section 2620
    was harmless. Davidson must establish that it is reasonably probable a result more
    favorable to Davidson would have been reached absent the error. (Pool v. City of
    Oakland (1986) 
    42 Cal.3d 1051
    , 1069; Code Civ. Proc., § 475.)
    12
    “A guardian or conservator is subject to the regulation and control of the court in
    the performance of the duties of the office.” (§ 2102.) As a court-appointed officer, the
    conservator remains under the control and continuing jurisdiction of the court in the
    discharge of her duties. (In re Estate and Guardianship of Davis (1967) 
    253 Cal.App.2d 754
    , 760; Hillman v. Stults (1968) 
    263 Cal.App.2d 848
    , 872; Hartford Acc.
    & Indem. Co. V. Crawford (1962) 
    204 Cal.App.2d 557
    , 561.) The probate court can, on
    its own motion, “intervene to prevent or rectify abuses” by a fiduciary. (Schwartz v.
    Labow (2008) 
    164 Cal.App.4th 417
    , 427; § 1850, subd. (b).) There is a fiduciary
    relationship between the conservator and conservatee. (§ 2101.) One of a conservator’s
    duties is to exercise ordinary care and diligence in managing and controlling the
    conservatee’s estate. (§ 2401.) The conservator’s compensation is paid by the
    conservatee’s estate. (§ 2640, subd. (c).)
    In the instant case, the probate court suspected Davidson breached her fiduciary
    duty to Presha by overcharging for the services rendered. The issue of whether
    Davidson overcharged Presha’s estate was a proper issue for the probate court to
    examine because Davidson is an agent of the probate court. (§ 2102; Hartford Acc. &
    Indem. Co. v. Crawford, supra, 204 Cal.App.2d at p. 561.) If Presha’s estate was being
    abused by an agent of the probate court, then that was precisely the type of matter the
    probate court must regulate and control. (§ 2102; Schwartz v. Labow, supra, 164
    Cal.App.4th at p. 427.)
    In other words, if Davidson overcharged Presha’s estate, and the probate court
    did not examine the issue, the probate court would be remiss in its duty to regulate and
    13
    control Davidson’s performance as a fiduciary. (§ 2102.) In sum, the probate court had
    the authority to examine Davidson’s billing practices because the manner in which
    Davidson performs her duties, such as billing clients, is subject to court control and
    regulation. (§ 2102.) Accordingly, although the probate court erred by relying on
    section 2620, subdivision (d) to explain its procedure, the error is harmless because the
    same procedure could have been employed via section 2102.
    B.     UTILIZING THE FINDING
    Davidson contends the probate court erred by utilizing the finding concerning her
    improper billing practices when ruling on her petition for compensation.
    We independently review whether the probate court employed an improper
    procedure. (Lucas v. County of Los Angeles (1996) 
    47 Cal.App.4th 277
    , 284-285.)
    Probate proceedings are purely statutory, therefore, probate courts “may not
    competently proceed in a manner essentially different from that provided” by the
    statutory scheme. (In re Quinn’s Estate (1955) 
    43 Cal.2d 785
    , 787.)
    The typical procedure when a conservator has overcharged an estate is to order
    the conservator to reimburse the estate for the estate’s wrongful losses. (§§ 2401.3,
    2625; Bank of America v. Superior Court (1986) 
    181 Cal.App.3d 705
    , 719.) In the
    instant case, rather than a two-step process (the estate suffers the wrongful loss and then
    Davidson reimburses the estate), the probate court reduced the process to one-step
    (Davidson does not wrongfully receive the money). The probate court made the
    procedure more efficient and did not alter the essential nature of the procedure. The
    14
    essential nature being that the estate pays only proper compensation and the conservator
    does not profit from improper charges. (§§ 2401.3, 2625; Bank of America, at p. 719.)
    In December 2015, Davidson was given notice that the probate court was
    considering handling the issue via a single-step procedure. Thus, the probate court
    provided Davidson with approximately four months’ notice of the single-step procedure
    and did not alter the essential nature of the procedure. Accordingly, we see no error in
    the procedure utilized by the probate court.
    C.     UTILIZING THE PRIOR CASES
    Davidson contends the probate court erred by utilizing the prior cases when
    ruling on her petition for compensation because the probate court violated the finality of
    the prior cases.
    When an order becomes final, the conservator is released from any claim by the
    “conservatee and [by] any persons affected thereby based upon any act or omission
    directly authorized, approved, or confirmed in the . . . order.” (§ 2103, subd. (a).)
    The probate court’s ruling did not affect the prior cases. The probate court’s
    ruling in the instant case relates only to the petition for compensation that was before
    the court. On the petition pending before the probate court, the court granted Davidson
    compensation in the amount of $7,000. The probate court did not alter or adjust any
    prior compensation granted to Davidson. Accordingly, we are not persuaded that the
    probate court vitiated the finality of the prior cases.
    15
    D.     COMPENSATION FACTORS
    Davidson contends the probate court erred by not utilizing the enumerated
    factors when ruling on her petition for compensation.
    We examine whether the probate court abused its discretion by disregarding the
    proper legal standard. (In re Marriage of Cheriton (2001) 
    92 Cal.App.4th 269
    , 282-
    283; In re Levi’s Estate (1943) 
    61 Cal.App.2d 644
    , 646.) When granting compensation
    to a conservator, the probate court should determine what amount is “just and
    reasonable.” (§§ 2623, subd. (a)(2), 2640, subd. (c).) There is an enumerated list of
    nine factors a probate court may consider when determining what amount of
    compensation is just and reasonable. (Cal. Rules of Court, rule 7.756(a).)
    One of the enumerated factors is “[t]he time spent by the conservator or guardian
    in the performance of service.” (Cal. Rules of Court, rule 7.756(a)(5).) The probate
    court explained that Davidson inaccurately reported the time she spent on various tasks.
    For example, Davidson wrongly reported the amount of time she spent on receiving an
    e-mail from her accountant. Accordingly, the probate court considered the factor of
    time spent on tasks and found Davidson inaccurately reported her time.
    Another factor is the necessity of the services performed. (Cal. Rules of Court,
    rule 7.756(a)(3).) The probate court explained that Davidson performed unnecessary
    services, such as filing a copy of bank policies in Presha’s file, when Davidson utilized
    the same bank for all of her accounts. The probate court concluded Davidson could
    have one file for bank policies that is universal, and therefore not charge Presha for the
    16
    act of filing the document. Accordingly, the probate court considered the factor of the
    necessity of the services and found Davidson performed unnecessary tasks.
    A third factor is “[t]he conservator’s or guardian’s estimate of the value of the
    services performed.” (Cal. Rules of Court, rule 7.756(a)(8).) The probate court
    explained that many of Davidson’s tasks were clerical in nature and could have been
    performed by an office assistant who would bill at a lower rate than Davidson. The
    probate court’s conclusion reflects it considered the issue of whether Davidson was
    overvaluing the cost of the services performed, and it concluded her estimate of the
    value of the services performed was too high. In sum, the probate court considered the
    relevant factors when determining that $7,000 would be just and reasonable
    compensation for Davidson.
    DISPOSITION
    The order is affirmed. Davidson must pay her costs on appeal.3 (Cal. Rules of
    Court, rule 8.278(a)(4).)
    CERTIFIED FOR PUBLICATION
    MILLER
    J.
    We concur:
    McKINSTER
    Acting P. J.
    CODRINGTON
    J.
    3Respondents did not make a substantive appearance in this court and so we do
    not make an award of costs in their favor. (Cal. Rules of Court, rule 8.278 (a)(5).)
    17
    

Document Info

Docket Number: E066177

Filed Date: 8/22/2018

Precedential Status: Precedential

Modified Date: 8/22/2018