Opinion
G054116
11-09-2017
Estate of DANIEL A. ANTOS, Deceased. JOSEPH D. ANTOS, Petitioner and Respondent, v. JANALEE T. ANTOS, Contestant and Appellant.
John L. Dodd & Associates, John L. Dodd and Benjamin Ekenes, for Contestant and Appellant. Fitzgerald Yap Kreditor and Eric P. Francisconi, for Petitioner and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2013-00652473) OPINION Appeal from a judgment of the Superior Court of Orange County, Jamoa A. Moberly, Judge. Affirmed. John L. Dodd & Associates, John L. Dodd and Benjamin Ekenes, for Contestant and Appellant. Fitzgerald Yap Kreditor and Eric P. Francisconi, for Petitioner and Respondent.
Contestant and appellant Janalee T. Antos appeals from a probate court judgment that invalidated an amendment to her father's trust, replaced her as trustee of the trust, and ordered her to pay attorney fees. The judgment was based on the trial court's determination that Janalee had procured that trust amendment by exerting undue influence over her father, Daniel A. Antos.
As often happens in litigation arising among family members, the parties to this appeal share the same last name. Consequently, for the sake of clarity we refer to the parties by their first names.
Janalee contends the trial court erred by applying a presumption of undue influence against her because Probate Code section 21380 (section 21380), which establishes the presumption in specified circumstances, is inapplicable to family members. She also claims the court's undue influence determination must be reversed because the trial court's finding that she benefitted unduly as a result of the challenged amendment was unsupported by substantial evidence.
Janalee further contends the court's alternative justification for invalidating the challenged trust amendment — its finding that Daniel lacked testamentary capacity when he executed it — was also unsupported by substantial evidence. And finally, Janalee argues that even if the court did not err by invalidating the trust amendment, it nonetheless erred by awarding attorney fees to petitioner and respondent Joseph D. Antos because there was no finding, and no evidence to support a finding, that she acted in bad faith in procuring the challenged trust amendment.
We affirm the judgment. Although Janalee is correct that the statutory undue influence presumption set forth in section 21380 is not applicable to her in this case, that presumption is not the one the trial court relied upon. Instead, the court properly applied the common law presumption, which remained in effect after section 21380 was enacted. And the trial court's finding that Janalee benefitted unduly from the challenged amendment was unassailable. By its terms, the amendment gave her sole ownership of the family home, worth $400,000, while giving her brother Joseph no enforceable right to any additional assets. The amendment also gave Janalee the remarkable power to further amend the provisions of Daniel's trust as she saw fit, in the event Daniel became incompetent. Janalee's assertion that those additional benefits were merely Daniel's effort to compensate her for the many years she spent providing care to him — while Joseph remained free to establish his own home and raise a family — merely demonstrates a factual dispute that the trial court could properly resolve against her.
Having found no error in the trial court's determination that Janalee procured the challenged trust amendment through undue influence, we need not address the court's alternative basis for invalidating the amendment; i.e., that Daniel lacked testamentary capacity at the time he signed it.
Finally, Janalee's challenge to the attorney fee award fails because we must infer the court made all findings necessary to support its award, and the evidence was sufficient to uphold a finding of bad faith.
FACTS
Daniel died a widower in December 2012, at the age of 94. Janalee and Joseph are Daniel's two children. In September 1988, 24 years before he died, Daniel executed the Daniel A. Antos Family Trust (the Trust), which provided that upon his death, the trust estate would be divided equally between Janalee and Joseph. Daniel's long-time home (the family home) was deeded to the Trust. As is common, Daniel executed a will in conjunction with the Trust, specifying all of his separate property was devised to the Trust. Daniel named Joseph as the executor of his will, and designated him to act as successor trustee of the Trust, and as Daniel's representative in the event Daniel became incapacitated.
Both Janalee and Joseph grew up in the family home, and Joseph continued to live there with Daniel until 1992, when Joseph married and moved into his own home. Daniel helped Joseph with $20,000 toward the purchase of that home, and later helped Joseph and his wife with $10,000 toward the purchase of a hair salon business. Joseph repaid about $20,000 of those funds over time.
Janalee moved out of the family home for a time, graduated from college and held a full-time job. But she moved back into the family home with Daniel a couple of years after Joseph moved out, when she was 30. Thereafter, Janalee never held a full-time job. Instead, her only employment was doing "document assistance" for a real estate office, for which she was paid what she characterized as a "token amount" of $500 per file. In 2002, Janalee attended law school for a semester, but then dropped out.
After Janalee moved back into the family home, she viewed taking care of Daniel as her full time job, and described her role as "assisting [Daniel] in the household like a housewife." However, Janalee admitted Daniel was capable of driving and doing things for himself until about 2009. At that point, due to Daniel's hearing loss and decreasing mobility, Janalee's role became more like that of a caregiver.
Janalee did not pay for rent, food, transportation, or property taxes while she lived with Daniel.
Beginning in 2001, Daniel paid Janalee $5,000 per year, which was deposited into an IRA. And effective in 2007, Daniel began paying Janalee a "wage" for her services, in an amount equal to the disability benefit he received from the United States Department of Veterans Affairs (VA) — $2,850 per month. Janalee paid taxes on the wages she received from Daniel and she was classified for tax purposes as a "household employee," in part so she would qualify for disability if she became disabled while taking care of Daniel. In 2009, Janalee also became a joint owner of Daniel's bank account. This allowed her to take care of all banking matters, and she understood that all the funds in the account would pass to her upon Daniel's death.
Beginning in 2009, the VA began providing professional caregivers for Daniel for 20 hours per week. Janalee also testified she did not believe her father required a full-time caretaker at any time before he was admitted to the hospital in July of 2012.
In December 2009, Daniel executed a form entitled "Amendment to Living Trust" (the first trust amendment). The form was filled out in Janalee's handwriting, and reflected Daniel was adding language to the Trust to redesignate the successor trustee as: "(1) Janalee T. Antos (2) Joseph Daniel Antos." The document also reflected the following added provision: "General Durable Power of Attorney: Attorney in fact Janalee T. Antos Alternate Joseph D. Antos." The document also reflected Daniel was amending the Trust to delete the following: "Assignment: Asses[s]or's parcel number 128-472-24, 2116 W. Pacific Ave . . . ."
On the same day the first trust amendment to Trust was signed, Daniel, acting in his capacity as trustee of the Trust, executed a grant deed to the family home to himself and Janalee, as joint tenants. The deed was recorded in January 2010. In June 2011, Janalee signed a grant deed transferring her ownership share of the family home back to Daniel, and Daniel transferred the property back into the Trust.
In 2012, Janalee purchased the house next door to the family home (the 2120 house.) She stated the down payment on the 2120 house was made with "my funds and with a gift letter from my father, also."
In July 2012, Daniel signed the second trust amendment — the document at issue in this appeal. The amendment was again prepared using a form document, with the relevant provisions handwritten onto the form by Janalee. It states, "The following is added to the Declaration of Trust: "If the original Trustee of this Trust becomes incapacitated the acting Successor Trustee shall have the authority to amend this Trust. I leave 2116 W. Pacific Ave . . . to Janalee Teresa Antos, or if Janalee Teresa Antos does not survive me Joseph Daniel Antos. I leave my AXA Equitable Life Insurance Company Account . . . To Joseph Daniel Antos, or if he does not survive me to his children equally. If they are minors, Christine Antos is appointed property guardian."
On the day Daniel signed the second trust amendment, he was bedridden, frail and weak. Janalee hired a notary, with whom she was acquainted, to come to the house and notarize Daniel's signature at his bedside. Although Janalee testified that Daniel and the notary had engaged in a conversation in Czech (Daniel's native language) during the time the notary was with him, the notary contradicted that claim in her own testimony. The notary described Daniel as entirely nonverbal during their brief meeting, and explained she did not speak Czech.
The notary testified she did ask Daniel some questions to ascertain "if he knew what he was doing," and he nodded his head. She also asked him, in connection with his signing what she described as a power of attorney form, "if he understood that [he] was giving power of attorney to [Janalee]," and he said yes. She also asked him "if he was doing it willingly," to which he again nodded his head, and then asked if anybody was forcing him. He shook his head. The notary testified she had no doubt Daniel understood what he was doing, and that he was doing it willingly. However, she acknowledged she did not ask Daniel any questions about his understanding of the trust amendment, or its specific content, and confirmed it was not her responsibility as a notary to go over the content of a document with the person whose signature on it she was notarizing.
The next day, which was Daniel's 94th birthday, Janalee summoned an ambulance to take him to the hospital. He was admitted, and according to the intake report, his "chief complaint" was an "altered level of consciousness." The hospital admission document reflects Janalee reported that Daniel had been "a little bit confused yesterday." The physician's consultation notes reflect he was told Daniel "became somewhat less alert and possibly confused the day before admission."
Daniel went from the hospital to a rehabilitation facility, where he remained until his death in December 2012. After Daniel died, in January or February of 2013, Joseph came to the family home to get the binder he knew held Daniel's trust documents. At that time, Joseph still believed he was the successor trustee, as originally designated. Neither the first nor the second amendments were included in the binder.
It was not until March 2013, approximately one month later, that Janalee showed Joseph the first trust amendment. He reacted angrily, and she told him that if he said anything more, she would "take everything."
When Joseph thereafter checked on the status of the AXA insurance policy account, he discovered Janalee had already withdrawn half of the funds from the account in February. He was told by a representative of the insurance company that there was nothing they could do about it because their records reflected Janalee was an equal beneficiary of the account following Daniel's death. Joseph also learned that Janalee, acting in the capacity of successor trustee of the Trust, had already deeded the family home to herself, also in February. It was after those discoveries that Joseph filed his original petition in the probate court, seeking to revoke the first trust amendment, to have Janalee removed as trustee, and to invalidate the deed that purportedly transferred ownership of the family home to her.
However, it was not until a mandatory settlement conference in this case that Janalee first produced a copy of the second trust amendment. Following that revelation, Joseph was granted permission to file an amended petition, seeking an adjudication of the propriety of the second trust amendment and stating causes of action for breach of fiduciary duty and conversion, and seeking imposition of a constructive trust.
In her trial brief, Janalee acknowledged that (1) Daniel had paid her $32,000 per year, beginning in 2007, "in exchange for her care giving," and (2) Daniel's social security checks had also been automatically deposited into the bank account they jointly owned.
Janalee also asserted in her trial brief that Daniel had been of sound mind when he executed the second trust amendment, and that his execution of that amendment had reflected his longstanding wish to give her the family home as a reward her for her many years of caregiving. She also claimed that notwithstanding the provision in the second trust amendment stating the AXA insurance account was to go entirely to Joseph, she was not obligated to return "her half withdrawn in February 2013. Instead, she asserted that because the AXA account had been maintained in Daniel's name, and never transferred into the trust, the amendment was not effective to dispose of it.
Following a trial at which several witnesses testified, including both Janalee and Joseph, the trial court issued its statement of intended decision. The court concluded the second trust amendment was the product of undue influence. The court explained that all three factors necessary to create a presumption of undue influence were present in connection with the second trust amendment: (1) a confidential relationship existed between Daniel and Janalee; (2) Janalee drafted the challenged instrument; and (3) the provisions of the instrument gave her an undue benefit. Moreover, the court concluded Janalee had failed to rebut that presumption, noting her testimony about the circumstances surrounding Daniel's execution of the second trust amendment was not credible in several respects and that her conduct suggested she had been aware of her father's declining condition and felt some "urgency to secure ownership of the [family home] which she felt she deserved."
The court also noted that Janalee's "intent in procuring the second Amendment is also shown by her insertion of a term that in the event of incapacity, the acting successor trustee would have authority to amend the trust (rather than the trust becoming irrevocable.)" The court made additional findings on issues specified by the parties, including that "Daniel did not have testamentary mental capacity to execute the Second Amendment." The court also found that Janalee breached her fiduciary duties to Joseph, while concluding "there is not sufficient evidence that her actions were malicious nor does the Court find[] Joseph has suffered specific damages other tha[n] as to the AXA annuity and attorney fees and costs once the [family home] is transferred to the Trust." The court also characterized Janalee's failure to produce the second trust amendment before the mandatory settlement conference as "deception," but concluded that "under all the circumstances based on the evidence presented the Court does not find this supports an award of punitive damages."
The court then ordered that (1) Janalee be removed as successor trustee of the Trust, and Joseph appointed as the sole successor trustee, (2) the family home be transferred to Joseph, as the new successor trustee, and (3) Joseph be awarded his attorney fees and costs pursuant to Probate Code section 859.
The court also ordered that its statement of intended decision would be its statement of decision unless any party specified additional controverted issues or made proposals not covered in the intended decision within 10 days. Neither party claims to have done so.
DISCUSSION
1. Presumption of Undue Influence
Janalee first argues the judgment must be reversed because the trial court erroneously applied a presumption that she procured the second trust amendment through undue influence. She acknowledges that section 21380 establishes a presumption of undue influence in connection with certain donative transfers, including those in which the instrument is drafted by the recipient of the transfer, and those in which the recipient is a fiduciary, care custodian or cohabitant of the transferor. (§ 21380, subd. (a)(1)-(4).) However, she then points out that as stated in Probate Code section 21382, subdivision (a), the presumption does not apply to a "donative transfer to a person who is related by blood or affinity, within the fourth degree, to the transferor . . . ." Thus, as Daniel's daughter, Janalee would not be subject to that undue influence presumption in connection with the second trust amendment.
Janalee's analysis of section 21380 is correct, as far as it goes. Unfortunately for her, it does not go very far. Because as Joseph points out in his respondent's brief, the undue influence presumption set forth in section 21380 is not the one the trial court relied upon in this case. Instead, the court relied upon the common law presumption of undue influence applicable to testamentary instruments, which exists independently of the statutory presumption.
The common law rule is that "'a presumption of undue influence, shifting the burden of proof, arises upon the challenger's showing that (1) the person alleged to have exerted undue influence had a confidential relationship with the testator; (2) the person actively participated in procuring the instrument's preparation or execution; and (3) the person would benefit unduly by the testamentary instrument.'" (Bernard v. Foley (2006) 39 Cal.4th 794, 800.) As the trial court's statement of decision makes clear, it is this three-factor test that it relied upon in determining Janalee had presumptively exercised undue influence over Daniel in procuring the second trust amendment.
While there is some overlap between section 21380 and the common law presumption applicable to testamentary instruments, the two presumptions operate somewhat differently. Section 21380 looks only at (1) the circumstances under which the donative instrument was created — i.e., whether the recipient drafted the instrument, and (2) the relationship between the donor and the recipient — i.e., whether the recipient is a fiduciary or care custodian of the donor. If those conditions are met, the presumption will apply without regard to whether other factors suggest that a gift is reasonable or justified in light of the parties' relationship. In other words, the statutory test ignores the "undue benefit" factor of the common law test.
"Section 21380 prohibits donative transfers to broad categories of persons who, because of their relationship with the settlor/trustor, might exercise undue influence. Undue influence is presumed where the donative transfer is in favor of the person who drafted the instrument or where the person who transcribed it or caused it to be transcribed had a fiduciary relationship with the settlor/trustor." (Butler v. LeBouef (2016) 248 Cal.App.4th 198, 208.)
While the common law presumption is always subject to rebuttal, the section 21380 presumption is conclusive in cases "[w]here the donative transfer is to the person who drafted the donative instrument." (Butler v. LeBouef, supra, 248 Cal.App.4th at p. 208.) Thus, the statutory presumption may operate quite harshly, absolutely precluding a gift to a worthy recipient who was acting in good faith when he or she wrote out the terms of an instrument exactly as requested by the donor, who then signed it. Indeed, if section 21380 were applicable to this case, it would have precluded Janalee from enforcing the second trust amendment — which she admits she drafted — without even giving her an opportunity to explain her side of things.
However, as we have already acknowledged, that rigid statutory presumption does not apply to family members, nor does it apply to cohabitants of the donor. (Prob. Code, § 21382.) Instead, it is primarily intended to apply to those whose professions may give them heightened access to persons who are especially susceptible to undue influence. (See Rice v. Clark (2002) 28 Cal.4th 89, 97 [explaining that former Probate Code section 21350, the predecessor to section 21380, was enacted "in response to reports that an Orange County attorney who represented a large number of Leisure World residents had drafted numerous wills and trusts under which he was a major or exclusive beneficiary, and had abused his position as trustee or conservator in many cases to benefit himself or his law partners"].)
"In 2010, Probate Code former section 21350 et seq. was repealed, effective January 1, 2014. (Prob. Code, former § 21355, subd. (b); Stats. 2010, ch. 620, § 6.) At the same time, Probate Code section 21380 et seq. was enacted, effective January 1, 2011. (Stats. 2010, ch. 620, § 7.)" (Jenkins v Teegarden (2014) 230 Cal.App.4th 1128, 1136.) In doing so, the Legislature "reenact[ed] Probate Code section 21350 et seq. as Probate Code section 21380 et seq." (Id. at p. 1138.)
But when the Legislature enacted that more rigid undue influence presumption applicable to nonfamily members, it did not dispense with the common law presumption that already existed — and which did apply to family members. Instead, the Legislature intended that the common law test for undue influence would remain in effect. (See Bernard v. Foley (2006) 39 Cal.4th 794, 800 ["this statutory scheme supplements the common law doctrine"].) Probate Code section 21392, subdivision (b), which was enacted along with section 21380 in part 3.7 of the Probate Code, states that intention explicitly: "It is the intent of the Legislature that this part supplement the common law on undue influence, without superseding or interfering in the operation of that law. Nothing in this part precludes an action to contest a donative transfer under the common law or under any other applicable law. This subdivision is declarative of existing law." (Italics added.)
Consequently, because the common law test for undue influence remains in effect and was not superseded by section 21380, the trial court did not err when it relied on that common law test to establish a presumption that Janalee had procured the second trust amendment through undue influence. 2. Substantial Evidence Supports the Finding of Undue Benefit
Janalee next contends the judgment must be reversed because even assuming the common law undue influence test were applicable, the trial court nonetheless erred in applying it because there was no substantial evidence to support a finding she benefitted unduly from the second trust amendment. We reject her contention.
In reviewing a challenge to the sufficiency of the evidence, "[w]e presume the evidence supports every finding of fact unless appellant demonstrates otherwise, and we must draw all reasonable inferences from the record to support the judgment." (El Escorial Owners' Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1357.) Thus, "we are bound by the familiar principle that 'the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,' to support the findings below." (Oregel v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094, 1100.)
Janalee's primary assertion is that the benefits she received under the second trust amendment — full ownership of the family home, plus the right to amend the other provisions of the Trust if Daniel became incapacitated — must be viewed as compensation for the many years she had devoted to Daniel's caregiving, and thus could not be deemed "'unwarranted, excessive, inappropriate, unjustified or improper.'"
Janalee relies primarily on In re Estate of Shay (1925) 196 Cal. 355 (Shay), a case in which the decedent, a father of six, had devised his home solely to his daughter, Margaret, who had resided there with him and been his caregiver. Janalee points out that in Shay, "[o]ur Supreme court reversed the jury's finding the will had been procured in undue influence," and highlights the court's statement that "the fact that [Margaret] had lived with and constantly cared for the testator throughout the last years of his life would seem to afford a perfectly good reason for his preferment of her." (Id. at p. 363.) Relying on Shay, Janalee contends Daniel's decision to leave the family home to her "is not undue profit as a matter of law." (Italics added.)
However, what Janalee does not acknowledge is that the Shay court's musing on the reasonableness of a father's preferment of the daughter who had been his longtime caregiver came immediately after it conceded that the jury's finding of undue profit would not be questioned on appeal because there was evidence to support it. The court's full quote, in context, was "the facts of this case do not bring it within the purview of this [undue influence] rule. It may be conceded that Margaret and George sustained a confidential relationship toward the testator. It may be further conceded that Margaret unduly profited by the will, although the fact that she had lived with and constantly cared for the testator throughout the last years of his life would seem to afford a perfectly good reason for his preferment of her. But there is no evidence that [Margaret] was active in procuring the execution of the will, or that she participated therein to any extent." (Shay, supra, 196 Cal. at pp. 363-364, italics added.)
Thus, the Shay court's rejection of undue influence as a basis for invalidating the decedent's gift to Margaret was not based on any determination that her years of caregiving required the trier of fact to conclude she was due a greater share of her father's estate than were her siblings — whatever the court's own views on the reasonableness of such a gift might have been. Instead, the court's rejection was based on a determination there was no evidence Margaret had participated in procuring the will that bequeathed her the greater share. Consequently, Shay offers no support for Janalee's suggestion that her own years of caring for Daniel somehow required the trial court here to find in her favor on the issue of undue benefit.
Further, none of the other cases Janalee cites reflect an appellate court's reversal of a factual finding on the issue of undue benefit. (Estate of Sarabia (1990) 221 Cal.App.3d 599 [affirming judgment]; Estate of Fritschi (1963) 60 Cal.2d 367, 374 [reversing for lack of evidence the beneficiary participated in procuring the "unnatural" will]; In re Estate of Morey (1905) 147 Cal. 495 [affirming judgment]; In re Estate of Carriger (1894) 104 Cal. 81 [affirming order granting new trial of will contest]; Estate of Ventura (1963) 217 Cal.App.2d 50 [affirming judgment]; Estate of Trefren (1948) 86 Cal.App.2d 139 [affirming judgment]; Estate of Baker (1982) 131 Cal.App.3d 471 [affirming judgment]; In re Estate of Lances (1932) 216 Cal. 397 [reversing a directed verdict and remanding for trial]; Estate of Auen (1994) 30 Cal.App.4th 300 [affirming judgment]; Estate of Gelonese (1974) 36 Cal.App.3d 854 [affirming judgment].) That is not surprising because, as explained in Estate of Sarabia, supra, 221 Cal.App.3d at page 607, the analysis of what constitutes an "undue" benefit is intensely factual and subjective: "To determine if the beneficiary's profit is 'undue' the trier must necessarily decide what profit would be 'due.' These determinations cannot be made in an evidentiary vacuum. The trier of fact derives from the evidence introduced an appreciation of the respective relative standings of the beneficiary and the contestant to the decedent in order that the trier of fact can determine which party would be the more obvious object of the decedent's testamentary disposition. [Citation.] That evidence may include dispositional provisions in previous wills executed by the decedent [citation], or past expressions of the decedent's testamentary intentions. [Citation.] It may also encompass a showing of the extent to which the proponent would benefit in the absence of the challenged will."
In this case, Janalee and Joseph were both Daniel's children, and thus both were presumptively "due" the same inheritance. Further, Daniel's Trust had initially treated them equally. It was not until the second trust amendment, executed two decades after the Trust was created, and shortly before Daniel died, that Janalee was given full ownership of the family home, worth $400,000. Thus, the circumstances suggest the second trust amendment conferred an undue benefit on Janalee.
However, Janalee claimed that Daniel's additional gift of the family home to her was not undue because she was the child who had devoted years of her life residing with and providing care to Daniel, while Joseph had been free to live his life independently and raise a family. But the trial court was not obligated to accept Janalee's assertion that her services as Daniel's caregiver would justify her receipt of a significantly larger inheritance than Joseph did. To the contrary, the evidence was more than sufficient to support the inference that Janalee actually benefitted from her living arrangement with Daniel, and that she had been fairly compensated, during Daniel's lifetime, for her services as a caregiver.
The evidence demonstrated Janalee never held a full-time job after she moved back in with Daniel. And while she characterized her lack of a career as part of the sacrifice she made to care for Daniel, Joseph saw it differently. His contention was that Janalee chose to move in with Daniel because she was no longer able to support herself, and living with Daniel freed her from that obligation. The undisputed fact that Daniel remained able to drive and manage other things independently for years after Janalee moved back in with him tends to support Joseph's view that the living arrangement had redounded to her benefit as much as Daniel's, while undermining Janalee's contention that caring for Daniel had always been her "full time job."
What is undisputed is that Daniel always provided Janalee with rent-free accommodations, food, and other essentials. And as time passed, he began giving her financial compensation as well, first in the form of an IRA and later by paying her actual wages. Daniel also made Janalee the joint owner of his bank account, into which were deposited not only her wages, but also his Social Security checks. He even helped her to purchase the house next door to the family residence. Taken together, this evidence suggests that as Daniel became increasingly dependent upon Janalee for assistance, he gave her increasing compensation in exchange for that assistance. Based on that evidence, we infer the trial court concluded that Janalee's services as Daniel's caregiver were compensated during his lifetime, and thus would not justify her receipt of a significantly greater inheritance than Joseph did.
And when we eliminate Janalee's caregiving from the equation, her challenge to the trial court's finding of undue benefit collapses. She is otherwise similarly situated to Joseph — they had the same familial relationship with Daniel, and the original provisions of the Trust specified that all property would be divided equally between them after he died. The second trust amendment, which purported to exempt the family home from equal division and give it to Janalee alone, reflected a significant departure from Daniel's longstanding plan, and would have resulted in her inheriting $400,000 more than Joseph. It is difficult to imagine a clearer example of an instrument which confers an undue benefit.
The other provision of the second trust amendment, which specified Joseph would be entitled to the entire AXA insurance account (valued at $65,000), rather than merely half, did not change the equation. As Janalee figured out, that AXA account was never added to the Trust, and instead remained subject to a separate beneficiary designation which entitled her to half. Consequently, Janalee was able to withdraw half of the insurance fund — and did so — without regard to what the second trust amendment provided. --------
Finally, we reject Janalee's suggestion that the second trust amendment should be upheld because the value of the family home, when viewed in the context of Daniel's assets as a whole (which included an $800,000 investment account), was not particularly significant. Specifically, Janalee claims that because her receipt of the family home merely "resulted in her devise being slightly larger in monetary value than [Joseph's]" (italics added), it could not constitute an "undue profit." While there is authority for the proposition that a gift might be too small to qualify as an undue benefit, that authority has no application to this case. For example, in Shay, supra, 196 Cal. at page 364, the Supreme Court rejected the contention that the decedent's gift to Margaret's brother, George, was an undue benefit because "[t]he amount which he will receive . . . is substantially the same as he would have received under the will executed in 1914, [and only] slightly greater than he would have received had the testator died intestate." (Italics added.) And that de minimus rule is also consistent with the statutory undue influence law, which exempts "donative transfer[s] of property valued at five thousand dollars ($5,000) or less, if the total value of the transferor's estate equals or exceeds" $150,000. (Prob. Code, § 21382, subd. (e) [incorporating amount from Prob. Code, § 13100].) Thus, under that statutory rule, no gift which exceeds $5,000 — no matter how large the decedent's estate — would be exempt from a claim of undue influence.
Needless to say, there is no possible way to construe Janalee's receipt of the family home as falling within either of those parameters. We are aware of no cases which would support the notion that a net $400,000 benefit conferred on one of the decedent's children, while giving little or nothing to the other[s], might be too small to qualify as an undue benefit for purposes of the common law undue influence test. This case will not be the first to do so. 4. Attorney Fees
Finally, Janalee challenges the award of attorney fees made to Joseph, pursuant to Probate Code section 859. That statute authorizes the court to award fees in cases where it finds "that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a conservatee, a minor, an elder, a dependent adult, a trust, or the estate of a decedent, or has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder or dependent adult financial abuse." (Ibid.)
Janalee argues the fee award must be reversed because (1) the court failed to make any finding that she acted in bad faith, and (2) there was no substantial evidence to support such a finding. Her first argument fails because we are obligated to infer the trial court made all necessary findings in support of its judgment. (In re Marriage of Arceneaux (1990) 51 Cal.3d. 1130, 1133.)
"The doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment. [Citation.] The doctrine is a natural and logical corollary to three fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error." (Fladeboe v. American Isuzu Motors, Inc. (2007) 150 Cal.App.4th 42, 58.) In order to avoid the doctrine of implied findings, "[t]he appellant must secure a statement of decision under Code of Civil Procedure section 632 and, pursuant to Code of Civil Procedure section 634, bring any ambiguities and omissions in the statement of decision to the trial court's attention." (Ibid.) And, "if a party fails to bring omissions or ambiguities in the statement of decision's factual findings to the trial court's attention, then 'that party waives the right to claim on appeal that the statement was deficient in these regards,' and the appellate court will infer the trial court made implied factual findings to support the judgment." (Id. at p. 59.)
In this case, the trial court did issue a statement of decision, and Janalee does not contend she brought to the trial court's attention that its statement was deficient for failing to make a finding of bad faith in connection with the attorney fee award. Consequently, we must infer the court made that finding.
We also conclude there was sufficient evidence to support the implied finding that Janalee acted in bad faith when she obtained Daniel's signature on the second trust amendment that purportedly gave her sole ownership of the family home. As Joseph points out, the court specifically concluded that (1) Janalee's sworn testimony about the circumstances surrounding Daniel's execution of the second trust amendment was not credible, and (2) she was guilty of "deception" in connection with that amendment because she failed even to reveal its existence to Joseph until the mandatory settlement conference. And while Janalee correctly points out that neither of those determinations qualifies as a direct finding she was acting in bad faith at the time she procured the amendment, she fails to recognize that they do qualify as circumstantial evidence which supports that finding.
"An inquiry into a party's state of mind and motives is a subjective one that poses a question of fact." (Smith v. Selma Community Hospital (2010) 188 Cal.App.4th 1, 36.) "A subjective state of mind will rarely be susceptible of direct proof; usually the trial court will be required to infer it from circumstantial evidence." (Knight v. City of Capitola (1992) 4 Cal.App.4th 918, 932, disapproved on another point in Reid v. Google (2010) 50 Cal.4th 512, 532, fn. 7.) And among the circumstantial evidence that may be considered is the party's actions both before and after the period in question. (See Smith, at pp. 36-37 [finding that a party's conduct both before and after litigation was relevant to the determination of whether the litigation itself was conducted in bad faith].)
In this case, Janalee's misconduct in the wake of obtaining Daniel's signature on the second trust amendment suggests she was experiencing what is known in the criminal law as "consciousness of guilt" about the circumstances under which that was done. (See People v. Jackson (1996) 13 Cal.4th 1164, 1224 [explaining criminal juries may be instructed "that certain types of deceptive or evasive behavior on a defendant's part could indicate consciousness of guilt"].) Her hesitation in even producing the second trust amendment, and her subsequent effort to embellish the evidence surrounding its creation, both suggest Janalee understood the second trust amendment would not withstand fair scrutiny. That evidence was sufficient to support the conclusion she procured it in bad faith.
The trial court's other findings support the determination of bad faith as well. The court specifically noted that Janalee herself was aware of Daniel's "probable lack of mental clarity" at the time he executed the second trust amendment, pointing out she had "corroborated" it the next day when she had Daniel admitted to the hospital and disclosed he had been unusually "confused" the previous day. Even in the absence of other evidence, the fact that Janalee arranged to have Daniel execute the second trust amendment on a day when she believed his mental state was sufficiently "confused" that she remarked upon it when describing his condition to hospital employees the following day, suggests she was not acting in good faith.
Finally, Janalee contends that the court's finding that her conduct was not "malicious" precludes a finding that she acted in bad faith. Not so. As several courts have pointed out, the concept of bad faith encompasses a broad swath of motivations for deceptive or improper behavior, including not only the sinister, but also the merely self-interested: "As noted in Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 100 [citation], '"'[b]ad faith,' is defined as '[t]he opposite of "good faith," generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake . . . , but by some interested or sinister motive[,] . . . not simply bad judgment or negligence. . . .'"'" (People v. Superior Court (Sokolich) (2016) 248 Cal.App.4th 434, 447.)
In this case, the trial court reasoned that Janalee's misconduct was prompted by her "urgency to secure ownership" of the home "she felt she deserved," rather than any actual malice. That assessment — that Janalee acted out of a sense that she "deserved" the family home, rather than any malice toward Daniel or Joseph — in no way precludes a finding she was acting in bad faith by obtaining Daniel's signature on the second trust amendment at a time she knew he was mentally confused, and thereafter making no mention of the document's existence until several months after he had died.
We consequently find no error in the court's attorney fee's ruling.
DISPOSITION
The judgment is affirmed. Joseph shall recover his costs on appeal.
IKOLA, J. WE CONCUR: BEDSWORTH, ACTING P. J. FYBEL, J.