Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Tuolumne County. Eleanor Provost, Judge, Super. Ct. No. PR9824
Carolyn Sue Mosley, in pro. per, for Defendant and Appellant.
Law Office of Rick J. Fenelli, Rick J. Fenelli, Amy Ciftcikara, Oz C. Ciftcikara and Katie Allyson Fenelli for Plaintiff and Respondent.
OPINION
HARRIS, J.
PRELUDE
Appellant, Carolyn Sue Mosley (Sue) one of three siblings, is and has been for approximately six years, the successor trustee of their parents family trust and their surviving mother’s attorney-in-fact pursuant to durable powers of attorney for health care and for management of property and personal affairs. The crux of this case is twofold, the proper valuation of the residence property and what, if any, trustee fees and/or other compensation and reimbursement Sue is entitled to for services rendered. Following their mother’s death, Sue distributed the remaining assets of the trust in one-third shares to herself and her two siblings as beneficiaries. In determining the distributable shares Sue first paid to herself the sum of $60,000 (after applied credits $40,000) as and for compensation for her various services over her term as trustee. She further self-valued the residential real property which she distributed to herself as part of her share. Subsequently, Sue’s sister, Linda, filed a petition pertaining to the propriety of obtaining a certified appraisal of the home, the propriety of Sue’s allocation to herself of $60,000 as compensation, and requesting an order for an accounting. Their brother Gerald was and is not a party to the proceeding. Following multiple pleadings and a hearing the trial court raised the allocation value of the residence consistent with the obtained appraisal and determined Sue was not entitled to her self-determined or any other compensation. Judgment was entered in favor of Linda for $78,860, interest, $14,000 in attorney fees and costs. Sue appeals. We will reverse in part and remand to the trial court for further specified proceedings.
STATEMENT OF THE CASE
On November 2, 1998, respondent Linda Herrick (Linda) and her brother, Gerald Herrick (Gerald), filed a petition in Tuolumne County Superior Court for appointment of a probate conservator for the person and estate of their mother, Anita Herrick (Anita). (Prob. Code, §§ 1820, 1821.)
All further statutory references are to the Probate Code unless otherwise indicated.
On November 23, 1998, Linda and Gerald’s sister, appellant Sue, filed written objections to the petition for conservatorship along with supporting points and authorities (§ 1829). Sue noted that a conservatorship was unnecessary because Anita had previously signed durable powers of attorney naming Sue her attorney-in-fact for health care and management of property and personal affairs. Sue further noted she was sole trustee of the Herrick Family Trust which, with minor exceptions, contained all of Anita’s assets.
On May 7, 1999, Sue filed a motion for summary judgment (Code Civ. Proc., § 437c).
On June 29, 1999, the court filed stipulated orders finding no conservatorship as of that date and vacating the hearing on the motion for summary judgment. The court set the matter for a review hearing on December 3, 1999 and specified the visitation rights of Linda and Gerald with respect to their mother.
On October 4, 2000, the court set a further review hearing for October 19, 2001.
On November 8, 2004, the court dismissed the conservatorship case with prejudice because Anita, the prospective conservatee, was deceased.
On June 17, 2005, Linda filed a verified petition for instructions regarding the propriety of obtaining a certified appraisal for Anita’s home on Arbona Circle in Sonora, and Sue’s allocation of $60,000 as compensation for past work and services she allegedly performed on behalf of Anita. Linda also sought an order compelling Sue to provide a trust accounting and an award of costs.
On September 12, 2005, the court filed a minute order setting a deadline for the filing of an accounting and real property appraisal and directing the real property remain unencumbered until resolution of the petition.
On September 27, 2005, the court filed a formal order directing (a) Sue to provide a statutory accounting of the $60,000 paid to her for services allegedly rendered during Anita’s lifetime, and (b) Linda to arrange and pay for a date-of-death appraisal of Anita’s former home on Arbona Circle in Sonora.
On November 21, 2005, Sue filed a memorandum of points and authorities regarding the accounting.
On November 23, 2005, Linda filed a first verified supplement to her petition for instructions and several supporting declarations.
On December 2 and 8, 2005, respectively, Sue filed supplemental and second supplemental memoranda of points and authorities regarding the accounting.
On December 29, 2005, the court filed a tentative decision finding (a) the true value of the Arbona Circle property to be $240,000 rather than Sue’s value of $182,000; (b) Sue breached her fiduciary duty as trustee by allocating $60,000 in compensation for services she rendered to Anita during the latter’s lifetime; and (c) a lien for the amount of $60,000 plus 10 percent interest and for $58,000 (the difference between $240,000 and $182,000) be imposed on the Arbona Circle property.
On January 9, 2006, Sue filed a written objection and supporting documents to the tentative decision. On January 10, 2006, Sue filed an amended written objection and supporting documents to the tentative decision.
On January 17, 2006, the court filed a statement of decision and judgment finding (a) the true value of the Arbona Circle house to be $240,000, as opposed to Sue’s value of $182,000, and (b) Sue breached her fiduciary duty by posthumously claiming allocated compensation for services rendered during her mother’s lifetime. The court awarded Linda the sum of $78,860 plus interest at 10 percent per annum, plus $14,000 in attorney fees, and costs. The court also placed on a lien on the Arbona Circle home for the judgment amount of $78,860 (based on two-third’s of the amounts involved) plus interest, attorney fees, and costs.
Because Sue was one of three trust beneficiaries, the court computed the award based on “2/3 of $60,000 plus 10% interest and 2/3 of the difference between Carolyn Sue Mosley’s value of the house at ... Arbona Circle and that of the appraiser, $38,860 (2/3 of $58,000) ....”
The statement of decision contains a discrepancy as to interest. In the section of the statement of decision relating to the $60,000, the court indicates that Sue “will only be required to reimburse the trust for 2/3 of the $60,000 or $40,000 plus interest on $40,000 at the rate of 10% from the date of distribution, October 11, 2004.” The concluding paragraph states: “Judgment for the Petitioner in the amount of $78,860 plus interest at 10% on $38,860. Plus attorney fees of $14,000 plus and costs.” From this phrasing, we cannot determine whether the $40,000 is to bear interest or the $38,860 is to bear interest. On remand the superior court can resolve this discrepancy.
On March 7, 2006, the clerk of court issued an abstract of judgment in the amount of $96,746 in favor of Linda.
On March 17, 2006, Sue filed a timely notice of appeal.
In California there is no right of appeal from probate orders except those specified in the Probate Code. (Varney v. Superior Court (1992) 10 Cal.App.4th 1092, 1098; Estate of Weber (1991) 229 Cal.App.3d 22, 24 [construing predecessor statutes]; see Cal. Law Revision Com. com., 52 West’s Ann. Prob. Code (2002 ed.) foll. § 1000, p. 459.) An appeal may be taken from an order made appealable by the provisions of the Probate Code. (Code Civ. Proc., § 904.1, subd. (a)(10)). With respect to a trust, the grant or denial of any final order under section 17200 is appealable. (§ 1304.) Under section 17200, a trustee or beneficiary of a trust may petition the court concerning the internal affairs of the trust. (§ 17200, subd. (a).) Proceedings concerning internal affairs of a trust include, as here, proceedings for instructing the trustee. (§ 17200, subd. (b)(6).) The judgment of January 17, 2006, instructing the trustee is an appealable order.
On October 18, 2006, this court granted Linda’s September 28, 2006, motion to augment the record on appeal to include the June 17, 2005, notice of petition for instructions and the July 18, 2005, notice of case number assignment.
On November 9, 2006, Sue filed a request for judicial notice of pages 1 through 200 of the clerk’s transcript in the instant appeal, noting those pages were previously filed in Anita’s conservatorship case (Super. Ct. Tuolumne County, 1998, PR 8413). Sue also requested this court take judicial notice of her November 7, 2006, declaration and attached October 29, 2006, correspondence with Linda’s counsel regarding stipulations to extension of time.
On November 13, 2006, Linda filed written opposition to the motion for judicial notice, asserting the documents to be noticed were not before the trial court.
On November 15, 2006, this court deferred ruling on Sue’s request pending consideration of the appeal on its merits.
Judicial notice may not be taken of any matter unless authorized or required by law. (Evid. Code, § 450.) Judicial notice may be taken of the records of any court of this state. (Evid. Code, § 452, subd. (d)(1).) A reviewing court may take judicial notice of any matter specified in Evidence Code section 452. (Evid. Code, § 459, subd. (a).) In the instant case, the conservatorship pleadings were filed in the superior court under a separate docket number, related to the handling of the surviving trustor’s assets, and provide context for the instant appeal. This court should and does hereby grant the motion for judicial notice as to those documents.
On May 3, 2007, Sue filed a request for judicial notice of documents relating to the valuation of the Arbona Circle residence. These documents included a residential building record—fact sheet reflecting square footage for the home and a January 25, 2007, letter from Linda’s counsel agreeing to amend the abstract of judgment “so long as you agree to allow me to record it directly against the Arbona property.” As noted above, documents not before the trial court cannot be included as part of the record of appeal and must be disregarded as beyond the scope of appellate review. (Pulver v. Avco Financial Services (1986), supra, 182 Cal.App.3d at p. 632.) Sue’s May 3, 2007, request for judicial notice of the residential building record and January 25, 2007, letter of Linda’s counsel is denied.
STATEMENT OF FACTS
Sonora residents Willard and Anita Herrick had three children, son Gerald and daughters Sue and Linda (respondent). On June 19, 1990, Willard and Anita executed the Herrick Family Trust agreement (agreement). The inter vivos agreement was designed to benefit Willard and Anita during their joint lifetimes and during the lifetime of the survivor. Upon the passing of the surviving settlor, the remainder of the trust estate was to be distributed to the three children in equal shares. Under the agreement, Willard and Anita were the initial trustees of the trust. Article X of the agreement provided that upon the death or disability of a settlor, the other settlor would serve as sole trustee of the trust estate. Upon the death or disability of both settlors, the three children were designated as successor co-trustees.
Willard Herrick passed away on May 28, 1998, and Anita became the sole trustee. On June 18, 1998, Anita amended Article X of the agreement to state in relevant part: “Upon the death or disability of both settlors, Carolyn Sue Mosley or her survivors shall serve as successor trustee of the trust estate.” On July 16, 1998, Anita resigned as trustee of the Herrick Family Trust, confirmed Sue’s status as successor sole trustee, and Sue signed a written consent to act as trustee that same date. On that same date, Anita signed durable powers of attorney for health care and for management of property and personal affairs. She named Sue as her attorney-in-fact under each document and Linda and Gerald as successor attorneys-in-fact.
On November 2, 1998, Linda and Gerald filed a petition in superior court for appointment of a probate conservator of Anita’s person and estate. They alleged Anita was suffering from Alzheimer’s disease, required around-the-clock care, and could no longer handle any financial matters. Sue filed written opposition to the petition, claiming a conservatorship was unnecessary. She noted the bulk of Anita’s assets were held in the trust, that she was trustee of the trust as well as Anita’s attorney-in-fact, and that Linda and Gerald lived out of the area and had only minimal contact with Anita in the preceding 15 years.
On December 1, 1998, the court and counsel reached a temporary agreement regarding personal and telephone visitation between Anita and Linda and Gerald. On May 7, 1999, Sue moved for summary judgment claiming that Linda and Gerald failed to consider the alternatives to conservatorship prior to filing their petition. On June 29, 1999, the superior court filed stipulated orders reflecting a partial settlement of the matter. The court declined to find a conservatorship, vacated the trial date for the hearing on petition, set the matter for a December 3, 1999, review hearing, and set forth the visitation rights between Anita and her children. Anita passed away on February 11, 2004, and Sue proposed the following distribution of trust assets by letter dated October 11, 2004:
“I have a sentimental attachment to the house here in Sonora which I built and maintained and want to keep it as part of my asset distribution. I know you were both fond of the Texaco stock, so I have allocated the distributions as follows:
“Gerald:
“1200shares of ChevronTexaco stock @ $87.57/share =
$105,084.00
“Cashfrom trust
$49,280.39
“Creditfrom Sue
$10,000.00
“Total
$164,364.39
“Linda:
“1200shares of ChevronTexaco stock @ $87.57/share =
$105,084.00
“Cashfrom trust
$49,280.39
“Creditfrom Sue
$10,000.00
“Total
$164,364.39
“Sue:
“27shares of ChevronTexaco stock @ $87.57/share =
$2,364.39
“1200sq. ft. House at 96 Arbona
$182,000.00
“Less$10,000 credit to Gerald and Linda each toequalize distribution
$-20,000.00
“Total
The actual distribution apparently took place prior to the transmittal of the letter as Sue conveyed the Arbona Circle home from the trust to herself via a grant deed dated October 7, 2004 and recorded in the Official Records of the County of Tuolumne on October 8, 2004 (Doc. No. 2004021983). Sue set forth the same distribution of trust assets in her memorandum of points and authorities regarding accounting filed November 21, 2005.
The court dismissed the conservatorship proceeding with prejudice on November 8, 2004.
On June 17, 2005, Linda filed a petition for instructions seeking (1) a determination of the propriety of obtaining a certified appraisal for Anita’s home at Arbona Circle in Sonora; (2) a determination of the propriety of Sue allocating for herself the sum of $60,000 as compensation for work allegedly performed for Anita during the latter’s lifetime; (3) an order compelling Sue to provide a complete statutory accounting; and (4) an award of costs. On September 12, 2005, the court conducted a contested hearing on the petition and, on September 27, 2005, filed a formal order on the petition. Among other things, the court ordered (a) Sue to provide a statutory accounting relative to the $60,000 in compensation; (b) Linda to arrange and pay for an appraisal of the Arbona Circle residence by a competent appraiser with a value as of February 11, 2004 (the date of Anita’s death); and (c) Sue not to transfer or encumber the Arbona Circle property until the court settled the entire matter.
On November 21, 2005, Sue filed a memorandum of points and authorities regarding the accounting. She filed supplemental memoranda of points and authorities on December 2 and 8, 2005. On December 29, 2005, the court filed a tentative decision holding (1) the true value of the Arbona Circle property was $240,000 as appraised by M. Douglas Peters, SRA, rather than Sue’s value of $182,000; (2) Sue breached her fiduciary duty by allocating $60,000 for herself and that she needed to reimburse the trust the sum of $60,000 plus interest at the rate of 10 percent from the date of distribution, October 11, 2004; (3) a lien should be placed on the Arbona Circle home “for the amount of $60,000 plus 10% interest and for the difference between Carolyn Sue Mosley’s value of the house ... and that of the appraiser, $58,000 ...”; and (4) that Sue pay Linda the costs of suit and attorney fees in the sum of $14,000 (§ 1002).
On January 9, 2006, Sue filed an objection to the tentative decision, claiming lack of notice of the September 12, 2005, hearing and the September 27, 2007, order and maintaining the tentative decision was incorrect as to fact and law. On January 10, 2006, Sue filed an amended objection to the tentative decision. On January 10 and 11, 2006, Sue filed several supplemental objections to the tentative decision.
On January 17, 2006, the court filed a statement of decision and judgment, providing in relevant part:
“1. THE PROPERTY VALUE OF 96 ARBONA CIRCLE
“When the trustee valued the property at 96 Arbona Circle, she did not have a standard appraisal done. She used a methodology to arrive at the value based on estimated square footage that turned out to be 9% smaller th[a]n the actual property. She then took an average price per square foot from 7 home sales in 2003 to arrive at a price per square foot. She valued the house by this method as of the date of Anita Herrick[’]s death (February, 2004) not as of the correct date of distribution (October, 2004).
“The Court finds this method of arriving at the value to be flawed. The trustee reduced the value by 9% by her error in square footage. She further reduced it by not accounting for the sharp increase in property values in California from 2003 to October 2004 and by using price per square foot without regard to lot size, condition, location and other factors that appraisers use.
“For those reasons the Court finds the true value of the property at 96 Arbona Circle to be $240,000 as appraised by Doug Peters rather than the trustee’s value of $182,000. The Court notes that the appraisal was based on a date of 2/11/04 rather than the preferred date of 10/11/04, but the Court cannot speculate as to what effect that 8 months difference would have made.
“Despite the considerable difference between the trustee’s value and the actual appraised value of the property, the Court does not find bad faith on the part of Carolyn Sue Mosley such that she should be required to pay interest on the difference. She is a realtor and should have known that her flawed methodology would result in a wrong value, but the Court does not find it has been proven by petitioner that on this issue she breached her fiduciary duties.
“2. THE $60,000 CREDITOR’S CLAIM
“The Court finds this issue to be an easy one. A Trustee cannot take some amount of money from a Trust and call it compensation for services rendered to the Trust. There is no basis in law to form a posthumous employment contract with the trustee. The Court finds that the trustee breached her fiduciary duty in this regard. As trustee points out in her objection to tentative decision, she is one of 3 beneficiaries of the trust. Therefore she will only be required to reimburse the trust for 2/3 of the $60,000 or $40,000 plus interest on $40,000 at the rate of 10% from the date of distribution, October 11, 2004.
“3. JUDICIAL LIEN
“The Court orders that a lien for the amount of 2/3 of $60,000 plus 10% interest and 2/3 of the difference between Carolyn Sue Mosley’s value of the house at 96 Arbona Circle and that of the appraiser, $38,860 (2/3 of $58,000), be placed on the Arbona Circle property.
“The Court further finds that the trustee must pay the Petitioner the costs of this suit and Petitioner’s attorney fees of $14,000 which will be added to the judicial lien on Arbona Circle. The Court orders its award of costs and attorney fees pursuant to Probate Code § 1002. The Petitioner was forced to file this petition because the trustee was non-responsive to her requests for information, made glib responses and failed to address the Petitioner[’]s substantive concerns. The Court further finds that she breached her fiduciary duty in keeping $60,000.
“Judgment for the Petitioner in the amount of $78,860 plus interest at 10% on $38,860. Plus attorney fees of $14,000 plus and costs.”
DISCUSSION
On appeal, appellant raises numerous issues. We address them seriatim.
I.
NOTICES OF HEARINGS
Sue contends she was not given notice of any hearing, citing in particular the original August 12, 2005, hearing date and the re-set September 12, 2005, hearing date.
Sue contends “[t]here is no proof of service in the record of notice to the trustee.” A judgment or order of the trial court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent. Under California law, it is the appellant’s affirmative duty to show error by an adequate record. A necessary corollary to this rule is that a record is inadequate, and appellant defaults, if the appellant predicates error only on the part of the record he or she provides the trial court but ignores or does not present to the appellate court portions of the proceedings which may provide grounds upon which the decision of the trial court could be affirmed. (Osgood v. Landon (2005) 127 Cal.App.4th 425, 435.)
A review of the superior court file and the augmented clerk’s transcript on appeal reveals that Linda served Sue with a notice of the August 12, 2005, hearing on petition for instructions via United States mail on June 14, 2005. The original notice was filed with the superior court on June 17, 2005. Linda also served Sue with a notice of case number assignment via United States mail on July 11, 2005, and that notice reflected the August 12, 2005, hearing date. The original notice of hearing with respect to the case number assignment was filed with the superior court on July 18, 2005. Linda properly points out that she, Sue, and counsel were not present at the August 12, 2005, hearing. Judge William G. Polley called the matter for hearing, noted that he had disqualified himself in the matter (Code Civ. Proc., § 170.1), and ordered the matter be set for hearing on a petition for instructions on September 12 before the Honorable Eleanor Provost, judge of the superior court. Linda concedes the trial court did not serve notice of the new hearing date on Sue. However, Sue had actual knowledge of the hearing and appeared in open court on September 12, 2005.
Generally speaking, compliance with the statutory procedures for service of process is essential to establish personal jurisdiction. Process is a writ or summons issued in the course of judicial proceedings. Unless otherwise provided by statute, notice of a claim against a defendant in a civil action is given by service of a summons on the person. Knowledge by a defendant of a plaintiff’s action does not satisfy the requirement of adequate service of a summons and complaint. Moreover, where there is a complete failure to comply with statutory service requirements, there can be no substantial compliance with those statutory or due process requirements. (Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1152-1153.)
In a proceeding concerning the internal affairs of a trust, the petitioner shall cause notice of hearing to be mailed to all trustees and beneficiaries at least 30 days before the time set for a hearing on the petition. (§ 17203, subd. (a)(1), (2).) If a hearing is continued or postponed, no further notice of the continued or postponed hearing is required unless ordered by the court. (§ 1205.) In the instant case, Judge Polley essentially continued the hearing on petition for instructions via minute order filed and dated August 12, 2005. Judge Polley did not require further notice of the new hearing date (September 12, 2005) and error did not occur in light of section 1205.
Sue further contends she never received notice of the August 12, 2005 and September 12, 2005 hearings. Effective service requires strict compliance with Code of Civil Procedure sections 1012, 1013, and 1013a. Service is complete at the time a document is deposited in the mail (Code Civ. Proc., § 1013a) and the sender does not have the burden of showing that notice was actually received by the addressee. (Sharp v. Union Pacific R.R. Co. (1992) 8 Cal.App.4th 357, 360.) The record shows Linda served Sue with a notice of the August 12, 2005, hearing by mail. The record does not reflect a notice of the September 12, 2005, hearing. Once again, however, the September 12 hearing was a continued or postponed proceeding and no further notice of the hearing was required unless ordered by the court. (§ 1205.) In any event, Sue had actual notice of the hearing and appeared in open court.
II.
DENIAL OF DUE PROCESS OF LAW
Sue contends she was not afforded due process of law under all of the circumstances of the instant case.
She specifically argues:
“The trustee had the right to be informed of the evidence presented against her in advance of the hearing and to be given a full hearing. The trustee was not given prior notice nor a copy of the petition and was not given a full and fair hearing .... In contrast, the petitioner was allowed to bring in an appraiser of her choice and her appraisal was considered the correct value. The trustee wasn’t even allowed to have an appraisal done.
“Service was not effected because the trustee did not receive a copy of the petition nor notice of the hearings. Still, the court denied the trustee’s requests for a continuance.
“The September 29, 2005 order did not comply with the notice requirements of [former] CRC 391(a)(b), wherein the trustee should have been afforded a copy of the proposed order within 5 days of hearing and afforded the opportunity to object to the order. The order was not mailed to the trustee until October 20, 2006.
“Also, the trustee did not receive petitioner’s November 23, 2005 filing or a copy of petitioner’s appraisal until just four hours before the hearing, so that the trustee had no opportunity to prepare for the second hearing. Again, the court denied the trustee’s request for a continuance.
“An Abstract of Judgment covering multiple properties owned by Appellant was signed and recorded without hearing on the matter. Service of this Abstract of Judgment was not received until July of 2006. Appellant was only aware of its recording when it was discovered while compiling her delegation of clerk’s transcript for this appeal.”
A. Notice of Hearing and Copy of Petition
Sue contends she did not receive a copy of the notice of the hearings (dates unspecified) and did not receive a copy of the petition. As noted in issue I above, Linda’s counsel did file and serve by mail notices of the petition for instructions and of the case number assignment with respect to that petition. The original notices were filed with the court on June 17, 2005 and July 18, 2005, respectively. Neither form of notice indicated that a copy of the petition was served with the notice. However, the face of each form of notice stated in relevant part: “2. You may refer to the filed documents for further particulars. (All of the case documents filed with the court are available for examination in the case file kept by the court clerk.)”
Section 17203, subdivision (a) requires a petitioner to cause “notice of hearing” to be mailed to all trustees and beneficiaries at least 30 days before the time set for the hearing on a petition concerning the internal affairs of a trust. Section 17203, subdivision (b) requires a petitioner to cause “notice of the hearing and a copy of the petition” be served on any person “other than a trustee or beneficiary, whose right, title, or interest would be affected by the petition .…” (Italics added.) Since Sue was a trustee, Linda fully complied with the requirements of section 17203, subdivision (a) by mailing a notice of hearing to Sue at least 30 days before the initial date and time set for the hearing on petition for instructions.
B. Request for Continuance
Sue contends the trial court improperly denied her requests for a continuance. In framing this contention, she asserts the requests are reflected at page 311 of the clerk’s transcript on appeal and in the totality of the reporter’s transcripts of hearings conducted in calendar year 2005. Page 311 of the clerk’s transcript does not reflect a request for a continuance. The reporter’s transcript of the October 4, 2000, hearing in the conservatorship proceeding did not reflect a request for a continuance. In the reporter’s transcript of the November 28, 2005, review hearing, Sue mentioned she had contacted Linda’s counsel and asked him to stipulate to a continuance in the preceding week. However, Sue never specifically asked the court for a continuance at the November 28, 2005, hearing.
Sue’s claim of error arising from the alleged denial of continuances is not supported by the record and must be rejected.
C. Transmittal of Proposed Order
Sue contends the September 27, 2005, order did not comply with the requirements of California Rules of Court, former rule 391 because (a) she did not receive a copy of the proposed order on instructions within five days of the hearing, and (b) she was not afforded the opportunity to object to the order.
Former rule 391 was redesignated rule 3.1312 effective January 1, 2007.
We initially note the order for petition for instructions was signed and filed by the court on September 27, 2005. We further note the proposed order and related notice of a November 28, 2005, hearing were served by mail on Sue. According to the proof of service, the documents were mailed on September 21, 2005. At the time the proposed order was prepared, California Rules of Court, former rule 391 stated in relevant part:
“(a) [Prevailing party to prepare] Unless the parties waive notice or the court orders otherwise, the party prevailing on any motion shall, within five days of the ruling, mail or deliver a proposed order to the other party for approval as conforming to the court’s order. Within five days after the mailing or delivery, the other party shall notify the prevailing party as to whether or not the proposed order is so approved. The opposing party shall state any reasons for disapproval. Failure to notify the prevailing party within the time required shall be deemed an approval. Code of Civil Procedure section 1013, relating to service of papers by mail, does not apply to this rule.”
In the instant case, the superior court made its initial ruling on the petition by minute order filed and dated September 12, 2005. Linda’s counsel served the proposed order by mail to Sue on September 21, 2005, slightly beyond the five days set forth in the rule of court. However, as Linda points out, in this case the court “ordered otherwise” by directing her to prepare the order. Even assuming the five-day requirement was applicable here, the failure to comply with a mandatory procedural rule does not render a ruling void. (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 772.) Moreover, the court must, in every stage of an action, disregard any error in the proceedings which, in the opinion of said court, does not affect the substantial rights of the parties. (Code Civ. Proc., § 475.) Sue fails to explain how a delay of several days beyond the five days specified in California Rules of Court, former rule 391 affected or abridged her substantial rights. Her claim must be rejected.
D. Transmittal of Linda’s November 23, 2005 Filing
Sue further contends she did not receive Linda’s November 23, 2005, filing or a copy of M. Douglas Peters’s appraisal of the Arbona Circle home “until just four hours before the [November 28, 2005] hearing, so that the trustee had no opportunity to prepare for the second hearing.” The November 23 filing consisted of Linda’s first verified supplement to notice of petition and petition for instructions as well as several companion documents. The superior court file reveals that these documents were served on Sue by mail on November 23, 2005. Although Sue contends she had no opportunity to prepare for the second, i.e., November 28, hearing, she did file a memorandum of points and authorities regarding the accounting on November 21, 2005.
As to service of the Douglas Peters’s appraisal of the Arbona Circle home, the following exchange occurred in open court at the November 28 hearing:
“THE COURT: Did you mail it [the appraisal] to her, or how did you get it to her?
“MR. CIFTCIKARA [Linda’s counsel]: Well, we mailed it to her and tried to personally serve her. I don’t know if you already have this. The process server filed this today. Apparently, the trustee has been trying to avoid service. We’ve got –
“MS. MOSELY: Your Honor, I told him last Wednesday I had not received a copy of it. When I asked for the stipulation [to a continuance] and asked them to please send me a copy as soon as possible, then this process server came out today, and I have gone –
“MR. CIFTCIKARA: Process server –
“MS. MOSELY: And I was gone, gone over the weekend.
“MR. CIFTCIKARA: The process server attempted to serve her a few hours after I received her fax, serve the response saying we couldn’t accept her request for a continuance because, one, it’s been over two months since the last hearing, it didn’t sneak up on her, and two, we already had the travel expenses. The nonrefundable travel expenses were already incurred. And I think, thirdly, the point her accounting is her account of what she did, and I can’t see how declarations are going to help her prove what she did.
“THE COURT: No. I’m not going to accept declarations, anyway, not as part of an accounting. And –
“MR. CIFTCIKARA: But the – and also, the process server tried, it looks like, about a half dozen times to serve her between the 23rd and today, indicated today that there was no answer, walked around, saw the trustee sitting in the kitchen and told me that she waved him away, told him to go away. And the server said, ‘I’m serving you,’ and left it there.
“THE COURT: And that’s when you got it?
“MS. MOSLEY: Your Honor, I have gone – yes, I have been gone over the holidays to my daughter’s.
“THE COURT: When did you leave?
“MS. MOSLEY: I left on Wednesday afternoon, and this wasn’t even served with the Court until almost 3:00 o’clock on the 23rd.
“THE COURT: I see that, yes.”
In the proof of service filed November 28, 2005, the process server stated he served Sue at 8:48 a.m. on November 28 by personally delivering copies of the first verified supplement to petition and companion documents. With respect to Sue, the process server stated: “Wouldn’t open door, saw through window (W, F, 5’4”, 140, LONG, BRN/GREY, 60’s).” A declaration of due diligence signed by the process server reflected eight attempts to serve Sue on November 23, 26, and 27, before finally serving her on the morning of November 28. With respect to service on the latter date, the process server stated: “No answer. No vehicle. Walked 15 feet to kitchen window, saw her sitting in chair. Advised loudly that she had been served, left papers in front door.”
From the foregoing facts and circumstances, the superior court reasonably concluded:
“Miss Mosley, I’ll tell you what I think. This has not been a very short turn-around. The fact that you filed this on the 23rd, the fact that I haven’t had a chance to review this as well as I would like to, I – do not supplement anything, do not file supplementals, you filed it and I’m done. I will read this and we’ll meet again on the 12th.”
The court’s comment appears to refer to Sue’s memorandum of points and authorities regarding the accounting, a document that was actually filed with the court on November 21, 2005.
The court went on to advise Sue that she would read her points and authorities, asked whether there was anything else that Sue wanted the court to address, and indicated the court would take the matter under submission. While the matter was under submission, Sue filed several supplemental memoranda of points and authorities regarding the accounting. Both supplemental memoranda specifically addressed the appraisal of Doug Peters.
In our view, the personal service of the appraisal on November 28, 2005, did not affect Sue’s substantial rights under all of the facts and circumstances of the case.
E. Abstract of Judgment
Sue contends an abstract of judgment was signed and recorded without a hearing and she did not receive service of the abstract until July 2006.
Code of Civil Procedure section 674, subdivision (a) states in relevant part:
“(a) Except as otherwise provided in Section 4506 of the Family Code, an abstract of a judgment or decree requiring the payment of money shall be certified by the clerk of the court where the judgment or decree was entered and shall contain all of the following:
“(1) The title of the court where the judgment or decree is entered and cause and number of the action.
“(2) The date of entry of the judgment or decree and of any renewals of the judgment or decree and where entered in the records of the court.
“(3) The name and last known address of the judgment debtor and the address at which the summons was either personally served or mailed to the judgment debtor or the judgment debtor’s attorney of record.
“(4) The name and address of the judgment creditor.
“(5) The amount of the judgment or decree as entered or as last renewed.
“(6) The social security number and driver’s license number of the judgment debtor if they are known to the judgment creditor....
“(7) Whether a stay of enforcement has been ordered by the court and, if so, the date the stay ends.
“(8) The date of issuance of the abstract.”
The abstract of judgment included in the clerk’s transcript on appeal complied with the foregoing statutory requirements. An abstract of judgment attaches to all interests (whether present or future, vested or continent, legal or equitable) in real property in the county in which the abstract is recorded. (Casey v. Gray (1993) 13 Cal.App.4th 611, 614.) Recordation of an abstract of judgment merely creates a lien upon real property of the judgment debtor and such recordation is not an execution upon a judgment. (Industrial Indemnity Co. v. Levine (1975) 49 Cal.App.3d 698, 699.) The judgment lien created by the recordation is purely statutory. (Helvey v. Bank of America (1941) 43 Cal.App.2d 532, 533.) Sue has not cited and we have been unable to find any statutory or case authority requiring a hearing before the issuance of an abstract of judgment by the clerk of court or mandating service upon the judgment debtor as a prerequisite to recordation of the abstract. Her challenge to the abstract of judgment must be rejected.
III.
LINDA HERRICK’S CLAIMS NOT TIME-BARRED
Sue contends Linda’s action is time-barred under section 16061.7.
Section 16061.7 states in relevant part:
“(a) A trustee shall serve a notification by the trustee as described in this section in the following events:
“(1) When a revocable trust or any portion thereof becomes irrevocable because of the death of one or more of the settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust. [¶] ... [¶]
“(h) If the notification by the trustee is served because a revocable trust or any portion of it has become irrevocable because of the death of one or more settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust, the notification by the trustee shall also include a warning, set out in a separate paragraph in not less than 10-point boldface type, or a reasonable equivalent thereof, that states as follows:
“‘You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is mailed or personally delivered to you during that 120-day period, whichever is later.’”
Section16061.8 states:
“No person upon whom the notification by the trustee is served pursuant to this chapter may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him or her, or 60 days from the day on which a copy of the terms of the trust is mailed or personally delivered to him or her during that 120-day period, whichever is later.”
Sue argues on appeal:
“On April 15, 2004, notice under [Probate Code section] 16061.7 was given to Gerald and Linda Herrick. Copies of the trust were concurrently sent to Gerald and Linda Herrick.
“On page 6, the trust instrument, itself, directed that the trustee ‘partition, allot and distribute the trust estate ... at values determined by the trustee.’
“On page 2, the trust directed that ‘upon the death of the surviving settlor, the successor trustee ... shall pay ... the deceased settlor’s debts outstanding at the time of said settlor’s death.’
“These provisions of the trust were not challenged. The beneficiaries had 120 days after notice to contest these trust provisions. They did not.
“The distribution of assets did not occur until October 11, 2004, more than 120 days after notice. All assets of the Herrick Family Trust were distributed to the three beneficiaries, with the exception of less than $1,000, which was reserved for 2004 income taxes and incidental purposes.
“Then, 14 months after notice and 8 months after the distribution of assets, Linda filed her petition which actually ‘contested the trust.’”
A “no contest clause” means a provision in an otherwise valid instrument that, if enforced, would penalize a beneficiary if the beneficiary files a contest with the court. (§ 21300, subd. (d).) A “contest” means any action identified in a “no contest clause” as a violation of the clause. The term includes direct and indirect contests. (§ 21300, subd. (a).) A “direct contest” means a pleading in a proceeding in any court alleging the invalidity of an instrument or one or more of its terms based on one or more statutory grounds, including revocation, lack of capacity, fraud, and misrepresentation. (§ 21300, subd. (b).) An “indirect contest” means a pleading in a proceeding in any court that indirectly challenges the validity of an instrument or one more of its terms based on any other ground not contained in section 21300, subdivision (b). (§ 21300, subd. (c).)
Sue contends that Linda’s petition for instructions constituted a contest or challenge to the trust instrument. However, a careful reading of the petition for instructions reveals it is not directed to the validity of the Herrick Family Trust instrument. Rather, it is a petition for instructions regarding (a) the propriety of obtaining a certified appraisal for the Arbona Circle property; (b) the propriety of Sue allocating $60,000 for work performed during settlor Anita Herrick’s lifetime; (c) an order compelling Sue, as trustee, to provide a complete statutory accounting of the trust; and (d) an award of costs. None of these items is an attack upon or challenge to the validity of the trust instrument.
Sue’s characterization of Linda’s petition as a contest subject to statutory time limits is incorrect and her claim must be rejected.
IV.
EMPLOYMENT CONTRACT
Sue contends there was nothing posthumous about her actions as trustee and the superior court’s reference to a “posthumous employment contract” was misplaced.
As noted above, the court held in its statement of decision:
“… A Trustee cannot take some amount of money from a Trust and call it compensation for services rendered to the Trust. There is no basis in law to form a posthumous employment contract with the trustee. The Court finds that the trustee breached her fiduciary duty in this regard.”
Sue specifically argues on appeal:
“Neither the court nor the petitioner alleged any misconduct or mismanagement of the trust assets. It appears that the petitioner simply didn’t want the trustee to have any compensation in any form for the six years she was the trustee of the trust. The finding the court made to not compensate the trustee for anything for six years of trusteeship flies in the face of trust law. The conclusion arrived at by the court is not predicated on statutory law or the trust instrument. There is no basis in law for finding that a trustee needs a contract to compensate the trustee.
“The court’s reference to a ‘posthumous employment contract’ is puzzling, since a trust is a separate entity and survives the decedent’s death. One is appointed to the office of trustee and, upon acceptance, assumes all the rights of that office; a trustee does not have an employment contract with anyone. There would be no need for an employment contract. Both the statutes and the trust direct that entitlement to compensation ....”
We initially note the trial court did not expressly hold or find that an employment contract is a prerequisite to the payment of trustee compensation.
The Herrick Family Trust agreement does not specify an amount of or formula for computing compensation for successor trustees. Section 15681 states: “If the trust instrument does not specify the trustee’s compensation, the trustee is entitled to reasonable compensation under the circumstances.”
Section 15686 states in relevant part:
“(b) A trustee may not charge an increased trustee’s fee for administration of a particular trust unless the trustee first gives at least 60 days’ written notice of that increased fee to all of the following persons:
“(1) Each beneficiary who is entitled to an account under Section 16062.”
Section 16062 states in relevant part:
“(a) Except as otherwise provided in this section and in Section 16064 [reporting and accounting requirements; exceptions], the trustee shall account at least annually, at the termination of the trust, and upon a change of trustee, to each beneficiary to whom income or principal is required or authorized in the trustee’s discretion to be currently distributed.”
Article III of the Herrick Family Trust provided: “The Trustees shall pay to or apply for the benefit of the Settlors all of the net income of the trust estate, or as much of said net income as the Settlors demand, in quarter-annual or more frequent installments ....” Thus, the settlor/beneficiary Anita Herrick, was entitled to an account from the successor trustee, Sue, under section 16062. Moreover, under section 15686, subdivision (b), Sue could not charge the sought-after trustee fees unless she first gave her mother 60 days’ written notice of the fees during Anita’s lifetime. In addition, the superior court found that Sue breached her fiduciary duty by paying herself $60,000 for services rendered to Anita during the latter’s lifetime.
Section 16420 provides in relevant part:
“(a) If a trustee commits a breach of trust ... a beneficiary or cotrustee of the trust may commence a proceeding for any of the following purposes that is appropriate: [¶]…[¶]
“(7) To reduce or deny compensation of the trustee.”
Section 16440 further provides in relevant part:
“(a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances:
“(1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest.”
In view of sections 16420 and 16440, the superior court was empowered to deny trustee compensation upon a finding of a breach of trust. However, as we note in issue V below, the trial court did not specify the fiduciary duty breached in the instant case or precisely how a breach of trust occurred. We cannot make such a determination from the face of the record and, as we explain in greater detail in issue V, a remand for further proceedings will be necessary in the instant case.
V.
COMPENSATION UNDER APPLICABLE STATUTES AND THE TRUST AGREEMENT
Sue further contends the superior court’s denial of compensation to the trustee was unsupported by the applicable statutes or the trust agreement.
Sue specifically argues:
“Exhibits I through XV of the Trustee’s Memorandum detail the trustee’s accounting of the compensation which the trustee should have received. The total compensation which the trustee should have received was $119,855.58, as totaled in Exhibit XV. What the trustee actually received was only $40,000 [after crediting each of the beneficiaries with $10,000]. [¶] ... [¶]
“Exhibit II [to the Trustee’s Memorandum] details the cost of institutionalized care vs. care provided by the trustee and her caregivers. Appellant would like the higher court to note that a savings to the estate of a minimum of $2,650.00 per month to a maximum of $4,000.00 per month accrued to the estate because of Sue providing the care for her Mother. This amounted to a savings of a minimum of $182,850 to a maximum savings of $276,000 over the 69 months or nearly 6 years Sue was trustee of the Herrick Family Trust and provided care for her Mother. If Sue had not provided the care for her Mother, the trust would have been drastically reduced by the costs of institutionalized health care for her mother.
“Section 15684 of the Probate Code provides that a trustee is entitled to the repayment out of the trust property for the following: [a] Expenditures that were properly incurred in the administration of the trust and [b] to the extent that they benefited the trust, expenditures that were not properly incurred in the administration of the trust .... Certainly, the trust benefited greatly from Sue acting as the entire ‘health care’ entity for her Mother.”
A. The Compensation Claimed
The trial court stated as to compensation:
“… A Trustee cannot take some amount of money from a Trust and call it compensation for services rendered to the Trust. There is no basis in law to form a posthumous employment contract with the trustee.”
We initially note that Sue’s accounting referenced several different types of compensation. These included compensation for: (1) hiring and supervising companion caregivers; (2) preparation of payroll for companion caregivers; (3) payment of Anita Herrick’s living expenses; and (4) serving as general contractor for the construction of Anita’s Arbona Circle home. Sue also noted she had performed other services for which she did not claim compensation. These services included property management for Anita Herrick, gardening and yard care at Anita’s primary residence and rental home, general maintenance of Anita’s primary residence and rental home, and moving Anita’s personal property and furnishings from her onetime Phoenix Lake home to the home on Arbona Circle. Virtually all of the services were governed by two documents: Anita’s July 16, 1998 durable power of attorney for management of property and personal affairs and the June 19, 1990 Herrick Family Trust agreement. The durable power of attorney specifically stated:
“Section 2.02. No Compensation. My attorney in fact [appellant Sue Mosley] shall not be entitled to compensation for the services rendered in the execution of any of the powers conferred by me in this Power [of Attorney].”
At oral argument, appellant acknowledged the existence of the “No Compensation” section of the durable power of attorney for management of property and personal affairs. She nevertheless sought compensation for a wide range of personal (as opposed to trust) services rendered to settlor Anita G. Herrick, citing the “health, support, maintenance, comfort, and welfare” language of the family trust agreement. In the durable power of attorney, Anita G. Herrick granted appellant—her attorney-in-fact—numerous comprehensive powers to be used for Anita’s personal benefit and to be exercised only in a fiduciary capacity. These detailed powers related to an array of dealings with (a) real and personal property; (b) securities; (c) commodities futures and options; (d) financial institutions; (e) bank accounts and financial instruments; (f) business operations; (g) insurance and annuities; (h) retirement plans; (i) estate, trust, and other beneficiary transactions; (j) tax matters; and (k) personal and family maintenance. On remand, the court and parties must take care in delineating those services more appropriately deemed to have been rendered pursuant to the durable power, for which no compensation is authorized, and those services rendered pursuant to the family trust agreement, for which compensation might be otherwise authorized.
Therefore, the trust agreement or some other document must provide a basis for compensation.
We note that Anita’s July 16, 1998 durable power of attorney for health care, which named Sue as attorney-in-fact, did not include any express provision for compensation of health care agents.
Sue explains on appeal:
“Trustee fees, alone, calculated at only 1.3% of the estate value, amounted to $50,388.08, $10,000 more than the $40,000 Sue received. Reimbursement of only partial expenses paid out by Sue amounted to over $2,000.00. And other work done by Sue which benefited her Mother and thereby benefited the trust because the purpose of the trust was ‘to provide for the Settlor’s proper health, support, maintenance, comfort and welfare’ [Herrick Family Trust, Article III, p. 1] amounted to over $67,000—and many items were not even charged to the trust. Forty thousand dollars was less than half of what the trustee should have been paid.” (Fn. omitted.)
To the extent Sue is relying upon services determined to have been provided pursuant to the management of property and personal affairs durable power of attorney as a basis for compensation, her claim must be rejected. We will now focus upon the governing provisions of the applicable statutes and the trust agreement itself.
B. Effect of the Applicable Statutes
Section 15684 states:
“A trustee is entitled to the repayment out of the trust property for the following:
“(a) Expenditures that were properly incurred in the administration of the trust.
“(b) To the extent that they benefited the trust, expenditures that were not properly incurred in the administration of the trust.”
On settlement of each account, a trustee is entitled to reasonable compensation for services rendered. Allowance of compensation rests in the sound discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of a manifest showing of abuse. Compensation may be reduced or denied where the trustee acts negligently or in breach of the trust. However, absent fraud, personal benefit by the trustee, or loss to the beneficiaries, the trial court may only deny compensation for services attributable to mismanaged assets. (Estate of Gump (1991) 1 Cal.App.4th 582, 597-599.)
One scholarly authority has observed:
“If the governing instrument provides a schedule of times for taking fees, it must be followed. If not, the trustee may take fees whenever he or she believes it is appropriate to do so. Corporate and private professional trustees generally take fees according to a set timetable, most often monthly or quarterly. Individual nonprofessional trustees are more likely to take fees annually or only after certain specific services have been performed. As a practical matter and from the standpoint of good client relations, the trustee should probably take fees only for services already rendered, rather than in advance.
“Even for unsupervised trusts, trustees have a duty to account to beneficiaries. Prob C § 16062. The account must show the trustee’s compensation for the last complete fiscal year of the trust or since the last account. Prob C § 16063(a)(3).
“Although no court order is needed to allow the trustee compensation from an unsupervised trust, if there is friction between the trustee and the beneficiaries it may be wise for the trustee to seek an order fixing compensation, or at least explain the basis of compensation to the beneficiaries, rather than wait until the beneficiaries ask for court review.
“Beneficiaries who believe the trustee’s compensation is not reasonable may petition the court for relief....” (1 Cal. Trust Administration (Cont.Ed.Bar 2d ed. 2007) § 9.21, p. 438.)
Here, the trustee did not seek an order fixing compensation. Rather, in an October 11, 2004, letter written in conjunction with the distribution of trust assets, Sue stated in relevant part to Linda and Gerald:
“No one should be expected to work for free—that’s slave labor—and that was abolished in America 150 years ago. Upon the advise and urging of many people who watched and saw the enormity of the task I, many times, was overwhelmed by, I have paid myself $60,000 for the work I performed over those six years—that figures out to be $10,000 per year … let alone do several jobs for that amount, AND manage the trust, AND receive no reimbursement for expenses. CPA Eric Carlson has told me it is not enough for what I did.”
The superior court characterized Sue’s payment of compensation for trustee services as an impermissible “posthumous employment contract with the trustee” and concluded such payment constituted a breach of her fiduciary duty. When acting in good faith, trustees should be treated by a court of equity with liberality and indulgence. (Purdy v. Johnson (1926) 78 Cal.App. 310, 321.) Nevertheless, good faith is no defense in an action against trustees based upon negligence. (Lynch v. John M. Redfield Foundation (1970) 9 Cal.App.3d 293, 302.) Compensation may be reduced or denied where the trustee acts negligently or in breach of the trust. Absent evidence of fraud or self-dealing, however, it is reasonable to allow compensation for services relating to trust assets which were properly managed. A court should deny compensation only for those assets which were administered negligently or in breach of trust. This approach is consistent with section 15684. (Estate of Gump, supra, 1 Cal.App.4th at pp. 597-599.)
Here, the trial court apparently concluded that payment of fees to a successor trustee after the death of a surviving settlor amounts to a breach of fiduciary duty. A trustee is a fiduciary who owes the beneficiaries of the trust his or her undivided loyalty. A trustee is bound to act in the highest good faith toward the beneficiaries and must not occupy a position where his or her interests either conflict with those of the beneficiaries or even where the trustee is exposed to the temptation of acting contrary to the best interest of the beneficiaries. (Jones v. Stubbs (1955) 136 Cal.App.2d 490, 499-500.) A trustee’s duties include the duty of loyalty, the duty to avoid conflicts of interest, the duty to preserve trust property, the duty to make the trust property productive, the duty to dispose of improper investments, and the duty to report and account. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 462-463.)
The trial court did not specify which of the foregoing duties was breached in the instant case and we cannot make such a determination from the face of the record. Clearly, the settlors contemplated that successor trustees would be entitled to compensation for their services. Article VII of the trust agreement states in pertinent part:
“A. The Settlors may at any time revoke this instrument in whole or in part by a written instrument. If the Settlors revoke this instrument, the Trustees shall deliver to the Settlors or their designees all of the designated portion of the trust assets. If the Settlors revoke this instrument entirely or with respect to a major portion of the assets subject to the instrument, the Trustees shall be entitled to retain sufficient assets reasonably to secure payment of liabilities the Trustees have lawfully incurred in administering the trust, including Trustee fees that have been earned, unless the Settlors shall indemnify the Trustees against loss or expense.
“B. The Settlors may at any time amend any terms of this trust by written instrument signed by the Settlors. No amendment shall substantially increase the Trustees’ duties or liabilities or change the Trustees’ compensation without the Trustees’ consent, nor shall the Trustees be obligated to act under such an amendment unless the Trustees accept it. If a Trustee is removed as a result of refusal to accept an amendment, the Settlors shall pay to the Trustee any sums due and shall indemnify the Trustee against liability the Trustee has lawfully incurred in administering the trust.” (Italics added.)
The mere omission to fix the compensation of the trustee by the trust instrument does not invalidate the trust. (Shaw v. Johnson (1936) 15 Cal.App.2d 599, 606.) If the trust instrument does not specify the trustee’s compensation, the trustee is entitled to reasonable compensation under the circumstances. (§ 15681.) The court may properly consider comparable or customary charges within the private sector based upon a percentage of the value of the administered trust assets. However, it is not obliged to do so and is free to consider other relevant factors, including the success or failure of the trustee’s administration of the trust. (Estate of Gump (1982) 128 Cal.App.3d 111, 116.)
In the instant case, we cannot assess the success or failure of Sue’s administration of the trust because the trial court only ordered Sue to “provide a statutory accounting relative to the sixty thousand dollars ($60,000.00) paid to CAROLYN SUE MOSLEY by the Herrick Family Trust.” While of some assistance, such a narrow accounting does not illuminate Sue’s handling of the Herrick Family Trust throughout her tenure as trustee. Generally speaking, a trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration. (§ 16060.) In addition, a trustee shall account at least annually, at the termination of the trust, and upon a change of trustee, to each beneficiary to whom income or principal is required or authorized in the trustee’s discretion to be currently distributed. (§ 16062, subd. (a).) An account furnished pursuant to section 16062 shall contain, among other things, (1) a statement of receipts and disbursements of principal and income that have occurred during the last complete fiscal year of the trust or since the last account, and (2) a statement of the assets and liabilities of the trust as of the end of the last complete fiscal year of the trust or as of the end of the period covered by the account. (§ 16063, subd. (a)(1), (2).)
Sue became successor trustee upon Anita’s resignation as trustee on July 16, 1998, and served in that capacity from that date through Anita’s death on February 11, 2004, and beyond. Sue’s November 21, 2005, memorandum of points and authorities regarding accounting focuses on the substantial “savings [that] accrued to the [trust] estate under Ms. Mosley’s watch ... amounting to $182,800 ... or more than one-third of the total estate value ....” That may very well be true. However, neither this court nor the trial court can reach such a conclusion absent a precise accounting of receipts and disbursements/assets and liabilities for Sue’s entire tenure as trustee. Such an accounting should substantially conform to the principles of section 16063, subdivision (a) to fully enable the trial court, in particular, to determine the success or failure of Sue’s administration of the trust.
In our view, this portion of the judgment must be reversed and the matter remanded to the trial court with directions to instruct Sue Mosley to prepare and file a traditional accounting of her tenure as trustee consistent with the requirements of section 16063, subdivision (a). Upon receipt of such an accounting, the trial court may deny any unreasonable request for compensation or compensation requested for those assets which were administered negligently or in breach of trust. In directing the trial court and appellant Sue Mosley to take these steps, we note that inadvertent errors in trust accounts—made without any intention on the part of trustees to commit a deliberate wrong or to take advantage of their relations—are an insufficient basis for penalizing trustees by ordering a forfeiture of any commission for their services on behalf of the trust estate. (Purdy v. Johnson, supra, 78 Cal.App. at p. 324.)
See footnote 9, ante, page 26.
C. Effect of the Trust Agreement
Sue does not address the specific provisions of the trust agreement governing fees in her arguments on appeal. Rather, she initially notes in a caption of her opening brief: “The Statutes and the Trust Both Authorize Compensation to the Trustee.” She then goes on to argue:
“Exhibits I through XV of the Trustee’s Memorandum detail the trustee’s accounting of the compensation which the trustee should have received. The total compensation which the trustee should have received was $119,855.58, as totaled in Exhibit XV. What the trustee actually received was only $40,000 [after crediting each of the beneficiaries with $10,000]. [¶] ... [¶]
“Trustee fees, alone, calculated at only 1.3% of the estate value, amounted to $50,388.08, $10,000 more than the $40,000 Sue received. Reimbursement of only partial expenses paid out by Sue amounted to over $2,000.00. And other work done by Sue which benefited her Mother and thereby benefited the trust because the purpose of the trust was ‘to provide for the Settlor’s proper health, support, maintenance, comfort and welfare’ ... amounted to over $67,000—any many items were not even charged to the trust. Forty thousand dollars was less than half of what the trustee should have been paid.
“Exhibit II ... details the cost of institutionalized care vs. care provided by the trustee and her caregivers. Appellant would like the higher court to note that a savings to the estate of a minimum of $2,650.00 per month to a maximum of $4,000.00 per month accrued to the estate because of Sue providing the care for her Mother. This amounted to a savings of a minimum of $182,850 to a maximum savings of $276,000 over the 69 months or nearly 6 years Sue was trustee of the Herrick Family Trust and provided care for her Mother. If Sue had not provided the care for her Mother, the trust would have been drastically reduced by the costs of institutionalized health care for her Mother. [¶] ... [¶]
“That all compensation was deferred by the trustee until after the settlor’s death was merely a deferment of compensation and there is nothing in statute or the trust to preclude the trustee from deferring compensation until after the settlor’s death. The trustee should have probably received interest on the deferred monies for the six years in which she received nothing. She did not ask for interest.” (Fn. omitted.)
In her reply brief, Sue argues:
“Respondent continually refers to the ‘improper’ and ‘wrongful acts’ of the trustee without referring to what ‘improper’ or ‘wrongful act’ the trustee performed and avoids the statutes authorizing trustee compensation like the plague. It seems that merely the payment of compensation to the trustee is a ‘wrongful act’ in the petitioner’s mind.
“Authority for trustee compensation exists in Probate Codes 15681, 15684 and Probate Code 19252 authorizes the trustee to pay any claim even if the trustee herself is the claimant.
“And authority exists to pay the ‘debts of the settlor upon the death of the settlor’ in the trust instrument. Certainly, trustee compensation is a debt. And no where in the statutes does it say when a trustee must compensate himself.”
An appellant’s burden includes the obligation to present adequate argument and legal authority on each point raised. (People v. Stanley (1995) 10 Cal.4th 764, 793; Muega v. Menocal (1996) 50 Cal.App.4th 868, 877.) This encompasses more than just stating the contention advanced and supporting it with a few conclusory assertions or opinions. (See Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979.) Appellate jurists are not partisan advocates for any party. (Cal. Code Jud. Ethics, canon 3.) Nor do appellate courts act as counsel for an appellant by searching out relevant facts in the record and applicable law in the books in order to articulate a rationale which supports a disposition favorable to the appellant. (People v. Stanley, supra, 10 Cal.4th at p. 793.) Thus, it is the appellant’s duty to explain satisfactorily, based upon the pertinent record and authorities, precisely how his or her conclusions are correct. (Estate of Volen (1953) 121 Cal.App.2d 161, 166.) Under California law, an appellate court is not required to discuss or consider points that are not argued or that are not supported by citations to authorities or the record. (Kim v. Sumitomo Bank, supra, 17 Cal.App.4th at p. 979.) In the instant case, Sue summarily asserts that the trust agreement authorizes compensation to the trustee. However, her discussion does not expressly focus on the fee terms of the trust instrument and this portion of her contention must be rejected.
VI.
POWER TO VALUE THE TRUST PROPERTY
Sue contends the trust agreement directs her, as successor trustee, to value the trust property.
Section 16000 states: “On acceptance of the trust, the trustee has a duty to administer the trust according to the trust instrument .…” Article VIII of the Herrick Family Trust states in relevant part:
“To carry out the provisions of the trusts created by this instrument, the Trustees shall have the following powers besides those now or later conferred by law: [¶] ... [¶]
“M. To partition, allot and distribute the trust estate on any division or partial or final distribution of the trust estate, in undivided interests or in kind, or partly in money and partly in kind, at valuations determined by the Trustees, and to sell any property the Trustees consider necessary for division or distribution....” (Italics added.)
While the trust agreement did grant Sue the power to make valuations, the standard of care is the measure against which Sue’s duties as a trustee are gauged. (1 Cal. Trust Administration, supra, § 2.49, p. 66.) The trustee shall administer the trust with reasonable care, skill, and caution under the circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument. (§ 16040, subd. (a).)
Thus, Sue’s power to make valuations was subject to certain statutory limitations.
VII.
BREACH OF FIDUCIARY DUTY
Sue contends she did not breach her fiduciary duty and is therefore entitled to compensation as a trustee.
She argues:
“It appears that the finding of breach of fiduciary duty was made simply because the trustee ‘compensated’ herself—not because she actually breached any fiduciary duty. How can a trustee breach her fiduciary duty by compensating the trustee under the authority of the statutes and the trust? Without citing any actual ‘breach[,]’ the court simply ruled that the trustee could not be compensated.
“Did the trustee commit a breach of fiduciary duty in paying the debts of the settlor after death as the trust directs? Probate Code 16000 says that the ‘trustee has a duty to administer the trust according to the trust instrument.’
“One cannot breach a fiduciary duty by paying a trustee earned trustee fees. [(Prob. Code, §§ 15681, 16243.)] One cannot breach a fiduciary duty by reimbursing a trustee for expenses paid out of his own personal money. [(Prob. Code, § 15684.)] One cannot breach a fiduciary duty by paying a trustee for expenditures properly incurred in the administration of trust. [(Prob. Code, § 15684.)] Indeed, the statutes allow even reimbursement for expenses not incurred in the administration of the trust if it benefits the trust. [(Prob. Code, § 15684.)] [¶]…[¶] There was no breach of fiduciary duty.”
Once again, allowance of compensation rests in the sound discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of a manifest showing of abuse. Compensation may be reduced or denied where the trustee acts negligently or in breach of the trust. However, absent fraud, personal benefit by the trustee, or loss to the beneficiaries, the trial court may only deny compensation for services attributable to mismanaged assets. (Estate of Gump, supra, 1 Cal.App.4th at pp. 597-599.) The trial court did not specify the fiduciary duty or duties at issue in the instant case or how they were breached. Further, we cannot make such a determination from the face of the record. As noted in issue V, above, neither this court nor the trial court can determine whether a breach of fiduciary duty occurred absent a precise accounting of receipts and disbursements/assets and liabilities for Sue’s entire tenure as trustee. Such an accounting should substantially conform to the principles of section 16063, subdivision (a) to fully enable the trial court, in particular, to determine the success or failure of Sue’s administration of the trust. Upon receipt of such an accounting, the trial court may deny compensation only for those assets which were administered negligently or in breach of trust. Should Sue decline to render such an accounting, the court may reinstate the judgment previously rendered.
VIII.
DATE OF APPRAISAL
Sue correctly contends the superior court ordered the appraisal be made as of Anita Herrick’s date of death, and thus the court misstated in its statement of decision that the date of distribution was to have been the appraisal date. Thus she argues any criticism of her on such basis was unjustified.
Linda’s petition for instructions filed June 17, 2005, prayed for relief and orders as to “[t]he propriety of obtaining a certified appraisal for the real property located at 96 Arbona Circle, Sonora, California.” The superior court’s September 12, 2005 minute order stated: “THE ATTORNEY’S FOR THE PETITIONER WANT THE VALUES AS TO THE DATE OF DEATH ONLY. AN APPRAISAL OF THE PROPERTY IS TO BE DONE BY AN APPRAISER OF THE ATTORNEY’S FOR THE PETITIONER’S CHOICE. THE APPRAISAL IS TO BE DONE PRIOR TO THE NEXT COURT DATE.” The superior court’s formal order for instructions, filed September 27, 2005, stated in relevant part:
“2. The Petitioner shall arrange and pay for an appraisal of the real property located at 96 Arbona Circle, Sonora, California prior to November 28, 2005. The appraisal shall be conducted by a competent appraiser of the Petitioner’s choice. The appraisal shall reflect the value as of February 11, 2004 [the date of Anita Herrick’s death].”
Linda’s appraiser, M. Douglas Peters, SRA, appraised the parcel on Arbona Circle as of February 11, 2004. The superior court provided in relevant part in the January 17, 2006, statement of decision:
“When the trustee valued the property at 96 Arbona Circle, she did not have a standard appraisal done. She used a methodology to arrive at the value based on estimated square footage that turned out to be 9% smaller th[a]n the actual property. She then took an average price per square foot from 7 home sales in 2003 to arrive at a price per square foot. She valued the house by this method as of the date of Anita Herrick[’]s death (February, 2004) not as of the correct date of distribution (October, 2004). [¶] ... [¶]
“[T]he Court finds the true value of the property at 96 Arbona Circle to be $240,000 as appraised by Doug Peters rather than the trustee’s value of $182,000. The Court notes that the appraisal was based on a date of 2/11/04 rather than the preferred date of 10/11/04, but the Court cannot speculate as to what effect that 8 months difference would have made.”
In sum, the court’s minute order of September 12, 2005, directed an appraisal as of Anita Herrick’s date of death. The formal order on petition for instructions specified the date of death as the appraisal date. The separate valuations conducted by Sue and by M. Douglas Peters were as of Anita’s date of death. Thus, the superior court erred in its statement of decision. As noted above, however, the court must, in every stage of an action, disregard any error in the proceedings which, in the opinion of said court, does not affect the substantial rights of the parties. (Code Civ. Proc., § 475.) Although the trial court’s statement of decision was inconsistent with its minute order of September 12, the substantial rights of the parties were not affected because the respective valuations were conducted as of the date of Anita Herrick’s death.
IX.
APPELLANT’S MARKET COMPARISION VALUATION OF PROPERTY
Sue contends her market comparison valuation of property was valid and the superior court erred in holding her methodology invalid.
She argues:
“The trust instrument did not prescribe any particular methodology of valuation. The trust instrument did prescribe that the trustee determine the valuation of property. There is no legal reason why the trustee’s valuation must coincide with the methodology used by a licensed appraiser.
“Well-settled law does not support the court’s conclusion. An ‘appraisal’ is deemed ‘hearsay’ by the evidence code, as already stated, and it is well-settled case law that it should be discounted upon objection. The trustee objected strenuously to any appraisal value by Petitioner’s Appraiser Doug Peters, both in her court filings, in the courtroom and in her declaration filed in objection to the court’s tentative decision. The court ignored those objections.
“There was nothing flawed about the methodology used by Appellant in affixing a value to the Arbona property. That methodology was the same methodology used by realtors, statewide, day-in-and-day-out in the real estate business to determine market values of properties. It is called a ‘comparable sales method of appraisal[,]’ and is a valid way of appraising properties under Evidence Code, Section 816 ....
“Under the comparable sales method of appraisal, the appraiser identifies sales of properties deemed to resemble the property in relevant respects, and then derives a market value for the property from the prices paid for these comparables, ‘typically adjusting the price to reflect such matters as material differences between the properties.’ [(Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083.)]
“Sue made adjustments for the lack of central heat and air conditioning, and for the improvements she had made to the property since her mother’s death to her valuation. The petitioner’s appraiser did not.
“Although admittedly labor-intensive, common sense dictates that the best indication of value is achieved using every comparable available ‘like kind’ property, as the trustee did in her market comparison valuation. Using every comparable available will result in a more reliable result in valuation instead of selectively ‘picking’ the properties used, as the petitioner’s appraiser did. The trustee’s valuation considered every comparable ‘like kind’ property sold in the same area, in a relevant time line for her valuation. The trustee selected properties all on the same street in the same subdivision. These homes were of the same age, similar construction and had similar amenities.
“Mr. Peters’ appraisal considered only three properties, one of which is located outside the area, and is thus less likely to be reliable as indicative of ‘same area’ values.
“The trustee’s amended valuation was based upon observed conditions and observed amenities. It is accurate. It is not hearsay.”
The superior court in its discretion may make any orders and take any other action necessary or proper to dispose of the matters presented by the petition. (§ 17206.) Under California law, an appellate court uses the substantial evidence standard to review a judgment or order based upon the trial court’s determination of disputed factual issues. (Penny v. Wilson (2004) 123 Cal.App.4th 596, 603.) Where findings of fact are challenged on a civil appeal, we are bound by the elementary principle of law 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 of the trial court. We must view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving all conflicts in its favor. (SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 462.)
The substantial evidence standard applies to both express and implied findings of fact made by the superior court in its statement of decision (Code Civ. Proc., § 632) after a nonjury trial. The doctrine of implied findings directs the appellate court to presume the trial court made all factual findings necessary to support the judgment so long as substantial evidence supports those findings. The doctrine applies unless the omissions and ambiguities in the statement of decision are brought to the attention of the superior court in a timely manner. (SFPP v. Burlington Northern & Santa Fe Ry. Co., supra, 121 Cal.App.4th at p. 462.)
The reviewing court must accept as true all evidence tending to establish the correctness of the findings of the trial court, resolve all conflicts in the evidence in favor of the prevailing party, and indulge all legitimate and reasonable inferences to uphold the judgment. Our review is not limited to only those facts the trial court mentions in its statement of decision but, like any appellate review, extends to the entire record. This is apparent from the fact that a statement of decision need do no more than state the grounds upon which the judgment rests, without necessarily specifying the particular evidence considered by the trial court in reaching its decision. (In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 49-50.)
In the instant case, M. Douglas Peters, a Sonora appraiser, valued the Arbona Circle home at $244,789. Peters stated in his uniform residential appraisal report: “THE MARKET APPROACH WAS GIVEN THE MOST WEIGHT. IT IS SUPPORTED BY THE COST APPROACH. THE INCOME APPROACH WAS NOT USED BEING IRRELEVANT TO TYPICAL BUYER.” Peters used three comparable homes to make his appraisal. One was located .18 miles northwest of the subject home, the second was located .05 miles north of the subject home, and the third was located .83 miles southeast of the subject home. Peters measured the Arbona Circle residence and found it to be 1,338 square feet (gross living area). Sue based her valuation on a dwelling of 1,200 square feet. Michelle C. Denny, SRA, submitted a declaration in support of the petition for instructions. She stated in relevant part:
“[I]n my opinion, the methodology employed by the Trustee is inherently inaccurate. Moreover, given the general market conditions over the subject period, the Trustee’s methodology very likely resulted in a substantial under-valuation of the subject property. … [T]he appraisal methodology for appraising residential property should include at least the following steps: (1) measuring the subject property to accurately determine the size thereof; (2) consideration of comparable sales within 3-months of the appraisal (if extreme circumstances [such as a gross lack of comparable sales in the area] so require, a 6-month window may be used); and (3) the comparable sales should be adjusted for differences in size, condition, age, location, view, configuration, amenities and changes in the market condition. [¶] … [A]n appraisal not using at least these steps would be potentially inaccurate and inherently flawed.”
On appeal, Sue vigorously argues in support of her valuation, contending “[i]t is the Peters’ appraisal that uses the flawed methodology, not the Mosley valuation.” Nevertheless, we must view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving all conflicts in its favor. (SFPP v. Burlington Northern & Santa Fe Ry. Co., supra, 121 Cal.App.4th at p. 462.) The trial court’s finding of the property value of 96 Arbona Circle was supported by substantial evidence (i.e., the Peters’s appraisal and the Denny declaration) and Sue’s arguments to the contrary must be rejected.
X.
INDEPENDENT APPRAISAL OF THE ARBONA PROPERTY AS HEARSAY EVIDENCE
Sue contends the property appraisal of M. Douglas Peters was hearsay and inadmissible in the instant case.
She argues:
“Long-established law has established that an appraisal is ‘hearsay’ evidence and therefore inadmissible as evidence in a court of law. The Supreme Court has held in Nelson v. Fernando Nelson & Sons (1936) 5 Cal.2d 511 ...: ‘Appraisals are, of course hearsay, and can be excluded upon objection.’ [¶] Yet the court accepted Linda’s one, single, solitary appraisal by a person not authorized under the law to appraise the property as the appraised value.”
While the early-day Nelson case does describe appraisals as “hearsay,” current Evidence Code sections 810 through 824 provide special rules of evidence applicable to any action in which the value of property is to be ascertained. (Evid. Code, § 810.) The “value of property” means market value of real property or any interest therein. (Evid. Code, § 811.) The value of property may be shown only by the opinions of: (a) witnesses qualified to express such opinions; (b) the owner or spouse of the owner of the property or property interest being valued; and (c) an officer, regular employee, or partner designated by a corporation, partnership, or unincorporated association that is the owner of the property or interest being valued, if the designee is knowledgeable as to the value of the property or interest. “Owner of the property” includes a person entitled to possession of the property. (Evid. Code, § 813.)
The opinion of a witness as to the value of property is limited to such an opinion as is based on matter perceived by or personally known to the witness or made known to him or her at or before the hearing, whether or not admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion as to the value of the property. Such matters include, but are not limited to, the matters listed in Evidence Code sections 815 to 821, inclusive. (Evid. Code, § 814.) Of particular interest here, Evidence Code section 816 states:
“When relevant to the determination of the value of property, a witness may take into account as a basis for his opinion the price and other terms and circumstances of any sale or contract to sell and purchase comparable property if the sale or contract was freely made in good faith within a reasonable time before or after the date of valuation. In order to be considered comparable, the sale or contract must have been made sufficiently near in time to the date of valuation, and the property sold must be located sufficiently near the property being valued, and must be sufficiently alike in respect to character, size, situation, usability, and improvements, to make it clear that the property sold and the property being valued are comparable in value and that the price realized for the property sold may fairly be considered as shedding light on the value of the property being valued.”
In view of Evidence Code section 810 and its companion sections, the trial court did not err in admitting evidence of the appraisal of M. Douglas Peters.
XI.
THE METHODOLOGY OF THE INDEPENDENT APPRAISAL
Sue contends the Peters’s appraisal employed flawed methodology and the trial court erred in delegating the valuation to Linda’s sole appraiser, M. Douglas Peters.
Sue specifically argues: (1) Peters did not personally appear to testify; (2) Peters did not submit a declaration or affidavit as to any aspect of his appraisal; (3) the methodology of Peters does not conform to established law, statutes, or the trust instrument; (4) the Peters’s appraisal is based upon three dissimilar properties while her amended valuation is based upon seven like-kind properties; (5) the Peters’s methodology is based upon hearsay while her appraisal was based upon observed conditions and amenities as an owner; (6) her appraisal methodology conformed to Evidence Code section 816; (7) the Peters’s appraisal used higher-end comparables, thus skewing the appraisal value; (8) Peters failed to make an allowance for work completed on the Arbona property after title transferred to Sue’s personal ownership; and (9) the supporting declaration of Michelle C. Denny, was hearsay and failed to establish any familiarity with the Sonora area or the subdivision where the Arbona Circle home is located.
Sue’s multiple contentions are essentially an attack on the sufficiency of the evidence underlying the findings of the superior court. Credibility is an issue for the factfinder. On appeal, we do not reweigh evidence or reassess the credibility of witnesses. We have no power to judge the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom. When the evidence gives rise to conflicting reasonable inferences, one of which supports the findings of the trial court, the trial court’s finding is conclusive on appeal. (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622-623.) The focus is on the quality, not the quantity, of the evidence. (Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864, 871-872.)
In the instant case, the appraisal of M. Douglas Peters combined with the declaration of Michelle C. Denny, supported the superior court’s finding as to the value of the home at 96 Arbona Circle in Sonora. Sue’s claim of error must be rejected.
XII.
ERROR IN COMPUTING SQUARE FOOTAGE
Sue acknowledges the square footage of 1,200 feet used in her original property valuation was erroneous but maintains she made a good faith effort to value the house. She contends the error was unintentional, was explained to the court, and she maintains the court should have allowed her to correct the valuation.
The superior court provided in its statement of decision:
“Despite the considerable difference between the trustee’s value and the actual appraised value of the property, the Court does not find bad faith on the part of Carolyn Sue Mosley such that she should be required to pay interest on the difference. She is a realtor and should have known that her flawed methodology would result in a wrong value, but the Court does not find it has been proven by petitioner that on this issue she breached her fiduciary duties.”
A reviewing court must presume the judgment is correct in the absence of an affirmative showing of prejudicial error. A reviewing court will not reverse a judgment in the absence of an affirmative showing of a miscarriage of justice. Nor will a reviewing court act as counsel for an appellant by furnishing a legal argument as to how the trial court’s ruling was prejudicial. (Century Surety C. v. Polisso (2006) 139 Cal.App.4th 922, 962-963.) Absent an affirmative showing of prejudicial error here, the contention must be rejected.
A miscarriage of justice should be declared only when the court, after an examination of the entire cause, including the evidence, is of the opinion that it is reasonably probable a result more favorable to the appealing party would have been reached absent the error. (Neilsen v. Uyechi (1959) 172 Cal.App.2d 508, 515-516.)
XIII.
ATTORNEY FEES
Sue contends that section 1002 was inapplicable to an award of attorney fees in the instant case.
The statement of decision provided in relevant part:
“The Court further finds that the trustee must pay the Petitioner the costs of this suit and Petitioner’s attorney fees of $14,000 which will be added to the judicial lien on Arbona Circle. The Court orders its award of costs and attorney fees pursuant to Probate Code § 1002....”
Section 1002 states:
“Unless it is otherwise provided by this code or by rules adopted by the Judicial Council, either the superior court or the court on appeal may, in its discretion, order costs to be paid by any party to the proceedings, or out of the assets of the estate, as justice may require.”
Attorney fees are not recoverable as costs except where expressly allowed by statute or agreed to by express contract. The term “costs” means those fees and charges which are required by law to be paid to the courts or some of their officers or the amount of which is expressly fixed by law. Where a statute authorizes the allowance of an attorney fee, the fee is not technically regarded as part of the costs. Whenever an allowance of attorney fees is authorized to be made by the Probate Code, it is specifically provided for. (Estate of Bevelle (1947) 81 Cal.App.2d 720, 722-723.)
Respondent concedes on appeal:
“The trial court awarded Herrick attorney’s fees based on Probate Code section 1002. That section, however, only authorizes costs. While awarding attorney’s fees based on Section 1002 is an error, it is not prejudicial. A finding of prejudicial error is a prerequisite to reversal. (Code of Civil Procedure § 475[.]) The burden is on the Trustee to show prejudicial error.... A ruling that is correct on any legal theory is not prejudicial error.... A trial court’s order awarding attorney’s fees is reviewed under the abuse of discretion standard....
“Attorney’s fees may be awarded to the prevailing party if a trustee opposes a contest to the trustee’s account without reasonable cause and in bad faith. (Probate Code § 17211.) Here, the logical inference is that the trial court found that the Trustee’s opposition to Herrick’s objection to her accounting, and specifically to the $60,000 payment the Trustee made to herself, was made in bad faith.
“The trial court ordered an accounting of the $60,000 creditor’s claim payment that the Trustee made to herself. Based on the evidence, the trial court found that the Trustee had breached her fiduciary duty in paying the $60,000 to herself. On that basis, the trial court’s award of attorney’s fees could be supported under Probate Code section 17211. Accordingly, the award of attorney’s fees should be upheld, as there is an alternative legal theory which allows it.…”
Section 17211, subdivision (b) states:
“If a beneficiary contests the trustee’s account and the court determines that the trustee’s opposition to the contest was without reasonable cause and in bad faith, the court may award the contestant the costs of the contestant and other expenses and costs of litigation, including attorney’s fees, incurred to contest the account. The amount awarded shall be a charge against the compensation or other interest of the trustee in the trust. The trustee shall be personally liable and on the bond, if any, for any amount that remains unsatisfied.”
Linda submits that attorney fees may be awarded to the prevailing party if a trustee opposes a contest to his or her account without reasonable cause and in bad faith. (Prob. Code, § 17211.) As noted above, a “contest” has a unique meaning for purposes of the California Probate Code. A “contest” is specifically defined as any action defined in a “no contest clause” as a violation of the clause and includes both direct and indirect contests. (Prob. Code, § 21300, subds. (a)-(c).) In the instant case, Linda did not contest Sue’s account (Prob. Code, § 21300.) Rather, on June 17, 2005, she petitioned the superior court for instructions regarding the internal affairs of the trust. (Prob. Code, § 17200, subd. (b)(5), (7).) As part of that petition, Linda prayed for an order compelling Sue to provide a complete statutory accounting. On November 21, 2005, pursuant to the trial court’s order, Sue filed a memorandum of points and authorities regarding accounting. On November 23, 2005, Linda filed a verified supplement to her petition to object to Sue’s accounting filed November 21, 2005. In that supplement, Linda specifically noted: “Moreover, Attorney fees may be awarded to the prevailing party if the Trustee opposes a contest to the Trustee’s account without reasonable cause and in bad faith. Prob C § 17211.” Although Linda’s supplement set forth objections to Sue’s accounting and proposed trustee fee, the objections in the supplement did not constitute a “contest” within the meaning of section 17211.
On December 2 and 8, 2005, Sue filed supplemental memoranda with regard to her accounting. The first supplemental memorandum addressed two issues: (1) whether Sue, as trustee, could pay reasonable trustee fees and reimburse herself for services rendered to Anita and (2) whether Sue, as trustee, could determine the valuation of the Arbona Circle property. The second supplemental memorandum consisted of a chronology of events, declarations as to Sue’s good character, and an explanation of the disparity between her valuation of the Arbona Circle residence and that of Douglas Peters. The trial court’s statement of decision did not specifically address whether Sue prepared and filed the supplemental memoranda “without reasonable cause and in bad faith.” In any event, Linda did not “contest” the account, the trial court did not determine that Sue’s opposition was “without reasonable cause and in bad faith,” and attorney fees may not be awarded to Linda pursuant to section 17211, subdivision (b) under these circumstances.
XIV.
RELIEF AS TO GERALD HERRICK
Sue summarily contends Gerald is not entitled to any relief because he was not a party to the petition for instructions:
“Simply from a legal perspective, there is no basis in law for awarding to Linda Herrick any relief for Gerald Herrick. The third beneficiary, Gerald Herrick, did not petition the court for relief nor did he join in Linda Herrick’s petition and therefore was not a party to this petition. It was erroneous for the lower court’s Statement of Decision to have included an award to Gerald, who was not a party to the petition.”
The tentative decision of the court, filed December 29, 2005, did not mention the parties’ brother, Gerald Herrick. In her objection to the tentative decision filed January 9, 2006, Sue stated with respect to the background of the action:
“The trustee’s mother, Anita G. Herrick, died on February 11, 2004. In October 2004, the trustee distributed the assets of the Herrick Family Trust to Petitioner, Linda M. Herrick, her brother, Gerald W. Herrick and to the trustee, herself, Carolyn Sue Mosley. A copy of this distribution is shown on Exhibit I of Petitioner’s Petition ... reserving only a small contingency for the payment of any income taxes and for income tax preparation. At this point in time, the trust residual is less than a thousand dollars. In this distribution, the petitioner and her brother each received 2400 shares of Texaco stock and approximately $50,000 in cash .... The trustee received the ... Arbona property located in Sonora as part of her distribution and the trustee was paid $40,000 ($60,000 minus a $10,000 each offset to her brother and sister) in consideration of her work for 6 years in caring for her mother and as trustee, and for which she had heretofor[e] been paid nothing.”
On January 10, 2006, Sue filed a supplemental objection to tentative decision, stating:
“Lastly, any inequities in distribution must be apportioned in thirds to each beneficiary in order to equalize the distribution among the three beneficiaries, which is why the trustee asked to redistribute the assets using the trustee’s accounting with regard to the new value of the ... Arbona property and the compensation due the trustee ....”
On January 17, 2006, the court filed a statement of decision and judgment. Although the court did not mention Gerald Herrick, it did require Sue to “reimburse the trust for 2/3 of the $60,000 or $40,000 plus interest on $40,000 at the rate of 10% from the date of distribution, October 11, 2004.” The court also ordered a lien “for ... 2/3 of the difference between Carolyn Sue Mosley’s value of the house at ... Arbona Circle and that of the appraiser, $38,860 (2/3 of $58,000), be placed on the Arbona Circle property.”
Thus, the combined statement of decision and judgment does not include an express finding or ruling with respect to Gerald Herrick’s one-third share of the trust estate. Because the trial court referred to “2/3 of the $60,000” and “2/3 of the difference between Carolyn Sue Mosley’s value of the house ... and that of the appraiser,” there is an implicit reference to Gerald Herrick’s share of the trust estate. However, Gerald Herrick is not a party to this proceeding and we can only speculate as to the significance of the trial court’s language. In view of our reversal of the judgment, we need not address the propriety of the apparent allocation of a share to a nonparty. On remand, the parties may, if they so choose, appropriately and fully litigate this question before the trial court.
XV.
FORGIVENESS OF $7,280.39 DEBT TO THE TRUST
Sue contends:
“In making the original distribution and in the interest of mutual cooperation, the trustee forgave a $7,280.39 unaccounted for debt which Linda owed the trust. Appellant mentions this only because she wants the court to know that she has made every effort to cooperate with the petitioner.”
The duty of this court, as of all other judicial tribunals in California, is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it. (Paul v. Milk Depots, Inc. (1964) 62 Cal.2d 129, 132; National Assn. of Wine Bottlers v. Paul (1969) 268 Cal.App.2d 741, 746.) No further discussion of this issue is required.
XVI.
SUPERIOR COURT CALCULATIONS
Sue contends the trial court erroneously held in its statement of decision that $60,000 was actually paid to the trustee.
The statement of decision provided:
“… As trustee points out in her objection to tentative decision, she is one of 3 beneficiaries of the trust. Therefore she will only be required to reimburse the trust for 2/3 of the $60,000 or $40,000 plus interest on $40,000 at the rate of 10% from the date of distribution, October 11, 2004.”
Sue specifically argues:
“As Appellant has already pointed out in the Distribution of Assets and in her November 18, 2005 accounting, the trustee allocated $10,000 [of the $60,000 allotted to the Trustee as compensation] to each of the other two beneficiaries in the distribution, leaving only $40,000 net that the trustee was paid for compensation. This would result in a $13,333.33 one-third amount for one beneficiary, or $26,666.66 two-thirds amount for two beneficiaries, instead of the $40,000 (two-thirds of $60,000) amount the court used. ”
In issue V above, we reversed this portion of the judgment and remanded the matter to the trial court with instructions to Sue to prepare and file a traditional trust accounting of receipts and disbursements/assets and liabilities during her tenure as trustee, consistent with the requirements of section 16063, subdivision (a). Upon receipt of such an accounting, the trial court may deny compensation only with respect to those assets which were administered negligently or in breach of trust. In view of our order reversing and remanding this portion of the judgment, no further discussion of the trial court’s calculations is required.
See footnote 9, ante, page 26.
XVII.
THE ABSTRACT OF JUDGMENT
Sue contends that Linda is liable for an erroneously recorded abstract of judgment and further contends the superior court erroneously ordered a lien on Sue’s personal real property.
She specifically argues:
“The court ordered that ‘a judicial lien be placed on the Arbonna [sic] property’ The petitioner, however, placed an abstract of judgment on all properties owned by the trustee and is therefore liable for a wrongful attachment because the petitioner tied up more property than was reasonably necessary to secure the claim. [¶] ... [¶]
“This petition was filed on June 17, 2005. The Arbona property had been transferred to Sue’s own revocable trust as of October 2004 and had not been a part of the Herrick Family Trust for more than eight months. An abstract does not attach until it is recorded and it therefore could not affect previously transferred property .... The attachment was improper.
“Without any hearing, the petitioner essentially attached all the real property owned by Sue Mosley, including property contained in her own revocable trust, the Hazel Valley Trust. The Hazel Valley Trust contains the assets of trustor Carolyn Sue Mosely for the benefit of her own two children. It is not the same entity as the Herrick Family Trust, which contained the assets of the Herrick Family Trust for the benefit of the three Herrick children. [¶] ... [¶]
“The Hazel Valley Trust has nothing to do with the Herrick Family Trust and is wrongly identified in the affidavit of identity. Regardless, the interest in ownership in the Arbona property was and is no longer Herrick trust property ....”
A review of the superior court file reveals that Linda obtained an amended abstract of judgment on July 12, 2006. That amended abstract lists the judgment debtor’s name as: “Carolyn Sue Mosley, Trustee of the Herrick Family Trust” and indicates the judgment was entered on January 17, 2006. A review of the superior court file also reveals that Linda obtained a second amended abstract of judgment on February 1, 2007. That amended abstract lists the judgment debtor’s name as: “Carolyn Sue Mosley, Trustee of the Herrick Family Trust” and again indicates the judgment was entered on January 17, 2006. The amended forms of abstract of judgment make no specific mention of Sue’s Hazel Valley Trust and her concern about misidentification of the relevant property appears to have been resolved.
XVIII.
INDEMNIFICATION
Sue contends the trust agreement directed her to determine the valuation of the real property, she made a good faith attempt to do so, and the trust indemnifies her against any kind of judgment.
The trust agreement provided:
“To carry out the provisions of the trusts created by this instrument, the Trustees shall have the following powers besides those now or later conferred by law: [¶] ... [¶]
“I. To initiate or defend, at the expense of the trust, any litigation relating to the trust or any property of the trust estate the Trustees consider advisable, and to compromise or otherwise adjust any claims or litigation against or in favor of the trust.”
Section 16040 states in relevant part:
“(a) The trustee shall administer the trust with reasonable care, skill, and caution under the circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument.
“(b) The settlor may expand or restrict the standard provided in subdivision (a) by express provisions in the trust instrument. A trustee is not liable to a beneficiary for the trustee’s good faith reliance on these express provisions.”
The superior court provided in its statement of decision:
“When the trustee valued the property at 96 Arbona Circle, she did not have a standard appraisal done. She used a methodology to arrive at the value based on estimated square footage that turned out to be 9% smaller th[a]n the actual property. She then took an average price per square foot from 7 home sales in 2003 to arrive at a price per square foot....
“The Court finds this method of arriving at the value to be flawed. The trustee reduced the value by 9% by her error in square footage. She further reduced it by not accounting for the sharp increase in property values in California from 2003 to October 2004 and by using price per square foot without regard to lot size, condition, location and other factors that appraisers use. [¶]…[¶]
“Despite the considerable difference between the trustee’s value and the actual appraised value of the property, the Court does not find bad faith on the part of Carolyn Sue Mosley such that she should be required to pay interest on the difference. She is a realtor and should have known that her flawed methodology would result in a wrong value, but the Court does not find it has been proven by petitioner that on this issue she breached her fiduciary duties.”
On appeal, Sue submits that she is entitled to indemnification under the trust agreement and that indemnification can only take place if this court instructs “that the beneficiaries return their distribution for allocation of their two-thirds liability for indemnification of the trustee in the remote chance that this decision is affirmed.”
A breach of trust is a violation by the trustee of any duty that the trustee owes the beneficiary. (§ 16400.) If a trustee commits a breach of trust, a beneficiary may commence a proceeding to compel the trustee to redress the breach by payment of money or otherwise. (§ 16420, subd. (a)(3).) If the trustee commits a breach of trust, the trustee is chargeable with any profit made by the trustee through the breach of trust, with interest. If the trustee has acted reasonably and in good faith under the circumstances as known to the trustee, the court, in its discretion, may excuse the trustee in whole or in part from liability for the profit, if it would be equitable to do so. (§ 16440.)
In the instant case, the superior court exercised its discretion, determined Sue used an incorrect methodology in valuing the real property, further determined that Sue did not engage in bad faith, and ordered imposition of a lien for two-thirds of the difference between Sue’s valuation and that of M. Douglas Peters, i.e., a sum of $38,860 (two-thirds of $58,000). The order of the court properly redressed resulting error in valuation and reversal as to this finding is not required.
XIX.
CLAIMED BIAS AGAINST APPELLANT
Sue contends the trial court exhibited a personal prejudice against her by using the term “glib” to describe her in the statement of decision.
The statement of decision provided in relevant part:
“… The Petitioner was forced to file this petition because the trustee was non-responsive to her requests for information, made glib responses and failed to address the Petitioners substantive concerns. The Court further finds that she breached her fiduciary duty in keeping $60,000.”
Sue now argues:
“… With all due respect the court should not … be concerned with the trustee’s manner of speech, as long as it is not disrespectful, but should only be concerned with the facts and the law. That the trustee speaks frankly and not in the manner of a polished attorney should not be perceived as ‘glib’ but merely as the trustee’s frank manner of speaking and means no disrespect.
“That the trial court judge included a derogatory comment about the trustee in the Judgment demonstrates a bias toward the trustee which was evident throughout the court proceedings. ”
“Glib” is commonly defined as “… characterized by a propensity for, ability to use, or production of a smooth ready flow of words.” (Webster’s 3d New Internat. Dict. (1986) p. 964.) Appellant clearly displayed these exemplary qualities in her articulate remarks at the November 28, 2005, hearing on petition and in the many incisive pleadings she filed in the superior court. Canon 3 of the California Code of Judicial Ethics provides: “A judge shall perform the duties of judicial office impartially and diligently.” Specifically, canon 3B(5) provides: “A judge shall perform judicial duties without bias or prejudice. A judge shall not, in the performance of judicial duties, engage in speech, gestures, or other conduct that would reasonably be perceived as … bias or prejudice ....” However, the burden is on the complaining party to prove bias because “[i]t is presumed that official duty has been regularly performed.” (Evid. Code, § 664; see California Advocates for Nursing Home Reform v. Bonta (2003) 106 Cal.App.4th 498, 505.)
In our view, the trial court’s solitary use of the adjective “glib” in the statement of decision does not prove bias against Sue. Although Sue goes on to complain about her lack of notice of various hearings and the denials of requested continuances, the record reveals that Sue had ample opportunity to present her position through a number of supplemental pleadings. She also contends the trial court “hadn’t even read the trustee’s accounting as of the November 28, 2006 hearing date.” However, the court explained to Sue at that hearing, “... I’m going to read it, I’m going to take it under submission.” The court went on to briefly explain the statement of decision process and referred Sue to the Rules of Court for guidance.
The record does not support Sue’s claim of judicial bias and her contention must be rejected.
SUMMARY
As more specifically discussed herein, there are three substantive issues, the resolution of which is required for disposition of this appeal. They are: (1) the valuation of the trust real property; (2) the entitlement of appellant to compensation as trustee; and (3) the trial court’s award of attorney fees.
For the reasons set forth herein, we will affirm the finding of the trial court setting the value of the residential property at $240,000, reverse the trial court’s finding denying appellant any compensation and remand for further proceedings on the issue of compensation, and finally, reverse the award of attorney fees in favor of respondent Linda Herrick. For such reason, we will vacate the judgment.
Upon remand, the trial court shall give appellant Sue Mosley the opportunity to prepare and file a full accounting of the affairs of the trust during the period she served as successor trustee. In connection with this accounting, Sue may seek and document an award of reasonable and traditional trustee fees. In ruling upon such a claim for fees, the trial court shall inter alia (1) disallow fees for services determined to have been more appropriately provided pursuant to the “Durable Power of Attorney for Management of Property and Personal Affairs” (which contains a no-compensation provision), and (2) only disallow items attributable to administration of the trust upon a finding of unreasonableness, negligence, mismanagement, or breach of trust, which findings shall be set forth and discussed in reasonable detail. The trial court shall thereupon after consideration enter judgment accordingly.
Should Sue fail to provide such an accounting within a reasonable time as directed and specified by the trial court (but not less than 60 days) the trial court may reinstate the judgment except for the previous award of attorney fees for respondent Linda Herrick.
DISPOSITION
The judgment is vacated. The finding of the trial court as to the value of the residential real property is affirmed. The award of attorney fees is reversed. The issue of trustee compensation is remanded to the trial court for further proceedings in accordance with the views expressed herein.
The parties shall each bear their own costs on appeal.
WE CONCUR: VARTABEDIAN, Acting P.J., LEVY, J.
Sue’s October 29, 2006, letter is another matter. The letter was dated October 29, 2006, was apparently transmitted by facsimile on or about that date, and was not before the trial court when it filed its statement of decision and judgment on January 17, 2006. Documents not before the trial court cannot be included as part of the record on appeal and must be disregarded as beyond the scope of appellate review. (Pulver v. Avco Financial Services (1986) 182 Cal.App.3d 622, 632.) Sue’s request for judicial notice of the October 29, 2006, letter is denied.