Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
Superior Court County of Santa BarbaraSuper. Ct. Nos. 1131887, 1156326, 1158809, Thomas P. Anderle, Judge.
Stein & Flugge, Valerie V. Flugge, Marc R. Stein and Dilan A. Esper for Petitioners, Plaintiffs and Appellants Joyce L. Trevillian, Sheila M. Smith, Sheri C. Gardner.
Horvitz & Levy, John A. Taylor, Jr., Patricia Lofton; Arnold, Bleuel, Larochelle, Mathews & Zirbel, Gary Arnold; Price, Postel & Parma, Melissa J. Fassett, Timothy E. Metzinger for Objector, Defendant and Respondent Terri Lee Trevillian, individually, and as Executor of the Estate of Marvin R. Trevillian, and as Trustee of the Marvin R. Trevillian Revocable Trust.
COFFEE, J.
The variable estate plans of Marvin Trevillian generated three legal actions against his widow, Terri Trevillian. Appellants Joyce Trevillian (Marvin's former spouse) and two of their three daughters, Sheila Smith and Sheri Gardner, filed a will contest, a trust contest and a civil complaint against Terri. They sought to obtain a constructive trust, claiming that Terri had exercised undue influence over Marvin, and to enforce a 1991 estate disposition agreement (ED agreement) involving approximately 90 percent of Marvin's significant estate and/or to recover damages for the breach of that agreement and others. The court entered judgment in favor of Terri and awarded her attorney fees. Appellants contend that the court erred by interpreting the ED agreement as an integrated agreement; by excluding parol evidence; by finding that Terri neither actively procured nor unduly benefited from Marvin's testamentary instruments; by placing the burden of proving undue influence upon appellants; by concluding that Marvin was not a "dependent adult" and Terri was not a "care custodian" under Probate Code section 21350; and by denying appellants a jury trial on their interference with contract and interference with inheritance rights causes of action. Appellants also claim that the court abused its discretion in awarding Terri attorney fees. We affirm.
FACTS AND PROCEDURAL HISTORY
Marvin and Joyce married in 1954, separated in 1983, and their first marriage terminated in 1985. Their daughters, Sheila, Victoria and Sheri, were born in 1955, 1956 and 1958, respectively. (Marvin also had another, older daughter named Deborah Ann Harris.) While married to Joyce, Marvin developed, bought, and managed commercial and residential real estate. He also owned several self-storage facilities, his personal residence, and other property.
Terri and Marvin met in 1966, when she worked for his business partner's father. Terri and Marvin were then 18 and 35 years old, respectively. They began dating in 1971. Terri then had two young children who were born during her short marriage to Mylan McMurray, whom she divorced in 1970. Terri dated and worked for Marvin for many years, both during and after his first marriage to Joyce. Marvin financed private junior and senior high school educations for Terri's children. He also paid living and education expenses for Terri in the late 1970's when she attended Santa Barbara Community College.
Marvin executed a will on August 16, 1979. He signed a codicil to provide a $100,000 gift for Terri on the same day. Marvin's 1982 will, like most of his wills, primarily benefited his wife (then Joyce). Marvin acknowledged his four daughters in his 1982 will, but "purposely [made] no provision" for his oldest daughter, Deborah Ann Harris, while leaving gifts of $30,000 to Sheila, Victoria and Sheri, and a $150,000 gift to Terri.
Marvin continued to support Terri and pay her education expenses while she attended the University of California at Santa Barbara. She often missed class while traveling with Marvin, and she stopped attending the university in 1980 or 1981.
Marvin filed a divorce petition in 1983. After acrimonious proceedings, Marvin and Joyce's divorce was final in 1985. Joyce formed Kamunity Properties (Kamunity) in 1985 to manage the properties she received pursuant to the divorce settlement (two houses and three apartment buildings then valued at approximately $15,000,000). She hired Sheri to manage operations and Sheila to manage maintenance for Kamunity. Victoria worked for Kamunity part-time, first doing secretarial work, and later collecting money from the properties' coin-operated laundry machines.
In 1986, Terri helped Marvin when he had a heart attack and underwent open heart surgery. Marvin did not attend Sheri's wedding that year. His 1986 estate plan "purposely [made] no provision" for Sheri, Sheila or Victoria. That plan provided substantial gifts for Terri (including $240,000, and one-half of his interest in two businesses) and Jo Anne Collins (including $240,000, and one-half of his interest in two businesses, and his primary residence).
Later in 1986, Marvin married Jo Anne. His January 1987 will left substantial gifts to Sheila, Victoria, and Sheri (equal shares of his interests in two businesses, and $100,000 each) and to Jo Anne (his residence, country club membership, and the residue of his estate). It provided nothing for Terri. Marvin and Jo Anne separated after several months of marriage. He began calling Terri in April 1987, and they resumed their relationship. In May 1987, Marvin signed a will in which he purposely made no provision for Jo Anne, his wife; but made gifts to Sheila, Victoria and Sheri, as he had done in his January will; he also gave Terri his residence, $200,000, and other items.
In spring 1989, Marvin invited Joyce to lunch to discuss something important regarding their daughters. During lunch, he proposed that they remarry so that he could leave his estate in trust to Joyce, free of estate tax, to keep for their daughters. At trial, Joyce testified that Marvin promised never to divorce her if they remarried, but that she would remain free to divorce him. During a deposition before his death, however, Joyce testified that she and Marvin never discussed his giving up the right to divorce her. After continuing discussions regarding their remarriage, Marvin and Joyce consulted lawyers. Attorney Valerie Flugge represented Joyce. Attorneys Ann Canova-Parker and Douglas Schmidt represented Marvin. Counsel began working on a prenuptial agreement and the ED agreement. On February 20, 1991, Marvin and Joyce executed the ED agreement and the prenuptial agreement (1991 prenuptial agreement).
The 1991 prenuptial agreement describes the separate properties of each spouse, contains a mutual waiver of rights in separate property, and provides that no community property will be acquired during the marriage. It further provides that "[i]f the parties' marriage dissolves, each party . . . waives and relinquishes any right to spousal support from the other." It includes a merger clause stating that it contains the entire understanding and agreement of the parties, and that there have been no prior promises or agreements, either oral or written, except as set forth in the agreement.
The ED agreement provides that Marvin will create a QTIP trust, funded with 90 percent of his assets, which upon his death will furnish Joyce with income from the trust for life. That agreement is "[c]onditioned only upon the parties being married to each other at the time of MARVIN's death." The ED agreement also states that "MARVIN and JOYCE are executing contemporaneously herewith that certain Prenuptial Agreement dated February 20, 1991. [¶] . . . [¶] In consideration of the mutual promises contained herein and of the Prenuptial Agreement executed contemporaneously herewith, the parties agree as follows . . . ."
A QTIP trust (qualified terminable interest property trust) permits a person to leave property in a life estate to a spouse with the remainder to pass to
Marvin and Joyce married on February 21, 1991, in the presence of their three daughters. Marvin insisted that the marriage be kept a secret. Four days later, on February 25, Marvin executed a pour-over will and a trust amendment (the 1991 testamentary instruments), providing Joyce, upon his death, with a lifetime income from his estate and providing their daughters with equal shares of the balance of the residue upon Joyce's death. Marvin named Joyce to succeed him upon his death as trustee of the trust and to serve as executor of his will.
On January 5, 1993, Marvin and Joyce executed a property management agreement whereby Kamunity would manage his apartment properties in exchange for 5 percent of each property's monthly gross revenues. The agreement had an initial term of five years (i.e., until January 5, 1998), with automatic one-year renewal periods, until cancelled with written notice no less than 90 days before the end of the term. Kamunity acquired additional personnel, equipment and office space in order to manage Marvin's properties. The agreement provided that "[s]hould [Marvin] request . . . Kamunity to undertake projects or services which are beyond the scope of normal property management activities, then [Marvin] and Kamunity must agree to compensation prior to Kamunity undertaking such projects . . . ."
Marvin frequently went to the Kamunity office and spoke with Joyce, Sheila, and Sheri regarding business. At Marvin's request, Sheila and Sheri assumed increasing responsibility for his business and personal affairs. This included overseeing renovation of his apartments; maintaining his residence; paying his personal bills; making investments for him; and performing services for his self-storage business. Much of this work exceeded the scope of the property management agreement and, according to appellants, was performed without compensation to Kamunity or its employees. Marvin said that he wanted to give his daughters an opportunity to learn the business from him. Sheila and Sheri testified that Marvin repeatedly said they needed to work on his business, residential and financial matters so they could manage the properties and money they would inherit, and that their hard work would pay off because all of his properties would be theirs some day. They also testified that but for Marvin's repeated assurances that they would inherit his estate, they would not have provided extensive services beyond the scope of the property management agreement.
In 1997 and 1999, Marvin complained to Kamunity about two separate matters. Kamunity had purchased two pick-up trucks and charged one of them to Marvin without his consent. He also discovered a $600,000 shortfall in a balance sheet from Kamunity. He began to lose confidence in Kamunity, although it had rectified the errors.
On April 6, 1999, Marvin and Joyce signed an amendment to the ED agreement. The amendment required Marvin to fund the QTIP trust with 75 percent, rather than 90 percent, of his assets; and it provided that Joyce be named trustee of the QTIP trust. Like the balance of the ED agreement, the amended provisions were "[c]onditioned only upon the parties being married to each other at the time of MARVIN's death." Ten days later, on April 16, Marvin executed a trust amendment, naming Terri as successor trustee and revised his will to remove Joyce as executor and name Terri in her place.
Following his second marriage to Joyce, Marvin socialized more often with his daughters, frequently had lunch with them and attended more family gatherings. Marvin and Terri continued to travel together, often on cruises. In spring 2000, Sheila, Sheri and Victoria joined them on a cruise. Marvin enjoyed the cruise and told Terri to look for other cruises so that his daughters could join them on future cruises.
Some time after their spring cruise, Marvin, Terri, Victoria and Sheila met at a restaurant for lunch. (Sheila thought that this lunch occurred in June 2000.) During lunch, Marvin said that Terri would begin taking over some of his investments that Sheila had been handling. According to Marvin, Shelia "got mad[,] . . . got up and walked out of the restaurant"; and "if she had [had] a gun, [he was] sure she would have shot [him]." On July 13, 2000, Marvin said he was giving Sheila a trip for two to Hawaii in appreciation of her work on his investments.
In September 2000, Marvin and Terri went on a month-long cruise. Kamunity employees, including Paul Brotherton, who was also Sheila's close, personal friend, cared for Marvin's residence in his absence. When Marvin and Terri returned in early October, his long-term maid told them that in their absence, Brotherton had entered Terri's office, copied data from her computer, and gone through her desk. This incident caused Marvin to become extremely angry.
Marvin also read an upsetting email that Victoria had written during his absence. Her email explained that she would no longer be collecting laundry money from his properties because she had "trouble with the tension in the [Kamunity] office," and "no one appreciate[d her.]"
On October 3, 2000, Marvin went to Kamunity's office to speak with Joyce. After he described the computer incident, Joyce called Terri a "god dam liar." When Joyce learned that his maid had told Marvin about the incident, she called the maid a liar. Marvin told Joyce he was not happy with the way Kamunity people were treating Victoria.
On October 4, Marvin personally delivered a letter to Kamunity's office, which gave notice that he was canceling the property management agreement, effective January 1, 2001. Marvin's anger escalated when he later encountered difficulty obtaining information concerning his properties from Kamunity. Sheri had instructed Kamunity employee Jill Holder not to fax anything to Marvin, although she knew it could anger him. Sheila had instructed resident managers not to send rent schedules to Marvin's office. On October 6, 2000, Marvin sent Sheila a note saying, "In light of your current attitude as to the information I requested earlier today concerning the rent schedules, I feel the appropriate reaction from me is to CANCEL YOUR HAWAIIAN TRIP." Marvin complained to Terri and Victoria about the treatment he received from Sheila, Sheri and Joyce after he cancelled the property management agreement.
Soon after Kamunity received Marvin's cancellation notice, Victoria was at Sheri's home. Sheri screamed that Marvin would still be at Kamunity if it were not for Victoria, and she kicked Victoria out of her home. Joyce, Sheri and Sheila started excluding Victoria from family gatherings. When Marvin heard about these incidents, he said that Sheri and Sheila "were going to be very surprised, because they were going to get next to nothing."
On December 5, 2000, Marvin filed a petition to divorce Joyce. In late 2000 and throughout 2001, Marvin remained angry and disgusted with Kamunity's conduct concerning the transition of his business to another property management company, Courtland-Dane. After receiving a letter from Sheila in which she criticized Courtland-Dane's management, Marvin became further irritated and complained that Sheila was arrogant and would not leave him alone.
Marvin felt that Sheila's attitude had "absolutely gone from nice girl to mean bitch." He also expressed irritation with Joyce's attitude, her charging his business for gas expenses for the "whole Trevillian clan," and her failure to pay Victoria money that Marvin had provided to Kamunity for Victoria's services.
In February 2001, Marvin told Victoria that Joyce, Sheila and Sheri were not speaking to him, that the hostility over the property management contract cancellation overshadowed everything, and that he no longer could trust Joyce to handle his estate. He said he just wanted to walk away from all of it.
Marvin's communications with Joyce, Sheila and Sheri remained minimal. He instructed the guard at the gate of his residence to call the police if Sheila tried to see him. While hospitalized in February 2001, Marvin did not want Sheila and Sheri to know of his condition or be permitted to visit him. When Sheri learned of his hospitalization from an employee, she telephoned Terri and screamed at her. Terri learned of Marvin's second marriage during that conversation when Sheri said that he had remarried Joyce and they might get a divorce.
Marvin told several people of his desire to survive long enough to divorce Joyce. He planned to marry Terri a week after June 5, 2001, when the divorce would be final. Marvin hand-wrote a list of estate plan changes. These changes involved leaving Sheila and Sheri $100 each; leaving Victoria cash equal to the balance of the estate tax exemption amount, his self-storage businesses, and the Fran apartment building; and leaving the remainder of the estate to Terri. On May 4, 2001, he asked Terri to type his handwritten list of estate plan changes, and two additional lines he dictated to her, and fax the documents to his estate planning attorney, Schmidt. Terri did so.
During a telephone conversation with Schmidt on May 9, 2001, Marvin said that Terri should receive the residue of his estate, without restrictions. On May 14, 2001, Marvin met with Schmidt, alone, for 45 minutes to discuss a trust amendment. Marvin said that his daughters should no longer receive the residue of the estate. At Marvin's request, his lawyers prepared a prenuptial agreement and revised his estate plan. On June 5, 2001, Marvin executed a pour-over will and a trust amendment (the 2001 testamentary instruments), which incorporated the revised gifts for Sheila, Sheri, Victoria and Terri. Marvin married Terri on June 12, 2001.
In August 2001, Marvin sued Kamunity to recover records concerning his properties. He also sued Sheri and her husband to recover money that he had lent them. In January 2002, Sheri sued Victoria, the trustee of educational trusts that Marvin had established for his grandchildren, and claimed that she had mismanaged the trusts. Sheri's lawsuit against Victoria upset Marvin, who had been annoyed that Sheri used the trust funds as a "taxi cab."
In January 2002, Marvin sent Schmidt a handwritten note describing additional amendments to the trust. Schmidt then prepared Marvin's 12th trust amendment to give the Fran Apartments to Terri instead of Victoria and specify that Victoria would receive $500,000 (in lieu of the balance of the applicable estate tax exemption amount). Marvin signed the 12th trust amendment on January 24, 2002.
Marvin died in October 2003. At the time of his death, his property was worth between $72,000,000 and $125,000,000.
Appellants filed a will contest, a trust contest and a civil complaint against Terri. The court ordered the three actions consolidated for trial and reserved judgment on two legal claims (inducing breach of contract and interference with the right to inherit) pending resolution of the equitable claims. After a lengthy trial, the court found no merit to appellants' equitable claims, concluded that its resolution of the equitable claims rendered the legal claims moot, and entered judgment in favor of Terri. It also awarded attorney fees to Terri.
DISCUSSION
Contract Claims
Appellants sought to obtain specific performance of the ED agreement, or damages. Although the ED agreement was subject to the condition that Joyce be married to Marvin at his death, appellants argued that Marvin had breached an alleged oral agreement not to divorce Joyce and his obligations under the ED agreement. On appeal, they claim that the trial court erred in finding that the ED agreement was an integrated agreement; in applying the parol evidence rule to exclude extrinsic evidence of an oral agreement; and in concluding there was no such oral agreement. We disagree.
In analyzing the 1991 prenuptial agreement and the ED agreement, the court concluded that the two agreements should be read together. Surrounding circumstances and the following language in the ED agreement support the court's conclusion: "MARVIN and JOYCE are executing contemporaneously herewith that certain Prenuptial Agreement dated February 20, 1991. [¶] . . . [¶] In consideration of the mutual promises contained herein and of the Prenuptial Agreement executed contemporaneously herewith, the parties agree as follows . . . ." A contract need not recite that it "incorporates" another document, so long as it "'guide[s] the reader to the incorporated document.'" (Shaw v. Regents of University of California (1997) 58 Cal.App.4th 44, 54.) Here, the ED agreement incorporated the 1991 prenuptial agreement. (Ibid.)
In addition to their contemporaneous execution, the 1991 prenuptial agreement and the ED agreement were both the result of lengthy discussions and negotiations concerning the remarriage of Joyce and Marvin to facilitate his leaving her 90 percent of his estate on a tax-free basis. Each party was represented by counsel throughout the negotiations. Marvin stated that he regarded the two agreements as "companion agreements."
An agreement is integrated when the parties intend it to be the complete and final expression of their agreement. (Banco Do Brasil, S.A. v. Latian, Inc. (1991) 234 Cal.App.3d 973, 1001.) The 1991 prenuptial agreement includes a merger clause, which provides that the agreement contains the parties' entire understanding and written agreement; and that their agreement could be amended only in writing. Along with the balance of the 1991 prenuptial agreement, its merger clause was incorporated into the ED agreement. Together, the two agreements constitute the entire agreement between Marvin and Joyce concerning their subject matter which must be interpreted together, as an integrated agreement.
Appellants also claim that the court erred by excluding parol evidence of oral promises and discussions between the parties regarding the ED agreement. We disagree. "'The decision whether to admit parol evidence involves a two-step process. The first is to review the proffered material regarding the parties' intent to see if the language is "reasonably susceptible" of the interpretation urged by a party. [Citation.] If that question is decided in the affirmative, the extrinsic evidence is then admitted to aid in the second step, which involves actually interpreting the contract.'" (Roden v. Bergen Brunswig Corp. (2003) 107 Cal.App.4th 620, 624.) "If parol evidence is admitted and is in conflict, the substantial evidence test applies." (Id. at p. 625.) The court followed the correct procedure by admitting extrinsic evidence of the purported oral agreement on a provisional basis. (Id. at p. 624.)
After considering the proffered parol evidence, the court found that appellants failed to prove that Marvin made any oral agreement not to divorce Joyce. Substantial evidence supports the court's finding. (Roden v. Bergen Brunswig Corp., supra, 107 Cal.App.4th 620, 625.) Before Marvin's death, Joyce testified that she never had a discussion with him regarding his giving up the right to divorce her. In their second divorce proceeding, Marvin provided a sworn declaration stating that he never promised not to divorce Joyce. Marvin testified that he never intended to waive the provision conditioning the ED agreement on the parties' being married to each other at his death, nor made any oral agreement with Joyce to waive any provision of the ED agreement.
Appellants further argue that the following language in paragraph 4 of the ED agreement prohibited Marvin from divorcing Joyce: "MARVIN agrees that, during his lifetime, he will do nothing to defeat the purpose and intent of this agreement by way of intervivos transactions or conveyances." This argument is not persuasive. First, intervivos "conveyances" and "transactions" connote gifts, sales, transfers and similar property transactions, rather than events such as marriages, divorces or births. Moreover, appellants' argument that paragraph 4 of the ED agreement prohibited Marvin from divorcing Joyce makes no sense because paragraph 15 of the 1991 prenuptial agreement recognized that the marriage could be terminated: "If the parties' marriage dissolves, each party . . . relinquishes any right to spousal support from the other." As parts of an integrated agreement, these provisions must be read together. Neither the 1991 prenuptial agreement nor the ED agreement suggests that Marvin unilaterally waived the right to obtain a dissolution or divorce.
Appellants also challenge the trial court's determination that Marvin did not breach the ED agreement (or any oral modification thereto), because it erroneously excluded Flugge's hearsay testimony regarding statements purportedly made to her by Marvin's attorney during negotiations of the ED agreement. Appellants argue that such testimony was admissible to establish the meaning of the parties' agreement rather than for the truth of statements made by Marvin's attorney, Ann Canova-Parker. They contend that such testimony would include Marvin's statements regarding estate planning and show whether he could do anything (including divorce Joyce) to avoid his obligations under the ED agreement. Appellants present no plausible explanation of how such testimony would be probative if the statements were not presented for their truth.
Appellants further argue Flugge's testimony was admissible because Canova-Parker's statements were authorized admissions of Marvin. Evidence Code section 1222, subdivision (a) specifies the requirements of an authorized admission: "The statement was made by a person authorized by the party to make a statement or statements for him concerning the subject matter of the statement." The court correctly ruled that the statements failed to satisfy the requirements of an authorized admission because appellants failed to establish that "[Canova-Parker] had the authority to make [the specific proffered] statements . . . that she made to Miss Flugge." (See Evid. Code § 1222, subd. (a); see also Whitaker v. Title Ins. & Trust Co. (1921) 186 Cal. 432, 435-436.)
Appellants argue that the court should have admitted Flugge's testimony because Canova-Parker's authority to negotiate for Marvin indicates that her statements must have been made with implied or presumed authority. In so arguing, they rely on inapposite cases such as Phelps v. Kozakar (1983) 146 Cal.App.3d 1078. In Phelps, the court concluded that an attorney had authority to make statements on behalf of his client where the attorney swore under penalty of perjury in a formal declaration that his statements were authorized. (Id. at pp. 1082-1083.) Here, in contrast, appellants provided no such sworn testimony from Canova-Parker. They represented that they did not call Canova-Parker as a witness at trial because she had claimed a lack of recollection during her deposition testimony. The court ruled correctly in excluding Flugge's proffered hearsay testimony.
The evidence supports the trial court's finding that there was no oral agreement by Marvin to remain married to Joyce for life. The ED agreement was "[c]onditioned . . . upon the parties being married to each other at the time of MARVIN's death." This is a legitimate condition in a premarital estate planning agreement. (French v. French (1945) 70 Cal.App.2d 755, 757.) The court correctly concluded that Marvin acted within his rights in divorcing Joyce, that he was not married to Joyce upon his death, and that Joyce did not establish that Marvin breached the ED agreement. It correctly ruled that appellants failed to establish that Marvin breached any agreement, written or oral, to leave his estate to Sheri, Sheila or Joyce, or that they were entitled to any equitable relief or damages based on any contract theory.
Undue Influence Claims
Appellants contend that the trial court made multiple errors concerning their claim that the testamentary instruments executed by Marvin in 2001 and 2002 resulted from the exercise of Terri's undue influence upon him. California law allows a testator to dispose of property as he or she sees fit without regard to whether the dispositions specified are appropriate or fair. (See Estate of Sarabia (1990) 221 Cal.App.3d 599, 604.) "'[A]s a matter of law one has a right to make an unjust will, an unnatural will, an unreasonable will, or even a cruel will.'" (Estate of McGivern (1946) 74 Cal.App.2d 150, 154). The presumption in favor of a will "can be overcome if it is shown that the testator was affected by undue influence, a concept with a very definite meaning." (Sarabia, at p. 604.)
The presumption of undue influence arises where all of the following elements exist: "(1) [T]he existence of a confidential relationship between the testator and the person alleged to have exerted undue influence; (2) active participation by such person in the actual preparation or execution of the will, such conduct not being of a merely incidental nature; and (3) undue profit accruing to that person by virtue of the will." (Estate of Sarabia, supra, 221 Cal.App.3d 599, 605.) Where all these elements are proved, the presumption "shifts to the proponent of the will the burden of producing proof by a preponderance of evidence that the will was not procured by undue influence." (Ibid.) The trier of fact must determine not only "whether the presumption will apply" but also "whether the burden of rebutting it has been satisfied." (Ibid.) Here, the trial court found that the presumption did not apply because appellants failed to establish all of the prerequisite factors. We reject appellants' contention that no substantial evidence supports that finding.
The trial court considered extensive evidence from many sources before finding that Terri did not actively procure the 2001 testamentary instruments or the 2002 trust amendment, and that Terri did not unduly benefit from those instruments. Donald Schmidt had known and advised Marvin in estate planning matters since 1979. He drafted numerous testamentary instruments for Marvin, including the challenged instruments. He testified that Marvin spoke with him on the telephone and in person regarding those instruments. He also testified that although Terri sometimes accompanied Marvin to his office, she rarely participated in any discussion. He had no doubt that Marvin exercised independent judgment in amending his estate plan in 2001. His perception is consistent with testimony from Victoria and Dr. Welton (who treated Marvin for several years and saw him very regularly from February 2001 until his death). Both Victoria and Welton testified that it was important to Martin to survive until his divorce from Joyce was final so that she would not inherit his estate.
The court recognized that in May 2001, at Marvin's direction, Terri faxed Schmidt documents describing changes to Marvin's trust that would leave the bulk of his estate to her. Appellants stress that Terri called Schmidt to tell him that Marvin was too sick to see him for an appointment and picked up the instruments after they were prepared. Substantial evidence supports the trial court's conclusion that Terri did not actively participate in the preparation or execution of Marvin's 2001 testamentary instruments. To the extent she participated, she did so in an incidental manner. (See Estate of Sarabia, supra, 221 Cal.App.3d 599, 605.) Unlike the beneficiaries in the cases cited by appellants, Terri did not recommend an estate planning lawyer to Marvin or join in substantive discussions with Marvin and his attorney regarding the terms of the will. (See Estate of Baker (1982) 131 Cal.App.3d 471, 480; Estate of Teel (1944) 25 Cal.2d 520, 528.)
Similarly, substantial evidence supports the court's finding that Terri did not unduly benefit from Marvin's 2001 testamentary instruments and his 2002 trust amendment. Marvin executed the 2001 testamentary instruments on June 5, 2001, in anticipation of his marriage to Terri, as the following explicit language from the will reflects: "I, MARVIN R. TREVILLIAN . . . make this Will in anticipation of my marriage to TERRI LEE McMURRAY. This Will shall become effective only upon the occurence [sic] of such marriage." Comparable language in the June 5, 2001, trust amendment conditions its effect upon Marvin's marriage to Terri. They married on June 12, 2001.
With rare exception (e.g., while separated), throughout his life, when Marvin was married, he designated his wife as the primary beneficiary of his estate. On June 5, 2001, when Marvin executed the testamentary instruments designating Terri as his primary beneficiary, he planned to marry her. He married her a week later, and they remained married until his death in October 2003.
Although most of Marvin's wills and trusts left substantial gifts to Sheila, Victoria, and Sheri, his 1986 estate plan left them nothing. In addition, most or all of Marvin's estate plans "purposely provided nothing for" his oldest daughter, Deborah Ann Harris. In nearly every will and trust for over 20 years, Marvin made significant gifts to Terri. Sometimes, long before 2001, his cash gifts to Terri exceeded the value of his cash gifts to Sheila, Victoria, or Sheri. Marvin supported Terri for many years; financed her college education, and private junior and senior high school educations for her children; took Terri on many vacations, sometimes with her children; bought her residences; and gave her other substantial gifts. Terri assisted Marvin in 1986, as he underwent heart surgery. She had a personal and/or working relationship with Marvin for more than 20 years. He lived more than two years after he made Terri the primary beneficiary and executor of his estate. Substantial evidence supports the trial court's finding that Terri did not unduly benefit as a result of the 2001 and 2002 amendments to Marvin's testamentary instruments.
After finding that appellants had not met their burden of proving the elements necessary to shift the burden to Terri to produce proof by a preponderance of evidence that Marvin's estate plan was not procured by Terri's undue influence, the court further found that Terri carried that burden, as she "did nothing that supports any claim that she exerted undue influence." In arguing that the court erred by concluding that Terri proved that Marvin's estate plan was not procured by her undue influence, appellants claim that the record is "devoid of any evidence as to whether any person had or had not pressured or otherwise convinced Marvin to disinherit Sheila and Sheri and leave the bulk of his estate to Respondent." Appellants are wrong.
The court reasonably concluded that Marvin modified his estate plan as a result of his irritation, conflict, disgust and anger with (and distrust of) appellants, and not because he was unduly influenced by Terri. In expressing irritation about appellants' treatment of Victoria, Marvin indicated that Sheila and Sheri would be "surprised because they were going to get next to nothing." After Marvin terminated the property management agreement, he was angry that Sheri and Sheila's actions had interfered with his prompt receipt of information regarding his properties. His initial reaction was to send Sheila a note saying that he had cancelled the Hawaiian vacation he had given her. Marvin also expressed disgust upon learning that Kamunity had damaged work shirts (to remove a logo) before sending them to a successor management company.
Other conduct of appellants aggravated Marvin, including the failure of Sheri and her husband to repay their debt to him, Sheri's taking legal action against Victoria as trustee of the educational trusts, and Sheila's sending him a letter critical of Courtland-Dane, the successor management company. Some time around February 2001, Marvin said that Joyce, Sheila and Sheri were not speaking to him, that the hostility over the property management contract cancellation was overshadowing everything, and that he no longer could trust Joyce to handle his estate. He said that he just wanted to walk away from all of it. In August 2001, Marvin filed the previously described lawsuits again Kamunity and Sheri and her husband.
The record lacks evidence that Terri exerted undue influence upon Marvin. Her faxing documents to Schmidt at Marvin's request does not prove undue influence. Much of appellants' undue influence action rests on their claim that Marvin was sick, weak, depressed, isolated and dependent upon Terri. Appellants' medical expert, Dr. Stephen Read, testified that Marvin was susceptible to undue influence because of his depression, compromised medical condition, and other factors. As the trial court noted, however, Dr. Read "did not know all the facts concerning the relationship among the parties during [the] eight-month period of time [preceding June 5, 2001]," and he had not personally seen Marvin during that time period or spoken to many of the people who did in fact see and talk with him.
Several people met with Marvin during the months preceding his execution of testamentary instruments on June 5, 2001, and January 24, 2002. They indicated that he appeared independent and mentally alert. For example, Welton saw Marvin driving a convertible with the top down and recalled that when Marvin came to see him, they met alone about 60 percent of the time. Judy Ricker, from Courtland-Dane, met with Marvin while managing Marvin's properties before and after January 2001. She recalled that he was mentally alert and completely in charge during their meetings. Lynneada McNeil, from Marvin's self-storage business, saw no change in his mental or physical status when they met in 2001. Victoria also said that Marvin remained independent and mentally sharp.
Similarly, Schmidt (Marvin's estate planning lawyer) and Paul Hartloff (who discussed the 2001 prenuptial agreement with Marvin) testified that Marvin came to their meetings on his own volition and was alert and mentally acute. From February 2001 until June 2001, he drove either his red Rolls Royce convertible or his Mercedes Benz almost daily. He drove his red Thunderbird until his license expired in August 2003. Substantial evidence supports the trial court's findings that Marvin was not susceptible to undue influence and that Terri did not exert undue influence upon him.
Appellants also contend that the trial court erred in concluding that Marvin was not a "dependent adult" and Terri was not a "care custodian" within the meaning of Probate Code section 21350, subdivision (c). That statute has no application to this case. Section 21350, subdivision (a) lists seven categories of persons who cannot be valid recipients of a donative transfer by testamentary instruments unless they can prove by clear and convincing evidence that there was no undue influence. (Prob. Code, §§ 21350, subd. (a), 21351, subd. (d).) These categories include "[a] care custodian of a dependent adult who is the transferor." (§ 21350, subd. (a)(6).) Because Probate Code section 21351, subdivision (a) exempts cases in which the transferor is related to the transferee by marriage, however, section 21350, subdivision (a) does not apply in this case, where Terri was Marvin's spouse.
Appellants argue that the Probate Code section 21351, subdivision (a) exception for a spouse does not apply here because Marvin and Terri were not married when he executed the challenged instruments or during the relevant period preceding their execution. This argument is not persuasive where the 2001 testamentary instruments would not be effective unless Marvin married Terri, and they were drafted in anticipation of that marriage. Under such circumstances, the section 21351, subdivision (a) exemption for gifts between spouses applies to Marvin's testamentary instruments.
The Jury Trial Claims
Appellants also complain that the trial court deprived them of their fundamental rights to have a jury decide their claims for inducing breach of contract and interference with the right to inherit. This argument lacks merit.
We first address the inducing breach of contract claim. During trial, appellants described the legal issues reserved for later determination as "Whether Terri induced Marvin to breach his agreements with Joyce[;] [¶] Whether Terri induced Marvin to breach his agreements with Sheila and Sheri[;] [¶] [and] Whether Terri interfered with Joyce's, Sheila's and Sheri's rights to inherit." (Italics added.) In seeking to expand the issues beyond those reserved for later determination, appellants now assert: "In light of the trial court's findings that Marvin had the right to terminate the Disposition Agreement by divorcing Joyce and to terminate the Management Agreement by its terms, some of the later cases [e.g., Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1127-1129] indicate that Appellants' cause of action may be more appropriately stated as interference with contractual relations or interference with prospective economic advantage." The "later" case appellants cite was decided in 1990, long before trial. If appellants sought relief on the theory that Terri interfered with their contractual relations without inducing Marvin to breach his agreements, they could have sought leave to amend their complaint accordingly and described the issues reserved for later determination to preserve their right to seek relief on that theory. They did not.
Terri's "Post-Trial Brief Regarding Plaintiffs' Right to a Jury Trial" put appellants on notice that she was relying on their contention that Marvin had breached contracts in arguing that the trial court's decision had resolved the inducing breach of contract claim. (See Distefano v. Forester (2001) 85 Cal.App.4th 1249, 1264-1265.) This reliance was reasonable, based on the allegations of the complaint and appellants' description of the issues reserved for later determination. The court properly determined that its decision that Marvin did not breach any contract rendered moot their claim that Terri induced him to breach a contract. Thus, it correctly ruled that no inducing breach of contract action remained for a jury determination.
Appellants also contend that the trial court deprived them of their right to have a jury decide their claim for interference with the right to inherit. The tort of interference with the right to inherit has not been recognized in California. (See Hagen v. Hickenbottom (1995) 41 Cal.App.4th 168, 173.) We reject appellants' argument that Hagen impliedly recognized the viability of that tort and their alternative argument that this court should recognize that tort. There is no merit to appellants' claim that the trial court deprived them of their right to have a jury determine their interference with the right to inherit cause of action.
Attorney Fees
We also reject appellants' contention that the trial court abused its discretion in awarding Terri attorney fees pursuant to Code of Civil Procedure section 2033.420. Subdivision (a) of that statute provides that if a responding party is found to have unreasonably denied a request for admission, he or she may be ordered to pay the costs and fees incurred by the requesting party in proving that matter. The court is required to impose such sanctions unless the responding party proves (1) "The admission sought was of no substantial importance"; (2) the responding party "had reasonable ground to believe that that party would prevail on the matter"; or (3) "[t]here was other good reason for the failure to admit." (Code Civ. Proc., § 2033.420, subd. (b)(2), (3), (4); Rosales v. Thermex-Thermatron, Inc. (1998) 67 Cal.App.4th 187, 198.)
"The determination of whether 'there were no good reasons for the denial,' whether the requested admission was 'of substantial importance,' and the amount of expenses to be awarded, if any, are all within the sound discretion of the trial court. [Citation.] . . . On appeal, the trial court's decision will not be reversed unless the appellant demonstrates that the lower court abused its discretion." (Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 508.) "An abuse of discretion occurs only where it is shown that the trial court exceeded the bounds of reason. [Citation.] It is a deferential standard of review that requires us to uphold the trial court's determination, even if we disagree with it, so long as it is reasonable." (Stull v. Sparrow (2001) 92 Cal.App.4th 860, 864.)
Appellants denied requests to admit that Marvin was mentally competent when he executed the 2001 testamentary instruments (Nos. 3-5). Just before trial, Terri's counsel again sought appellants' agreement that Marvin's mental capacity would not be at issue where appellants' expert, Dr. Read, had testified in his deposition that Marvin had testamentary capacity when he executed the 2001 testamentary instruments. Appellants again denied these requests. Terri proved the truth of the matter. The trial court held that "the evidence . . . persuaded me that Marvin was mentally competent . . . ." During closing argument, appellants' counsel conceded he was no longer disputing the issue. Appellants' concession of the issue at trial, following their denial just before trial, indicates that they had no good reason for their denial. (See Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d 500, 510-511.)
Appellants also denied requests to admit that Terri was not involved in drafting or preparing the 2001 testamentary instruments and the 2002 trust amendment (Nos. 1-2, 6-20). Terri proved the truth of the matter. The court concluded that "the facts in this case do not support any claim that Terri actively procured the June 5, 2001 Will and Trust or the January 2002 Amendment"; "Terri was not shown to have been active in procuring the instruments in question." Testimonial and documentary evidence available before trial supported the court's conclusions relevant to this issue. Appellants' failure to present evidence of Terri's significant involvement in preparing the challenged instruments indicates that appellants' denials were not reasonable. (Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 636-637.)
Appellants also denied requests to admit that Marvin executed the 2001 or 2002 testamentary instruments of his own free will and volition (Nos. 24-27). Terri proved the truth of the matter. The trial court concluded: "I do not see [Terri's] fingerprints on [Marvin's] decisions relating to the disposition of his estate in any fashion whatsoever. [Appellants] have not proved that Terri over-powered Marvin's mind and destroyed his free will"; "Marvin's plans were totally and completely his decision based upon his perception of the facts that were supported by the evidence as being real and of substantial worth." Before trial, appellants had access to testimonial and documentary evidence, including Marvin's handwritten notes, that proved that he freely and voluntarily executed the challenged instruments. That evidence and appellants' failure to present contrary evidence indicate that their denial of these requests was unreasonable.
In addition, appellants denied requests generally pertaining to the issue of "undue benefit." These were requests to admit that Marvin intended to marry Terri at the time he executed the 2001 testamentary instruments (No. 29); that Terri was the natural object of Marvin's bounty (Nos. 30-31); and that Marvin had known Terri and had a personal relationship with her for more than 30 years (Nos. 34-35). Terri proved the truth of these matters. The trial court found: "Terri [fn. omitted] was in Marvin's estate plan for many years long before the change in his estate plan in 2001. Moreover they had a relationship for almost three decades that was for the most part consistent and significant. They traveled together extensively; they dated and worked together. . . . She was a significant companion over many years that predated the year[] 2001"; "I find that Terri was in a confidential relationship with Marvin at the time the estate documents were signed"; "An important indication of undue influence is that the Will is 'unnatural' in the sense that it prefers strangers in blood to the natural objects of the decedent's bounty. [¶] But I see none of these factors as being established by the plaintiffs."
Appellants claim they reasonably believed that they would prevail on the "undue benefit" issue because it was "hotly-contested" at trial and they had compelling evidence--specifically, that Marvin disinherited two of his daughters. Such evidence is hardly compelling in view of Marvin's long-standing practice of including people in his estate plan, and later excluding the same people (even his own daughters), and making major changes in the nature and the value of his gifts to individuals. Documentary and testimonial evidence available before trial established that Marvin intended to marry Terri at the time he signed the challenged testamentary instruments, that he did marry her, and that Marvin and Terri had been close, personal friends for decades. That evidence supported the undue benefit admission requests. Appellants' failure to offer contrary evidence at trial indicates that they lacked reasonable grounds to deny such requests. (See Wimberly v. Derby Cycle Corp., supra, 56 Cal.App.4th 618, 636-637.)
During her deposition, Joyce testified that Marvin and she never discussed his giving up the right to divorce her. Terri's counsel later sought admission requests from Joyce regarding the existence and content of writings. Joyce denied that the only written amendment to the ED Agreement was the April 1999 amendment (No. 37); that the ED Agreement states that it is expressly conditioned upon Marvin and Joyce being married at the time of his death (No. 38); that there are no writings that support the allegations that Marvin orally agreed to devise property to them (Nos. 40-44, 60-61); and that none of Marvin's wills refer to the ED agreement or any oral agreement to devise property (Nos. 55-57). Terri proved the truth of these matters. The trial court concluded, "The evidence did not support Joyce's claim of an oral contract to remain married"; "[as for] the claim by Sheri Gardner and Sheila Smith that Marvin promised to leave part of his estate to them in exchange for the performance of services--I find for the defendant. . . . Neither has established that she is entitled to any relief"; "[as for] the claim made that Marvin entered into a binding oral agreement with Sheila and/or Sheri that he would leave his . . . property, to the three daughters--I find for the defendant. I find that neither of these plaintiffs has established the elements of an alleged oral contract. . . . The conversations they had from time to time do not meet the requirements of contract." There was no reasonable basis for appellants to believe they would prevail on these matters in view of the available documentary and testimonial evidence and their failure to present contrary evidence at trial. (See Wimberly v. Derby Cycle Corp., supra, 56 Cal.App.4th 618, 636-637.)
Appellants have not established that the trial court abused its discretion or acted unreasonably in awarding Terri attorney fees pursuant to Code of Civil Procedure section 2033.420. Consequently, we uphold the attorney fees award. (Stull v. Sparro, supra, 92 Cal.App.4th 860, 864.)
The judgment is affirmed. Costs are awarded to respondent.
We concur: GILBERT, P.J., YEGAN, J.
designated beneficiary(ies) upon the spouse's death, and permits the transfer
to the spouse to occur without taxation. (26 U.S.C. § 2056(b)(7)(B)(i).)