Opinion
E076542 E077143 E077260
01-09-2023
Estate of ROBIN MANSFIELD, Deceased. v. BRENT MANSFIELD et al., Objectors and Respondents. BARBARA J. MANSFIELD, Petitioner and Appellant, Estate of ROBIN MANSFIELD, Deceased. BARBARA J. MANSFIELD, Petitioner and Appellant, v. BRENT MANSFIELD et al., Objectors and Respondents. RIVERSIDE COUNTY PUBLIC ADMINISTRATOR, Successor Administrator and Respondent.
Bochnewich Law Offices, Peter M. Bochnewich and Jacquetta Bardacos for Petitioner and Appellant. Greenberg Traurig and Scott D. Bertzyk for Objectors and Respondents. No appearance for Successor Administrator and Respondent.
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. INP1600184. John G. Evans, Judge. Affirmed.
Bochnewich Law Offices, Peter M. Bochnewich and Jacquetta Bardacos for Petitioner and Appellant.
Greenberg Traurig and Scott D. Bertzyk for Objectors and Respondents.
No appearance for Successor Administrator and Respondent.
OPINION
MILLER J.
Robin Mansfield (Decedent) was married to petitioner and appellant Barbara Mansfield (Wife). They each had two adult biological children from prior relationships. Decedent's two children are objectors and respondents Tamara Mansfield (Daughter) and Brenton Mansfield (Son). When Decedent died in 2015, his bank account at First Republic Bank (the First Republic Account) had a balance of $1,922,671.79.
In 2014, Decedent executed a codicil (the 2014 Codicil) to his 1995 will (the 1995 Will). Both documents were admitted to probate. Wife asserted that she should inherit the entire balance of the First Republic Account per the 1995 Will. Daughter and Son (collectively, Children) asserted they should each inherit 35 percent of the balance of the First Republic Account per the 2014 Codicil, and they asserted that Wife breached her fiduciary duties as executor of Decedent's estate.
The probate court found (1) Children each inherit 35 percent of the First Republic Account per the 2014 Codicil; (2) Wife must reimburse the estate $200,000 for a loan she had made to herself; (3) Wife must repay the estate $250,000, which she had withdrawn from the First Republic Account and had failed to account for; and (4) the source of the funds for a $515,000 loan to Wife's biological son, Patrick Watson (Patrick) was Decedent's separate property. Further, the probate court awarded Children $61,296 in attorneys' fees as cost-of-proof sanctions against Wife, and the court removed Wife as executor. Wife contends all the foregoing actions by the probate court were erroneous. We affirm the orders.
Patrick was referred to by his first name in the probate court. Therefore, for the sake of clarity and consistency, we use his first name in this court as well; no disrespect is intended.
FACTUAL AND PROCEDURAL HISTORY
A. 1995 WILL
In the 1995 Will, which was executed in August 1995, Decedent appointed Wife as the executor of his estate. Decedent specified how certain properties were to be inherited, and then "bequeath[ed] all the rest, residue and remainder of [his] entire estate" to Wife.
B. MOTHER'S TRUSTS
Joyce K. Schaeffer (Mother) was Decedent's mother. The Schaeffer Land Trust owned the Cambria Park Plaza Shopping Center in San Jose (the shopping center). The Schaeffer Land Trust made distributions to its beneficiary, the Joyce K. Schaeffer Irrevocable Trust (the Trust) of which Mother was a beneficiary. Mother died in 2012. After Mother's death, Decedent and his sister received distributions from the Trust.
We infer from the record that the Trust was one of three beneficiaries of the Schaeffer Land Trust, and, after Mother's death, Decedent split that one-third interest with his sister.
C. 2014 CODICIL
Decedent was diagnosed with esophageal cancer in 2012. In August 2014, Decedent spoke with Mother's attorney, who was also a trustee of the Trust. Decedent told Mother's attorney that he was concerned all of the money he would receive from the Trust would go to Children, and he wanted a portion of the money to go to Wife. Mother's attorney told Decedent that Children would have inherited all of Decedent's share of the Trust disbursements if Decedent had predeceased Mother; but, because Mother predeceased Decedent, Wife would inherit all of Decedent's Trust disbursements per the 1995 Will.
Decedent was "complete[ly] surprise[d]" by that information. Decedent "was worrying about [Wife] but now [he] had to start worrying about [Children]." As a result, in August 2014, Decedent executed the 2014 Codicil, which provided in relevant part: "I give, devise and bequeath all of my estate consisting of assets to which I am entitled from THE JOYCE K. SCHAEFFER TRUST or the SCHAEFFER LAND TRUST, the subject of this Will as follows:
"A. Thirty percent (30%) thereof to my wife, [Wife] ....
"B. Thirty-five percent (35%) thereof to my son, [Son] ....
"C. Thirty-five percent (35%) thereof to my daughter, [Daughter].
" D. TRUST DISBURSEMENTS AND DEATH
The shopping center sold in February 2015 for $49,000,000. Distributions from the Trust, for Decedent's share of the shopping center sale proceeds, were deposited in the First Republic Account. On March 9, 2015, the Trust distributed $2,800,000 to Decedent. On April 13, 2015, the Trust distributed $550,000 to Decedent. On August 6, 2015, the Trust distributed $2,727,537 to Decedent, which constituted his final distribution of the proceeds from the sale of the shopping center. In sum, Decedent received $6,077,537 from the sale of the shopping center. Decedent died of cancer on November 26, 2015. At the time of Decedent's death, the balance of the First Republic Account was $1,922,671.79.
E. PROBATE COURT
1. LITIGATION
On March 16, 2016, Wife filed a petition for probate of Decedent's estate. On April 13, 2016, in an email to Daughter, Wife wrote, "There is one [account] at First Republic to [sic] almost two million dollars and two [accounts] at Chase of about seventy-five thousand each. [Decedent] told me before Thanksgiving that it would come to about two million 'plus change.' . . . [T]he accounts . . . will come to me under his Will. Once the three accounts are distributed to me, I will gift 35% to you and 35% to [Son], which was [Decedent's] wish."
Later, Wife took the position that Children were not to inherit 70 percent of the balance of the First Republic Account; instead, per the 2014 Codicil, they were only to receive future Trust distributions-those made after Decedent's death. Wife asserted that, per the 1995 Will, she inherited all the Trust distributions received by Decedent prior to his death, and was entitled to the entire balance of the First Republic Account.
In May 2018, Children petitioned for an accounting and requested damages for Wife's alleged breaches of fiduciary duty. Children alleged that, per the 2014 Codicil, they should each receive 35 percent of the balance of the First Republic Account. In regard to the alleged breaches of fiduciary duty, Children contended that, after Decedent's death, Wife took money that belonged in the First Republic Account. Specifically, Children asserted Wife took $200,000 for a loan to herself and improperly took the $515,000 repayment of a loan to Wife's son, Patrick.
At trial, in December 2019, Wife testified that she believed future distributions would be made from the Trust, but she did not know the amount of the distributions.
2. FINAL STATEMENT OF DECISION
Following a six day trial, the probate court wrote the following in its final statement of decision: "In Estate of Duke (2015) 61 Cal.4th 871, our Supreme Court held 'An unambiguous will may be reformed to conform to the testator's intent if clear and convincing evidence establishes that the will contains a mistake in the testator's expression of intent at the time the will was drafted, and also establishes the testator's actual specific intent at the time the will was drafted[.]'
"The court finds [Children] proved by clear and convincing evidence that: 1) it was [Decedent's] actual specific intent at the time . . . his 2014 Codicil was established to distribute the Schaeffer Trusts 'shopping center sale proceeds' 30% to [Wife], 35% to [Daughter] and 35% to [Son]; and 2) the 2014 Codicil contains a mistake in [Decedent's] expression of intent at the time the will was drafted.
"Whether the terms of the 2014 Codicil are or are not ambiguous, [Decedent's] intent was clear. He expressed [his intent] to [Mother's attorney] during a social dinner. [Wife] testified he expressed his intent to her. He expressed his intent to [Children] by email. His 2015 Trust is consistent with his intent. And, most importantly, [Wife] confirmed [Decedent's] intent in a writing to [Children] and even pledged she would carry out [Decedent's] intent regardless of the manner in which [Decedent's] estate was distributed. [Wife] went so far as to confirm that if something happened to her, her children would do likewise, using the exact percentages used by [Decedent]."
The probate court concluded, "Therefore, the court finds the entire balance of $1,922,672 in the First Republic Account 8297 on the date of [Decedent's] death be distributed under the 2014 Codicil: 30% to [Wife], 35% to [Daughter] and 35% to [Son], to the extent not used to pay taxes and expenses of administration."
DISCUSSION
A. 2014 CODICIL
1. EXCESS OF JURISDICTION
Wife contends the probate court acted in excess of its jurisdiction by reforming the 2014 Codicil because "[n]one of the underlying pleadings raised an issue of reformation of the 2014 Codicil."
Children assert Wife forfeited this issue by failing to raise it in the probate court. (People v. Mower (2002) 28 Cal.4th 457, 474, fn. 6 [acts in excess of jurisdiction are subject to forfeiture].) We choose to address the merits of the issue because it is easily resolved.
"If a court gives a remedy not warranted by the pleadings or not expressly litigated, the judgment is improper" due to being in excess of jurisdiction. (In re Marriage of Fox (1986) 180 Cal.App.3d 862, 872.) Reforming an instrument means revising the language to correct an error in the instrument by making it conform to the testator's intent. (Lemoge Elec. v. San Mateo County (1956) 46 Cal.2d 659, 663; Estate of Duke (2015) 61 Cal.4th 871, 887-888.) A court can reform an instrument when there is evidence of fraud, mistake, or undue influence and the instrument does not match the testator's true intent. (Mahan v. Millar (1922) 56 Cal.App. 280, 289; Ike v. Doolittle (1998) 61 Cal.App.4th 51, 85; Civ. Code, § 3399.)
The probate court cited law pertaining to reformation and concluded that "the 2014 Codicil contains a mistake in the testator's expression of intent at the time the will was drafted." However, the probate court did not identify the mistake in the 2014 Codicil, and the court did not revise any language in the 2014 Codicil.
Rather, the probate court found, "Whether the terms of the 2014 Codicil are or are not ambiguous, [Decedent's] intent was clear." The probate court concluded that it was Decedent's intent to bequeath to Children 70 percent of the remaining balance of the Trust distributions paid to him after signing the 2014 Codicil and the court made distribution orders consistent with that finding of intent. Thus, the probate court started on the path of reforming the 2014 Codicil by citing the pertinent law and generally concluding a mistake was made in the 2014 Codicil; but the probate court then veered off the reformation path by not identifying the mistake in the 2014 Codicil and not substantively altering the words in the 2014 Codicil.
Ultimately, the probate court used extrinsic evidence to settle the parties' dispute over whether Decedent intended for the 2014 Codicil to encompass the remaining balance of the Trust distributions made to Decedent after August 2014. That specific issue was presented by Children's petition for "an order compelling distributions[ ] consistent with Decedent's intent." In the petition, Children asserted, "[Wife] has adopted the litigation position that the 2014 Codicil . . . appl[ies] only to distributions that might be made after [Decedent's] death, and that anything distributed prior to [Decedent's] death passes to her outright. This, of course, is contrary to (i) [Wife's] prior admissions, (ii) common sense, (iii) the wording of the dispositive instruments (which contemplated cash distributions upon [Decedent's] death), and (iv) all available extrinsic evidence." Children "request[ed] that the Court provide instructions as to [Decedent's] intent regarding distribution of the Schaeffer Trust proceeds in the [First Republic] account, and order distributions consistent with those instructions."
The foregoing portion of Children's petition framed the issue of a dispute over the language of the 2014 Codicil and made a request for the probate court to order distributions per Decedent's intent. Thus, the action taken by the probate court- determining Decedent's intended meaning of the 2014 Codicil and applying that to an order for distribution-was within the scope of the pleading. Therefore, the probate court did not act in excess of its jurisdiction.
2. MISTAKE
Wife contends there is not substantial evidence of a mistake or a drafting error to support reformation of the 2014 Codicil. We agree because the plain language of the 2014 Codicil provides that, after Decedent's death, Children are to receive 70 percent of the remaining balance of the Trust distributions received by Decedent after signing the 2014 Codicil. In other words, there is not a drafting mistake in the 2014 Codicil.
Instead, the plain language of the 2014 Codicil supports the resolution reached by the probate court.
" 'It is a generally accepted rule that where the language of the will is clear and unambiguous, it must control.'" (In re Jones' Estate (1943) 60 Cal.App.2d 795, 800; see also In re Estate of Salmonski (1951) 38 Cal.2d 199, 214; In re Nunes' Estate (1954) 123 Cal.App.2d 150, 155; Prob. Code, § 21102, subd. (a).) When interpreting a will, we give the words "their ordinary and grammatical meaning." (Prob. Code, § 21122.) We apply the de novo standard of review. (Estate of Verdisson (1992) 4 Cal.App.4th 1127, 1135-1136.)
The 2014 Codicil reads, "I give, devise and bequeath all of my estate consisting of assets to which I am entitled from [the trusts], the subject of this Will as follow." There are three key words in that sentence, "my estate" and "I." Decedent's use of these different words demonstrates that he understood the difference between his estate and himself. Decedent wrote "to which I am entitled." The "I" in that sentence refers to Decedent receiving disbursements while he was alive because Decedent-not his estate-received the Trust distributions. If Decedent had intended for the 2014 Codicil to only apply to distributions received after his death, then it would have read, "to which my estate is entitled." (Prob. Code, § 21122 ["words of an instrument are to be given their ordinary and grammatical meaning"].) Thus, the wording of the 2014 Codicil is clear-it applies to the remaining balance of Trust distributions Decedent received while he was alive. There is no mistake in the 2014 Codicil, and the probate court did not err in its ruling. (See generally Coral Construction, Inc. v. City and County of San Francisco (2010) 50 Cal.4th 315, 336 [" '[I]t is axiomatic that we review the trial court's rulings and not its reasoning' "].)
3. INTENT
Wife contends the probate court erred by concluding that Children were entitled to inherit a portion of the money in the First Republic Account. Wife asserts the 2014 Codicil can only be understood as Decedent intending for Children to receive a portion of the money that Decedent was "entitled to receive after his death"-not "to assets he already received." As set forth in the paragraph ante, the plain language of the 2014 Codicil reflects that Decedent intended for the 2014 Codicil to apply to distributions he received while alive, which is why it reads "to which I am entitled to receive," rather than "to which my estate is entitled to receive." Accordingly, the probate court did not err.
Wife asserts that the 2014 "Codicil, like any other will or codicil, operates from the date of death forward, not from the date it was signed, forward. The [2014 Codicil] cannot ever apply to funds already received from the Schaffer [sic] trust(s) .... The very moment that [Decedent] received those funds they were [Decedent's]."
The purpose of drafting "a will is to accomplish the future transfer of the estate of the testator to the beneficiaries named in the will." (Lucas v. Hamm (1961) 56 Cal.2d 583, 589-590.) In the 2014 Codicil, Decedent described property that he expected to be part of his estate, specifically the Trust distributions, and bequeathed the remaining balance in certain percentages to Wife and Children upon his death. Hence the 2014 Codicil reading, "I give, devise and bequeath all of my estate consisting of ...." Wife and Children did not have an immediate ownership interest in the Trust distributions in August 2014. Rather, they had an interest in the remaining balance of the First
Republic Account after Decedent's death.
4. POWER OF APPOINTMENT
Wife contends that interpreting the 2014 Codicil as granting Children an interest in the distributions Decedent received while he was alive "would violate Probate Code §§ 630, 631, and 632." Those Probate Code sections pertain to the power of appointment."' "A power of appointment is a power conferred by the owner of property (the 'donor') upon another person (the 'donee') to designate the persons ('appointees') who will receive the property [('appointive property')] at some time in the future." '" (Estate of O'Connor (2018) 26 Cal.App.5th 871, 879; see also Prob. Code, § 610, subd. (f).) Decedent did not designate a donee to select appointees to receive the Trust distributions. Rather, Decedent himself designated who would receive the money in his estate-Wife and Children. Accordingly, Wife's power of appointment argument is misplaced.
Probate Code section 630 provides: "(a) Except as otherwise provided in this part, if the creating instrument specifies requirements as to the manner, time, and conditions of the exercise of a power of appointment, the power can be exercised only by complying with those requirements. [¶] (b) Unless expressly prohibited by the creating instrument, a power stated to be exercisable by an inter vivos instrument is also exercisable by a written will." Probate Code section 631 provides: "(a) Where an appointment does not satisfy the formal requirements specified in the creating instrument as provided in subdivision (a) of Section 630, the court may excuse compliance with the formal requirements and determine that exercise of the appointment was effective if both of the following requirements are satisfied: [¶] (1) The appointment approximates the manner of appointment prescribed by the donor. [¶] (2) The failure to satisfy the formal requirements does not defeat the accomplishment of a significant purpose of the donor. [¶] (b) This section does not permit a court to excuse compliance with a specific reference requirement under Section 632. Probate Code section 632 provides: "If the creating instrument expressly directs that a power of appointment be exercised by an instrument that makes a specific reference to the power or to the instrument that created the power, the power can be exercised only by an instrument containing the required reference."
Children assert Wife forfeited the "power of appointment" issue by failing to raise it in the probate court. They are mistaken. Wife raised the power of appointment issue in the probate court.
B. COST OF PROOF SANCTIONS
1. PROCEDURAL HISTORY
In June 2018, Children sent Wife requests for admission. Request for Admission No. 2 read: "Admit that [Decedent] intended the monies in the [First Republic] Account to be distributed in accordance with the plan of distribution set forth in the 2014 Codicil .... (As used herein, the term 2014 Codicil means and refers to that certain 'Will' signed by [Decedent] on August 24, 2014, and admitted to probate.)"
In Wife's response to Request for Admission (RFA) No. 2, she made various objections, and then wrote, "Deny. [¶] [Wife] denies that the monies in the aforementioned [First Republic] Account are to be distributed according to the Codicil. Instead, [Wife] asserts that the relevant purpose of the Codicil was to enable [Decedent] to exercise a power of appointment vested in him, as to how the income or benefits he may have received during his life from the aforementioned Schaeffer Trusts, would be appointed after his death."
After six days of trial, the probate court concluded that Decedent intended for the remaining balance in the First Republic Account to be distributed per the percentages set forth in the 2014 Codicil. On August 4, 2020, Children moved for "cost of proof" sanctions. (Code Civ. Proc., § 2033.420.) In the motion, Children asserted the primary need for the six-day trial was that "[Wife] flatly denied that [Decedent] intended the funds in [the First Republic Account] to be distributed under the 2014 Codicil [(]RFA No. 2[)]." Children asserted there was no justification for Wife's denial of RFA No. 2, and therefore Wife should have to pay Children's reasonable expenses in proving that Decedent intended the balance of the First Republic Account to be distributed per the percentages set forth in the 2014 Codicil.
The probate court granted the motion, finding that Wife was not justified in her denial of RFA No. 2. The probate court awarded Children attorneys' fees of $61,296.
2. ANALYSIS
"If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees." (Code Civ. Proc., § 2033.420, subd. (a).) The court can deny the request for expenses if "[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter." (Code Civ. Proc., § 2033.420, subd. (b)(3).) We apply the abuse of discretion standard of review. (Yoon v. Cam IX Trust (2021) 60 Cal.App.5th 388, 391-392.)
Wife contends, "The plain language of the 2014 Codicil does not speak to [Decedent's] intent," so when answering RFA No. 2, "[W]ife reasonably believed that the 2014 Codicil could only operate as a single purpose power of appointment document, a designation or directive intended to direct what [Decedent] would be entitled to receive going forward, from the date of his death."
As explained ante, the plain language of the 2014 Codicil reflected Decedent's intent to bequeath the remaining balance of the Trust distributions he received after August 2014. There was nothing in the 2014 Codicil about a power of appointment. (Prob. Code, § 610, subd. (f).) Thus, there was no reasonable basis for Wife's response to RFA No. 2, which means Wife did not have reasonable grounds to believe she would prevail on the matter. We conclude the probate court did not abuse its discretion.
C. THE PATRICK LOAN
1. PROCEDURAL HISTORY
On March 1, 2015, the balance in the First Republic Account was $40,458.30. On March 9, 2015, the first deposit from the proceeds of the sale of shopping center, specifically, $2,800,000, was deposited into the First Republic Account. On March 11, 2015, Decedent transferred $80,000 from the First Republic Account to his joint account with Wife at Chase Bank (the Chase Account). On April 15, 2015, Wife and Decedent lent Wife's son, Patrick, and Patrick's wife $515,000 for the purchase of a condominium. The loan had an interest rate of 2.7 percent and was to be repaid to Wife and Decedent over a period of 35 years ("the Patrick Loan").
On July 23, 2015, Decedent emailed Patrick to congratulate him on having an offer accepted on a condominium. In the email, Decedent wrote, "It is our intention to go over to Chase Bank tomorrow and wire the deposit, that is once we have the escrow number and the other bank information to so [sic] do this."
Patrick repaid the Patrick Loan after Decedent died. Wife deposited the repayment proceeds into her bank account because she believed it was "[her] promissory note at that point."
At trial, during the cross-examination of Wife, Children's attorney asked, "You would agree with me that although the [Patrick] loan was in your name, this wasn't your money being lent to Patrick, it was [Decedent's] money?" Wife replied, "As far as I know, that is where it came from, yes."
The following exchange took place during the redirect examination of Wife:
"[Wife's Attorney]: Now, the Chase Bank account, how was that held? How was title to that account held?
"[Wife]: That was in joint tenancy.
"[Children's Attorney]: Objection. Best evidence. "The Court: Is that in evidence?
"[Wife's Attorney]: It is in evidence, I think. I'm asking for her knowledge.
"[Wife's Attorney]: Do you know how the Chase Bank Account was held?
"[Wife]: It was held in joint tenancy.
"[Children's Attorney]: It's still best evidence.
"[Wife's Attorney]: Am I to go on, your Honor? "The Court: Please.
"[Wife's Attorney]: Okay. I didn't know if there was an objection or not.
"The Court: It was an objection. It was a good objection. It's-she already answered, and it confirms what the exhibits are.
Ultimately, the probate court found "there was no documentary support showing how the [Chase] account was titled."
"[Wife's Attorney]: All right. Do you have personal knowledge, as you sit here today, as to how your accounts at Chase were held?
"[Wife]: They were-that particular account was held in joint tenancy."
In its final statement of decision, the probate court found "there was no documentary support showing how the [Chase] account was titled. [Wife] testified it was a joint account that passed to [Wife] by operation of law upon [Decedent's] death. [Citation.] There was no evidence introduced to the contrary. Exhibit 107 confirms [Wife] was a signatory on the account. [¶] Therefore, the court finds [the Chase Account] passed to [Wife] as a joint owner upon the death of [Decedent] and the account is not part of [Decedent's] estate." Exhibit 107 consists of checks dated from 2013 to 2015, for the Chase Account, signed by Wife; however, only Decedent's name is preprinted in the upper corner of the checks where the account holder's information appears.
Children asserted the source of the Patrick Loan funds was Trust disbursements, to which Children were entitled to 70 percent. The probate court found the Patrick Loan was funded by Trust distributions "which were [Decedent's] separate property." The court concluded that Wife failed to prove "the source of the funds for the [Patrick] loan became community property based upon the terms of the loan."
The probate court also determined that Children failed to prove it was Decedent's intent for the repayment of the Patrick Loan to be distributed under the 2014 Codicil. Rather, the probate court ruled that "[b]ecause there was no evidence where the loan payments were to be deposited, . . . all funds due under the promissory note at the time of [Decedent's] death are to be treated as part of the residue of [Decedent's] estate and . . . are subject to distribution under the 1995 Will."
2. ANALYSIS
Wife reasons that if the Chase Account was held in joint tenancy, as the probate court found, then the promissory note must have also been held in joint tenancy because the Patrick Loan was funded from the Chase Account. Thus, Wife contends that the probate court correctly found the Chase Account was held in joint tenancy, but incorrectly found that the promissory note was not held in joint tenancy.
Wife cites to Taylor v. Crocker-Citizens National Bank (1968) 258 Cal.App.2d 682 (Taylor), disapproved of on another issue by Estate of Propst (1990) 50 Cal.3d 448, 461-462. In Taylor, a husband and wife refinanced their joint tenancy real property. The money from the refinancing was deposited into the couple's joint checking account-the type of joint checking account was not identified in the appellate opinion.
The couple then lent the money to the husband's employer, and the employer executed a promissory note payable to the husband and wife. (Taylor, supra, 258 Cal.App.2d at p. 684.) After the husband died, the wife sued "to have it determined that the note belongs to her as surviving tenant of a joint tenancy." (Ibid.)
The lower court in Taylor concluded that "the promissory note was held by the spouses in tenancy in common." (Taylor, supra, 258 Cal.App.2d at p. 685.) The appellate court explained, "There is no question but that the moneys loaned to [the husband's company], were obtained by the spouses from a loan secured by their joint tenancy property.... It is clear that under the authorities 'proceeds of joint tenancy property, in the absence of contrary agreement, retain the character of the property from which they were acquired.'" (Ibid.) The appellate court found that, in tracing "the source of the funds, they came from joint tenancy property." (Id. at p. 688.) Ultimately, the appellate court concluded that the promissory note was a joint tenancy asset. (Ibid.)
Wife's reliance on Taylor is misplaced. Taylor concerns tracing funds to their source. In the instant case, the probate court found that the source of the funds for the Patrick Loan was "Schaffer [sic] Trust distributions to [Decedent] which were [Decedent's] separate property." Thus, the probate court concluded that tracing the source of the Patrick Loan funds, in a fashion similar to Taylor, causes one to arrive at the shopping center owned by the Schaeffer Land Trust-not a property held in joint tenancy by Wife and Decedent. Thus, under Taylor, the promissory note is not a joint tenancy asset. Accordingly, the probate court did not err.
D. $250,000 WITHDRAWAL
1. PROCEDURAL HISTORY
On February 24, 2017, Wife filed a petition for final distribution on waiver of account. Attachment 27 to the petition was a "schedule of assets on hand," which reflected the Chase Account had a balance of $250,500.77. Wife declared under penalty of perjury that the "schedule of assets on hand" was true and correct.
In May 2018, Children petitioned for an accounting alleging, "[Wife] has flatly refused to account for any Schaeffer Trust proceeds beyond the approximately $2 million in the [First Republic] Account at the time of [Decedent's] death-leaving the whereabouts of well over $2.5 million shrouded in mystery."
In December 2019, a proposed stipulation of facts and issues of law was drafted. The proposed stipulation document was only signed by Children's attorney; the signature line for Wife's attorney is blank. One of the proposed stipulations was: "On May 19, 2016, [Wife] deposited $250,000 into [the Chase Account]. Trial Ex. reflects this." In Children's trial brief, they wrote, "On May 19, 2016, [Wife] deposited $250,000 into [the Chase Account]. (See Trial Ex. 44.)" Trial exhibit No. 44 is not included in the record, nor is it included on the exhibit list.
The trial evidence reflected that on May 23, 2016, Wife withdrew $250,000 from the First Republic Account via a check made payable to the Estate of Robin Mansfield. Specifically, the evidence included a copy of the check dated May 23, 2016 (Exhibit 76) and a bank statement indicating the check cleared the First Republic Account (Exhibit 77).
On February 26, 2020, the probate court issued a tentative statement of decision in which it tentatively concluded that "[Wife] must file an accounting." The probate court tentatively found, "[T]here is no accounting for the $250,000 withdrawal made on May 2[3], 2016, or any explanation how the balance of the estate available for distribution is $1,923,246.14."
In a February 27, 2020, minute order, bearing the title, "Ruling on Matter Submitted," the probate court granted Children's petition for an accounting and ordered Wife to "prepare an accounting covering the time period from April 27, 2016 through January 10, 2020." On June 19, 2020, Wife filed a first and final accounting, which did not account for the $250,000 withdrawal on May 23, 2016.
In the December 11, 2020, final statement of decision, the probate court wrote, "[T]he court is unable to determine the exact amount of funds remaining in the Estate of Robin Mansfield. Specifically, there is no accounting for the $250,000 withdrawal made on May 2[3], 2016, or any explanation how the balance of the estate available for distribution was $1,923,246.14."
The court continued, "On 5/23/16, [Wife] in her capacity as Executor of the Estate, withdrew $250,000 from the estate account. Those funds have not been accounted for by [Wife]. [¶] The court finds the $250,000 withdrawal as documented in Exhibits 76 and 77 was made without prior court authority and is a breach [of] [Wife's] fiduciary duty as executor. The court further finds the withdrawal has resulted in a $250,000 depreciation in the value of decedent's estate." The probate court ordered Wife "to reimburse the estate the full amount of the $250,000 withdrawn from the estate account on or around 5/23/16 plus 10% interest from the date of withdrawal until the $250,000 is full[y] repaid."
On February 8, 2021, Wife filed a notice of appeal from the December 11, 2020, order. On May 6, 2021, in a supplement to the supplemental first account, Wife "focuse[d] upon any concern regarding a purportedly missing $250,000." Wife asserted that, on February 24, 2017, she filed a petition for final distribution which indicated the $250,000 had been deposited into the Chase Account. Wife asserted, "The actual bank statements were produced in discovery and most were used at Trial." The bank statements were not attached to the supplement to the supplemental first account. Wife requested the probate court reconsider its order directing her to pay $250,000 plus interest.
On May 7, 2021, during a hearing in the probate court, Wife's attorney asked if the probate court was "satisfied that the $250,000 amount did not come out of the estate, and was always in the estate account?" The probate court responded, "I'm not going to comment on it at this time. It's under appeal."
2. ANALYSIS
Wife asserts, "[T]here is not . . . substantial evidence[] to support the trial court's finding that [Wife] moved the sum of $250,000 out of the Estate on May 23, 2016, for her own personal benefit or that the withdrawal of that sum is unexplained." Contrary to Wife's assertion, the probate court did not explicitly find that Wife transferred the $250,000 for her personal benefit. Rather, the probate court found (1) "[t]hose funds have not been accounted for by [Wife]," and; (2) "the $250,000 withdrawal . . . was made without prior court authority." Nevertheless, we will address Wife's assertion that substantial evidence does not support a finding that she failed to account for the $250,000.
Wife does not direct this court to evidence of a single $250,000 deposit being made in the Chase Account; and if such a deposit was made, when it was made. There is only evidence of the $250,000 being withdrawn from the First Republic Account. There is no evidence of where that money went. Wife's argument that the Chase Account has a balance of around $250,000 is not substantial evidence that the $250,000 from the First Republic Account was deposited into the Chase Account.
Wife asserts that Children never contested the fact that the $250,000 from the First Republic Account was deposited into the Chase Account and points to the proposed stipulation. There are three problems with this argument. First, a proposed stipulation is not evidence. Second, if the proposed stipulation had evidentiary value, it reflects Wife deposited $250,000 in the Chase Account on May 19, 2016, but the $250,000 check from the First Republic Account was dated May 23, 2016, and cleared the First Republic Account on May 25, 2016. Given that the alleged deposit into the Chase Account occurred days prior to the check being written from the First Republic Account, the proposed stipulation does not support a finding that the $250,000 First Republic check was deposited in the Chase Account. Third, even if Children did not assert that the $250,000 was wrongfully taken by Wife, the probate court ordered Wife to account for the $250,000, and Wife failed to do so. (Prob. Code, § 2619, subd. (a) [the court can order an accounting].) Therefore, we are not persuaded by Wife's argument.
E. $200,000 LOAN
1. PROCEDURAL HISTORY
Wife filed the probate petition in this case on March 16, 2016. On May 27, 2016, Wife withdrew $200,000 from the First Republic Account. Wife executed a promissory note reflecting the $200,000 was a loan and she would pay 0.67 percent interest on the loan. The probate court found the $200,000 loan was a breach of Wife's fiduciary duty to Children because the loan "was made without prior court authority." The court ordered Wife to repay the loan with 10 percent interest.
2. ANALYSIS
Wife contends the probate court erred by not excusing her self-dealing. Wife asserts she believed that she was the sole beneficiary of the First Republic Account, so "was effectively borrowing from her own inheritance for purposes of sustaining the ability to maintain a household."
"If a personal representative breaches a fiduciary duty, the personal representative is chargeable with any of the following that is appropriate under the circumstances: [¶] (1) Any loss or depreciation in value of the decedent's estate resulting from the breach of duty, with interest." (Prob. Code, § 9601, subd. (a)(1).) However, "[i]f the personal representative has acted reasonably and in good faith under the circumstances as known to the personal representative, the court, in its discretion, may excuse the personal representative in whole or in part from liability under subdivision (a) if it would be equitable to do so." (Prob. Code, § 9601, subd. (b).)
Wife had two roles here-one as executor and one as beneficiary. Wife is focused on her role as beneficiary, but she is being charged in her role as executor. As the executor, Wife had no interest in the estate and should not have been self-dealing. (Estate of Merrifield (1884) 66 Cal.180, 180.) Thus, the probate court did not abuse its discretion in not excusing Wife's breach.
F. REMOVAL OF WIFE AS EXECUTOR
1. PROCEDURAL HISTORY
On February 25, 2021, Wife filed a supplemental first account. In Children's objections to the supplemental first account, they asserted Wife should be removed as executor due to her breaching her fiduciary duties and not repaying money owed to the estate. The probate court issued an order "to show cause why [Wife] should not be removed as executor and the Public Administrator appointed as executor." (Some caps. omitted.)
In her response to the order to show cause, Wife asserted "that the $250,000 has never been missing, and was never taken by [Wife] out of the Estate.... [Wife] assured the Court that the entire $250,000, is all there and always has been there, in estate accounts." Further, Wife contended she repaid $50,000 of the $200,000 loan.
On May 7, 2021, during a hearing on the order to show cause, the probate court said, "[T]he Court has lost confidence in [Wife's] ability as Executor of the estate to faithfully fulfill or honor her fiduciary responsibilities to the beneficiaries of the estate. [¶] She is removed as Executor of the estate forthwith, and the Court appoints the Public Administrator as the Executor of the estate."
2. ANALYSIS
Wife asserts the probate court erred by removing her as executor. "A personal representative may be removed from office" because she has mismanaged the estate or in order to protect the estate. (Prob. Code, § 8502, subds. (a) &(d).) We apply the abuse of discretion standard of review. (Estate of Sapp (2019) 36 Cal.App.5th 86, 103.)
On February 26, 2020, the probate court tentatively found, "[T]here is no accounting for the $250,000 withdrawal made on May 2[3], 2016, or any explanation how the balance of the estate available for distribution is $1,923,246.14" The next day, the court ordered Wife to "prepare an accounting covering the time period from April 27, 2016 through January 10, 2020." On June 19, 2020, Wife filed a first and final accounting, which did not account for the $250,000 withdrawal on May 23, 2016. Wife's failure to account for the $250,000 withdrawal, when it was specifically identified as an issue by the probate court, supports her removal under the mismanagement prong, or the protection of the estate prong. (Prob. Code, § 8502, subds. (a) &(d).)
Further, Wife's breach of fiduciary duty in lending herself $200,000, which she did not immediately repay, would also support removal under the mismanagement prong or the protection of the estate prong. (Prob. Code, § 8502, subds. (a) &(d).) In sum, the probate court did not abuse its discretion by removing Wife as executor.
DISPOSITION
The orders are affirmed. Respondents are awarded their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: RAMIREZ P. J., RAPHAEL J.