Opinion
G055985
09-23-2019
SUSAN KATZEN, Plaintiff and Appellant, v. JUDIE CALLAN, as Trustee, etc., Defendant and Respondent.
Law Offices of Eric Becker and Samantha J. Morris for Plaintiff and Appellant. Oldman, Cooley, Sallus, Birnberg, Coleman & Gold, Marc L. Sallus and Kathleen F. Hazan for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. A243288) OPINION Appeal from an order of the Superior Court of Orange County, David L. Belz, Judge. Dismissed. Law Offices of Eric Becker and Samantha J. Morris for Plaintiff and Appellant. Oldman, Cooley, Sallus, Birnberg, Coleman & Gold, Marc L. Sallus and Kathleen F. Hazan for Defendant and Respondent.
Susan Katzen served as an attorney for Judie Callan in her role as trustee of a special needs trust for her daughter. After Katzen was replaced as Callan's attorney, she petitioned the probate court for attorney fees for services rendered to Callan as the trustee. The court determined Katzen lacked standing to petition directly for her fees, and as such, the court lacked jurisdiction to hear the attorney fee petition. Callan filed a motion to dismiss the appeal, asserting the order Katzen appealed from was not appealable. Because we agree the order was not final, we dismiss the appeal.
FACTS
Kimberly Michelle Callan is Callan's daughter and is an adult with serious and permanent disabilities. The Kimberly Michelle Callan Special Needs Trust (trust) was established for Kimberly's benefit in 2008. Callan was appointed trustee of the trust in February 2009.
We refer to Kimberly by her first name for ease of reference and intend no disrespect.
As trustee, Callan hired Katzen in March 2014. Katzen's engagement letter provided she agreed to represent Callan in her "role as [t]rustee . . . to the extent" that Callan requested Katzen's services.
Katzen was paid her fees from the trust pursuant to an order settling the third account current (third account). Thereafter, Callan informed Katzen that she hired new counsel to represent her as trustee. Callan's new counsel prepared the fourth account current (fourth account) and filed it on September 2, 2016. A substitution of counsel was not filed until September 27, 2016.
In December 2016, the probate court issued probate notes with respect to the fourth account asking whether Katzen had incurred any fees during the account period. Callan's declaration did not mention fees that had been incurred by Katzen during the account period. Katzen's second and final bill (2017 bill) was dated January 18, 2017.
Katzen filed a petition for attorney compensation and reimbursement of costs advanced (fee petition) on January 18, 2017, for payment of her 2017 bill. Callan objected to the 2017 bill. Katzen asserted the probate court had jurisdiction pursuant to Probate Code section 17000, subdivision (b), and stated the fee petition was brought pursuant to sections 2640 et seq. and 16247 for an order fixing and allowing compensation for services provided to Callan as trustee.
All further statutory references are to the Probate Code, unless otherwise indicated.
After a hearing, the probate court determined Katzen lacked standing to file her fee petition directly with the probate court, and ultimately concluded it lacked jurisdiction over the fee petition. The court proposed deeming the fee petition as a civil complaint and transferring the case to the limited civil division of the superior court. The court offered to give Katzen the time she needed to amend her fee petition to avoid any challenges to her pleadings in civil court. However, Katzen and her counsel responded they preferred to "file a fresh complaint in limited civil" because they thought it would be "cleaner." Rather than immediately dismissing the fee petition, the court set the matter for an order to show cause regarding dismissal, giving Katzen additional time to decide how she wished to proceed.
Ultimately, Katzen decided against having the matter transferred to the civil court and the court filed its order denying the fee petition without prejudice (order) on January 22, 2018. Katzen then filed this appeal. Callan filed a motion to dismiss and a request for judicial notice.
DISCUSSION
Katzen contends the probate court erred by failing to grant her fee request. Callan contends the court correctly determined Katzen had no standing to petition the probate court directly for approval of her attorney fees under sections 17200, 16247, and 2642. (Estate of Howard (1976) 58 Cal.App.3d 250, 260.) In her motion to dismiss, Callan asserts Katzen's appeal is improper because it was taken from a non-appealable order. We agree the order was not appealable and dismiss the appeal.
Appellate courts lack jurisdiction to entertain appeals from nonappealable rulings and judgments. (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.) "A trial court's order is appealable when it is made so by statute. [Citations.]" (Ibid.) Code of Civil Procedure section 904.1 governs appealability in civil actions. It also recognizes appeals may be taken from orders and decrees made appealable by the Probate Code. (Code Civ. Proc., § 904.1, subd. (a)(10).) Appealable probate orders are set forth in sections 1300 to 1304 and generally there is no right to appeal from any probate order other than those specified. (Varney v. Superior Court (1992) 10 Cal.App.4th 1092, 1098.)
Orders that resolve a dispute on the merits are generally the only types of orders appealable under the Probate Code. (Christie v. Kimball (2012) 202 Cal.App.4th 1407, 1411-1412.) However, the substance, not form, of the order determines whether it falls within the ambit of sections 1300 to 1304. (Estate of Martin (1999) 72 Cal.App.4th 1438, 1442.) If the order is not appealable, the court must dismiss the appeal unless it elects to treat the appeal as a petition for extraordinary writ. (Katzenstein v. Chabad of Poway (2015) 237 Cal.App.4th 759, 770 [declining to treat invalid appeal as petition for writ of mandate when appellant failed to show lack of adequate legal remedy].) However, a petition to treat any nonappealable order of the probate court as a writ "should only be granted under extraordinary circumstances, "'compelling enough to indicate the propriety of a petition for writ . . . .'"" (Estate of Weber (1991) 229 Cal.App.3d 22, 25.)
Here, Katzen appeals from the probate court's "refusal to make" an order "[f]ixing, authorizing, allowing, or directing payment of compensation or expenses of an attorney," pursuant to section 1300, subdivision (e). However, the order was issued "without prejudice." It did not decide the underlying merits of the fee petition or bar another action involving the same parties and the same cause of action. (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 784.) Quite the opposite, the parties and the court agreed the order would be made without prejudice for the specific purpose of allowing Katzen to refile her complaint as a civil action. Therefore, the court did not refuse to make an order under section 1300, subdivision (e). Rather, the order postponed resolution of the issues raised in the fee petition for a later time, namely, when the issues would be brought as a limited civil matter.
This case is analogous to Estate of Keuthan (1968) 268 Cal.App.2d 177, (Keuthan). There, the probate court denied without prejudice an estate administrator's petition for payment of fees pending determination of an heirship proceeding. (Id. at pp. 178-180.) The administrator purported to appeal from the order. (Id. at p. 179.) The Court of Appeal dismissed the appeal, recognizing the general rule that ordinarily, pursuant to the Probate Code, an appeal may be taken from an order distributing property or the refusal to make such an order. (Id. at pp. 179-180.) By denying the petition for distribution without prejudice, the probate court did not pass upon the merits of the petition, but merely postponed its ruling, making the order nonappealable. (Id. at p. 180.) "The words 'without prejudice' eliminate[d] any binding effect that the order appealed from might have." (Ibid.)
Like the Keuthan court, we hold section 1300, subdivision (e), recognizes an appeal may be taken from an order refusing to fix, authorize, allow, or direct the payment of compensation or expenses to an attorney. The order did not consider the merits of the fee petition. As such, it was not a binding order denying the payment of compensation or expenses of an attorney to give rise to the right to appellate review. That the order was issued "without prejudice" for Katzen to refile the same complaint further negates any binding effect that the order might have had.
Katzen further contends while the court's order was made without prejudice, the legal effect of denying the fee petition on jurisdictional grounds converts it to an appealable order. She argues because she is seeking payment for services rendered to a trustee, and entitled to be paid from trust assets, a civil court lacks jurisdiction to settle funds from the trust. Katzen further asserts the court committed legal error by determining she lacked the ability to petition the court directly for her fees, and that transferring the case to a civil court will effectively deprive her of a legal remedy to recover her fees. We disagree.
Under section 17200, "a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust . . . ." (§ 17200.) Katzen is neither. Katzen provides no authority permitting a former attorney of a trustee to petition the probate court directly for fees.
Next, section 16247 concerns a trustee's power to hire agents "to advise or assist the trustee in the performance of administrative duties." (§ 16247.) Pursuant to section 16243, "The trustee has the power to pay taxes, assessments, reasonable compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the collection, care, administration, and protection of the trust." (§ 16243.) Section 16247 does not authorize Katzen's fee petition.
Finally, section 2642 permits an attorney who has rendered legal services to the guardian or conservator of the person or estate or both to petition the court for an order fixing and allowing compensation for such services. (§ 2642.) The plain language of the statute makes clear it does not apply to an attorney of a trustee. Furthermore, Katzen did not raise this issue with the probate court.
None of the above statutory provisions, or case law interpreting them, confer standing on a trustee's former attorney to petition the probate court directly for fees. (See Powell v. Tagami (2018) 26 Cal.App.5th 219, 227 [trustee requested recovery of attorney fees and costs]; People ex rel. Harris & Becerra v. Shine (2017) 16 Cal.App.5th 524, 534 [former trustees petitioned court for attorney fees and costs]; Reinstein, Land & Katz v. Clune (1973) 30 Cal.App.3d 321, 322 [attorney for guardian of the estate of an incompetent person petitioned for fees].)
Katzen's jurisdictional argument assumes the trust is under the exclusive subject matter jurisdiction of the probate court. However, "The subject matter jurisdiction of the probate court is set forth in . . . section 17000. The statute gives the probate court exclusive jurisdiction over the 'internal affairs of trusts' [citations] but only gives it concurrent jurisdiction over 'proceedings' by 'creditors . . . of trusts.' [Citation.]" (In re Marriage of Perry (1997) 58 Cal.App.4th 1104, 1111.) Katzen's fee petition, if successful, is properly categorized as a proceeding by a creditor of the trust, not a proceeding confined to the trust's internal affairs. Katzen's fee petition concerns potential amounts the trust would owe a third party, independent of the trust's internal terms of distribution. The civil court would therefore have concurrent jurisdiction and the authority to order payments from the trust corpus. Since there is no provision permitting the appeal of a probate order without prejudice, the effect of which is merely to postpone consideration of the underlying petition, we must dismiss the appeal.
We also decline Katzen's request to treat the appeal as a petition for extraordinary writ. We find no extraordinary circumstances and determine she is not deprived of a legal remedy.
DISPOSITION
The purported appeal from the order dismissing the fee petition without prejudice is dismissed. Callan's request for judicial notice is denied. Callan is entitled to her costs on appeal.
Callan's request for judicial notice asks us to consider four documents from the underlying case, but such a request is more appropriately made by a motion to augment the record. (Cal. Rules of Court, rule 8.155(a).) In any event, it appears that all of the documents Callan sought judicial notice of were already part of the record on appeal.
O'LEARY, P. J. WE CONCUR: FYBEL, J. IKOLA, J.