Opinion
A150616
09-19-2018
MATT MIRABELLA, Plaintiff and Appellant, v. CRISTINA HOLLOWAY, Individually and as Trustee, etc., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG15792269)
Plaintiff and appellant Matt Mirabella (Mirabella) appeals from the trial court's judgment following its order sustaining, without leave to amend, a demurrer filed by defendant and respondent Cristina Holloway (Holloway). We reverse.
BACKGROUND
In May 2014, respondent Holloway's father Carmello ("Mel") Chiarenza (decedent) executed a Durable Power of Attorney. The Durable Power of Attorney appointed Holloway as decedent's Agent. Holloway was authorized to "amend, modify, revoke, or terminate" any trust created by decedent. The Durable Power of Attorney expired upon the decedent's death.
Also in May 2014, the decedent created the Mel Chiarenza Trust (Trust). Holloway was named successor trustee in the event of the decedent's death. The Trust provided for the division of the Trust's remainder as follows: 75% to Holloway; 10% to another daughter, Jackie Sheldon; and 15% to the decedent's son Kenneth Chiarenza. The portions left to Holloway and Sheldon were to be distributed "outright and free of trust," while Kenneth Chiarenza's share was to be placed in a sub-trust, the Trust for Kenneth Chiarenza (Subtrust). The decedent appointed appellant Mirabella trustee of the Subtrust.
The decedent died in November 2014. In April 2015, Mirabella, as trustee for the Subtrust, sued Holloway, individually and as trustee of the Trust, in Marin County Superior Court. Holloway moved for change of venue, which was granted in September 2015. Following the change of venue to the Alameda County Superior Court, Holloway demurred to Mirabella's first amended complaint. The trial court sustained the demurrer with leave to amend, and Mirabella filed a second amended complaint (SAC) in March 2016.
The SAC contains nine causes of action, including three claims for breach of contract, two claims for negligence, two claims for fraud, a common counts claim, and an elder abuse claim. The SAC alleges that, prior to his death, the decedent directed Holloway to amend the Trust (or asked her to help him amend the Trust) to equalize the shares of the remainder going to her and to the Subtrust, which would have shifted 30% from Holloway to the Subtrust. The SAC alleges that Holloway failed to amend the Trust or to assist the decedent in doing so, that she misled the decedent, and that the decedent died before he could make other arrangements to amend the Trust. The SAC alleges that conduct gave rise to seven of the nine causes of action, including two of the breach of contract claims, the two negligence claims, the two fraud claims, and the elder abuse claim.
The SAC further alleges that the decedent promised the Trust would compensate Kenneth Chiarenza for personal care services he provided during the last seven months of the decedent's life. The SAC alleges Kenneth Chiarenza assigned his claims to Mirabella and asserts causes of action for breach of contract and common counts.
Holloway demurred to the SAC, and the trial court sustained the demurrer as to all causes of action without leave to amend, on the ground that Mirabella lacks standing. The court entered judgment against Mirabella in January 2017. This appeal followed.
DISCUSSION
"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed 'if any one of the several grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment." (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967 (Aubry); accord Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 722.)
I. The Trial Court Erred in Sustaining the Demurrer as to the Elder Abuse and Related Claims
As explained previously, the SAC asserts seven causes of action for elder abuse and related claims arising out of allegations that Holloway failed to comply with the decedent's request that she amend the Trust to equalize the shares of the remainder going to Holloway and the Subtrust. The trial court's order sustaining Holloway's demurrer as to those causes of action concluded that Mirabella lacked standing to assert the claims. The court erred.
Code of Civil Procedure section 377.30 provides that, "A cause of action that survives the death of the person entitled to commence an action or proceeding passes to the decedent's successor in interest . . . and an action may be commenced by the decedent's personal representative or, if none, by the decedent's successor in interest." Section 377.11 defines the " 'decedent's successor in interest' " as "the beneficiary of the decedent's estate or other successor in interest who succeeds to a cause of action or to a particular item of the property that is the subject of a cause of action."
All undesignated statutory references are to the Code of Civil Procedure.
Without explanation, the trial court concluded Mirabella "has not alleged facts to support his claim that he is authorized to prosecute claims as the representative of Mel Chiarenza under [section] 377.10 et seq." However, the SAC alleges that Mirabella is trustee of the Subtrust and that Holloway's conduct resulted in depriving the Subtrust of an additional 30% of the Trust's remainder. Accordingly, under the allegations of the SAC, the Subtrust is the successor in interest to the property at issue in the claims. And, as trustee, Mirabella has legal authority to bring suit in the name of the Subtrust. (Saks v. Damon Raike & Co. (1992) 7 Cal.App.4th 419, 427 ["At common law, where a cause of action is prosecuted on behalf of an express trust, the trustee is the real party in interest because the trustee has legal title to the cause. . . . '[B]ecause an ordinary express trust is not an entity separate from its trustees, action may not be maintained in the name of the trust. [Citation.] Thus, absent special circumstances, an action prosecuted for the benefit of a trust estate by a person other than the trustee is not brought in the name of a real party in interest and is demurrable.' "].) Holloway cites no authority to the contrary.
We understand Mirabella to acknowledge that Holloway is decedent's personal representative and, thus, the person normally authorized to commence actions under section 377.30. However, he argues an exception to that rule applies because Holloway, as the alleged wrongdoer under the elder abuse and related claims, cannot be expected to commence an action against herself. For that proposition he relies on the decisions in Olson v. Toy (1996) 46 Cal.App.4th 818, and Estate of Lowrie (2004) 118 Cal.App.4th 220.
In Olson v. Toy, supra, 46 Cal.App.4th 818, two beneficiaries under a decedent's will sought to invalidate a trust based on allegations that the trustee exercised undue influence over the decedent. (Id. at pp. 821-822.) The court of appeal held the plaintiffs had "standing to maintain an action to invalidate the trust and compel delivery of the trust assets to the estate" even though normally such a cause of action should be brought by the personal representative. (Id. at pp. 823-824.) The plaintiffs had standing because, as in the present case, the personal representative was the defendant. (Id. at p. 824.) The court of appeal cited a treatise for the proposition that, " '[t]he general rule, both at common law and under the codes, is that the executor or administrator is the proper party to sue on behalf of the estate . . . . In the absence of special circumstances . . . neither one nor all of the heirs or distributees under a will can sue alone, and they are not necessary or proper parties to a suit by the representative.' " (Id. at pp. 823-824.) In concluding the plaintiffs had standing, the court reasoned, "Here there are special circumstances which implicate the exception which allows the decedent's heirs or beneficiaries under her will to bring the action in their names alone. As it happens, defendant Toy is both decedent's personal representative and the trustee of the trust. Toy could hardly be expected on behalf of the estate to initiate an action to declare invalid the trust which she administers as trustee." (Id. at p. 824.)
In Estate of Lowrie, supra, 118 Cal.App.4th 220, the court of appeal held the decedent's granddaughter, a beneficiary and "successor representative," had standing to bring an elder abuse claim against her uncle, the trustee of the decedent's estate. (Id. at pp. 222-224, 231.) The defendant argued, among other things, that the plaintiff lacked standing because he, as trustee, was the decedent's personal representative, citing section 377.30. (Id. at pp. 228-229.) The court concluded the purposes of the Elder Abuse Act required rules on standing that would "induce[] interested persons to report elder abuse and to file lawsuits against elder abuse and neglect." (Id. at p. 230.) It also held standing was proper under the reasoning of Olson v. Toy, supra, 46 Cal.App.4th 818, stating, "[The uncle], as the trustee and major beneficiary of the trust, cannot be expected to bring an elder abuse lawsuit against himself." (Estate of Lowrie, at p. 231.)
The present case is analogous to Olson v. Toy and Estate of Lowrie. Holloway argues the cases are distinguishable, but she fails to point to any material distinctions between those cases and the present case. As in those cases, Holloway, the personal representative and major beneficiary of the Trust, cannot be expected to bring the elder abuse and related claims against herself. The trial court erred in sustaining the demurrer as to those claims due to lack of standing.
As Holloway points out, section 377.32 requires a person who seeks to commence an action as a decedent's successor in interest to file a declaration providing certain information. She acknowledges Mirabella filed such a declaration, in which he declared he was "trustee of the Ken Chiarenza Subtrust of the Mel Chiarenza Trust." But Holloway argues Mirabella could not properly claim that "No other person has a superior right to commence the action or proceeding or to be substituted for the decedent in the pending action or proceeding." (§ 377.32, subd. (a)(6).) Instead, Holloway asserts that Kenneth Chiarenza, the decedent's son and the beneficiary of the Subtrust, has a "superior right to commence the action." (Ibid.) But Holloway cites no authority supporting that proposition. To the contrary, Mirabella, as trustee of the Subtrust, was the person authorized to bringing suit. (Saks v. Damon Raike & Co., supra, 7 Cal.App.4th at p. 427 ["A trust beneficiary has no legal title or ownership interest in the trust assets; his or her right to sue is ordinarily limited to the enforcement of the trust, according to its terms."]; see also Estate of Bowles (2008) 169 Cal.App.4th 684, 691 ["As a general rule, the trustee is the real party in interest with standing to sue and defend on the trust's behalf. [Citation.] Conversely, a trust beneficiary cannot sue in the name of the trust."]; Wolf v. Mitchell, Silberberg & Knupp (1999) 76 Cal.App.4th 1030, 1036 ["Generally, the beneficiary of a trust, having no legal title or ownership interest in the trust assets, is not the real party in interest and may not sue in the name of the trust."].)
II. The Trial Court Erred in Sustaining the Demurrer as to the Compensation Claims
The SAC alleges that the decedent promised to compensate Kenneth Chiarenza for care he provided and that Kenneth assigned his claims to Mirabella; the SAC asserts claims for breach of contract and common counts. The trial court did not explain the basis for its conclusion that Mirabella could not show standing as to those claims.
The only reasoning Holloway offers in support of the trial court's ruling is an assertion that Mirabella failed to include sufficiently specific allegations about the assignment he received from Kenneth Chiarenza. Holloway cites authority that "the evidence of assignment [must be] be clear and positive" and "[t]he burden of proving an assignment falls upon the party asserting rights thereunder." (Cockerell v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284, 292.) But Holloway cites no authority all the details of the assignment must be pled in a complaint. For purposes of the demurrer, we are required to accept the SAC's factual allegation that Kenneth assigned the claims to Mirabella. The trial court erred.
Holloway also argues, apparently as an alternate basis to affirm, that the language of the Trust itself defeats the breach of contract and common count claims. She argues that, under the terms of the Trust, compensation for care provided to the decedent is only available at the discretion of the trustee (Holloway) and to the extent the care was necessary to prevent the decedent's institutionalization. But Holloway cites no authority that Trust language nullifies a claim based on the specific promise of compensation alleged in the SAC. --------
III. Holloway's Jurisdictional Argument is Not an Alternate Basis to Affirm
Probate Code section 17000 provides, "The superior court having jurisdiction over the trust pursuant to this part has exclusive jurisdiction of proceedings concerning the internal affairs of trusts." Probate Code section 17200, subdivision (b), contains a non-exhaustive list of proceedings that concern the "internal affairs of a trust." Holloway contends Mirabella's claims relate to the internal affairs of the Trust and his action should have been filed in the probate department. Even if Holloway were correct some or all of the claims in the SAC concern the Trust's internal affairs, she has not shown that would provide a basis to affirm the trial court's dismissal with prejudice.
Holloway cites section 430.10, subdivision (a), which provides that a defendant may demurr to a complaint on the ground "The court has no jurisdiction of the subject of the cause of action alleged in the pleading." However, the trial court did not lack subject-matter jurisdiction over the claims in the SAC. "[E]ven in a county having a formal probate department, a nonprobate department does not lack fundamental jurisdiction over a probate matter. Instead, . . . the probate department has 'primary' jurisdiction and a nonprobate department 'secondary' jurisdiction of probate-related proceedings." (Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1344; see also Estate of Bowles, supra, 169 Cal.App.4th at p. 695 ["The superior court is divided into departments, including the probate department, as a matter of convenience; but the subject matter jurisdiction of the superior court is vested as a whole."].)
Because Holloway has not shown the trial court lacked fundamental jurisdiction over Mirabella's claims, and because she cites no authority the probate department's possible primary jurisdiction provided a basis to dismiss the SAC with prejudice, Holloway has not shown the trial court's judgment was correct on an alternate ground. We express no opinion whether, on remand, some or all of Mirabella's claims should be referred to the probate department. (See Estate of Bowles, supra, 169 Cal.App.4th at p. 695 ["We find the pertinent question is whether the civil action should be assigned to the probate department in which the first amended section 17200 petition is pending."].)
DISPOSITION
The trial court's judgement and order sustaining respondent's demurrer are reversed, and the matter is remanded for further proceedings consistent with this opinion. Costs on appeal are awarded to appellant.
/s/_________
SIMONS, J. We concur. /s/_________
JONES, P.J. /s/_________
BRUINIERS, J.