Opinion
A159767
03-30-2021
Estate of GUDRUN BLOCK-SABANOVICH, Deceased. LEWIS WARREN, as Executor, etc., Petitioner and Respondent, v. SARA HINES, Objector and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SPR092184)
This appeal involves the estate of Gudrun Block-Sabanovich and objections filed by Sara Hines, a relative of Gudrun's predeceased husband, to the petition to probate Gudrun's will. Gudrun's will left bequests to two of her long-time friends and two of her husband's grandnephews, with the residue of her multi-million dollar estate going to a nonprofit charitable foundation. The will was drafted by Lewis Warren, Gudrun's attorney, in December 2017; it named Warren as Gudrun's executor and proposed him as one of the directors of the charitable foundation.
As the parties do in their briefing, we refer to Ms. Block-Sabanovich as "Gudrun" for ease of reference, and we intend no disrespect.
Following Gudrun's death, Warren petitioned to probate the December 2017 will; Hines and two other relatives objected and contested the will on the grounds of testamentary capacity and undue influence. Following a bench trial, the trial court found that Gudrun was not unduly influenced and had testamentary capacity. The trial court entered an order and judgment admitting the will to probate. We affirm.
Only Hines is a party to this appeal.
I. BACKGROUND
The following facts are taken largely from the trial court's statement of decision. A. Gudrun and Nicholas Sabanovich and Their Estate
Gudrun's husband Nicholas Sabanovich passed away in 2015 after 62 years of marriage. The couple's only child died in 1979. Gudrun passed away on May 14, 2018, at the age of 93. When Gudrun died, she had no living descendants in the United States. Nicholas had a large extended family, but Gudrun had no significant interactions or communications, if any, with his family after his death. Gudrun chose not to have any relationship with her or Nicholas's relatives and had virtually no interaction with any family members for many years prior to her death. She did not want to leave her estate to family members.
Nicholas and Gudrun accumulated a substantial estate with an extensive real estate portfolio. When Gudrun died, the estate was valued between $26 million and $27 million. In amassing their real estate portfolio, Gudrun and Nicholas met Dale Dockins, a commercial real estate broker who, over the course of 25 years, helped Gudrun and Nicholas purchase real properties and assisted them with property-related services. Dockins also became a close personal friend. B. Theodore Hudson's Elder Abuse of Gudrun
Before Nicholas passed away, Gudrun and he began using the handyman services of Theodore Smith Hudson, III. When Nicholas passed away, Gudrun suffered from vision impairment and mobility issues, which made it difficult for her to handle her daily routines without assistance. As a result, she began to rely heavily on Hudson.
Hudson convinced Gudrun to execute a series of estate planning documents. In March 2015, she executed a revocable trust prepared by Stephen Hann, the son-in-law of Gudrun's close friend, Samuel Gordon. The March 2015 trust named Gordon as the sole successor trustee and residuary beneficiary of the trust. Hudson was the beneficiary of Gudrun's real property located in Cloverdale, California, on the condition that he provide her ongoing personal care and assistance until her death. On September 24, 2015, Hudson had Gudrun execute a holographic will revoking the March 2015 trust and leaving the entirety of her estate to him. Hudson convinced Gudrun to add his name to her various bank accounts and to transfer to him 10 different commercial rental properties. He also transferred money from Gudrun's accounts without her permission. In May 2016, Hudson had Gudrun create and sign a further holographic will that again left everything to him.
In July 2016, Gudrun discovered that Hudson had made transfers from her accounts without her knowledge, and she asked for Dockins's help confronting Hudson. Hudson confirmed that he had withdrawn nearly $1.5 million from Gudrun's accounts, and he refused to return the commercial properties. In August 2016, Gudrun executed a document intending to revoke the May 2016 holographic will. Dockins subsequently introduced Gudrun to respondent Warren, an attorney who worked on sophisticated and complex cases, to assist her in recovering her real properties and stolen money. Gudrun retained Warren, and he began to take steps to protect Gudrun and recover her assets. He ultimately filed a civil financial elder abuse case against Hudson.
Litigation of the civil case was expensive, protracted, and hard fought. After a five-week trial, the jury returned a verdict in Gudrun's favor. The case was not resolved until Hudson filed for bankruptcy, and Gudrun obtained relief through the bankruptcy court. Gudrun incurred more than $700,000 in legal fees and expenses, and her assets were returned in October 2017. The trial court found that overwhelming evidence established that, during the course of the civil case against Hudson, Warren and Gudrun established a trusting relationship and a strong bond forged from the challenges of the civil trial. Once a verdict was entered in Gudrun's favor, her outlook and approach to life was different than it was before the civil trial concluded.
Meanwhile, soon after Gudrun filed her civil case, the district attorney filed a criminal elder abuse case against Hudson. Attorney Carla Rodriguez handled the criminal case. Hudson was tried and convicted in May 2018 on criminal financial elder abuse charges. C. Gudrun's Estate Planning
When Warren was retained in August 2016, he immediately contacted Albert Handelman, a trusts and estates lawyer, regarding preparation of an estate plan for Gudrun. In September 2016, Gudrun and Warren met with Handelman. At that time, Gudrun said that she did not wish to leave anything to any individuals and wanted to leave the bulk of her estate to charity. However, Gudrun was unable to decide on a particular charity or charities. She also did not select any person or institution to serve as her administrator. The meeting ended with an agreement that Handelman would draft the basic documents of an estate plan so that Gudrun would have something concrete to consider.
Handelman's office prepared basic estate planning documents for Gudrun—a revocable trust, a pour-over will, and a durable power of attorney. Those documents provided, in essence, that all of Gudrun's estate would go to fund a charitable foundation to be established by the trustee to benefit the community of Sonoma County. Gudrun was named as the initial trustee, but no successor trustee was named and no executor for the pour-over will was named. Warren delivered the documents to Gudrun, and he later advised Handelman that Gudrun thought the documents were too long and complicated and requested that he prepare a will without a revocable trust. The trial court found overwhelming evidence that Gudrun did not want a trust and that she wanted a very short, uncomplicated will.
Handelman prepared an eight-page will. It expanded the disposition to enable the executor either to make gifts directly to tax-qualified charitable organizations selected by the executor, or to establish a tax-qualified charitable foundation. No executor was named because Gudrun had not decided on who would serve in that role. Warren delivered the will to Gudrun at the end of March 2017. Warren sent Handelman a few suggested changes, which Warren said he intended to present to Gudrun when they reviewed the draft will. Handelman soon heard from Warren that the document was still too long, and Warren advised Handelman not to do further work on Gudrun's estate plan. She had decided she did not want to continue working with Handelman directly.
After the civil case and the recovery of her assets, Gudrun was in a place to consider an estate plan, and she desired to create an estate plan to prevent what happened with Hudson from occurring again. As such, in October 2017, upon the return of her assets, Gudrun asked Warren to prepare her will. Warren agreed only with the understanding that he would consult with Handelman on any estate plan document that Warren would prepare. With Gudrun's agreement, Warren reviewed the last version of the will that Handelman had drafted and began to draft a shorter will. Once Warren completed his work, he sent it to Handelman for review and comment. The draft Warren sent to Handelman had Warren's name included as nominated executor and one of the directors of the charitable foundation Gudrun wanted to establish because Gudrun had asked Warren to serve in those capacities. There were still blanks where the names of successor or alternate executors could be filled in because Gudrun had not decided who should fill those roles. Dockins and Gudrun were also named as directors of the charitable foundation. Handelman made redline comments on the draft and emailed those comments to Warren on December 21, 2017. Warren incorporated those changes into a new draft and discussed the new will with Gudrun on December 22, 2017, at which time she signed the will with Warren and Dockins as witnesses. The trial court specifically found that Gudrun made the decision that she wanted to sign a will. It further found that witnesses testified consistently and persuasively that, once Gudrun signed the December 2017 will (hereafter, the will), she was not only relieved but happy. D. The Terms of Gudrun's Will
Gudrun made the following bequests in her will: $100,000 annually for five years to Samuel Gordon; $50,000 annually for five years to Tara Krug; $100,000 each to Nicholas's grandnephews, Mitchell and Franklin Sabanovich, for educational purposes.
Gudrun gave the residue of her estate "to Saba Enterprises Foundation ('Saba'), to be held for the purposes for which Saba has been organized." In the event that Saba was not formed by the time of Gudrun's death, the will directed her executor to create a private foundation called the "Saba Foundation ('Saba')" whose purpose "shall be to oversee and manage its assets (including those distributed to it under this Will) and distributing income generated from the sale, management or investment of my assets to charitable causes. The mission statement of Saba shall be to provide financial assistance to worthy charitable causes, such as the acquisition[,] development and/or operation of parks and/or playgrounds for children, the provision of financial aid to developmentally challenged children, the support of efforts to prevent abuse and cruelty to animals, and other charitable causes that Saba, in its discretion, deems appropriate." Saba was to be "formed in all respects to qualify as a public charity or a private foundation, as the case may be, such that it is treated as such for all purposes under the Internal Revenue Code and applicable Treasury Regulations, and such that the contribution to Saba under this [w]ill shall qualify for the estate tax charitable deduction allowed under Internal Revenue Code [section] 2055."
Saba was required to have a board of three directors who had complete power and authority to make any and all management, investment and operational decisions on behalf of the foundation, including, but not limited to: "i. The same power and authority I have conferred on my Executor to perform or continue to perform any and all acts described above; [¶] ii. The power to oversee, manage, operate and/or sell any of my assets; [¶] iii. The power to make charitable contributions to charitable entities and/or causes; and [¶] iv. The power to hire or retain and compensate employees, independent contractors and/or third parties, including an executive director, to assist in the operation, management and/or investment of the foundation's assets. [¶] All of the foregoing powers shall be exercised in the Board's complete and unfettered discretion." The will stated that Saba's initial directors would be Gudrun, if she formed Saba during her lifetime, Warren, and Dockins. However, "[i]f for any reason, a vacancy on the Board exists because one or more director(s) cannot or will not serve, the remaining director(s) shall have the full and complete power to appoint one or more successor director(s)." And, "[i]f, for any reason, a vacancy on the Board cannot be filled as provided above such vacancy(ies) will be filled by application to a court of appropriate jurisdiction."
The articles of incorporation for Saba Foundation, Inc., a nonprofit public benefit corporation organized under California law, were filed with the California Secretary of State on February 8, 2018. Both Warren and Dockins testified that they did not expect compensation for the role of director, and the trial court found there was no evidence that any money was going to be paid to them as directors. E. Gudrun's Meeting with Dr. Rosenberg
After Gudrun signed the will, Warren and Handelman discussed steps that could be taken to make sure the will would be admitted to probate. They discussed obtaining a certificate of independent review, but that notion was rejected because it was determined the will was not the proper subject of such a certificate. Warren mentioned that, in the course of the civil case against Hudson, Gudrun had been examined by Dr. Saul Rosenberg, a licensed psychologist specializing in clinical and forensic psychology. Handelman agreed that having Dr. Rosenberg examine Gudrun again in the context of her will would be a good idea.
Dr. Rosenberg examined Gudrun on January 23, 2018 and wrote a report detailing his findings. Dr. Rosenberg concluded that Gudrun's levels of depression and anxiety were considerably lower than they had been before the civil case against Hudson. Unlike the situation with Hudson, Gudrun did not indicate in any way that anyone was coercing, forcing or threatening her regarding executing the will. Moreover, none of the beneficiaries of the will had control over Gudrun's life in the same way Hudson had exercised control. When Dr. Rosenberg examined her, Gudrun was not under anyone's control. Dr. Rosenberg concluded that there was "not a single shred of evidence that any undue influence was occurring at the time Gudrun executed the [w]ill." F. Gudrun's Circle of Friends
Following her discovery of Hudson's crimes, Gudrun kept an extremely limited circle of friends—Dockins, Gordon, and Krug—who assisted her as it was clear she needed help. Gudrun was very clear and strong-willed about whom she would let help her at this stage of her life. The trial court found that the manner in which Gudrun developed relationships was consistent throughout her life. Generally, her relationships started through arm's length business interactions, which then evolved into a lunch, and eventually to intimate daily interactions. For example, Dockins first began doing work for Nicholas and Gudrun professionally and then became a personal, close friend. The trial court found that the weight of the evidence "absolutely established" Dockins helped Gudrun out of the kindness of his heart as she would not let anyone else help her. Similarly, Gordon was referred to Nick and Gudrun to do construction work on their commercial properties and eventually became a close, personal friend. Krug first met Gudrun in a business setting, and then the two became friends. Like Dockins, the trial court specifically found that Krug was a loving, supportive friend, and Krug's testimony was persuasive, genuine, and clear. The trial court rejected the contestants' argument that Dockins, Gordon, and Krug were motivated to assist Gudrun by greed, instead specifically finding that the "weight of the evidence shows that the aspects of human nature of kindness, generosity, affection, and love were demonstrated by Gudrun's friends and the basis for their actions in helping her." G. The Trial Court's Ruling
After the trial, the trial court issued an oral tentative statement of decision and then a written final statement of decision granting Warren's petition and overruling the objections on the grounds of undue influence and lack of testamentary capacity. The court found the objectors had not presented any evidence that Gudrun lacked testamentary capacity. Instead, the court found that descriptions of Gudrun throughout the trial as sophisticated, bright, strong-willed, and capable were exceptionally consistent, including the description by disinterested witness attorney Rodriguez. The court credited the testimony of Dr. Marguglio, Gudrun's personal physician since 1981, that Gudrun was mentally intact. The court also credited Dr. Rosenberg's opinion that Gudrun had capacity and was not unduly influenced, finding it to be valid and persuasive. It rejected the opinion from the objectors' expert, Dr. Hammel, that Dr. Rosenberg's review had been insufficient to render an informed opinion and that Gudrun suffered from posttraumatic stress disorder. Dr. Hammel had never met Gudrun, and the court found that his opinion was factually unsupported, vague, uncertain, overbroad, nebulous, and unpersuasive.
Hines does not challenge the trial court's finding that Gudrun had testamentary capacity.
The trial court also rejected the objectors' argument that Warren and Dockins controlled and limited Gudrun's access to information to perpetrate a "grand scheme" to ensure she executed a will giving money to a charitable organization from which Warren and Dockins would benefit. The trial court credited the testimony of Gudrun's personal physician, Dr. Marguglio, that he probably suggested to Gudrun that she leave her estate to charity and found this testimony further dispelled Hines' claim that Dockins and Warren suggested the idea of charities to Gudrun. The court further found the following evidence refuted objectors' "grand scheme" theory: The 2017 will included specific gifts to Gordon, Krug, and Gudrun's grandnephews; it was Gudrun's goal to create the charitable foundation; Gudrun explained to Warren her goals and what she wanted to do, Warren gave her ideas, and Gudrun decided that she, Warren, and Dockins would be directors of the foundation. In addition, Warren arranged for an independent attorney, Handelman, to review the will, and consulted with other attorneys.
Regarding statutory undue influence, the trial court found that Warren drafted the will, but the will did not make a donative transfer to Warren or Dockins under Probate Code section 21380. In so concluding, the court credited the definition of "donative transfer" from Jenkins v. Teegarden (2014) 230 Cal.App.4th 1128, 1131 (Jenkins), which held that a transfer is a donative transfer if it is for inadequate consideration. The court noted that Black's Law Dictionary defined "transfer" as "[a]ny mode of disposing of or parting with an asset or an interest in an asset, including a gift, the payment of money, release, lease, or creation of a lien or other encumbrance." In light of these standards, the court specifically found "there was no transfer, as defined by law, of an asset by Gudrun to [Warren] or Mr. Dockins. As such, no donative transfer occurred. Instead, Gudrun's Will provides the transfer is to a charitable foundation created by Gudrun of which Gudrun, [Warren,] and Mr. Dockins are to serve as directors. In the best light, the Will provides for [Warren] and Mr. Dockins to have a series of responsibilities in their roles with regard to the charitable foundation." The court found the common law presumption of undue influence did not arise because, although Warren shared a confidential relationship with Gudrun and actively participated in drafting the will, serving as a director of Saba constituted a burden, not an undue benefit.
All further statutory references are to the Probate Code unless otherwise stated.
Next, the trial court found that, even if a presumption of undue influence arose, "[Warren] overcame that presumption with overwhelming evidence." The trial court recognized that a statutory certificate of independent review (§ 21384) serves to avoid invalidation of certain donative transfers under section 21380 and to prevent removal of a sole trustee under section 15642, subdivision (b)(6), but found there was no need for such a certificate because there was no donative transfer or " 'sole trustee' of anything." The trial court entered an order and judgment admitting the 2017 will in its entirety and finding Hines and the other objectors would take nothing. Hines timely appealed.
II. DISCUSSION
In this case, Hines invokes the statutory doctrine of undue influence to challenge Warren's appointment as executor of Gudrun's estate and to challenge what Hines alleges was the appointment of Warren and Dockins as "co-trustee[s]" over assets of Gudrun's estate.
The provisions of a will may be contested for undue influence under statute and the common law. Under the common law, the contestant generally bears the burden of proving undue influence (§ 8252, subd. (a)); however, a presumption of undue influence, shifting the burden of proof, arises upon the challenger's showing that (1) the person alleged to have exerted undue influence had a confidential or fiduciary relationship with the testator; (2) the person actively participated in procuring the instrument's preparation or execution; and (3) the person would benefit unduly by the testamentary instrument. (Estate of Clegg (1978) 87 Cal.App.3d 594, 602.) The statutory presumption of undue influence or fraud supplements the common law and applies to "donative transfers" to statutorily enumerated persons. (§§ 21380, 21392.) Hines sought to invalidate Gudrun's will under the common law and section 21380 below, but she does not pursue her common law challenge on appeal. Thus, we address only the statutory scheme providing a presumption of undue influence or fraud for "donative transfers" to certain persons. (§ 21380.) A. Standard of Review
A judgment is presumed correct on appeal, and "all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) "In reviewing a judgment based upon a statement of decision following a bench trial, we review questions of law de novo. [Citation.] We apply a substantial evidence standard of review to the trial court's findings of fact. [Citation.] Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings." (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) " 'Statutory interpretation is a question of law that we review de novo.' " (Jenkins, supra, 230 Cal.App.4th at p. 1138.) B. The Statutory Presumption of Undue Influence or Fraud for Donative Transfers
Section 21380 "prohibits donative transfers to broad categories of persons who, because of their relationship with the [testator], might exercise undue influence." (Butler v. LeBouef (2016) 248 Cal.App.4th 198, 208.) As is relevant here, "[a] provision of an instrument making a donative transfer to any of the following persons is presumed to be the product of fraud or undue influence: [¶] (1) [t]he person who drafted the instrument . . . [¶] (3) [a] care custodian of a transferor who is a dependent adult, but only if the instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period." (§ 21380, subd. (a)(1), (3).) The presumption of fraud or undue influence arising for a donative transfer to a care custodian may be rebutted by clear and convincing evidence that the donative transfer was not the product of fraud or undue influence. (§ 21380, subd. (b).) However, where the donative transfer is to the person who drafted the donative instrument, the presumption is conclusive. (§ 21380, subd. (c).) Finally, "[i]f a beneficiary is unsuccessful in rebutting the presumption, the beneficiary shall bear all costs of the proceeding, including reasonable attorney's fees." (§ 21380, subd. (d).)
There are exceptions to section 21380. Among others, under section 21384, "[a] donative transfer is not subject to Section 21380 if the instrument is reviewed by an independent attorney who counsels the transferor, out of the presence of any heir or proposed beneficiary, about the nature and consequences of the intended transfer, including the effect of the intended transfer on the transferor's heirs and on any beneficiary of a prior donative instrument, attempts to determine if the intended transfer is the result of fraud or undue influence, and signs and delivers to the transferor an original certificate in substantially the [form set forth herein]." (§ 21384, subd. (a).) Section 21380 also does not apply to a donative transfer to a "public entity, an entity that qualifies for an exemption from taxation under Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code, or a trust holding the transferred property for the entity." (§ 21382, subd. (d).)
The only published opinion that closely examines the meaning of "donative transfer" is Jenkins, wherein the court addressed what types of transfers were "donative" under former section 21350, the predecessor to section 21380, and under section 21380. (Jenkins, supra, 230 Cal.App.4th at pp. 1130-1131.) The decedent in Jenkins quitclaimed his house to his caregiver (who did not dispute that she drafted the quitclaim deed), and Jenkins, the trustee and beneficiary of the decedent's trust, sought to void the transfer. (Id. at pp. 1131-1134, 1144 & fn. 8.) The court considered the meaning of "donative transfer" as a matter of first impression. (Id. at p. 1142.) It observed there was no statutory definition, and the statutory language was ambiguous. (Id. at pp. 1138-1139.) After reviewing the legislative history, the court concluded that "donative transfer" "include[d] not only a transfer for zero consideration, but also a transfer for unfair or inadequate consideration." (Id. at p. 1142.) The test for inadequate consideration was not whether the transfer exceeded the value of the consideration, but whether the consideration received was fair and reasonable under the circumstances. (Ibid.)
After Jenkins was decided, certain statutes within Part 3.7 of the Probate Code, which includes section 21380, referred to "gifts" whereas others referred to "donative transfers." (See Stats. 2017, ch. 56, § 1.) Noting that "existing case law construes the term 'donative transfer' to include, in addition to gifts, a transfer for inadequate or unfair consideration," the Legislature amended the statutes to delete "gifts" and instead refer to "donative transfers" throughout Part 3.7. (Ibid; Legis. Counsel's Dig., Sen. Bill No. 153 (2017-2018 Reg. Sess.).)
Jenkins thus established that the term "donative transfers" includes transfers for zero consideration, as well as those for unfair or inadequate consideration. (Jenkins, supra, 230 Cal.App.4th 1128 at p. 1142.) But Jenkins did not address what must be transferred to qualify as a donative transfer under section 21380, a question that we believe must be answered to clarify the meaning of the term. As always, our goal in construing a statute is to determine and give effect to the Legislature's intent. (Jenkins, at p. 1138.) We first examine the words of the statute because the "statutory language is generally the most reliable indicator of legislative intent." (Ibid.) The words "should be given their ordinary and usual meaning and should be construed in their statutory context." (Ibid.) If there is a plain, commonsense meaning, that meaning controls. (Ibid.) If the statute is susceptible to more than one interpretation, however, we may consider extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme. (Id. at pp. 1138-1139.)
Here, the commonly understood definition of "transfer" is clear and instructive. "Transfer" means "[a]ny mode of disposing of or parting with an asset or an interest in an asset . . . . The term embraces every method . . . of disposing of or parting with property or with an interest in property." (Black's Law Dict. (11th ed. 2019).) Thus, a "donative transfer," by its plain meaning, refers to a transfer of property or an interest in property to the recipient, and " '[p]roperty' means anything that may be the subject of ownership and includes both real and personal property and any interest therein." (§ 62.)
With these principles in mind, we turn to the terms of Gudrun's will. C. The Will's Provisions relating to Warren and Dockins Are Not Invalid under Section 21380
Hines's opening brief mentions the bequest to Tara Krug, twice stating that Krug was a "care custodian" for Gudrun. Below, Hines sought to invalidate only the will provisions relating to the residue of Gudrun's estate, and Hines does not specifically argue the bequest to Krug should be invalidated under section 21380 on appeal. Thus, we do not address the monetary bequest to Krug.
As best as we can discern from Hines's briefing, the alleged "donative transfers" she challenges are Warren's nomination as an executor and—although she does not explain her theory that Gudrun created a trust—the alleged "transfer of the vast bulk of Gudrun's estate, including money, personalty and real estate, to Warren (and Dockins, as co-trustee)." We address each of Hines's contentions post.
Warren's appointment as an executor does not qualify as a donative transfer under section 21380 because it does not effect a transfer of Gudrun's property. Although it arises in a separate context, we find Estate of Sobol (2014) 225 Cal.App.4th 771 instructive. In 2010, decedent Sobol executed a pour-over will providing that all her property would be held by her trust upon her death and naming Mr. Rose as executor. (Id. at p. 773.) She executed a living trust naming herself as trustee during her lifetime and Rose a successor trustee upon her death. (Ibid.) The trust was to distribute its assets upon Sobol's death, giving bequests to two individuals and the remainder of the assets to the trustee of Sobol's trust for the establishment of a charitable foundation. (Id. at p. 774.) In 2012, Sobol executed a codicil to her will and an amendment to her trust declaration drafted by her attorney, Ms. Shaylin, that changed the executor and successor trustees to Shaylin and two of Sobol's friends. (Id. at pp. 774-775.) Rose sought to contest the 2012 codicil on the ground of Shaylin's undue influence. The court first noted that only "interested persons" had standing to contest a will under sections 1043 and 48. (Id. at p. 781.) Relying on Jay v. Superior Court (1970) 10 Cal.App.3d 754, 757-759, which held that a previously-named executor's legal interest in receiving administrative fees did not give him standing to challenge a codicil that changed only the executor's identity, the court found that Rose lacked standing. (Estate of Sobol, at p. 784.) If administrative fees are insufficient to allow an executor to contest a subsequent will changing executors, it follows that nomination as an executor does not itself constitute a transfer of property under a will. Further, any such appointment is not "donative." The compensation Gudrun's executor would receive for services is set by statute. (§§ 10800-10805.) Thus, any alleged "transfer" resulting from Warren's nomination as executor would not be one for zero, inadequate, or unfair consideration as a matter of law. (Jenkins, supra, 230 Cal.App.4th at p. 1142.)
Section 10802, which generally approves of the compensation provided for in a will, is not at issue here because the will does not set the executor's compensation.
Hines next argues that section 21380 applies because "the transfer of the vast bulk of Gudrun's estate, including money, personalty and real estate, to Warren (and Dockins, as co-trustee) was the 'donative transfer' of a passel of 'property rights.' " Warren counters that the donative transfer of this property was to the Saba Foundation, not to Warren or Dockins. We agree with Warren.
Hines states numerous times that the will transferred the residue of Gudrun's estate to Warren and Dockins or to Warren and Dockins as trustees, but the will in fact gives the residue of Gudrun's estate "to Saba Enterprises Foundation ('Saba'), to be held for the purposes for which Saba has been organized"; "[i]n the event that Saba had not been formed by the time of [Gudrun's] death," the will directed the executor to create a private foundation called the "Saba Foundation" to receive the residue of her estate. It is undisputed that Saba Foundation is a California nonprofit public benefit corporation organized for charitable purposes, and its articles of incorporation were filed with the Secretary of State in February 2018, thus beginning its corporate existence months before Gudrun's death. (Corp. Code, § 5120, subd. (c).) A nonprofit public benefit corporation is a separate legal entity (see Corp. Code, §§ 5110 et seq.) with all the powers of a natural person; it must have a board of directors, and its activities, affairs, and corporate powers are exercised by or under the direction of a board of directors. (Corp. Code, §§ 5140, 5210.) The will reflects this statutory scheme, stating that the board of directors for Saba Foundation will have the power to make all operational decisions on behalf of the foundation. Thus, the language of the will and the evidence at trial support the court's finding that the transfer of the property comprising the residue of Gudrun's estate was to the Saba Foundation, not to Warren and Dockins individually or to Warren and Dockins as co-trustees.
As it relates to Warren and Dockins, the will states that they should be appointed as two of the three initial directors of the private foundation should they be willing and able to serve. In her briefing, Hines does not address Saba Foundation's status as a nonprofit public benefit corporation, the separate legal status of corporations, or why the appointment to the board consisting of three directors of such a corporation would be a donative transfer of Gudrun's property or property interests to Warren and Dockins subject to attack under section 21380. Because Hines does not specifically address either Saba Foundation's status as a nonprofit corporation or Warren's point that he and Dockins were never trustees as she claims, we find that this argument is forfeited (Tellez v. Rich Voss Trucking, Inc. (2014) 240 Cal.App.4th 1052, 1066 [appellant forfeits issue by failing to raise it in the opening brief]).
Finally, Hines cites California and out-of-state authorities to argue that Warren and Dockins received a benefit from the will, but none addresses section 21380. Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 479-483, involved an instance of financial elder abuse committed by the "taking" of the elder's real property (Welf. & Inst. Code, § 15610.30, subd. (a)), and the question the court addressed was whether the taking could occur by an executory, rather than consummated, agreement. Dudek v. Dudek (2019) 34 Cal.App.5th 154 did not address section 21380 and held that a settlor's execution of trust document naming his brother as trustee and beneficiary and listing a life insurance policy as the property transferred constituted an effective inter vivos transfer of the policy to the trust and funded the trust. The out-of-state authorities Hines cites focus on the rebuttable presumption of undue influence under the laws of other states, and are inapposite because they, unsurprisingly, do not address section 21380. D. Hines Fails to Show Error in the Court's Rebuttal Finding as to Dockins
Under Welfare and Institutions Code section 15610.30, subdivision (c), someone "takes" such property when the elder "is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest."
Hines argues that the will provision stating that Dockins should be a director of Saba Foundation is subject to section 21380's presumption of undue influence or fraud because Dockins was a "care custodian" of Gudrun and the record is bereft of clear and convincing evidence that the presumption was rebutted. Besides failing to show that the provisions relating to Warren and Dockins constituted donative transfers under section 21380, Hines's argument as to Dockins fails for the additional reason that she does not show error in the trial court's finding that any presumption of undue influence was rebutted.
The statutory presumption of undue influence relating to a "care custodian" is rebuttable by clear and convincing evidence that a donative transfer was not the product of fraud or undue influence. (§ 21380, subd. (b).) After finding statutory and common law presumptions of undue influence did not arise, in a separate section entitled, "Even if a Presumption of Undue Influence Arose, it Was Successfully Rebutted," the trial court found that "the Contestants failed to meet their burden in establishing a presumption of undue influence. However, even if that presumption were in play, [Warren] overcame that presumption with overwhelming evidence." The trial court determined that Dockins was a close personal friend of Gudrun; he helped her out of the kindness of his heart; it was Gudrun's goal to create the charitable foundation; Gudrun explained to Warren her goals and what she wanted to do, Warren gave her ideas, and Gudrun decided that she, Warren, and Dockins would be directors of the foundation.
This same trial court finding would also apply to any common law presumption of undue influence as to Warren if Hines were pursuing her common law theory on appeal. (Estate of Clegg, supra, 87 Cal.App.3d at p.602 [proponent of the will may rebut common law presumption of undue influence].)
While Hines summarily asserts that the record is "bereft" of clear and convincing evidence that the alleged donative transfer to Dockins was not the result of undue influence or fraud, she has forfeited her challenge. Hines does not mention the trial court's findings or argue that its rebuttal finding did not apply to the statutory presumption of undue influence with respect to Dockins. Her failure to do so, and her failure to discuss the evidence supporting the trial court's numerous factual findings, are dispositive. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881 [stating the rule that a proponent of a substantial evidence challenge forfeits such challenge by not setting forth all material evidence on the point].) E. The Lack of a Certificate of Independent Review Does Not Invalidate the Will
To the extent that there is any ambiguity regarding whether the rebuttal finding applied to the statutory presumption of undue influence, we must imply a finding that the presumption was rebutted by clear and convincing evidence. Hines asked for a statement of decision below, but she did not include her objections to the trial court's proposed statement in the appellate record. Thus, we imply all factual findings in support of the judgment. (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 48.) We would normally embark upon a review for substantial evidence (ibid.), but Hines forfeited any substantial evidence challenge by failing to mention the evidence supporting the trial court's factual determinations.
We reject Hines's argument that lack of a certificate of independent review itself invalidates provisions of the will. The statutory language of section 21384 clearly provides that, where a valid certificate of independent review is procured, "[a] donative transfer is not subject to Section 21380." (§ 21384, subd. (a).) Thus, a certificate of independent review operates to remove a donative transfer from the application of section 21380, but the absence of a certificate of independent review does not itself invalidate a donative transfer. Instead, the absence of a certificate of independent review merely means that, if the transfer at issue is subject to section 21380, the statute applies. As we have determined, Hines has not established that section 21380's presumption is applicable. F. Attorney Fees
Hines seeks attorney fees under section 21380, subdivision (d), which provides that "[i]f a beneficiary is unsuccessful in rebutting the presumption, the beneficiary shall bear all costs of the proceeding, including reasonable attorney's fees," and under section 15642, subdivision (c), which provides that "[i]f, pursuant to paragraph (6) of subdivision (b), the court finds that the designation of the trustee . . . was the product of fraud or undue influence, the person being removed as trustee shall bear all costs of the proceeding, including reasonable attorney's fees." Hines does not establish that she successfully petitioned for removal of a trustee under section 15642 subdivision (b)(6), and she has not prevailed on her section 21380 claim. She is not entitled to attorney fees. G. Hines Did Not Preserve Her Claim that Warren Violated the Rules of Professional Conduct
As an alternative to her section 21380 theory, Hines argues that Warren failed to obtain informed written consent from Gudrun for his "potentially lucrative" nomination as executor and as trustee in violation of Rule 1.7(b) or (c) of the Rules of Professional Conduct, and that therefore "the will's provisions making Warren executor and trustee of the Saba Foundation must [ ] be set aside as void . . . ." We conclude that Hines forfeited this challenge.
Rule references are to the Rules of Professional Conduct unless otherwise stated.
We agree with Warren that Hines has not shown that she raised before the trial court her argument that alleged breaches of the Rules of Professional Conduct render provisions of the will invalid. In her reply brief, Hines directs us to one page in her posttrial brief wherein she briefly mentioned Rule 1.7(b) and (c) and stated that Warren did not obtain informed written consent to a potential conflict of interest resulting from his " 'lucrative appointment[]' " as Gudrun's fiduciary. Hines made this fleeting reference to the Rules of Professional Conduct within her argument that Warren's appointment as a fiduciary conferred a benefit sufficient to trigger the common law presumption of undue influence. She did not argue that, independently and as a matter of public policy or otherwise, Warren's appointment as executor should be invalidated for an alleged violation of the Rules of Professional Conduct, and she made no mention of an alleged appointment as a trustee. "Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunity to consider." (JRS Products, Inc. v. Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168, 178.) As such, we conclude that Hines forfeited this argument on appeal, and she makes no argument that, forfeiture aside, we should consider this issue for the first time on appeal. (Truck Insurance Exchange v. AMCO Insurance Company (2020) 56 Cal.App.5th 619, 635 [arguments raised for the first time on appeal are generally deemed forfeited].)
Rule 1.7 provides in relevant part: "(b) A lawyer shall not, without informed written consent from each affected client and compliance with paragraph (d), represent a client if there is a significant risk the lawyer's representation of the client will be materially limited by the lawyer's responsibilities to or relationships with another client, a former client or a third person, or by the lawyer's own interests. [¶] (c) Even when a significant risk requiring a lawyer to comply with paragraph (b) is not present, a lawyer shall not represent a client without written disclosure of the relationship to the client and compliance with paragraph (d) where: [¶] (1) the lawyer has . . . a legal, business, financial, professional, or personal relationship with or responsibility to a party or witness in the same matter; or [¶] (2) the lawyer knows or reasonably should know that another party's lawyer is a spouse, parent, child, or sibling of the lawyer, lives with the lawyer, is a client of the lawyer or another lawyer in the lawyer's firm, or has an intimate personal relationship with the lawyer. [¶] (d) Representation is permitted under this rule only if the lawyer complies with paragraphs (a), (b), and (c), and: [¶] (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; [¶] (2) the representation is not prohibited by law; and (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal."
Hines cites to Rule 1.7(b) and (c), which became effective November 1, 2018. At the time of any alleged conduct in this case, Rule 3-310 was in effect. (See Friedman v. State Bar (1990) 50 Cal.3d 235, 238, fn. 1 [applying the professional conduct rules effective at the time of the conduct].) Hines does not make substantive arguments under Rule 3-310.
III. DISPOSITION
The judgment is affirmed.
BROWN, J. WE CONCUR: POLLAK, P. J.
TUCHER, J.