DSP/DNS – Trust

II. DEMURRER

Perrin demurs to the Petition and each cause of action therein on the following grounds: (1) Renner lacks standing because she is not a beneficiary of the DSP Trust and her stipulations of fact in connection with the trial on the insurance claim confirm her lack of standing; (2) the claims are time-barred by Code of Civil Procedure sections 366.2 and 366.3; (3) the Petition is time-barred because it had to have been brought as a compulsory cross-complaint to Perrin’s petition; and (4) the claims are barred by the doctrines of claim and issue preclusion.

A demurrer can be used only to challenge defects that appear on the face of the petition or from matters outside the pleading that are judicially noticeable. [Citations.] ‘To survive a demurrer, the [petition] need only allege facts sufficient to state a cause of action.’ [Citation.] The demurrer admits the truth of all material facts properly pleaded, including all ultimate facts alleged, but not contentions, deductions or conclusions of fact or law.” (Simple Avo Paradise Ranch, LLC v. Southern California Edison Co. (2024) 102 Cal.App.5th 281, 298–299.)

A. Standing

Perrin demurs to the Petition on the ground Renner lacks standing to pursue any of the claims because she is not a beneficiary under the terms of the DSP Trust. The Petition alleges Renner is a beneficiary of the DPS Trust based on a “Distribution of Pecuniary Amounts from the DSP Trust for David Perrin” executed by Decedent on November 1, 2017 (Distribution). (ROA 472, Exhibit G.) The Distribution stated Renner was to receive $1,000,000 from the DSP Trust. (Id.) The Petition alleges the Distribution was made pursuant to an enabling clause included in the 1st, 2nd, 3rd, and 4th amendments to the DSP Trust. (ROA 390 at 3:27-5:20.)

The Petition acknowledges that, after the Distribution was executed, a 5th amendment to the DSP Trust does not include the enabling clause. (ROA 390 at 5:21-24.) The Petition alleges, however, Decedent confirmed the $1,000,000 gift, verbally and in writing, that after the 5th amendment was executed. (ROA 390 at 5:25- 6:28.)

Citing only Probate Code section 16002(a), Perrin asserts the elimination of the enabling clause in the 5th amendment must be interpreted as eliminating the then-existing Distribution, thereby foreclosing Renner’s claim to be a beneficiary. However, section 16002(a), which reads: “The trustee has a duty to administer the trust solely in the interest of the beneficiaries” does not provide any direction as to the effect of the 5th amendment’s language or how it should be interpreted.

“The primary duty of a court in construing a trust is to give effect to the settlor’s intentions.” (Barefoot v. Jennings (2020) 8 Cal.5th 822, 826.) Renner alleges Decedent’s intent is shown in the Distribution and subsequent alleged oral and written affirmations of the Distribution. Perrin argues Decedent’s intent is shown in the 5th amendment’s amendment, which does not include the enabling clause. Looking solely at the Petition, including a review of the language of the Trust, the five amendments, and the Distribution as well as the allegation that Decedent confirmed his intention to give Renner $1,000,000 from the DSP Trust, the court cannot determine Decedent’s intent as a matter of law.

Renner’s stipulation that the DSP Trust and its amendments are valid does not change anything. She does not deny the validity of the 5th amendment. Rather, she argues a different interpretation and effect than that offered by Perrin. The question of Decedent’s intent remains, at this point in the proceeding, a question of fact.

The demurrer is OVERRULED on this ground.

B. Time-Bar

Perrin demurs to the Petition on the ground it was not filed within a year of Decedent’s death and argues it is, therefore, time-barred under Code of Civil Procedures sections 366.2 and 366.3.

Section 366.2 “specifically contemplates an action that may be brought against a person prior to his or her death. (Sefton v. Sefton (2012) 206 Cal.App.4th 875, 894.) Renner’s Petition does not state a claim against Decedent. Accordingly, the section does not bar Renner’s claims, which are stated against Perrin and the DSP Trust.

Section 366.3, which “applies to claims based on promises or agreements to create an instrument that will effectuate a distribution from the property of a decedent, rather than to claims based solely on the instrument effectuating the distribution (Smith v. Myers (2024) 103 Cal.App.5th 586, 593– 594 (Smith)) also does not apply. As the court explained in Smith at p. 594: “the statute contemplates a scenario in which a decedent had made an agreement with (or promise to) the claimant to execute a will, create a trust document, or prepare another instrument that would make the claimant a beneficiary upon the decedent’s death.

The claim at issue would then be one to enforce that promise or agreement, regardless of what the will, trust, or other instruments designating a decedent’s beneficiaries say.” By her Petition, Renner seeks a distribution under the terms of the DSP Trust, not under a promise to create a document.

Further, even if section 366.3 applied, the statute would arguably have been tolled during the period of Perrin’s petition, which raised the very issue Renner now seeks to have tried. (ROA 2 at 6:11- 18.) “[E]quitable tolling today applies when three ‘elements’ are present: ‘[(1)] timely notice, and [(2)] lack of prejudice, to the defendant, and [(3)] reasonable and good faith conduct on the part of the plaintiff.’” (Saint Francis Memorial Hospital v. State Dept. of Public Health (2020) 9 Cal.5th 710, 724.)

There is, at minimum, a question of fact as to whether the statute was equitably tolled from March 30, 2021 when Perrin filed his petition through July 1, 2025 when he dismissed his petition. According to the allegations of the Petition, Decedent died on March 4, 2021—26 days before Perrin filed his petition. Renner’s Petition was filed on October 2, 2025—93 days later. The total of 119 days is well within the one-year statute of limitations.

“‘A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.’” (Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 342.) The alleged statute of limitations bar does not clearly and affirmatively appear on the face of the Petition.

The demurrer is OVERRULED on this ground.

C. Compulsory cross-complaint

Perrin argues the Petition raises a claim, i.e., the claim to the Distribution, that could only be asserted as a compulsory cross-complaint to his petition under Code of Civil Procedure section 426.30(a). Section 426.30 does not apply to special proceedings. (Code of Civ. Proc., § 426.60(a) [“This article applies only to civil actions and does not apply to special proceedings”].) Probate proceedings are “special proceedings.” (Coberly v. Superior Court (1965) 231 Cal.App.2d 685, 690[“Probate matters fall within the category of special proceedings”].) Perrin’s initial petition alleged probate claims and was conducted in probate court. Accordingly, section 426.30 does not apply.

The demurrer is OVERRULED on this ground.

D. Issue and Claim Preclusion

Finally, Perrin argues the Petition is barred by the doctrines of claim and issue preclusion. “Claim preclusion prevents relitigation of entire causes of action. [Citation.] It applies only when ‘a second suit involves (1) the same cause of action (2) between the same parties [or their privies] (3) after a final judgment on the merits in the first suit.’” (Samara v. Matar (2018) 5 Cal.5th 322, 326–327.) For claim preclusion purposes, “a ‘cause of action’ is comprised of a primary right possessed by the plaintiff, a corresponding duty imposed upon the defendant, and a wrong done by the defendant which is a breach of such primary right and duty.

The primary right is the plaintiff’s right to be free of the particular injury, regardless of the legal theory on which liability is premised or the remedy which is sought. Thus, it is the harm suffered that is the significant factor in defining the primary right at issue.” (City of Oakland v. Oakland Policy & Fire Retirement System (2014) 224 Cal.App.4th 210, 228.) Perrin argues the primary right was “Renner’s right to receive any distribution from Decedent’s estate and trust” and asserts that primary right was determined in the first trial.

However, the final statement of decision issued by the court did not address the $1,000,000 Distribution (which was dismissed when Perrin dismissed his petition). The trial and the statement of decision were limited to the issue of the $500,000 insurance policy. Accordingly, the doctrine of claim preclusion does not apply.

The doctrine of issue preclusion applies “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825.) “‘[A]n issue was actually litigated in a prior proceeding if it was properly raised, submitted for determination, and determined in that proceeding.’” (In re Marriage of Brubaker & Strum (2021) 73 Cal.App.5th 525, 537.) The issue of the $1,000,000 pecuniary gift through the Trust was not raised, actually litigated or necessarily decided in connection with the prior trial and the doctrine of issue preclusion does not apply.

The demurrer is OVERRULED on this ground.

Petitioner is directed to give notice.