Paluda v. Young CA3

Filed 9/16/13 Paluda v. Young CA3 NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

LINDA M. PALUDA et al.,

Plaintiffs and Appellants, C068882

v. (Super. Ct. No. 05PR01793)

CAROLYN M. YOUNG, as Trustee, etc.,

Defendant and Appellant.

Plaintiffs Linda Paluda and Terry Peterson are sisters and beneficiaries of a family trust. Their father, Bob Hamblen, was the trustee until it was alleged that he had wasted or transferred substantial trust assets. A stipulated judgment provided for Hamblen to encumber his house in favor of the trust and for the appointment of defendant Carolyn M. Young as successor trustee. Despite the terms of the stipulated judgment, Hamblin did not assign an interest in the house to the trust. Instead, he took out a mortgage against the house. Young

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subsequently perfected the trust’s interest in the house, but that interest was subordinate to the mortgage lender’s interest. When the house was sold, the lender was fully repaid and the trust was not. The sisters sued Young for breach of trust in late 2010, alleging that she should have prevented the mortgage lender from taking an interest in the house. Young moved for summary judgment, asserting that the action is time-barred and that she is protected from liability by an exculpatory clause in the trust instrument. The trial court granted summary judgment, agreeing with Young that she is protected from liability by the exculpatory clause. The sisters now appeal the judgment of dismissal, arguing that the exculpatory clause is not applicable because Young was grossly negligent or recklessly indifferent. Young cross-appeals, claiming the trial court should have applied a record notice standard rather than an actual notice standard in analyzing the statute of limitations. We conclude the trial court did not err in granting summary judgment. The sisters did not offer any evidence to refute the undisputed material facts set forth in Young’s moving papers. Accordingly, we need not address the contentions in Young’s cross- appeal. We will affirm the judgment of dismissal. BACKGROUND Bob and Evangeline Hamblen established a revocable family trust in 1982. They named as beneficiaries their three children, Paluda, Peterson and a now-deceased son. After Evangeline’s death in 1996, Hamblen divided the trust into subtrusts, including Trust B, which is at issue.1