California Court of Appeal Feb 19, 2014 No. D064000Unpublished
Filed 2/19/14 Buser v. Buser CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
D064000 MARTIN BUSER, as Trustee
Respondent, (Super. Ct. No. 37-2010-00150555-PR- TR-NC) v.
DOUGLAS BUSER,
Appellant.
APPEAL from an order of the Superior Court of San Diego County, Julia Craig
Kelety, Judge. Affirmed.
Douglas Buser, in pro. per., for Objector and Appellant.
Hickson Kipnis & Barnes, Howard A. Kipnis and Steven J. Barnes for Petitioner
and Respondent.
Douglas Buser appeals from a probate court order approving a preliminary
distribution of the assets in the trust established by appellant's deceased parents.
Appellant asserts the court abused its discretion in approving the preliminary distribution.
We reject this contention and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 1997, Floyd and Donna Buser (the parents) established a trust for the
distribution of their assets upon their death to their three sons (appellant, Martin Buser,
and Burton Buser). Martin was named as successor trustee upon their death or incapacity
and was granted power of attorney. In 2009, Donna died. Martin gradually assumed
responsibility for the management of Floyd's financial affairs, and in 2011 took over as
successor trustee due to Floyd's dementia.
The parents owned five real estate properties, known as the Padilla, Park, Bogue,
Rosecrans, and San Marino properties.1 Before Floyd's death, Burton moved into the
San Marino property (where he and his wife took care of Floyd) and appellant moved
into the Rosecrans property. Apparently Burton and appellant did not pay rent. Starting
in 2010, Martin and appellant became involved in litigation that relates to the trust but
concerns issues not directly involved in this appeal. A separate appeal filed by appellant
arising from this dispute is currently pending before our court. (Buser v. Buser,
D063381.)
On May 3, 2012, Floyd died. As we detail below, nine months after Floyd's death,
Martin filed with the court a plan for final distribution of the trust assets, and appellant
objected to this plan. After several hearings, the court approved a preliminary
1 The parties refer to one of the properties as both the San Marino property and the Winthrop property; we refer to it as San Marino. 2
distribution of assets, with the issue of the final distribution to be decided at a future date.
The order approving the preliminary distribution is the subject matter of this appeal.2
I. Distribution Proposals and Objections Considered by the Court
The trust provides for the distribution of the trust assets in equal shares to the three
sons. Relevant to the issues raised on appeal, in 2006 the parents amended the trust to
accommodate a $186,000 loan they made to Burton that was not repaid. The amendment
states that "[a]ssets of the estate equal in value to $186,000" shall be distributed to both
appellant and Martin, and the "balance of the estate shall be distributed in equal shares"
to the three sons.3
A. Martin's Proposed Final Distribution Plan and Appellant's Objections
On February 8, 2013, Martin filed a final accounting (for the period of May 3,
2012 through October 31, 2012), and a petition for approval of a final distribution of the
trust estate (the Final Distribution Plan or Plan). In this pleading, Martin stated generally
that some of the beneficiaries owed obligations to the trust and others were entitled to
payments, and noted that the trust assets were to be distributed equally to the three sons
after first deducting $186,000 from Burton's share.
2 Appellant was represented by counsel in the proceedings before the trial court, and is representing himself on appeal.
3 The amendment states in relevant part: "Settlors made loans to their son, BURTON G. BUSER in the approximate amount of $186,000.00. These loans have not been repaid and were discharged in bankruptcy. . . . [¶] . . . [¶] . . . The . . . Trust . . . shall be distributed as follows: [¶] (i) Assets of the estate equal in value to $186,000.00 shall be distributed to DOUGLAS A. BUSER . . . . [¶] (ii) Assets of the estate equal in value to $186,000.00 shall be distributed to MARTIN B. BUSER . . . . [¶] (iii) The balance of the estate shall be distributed in equal shares to the sons of Settlors . . . ." 3
More specifically, the Final Distribution Plan states that as of October 31, 2012,
the total value of the estate is $5,670,196.96. Before calculating the one-third
distribution to each beneficiary, the Plan states there are two "[e]qualling allocation[s]"
for appellant and Martin: that is, (1) $186,000 and $18,500 to appellant, and (2)
$186,000 and $48,500 to Martin.4 After these equaling allocations, the Plan states that
the total value of the estate is $5,231,196.96, which entitles each beneficiary to a one-
third distribution of $1,743,732.32.
The Plan then calculates the particular distributions for each beneficiary. For
appellant, he is first entitled to the equaling allocations of $186,000 and $18,500.
Second, his one-third estate distribution of $1,743,732.32 is allocated as: (a) receipt of
the Rosecrans property valued at $1.4 million; (b) receipt of personal property from the
estate valued at $14,133; (c) $184,682.34 debt to estate owed by appellant (consisting of
$50,000 for a loan; $119,682.34 for court costs; and $15,000 for rent receivables); (d)
$50,000 to be kept in the estate as a reserve for expenses and contingencies; and (e)
$94,916.98 cash distribution from the estate to appellant. The total cash distribution to
appellant would be $299,416.98 (the equaling allocations of $186,000 and $18,500, plus
the $94,916.98 from the one-third distribution).
Burton's proposed distribution consists of his one-third estate distribution of
$1,743,732.32 allocated as: (1) receipt of personal property from the estate valued at
$14,134; (2) $13,569.14 debt to the estate owed by Burton (consisting of $3,364 for a car
4 The $18,500 and $48,500 equaling allocations owed to appellant and Martin, respectively, are referred to in a 2011 settlement agreement reached between the parties. 4
loan and $10,205.14 for rent receivables); (3) $50,000 reserve kept in the estate; and (4)
$1,666,029.18 cash distribution from the estate to Burton.
For Martin, he is first entitled to the equaling allocations of $186,000 and $48,500.
Second, his estate distribution consists of: (a) receipt of the Padilla, Park, Bogue, and
San Marino properties, valued at $575,000, $880,000, $1,750,000, and $897,600.41,
respectively; (b) personal property valued at $14,133; and (c) $50,000 reserve kept in the
estate. This estate distribution (the real estate, personal property, and reserve) totals
$4,166,733.41, which exceeds his one-third share of $1,743,732.32 by $2,423,001.09.
Accordingly, he is required to make a $2,188,501.09 cash contribution to the estate
(consisting of $2,423,001.09 minus his equaling allocations of $186,000 and $48,500).
Appellant's Objections
On March 28, 2013, appellant filed objections to the Final Distribution Plan,
claiming the trust estate was not in a condition to be closed. He raised numerous
objections, including that Martin had not provided adequate financial accountings, had
mismanaged trust assets, had incurred unnecessary legal expenses, and had requested
excessive trustee fees. Appellant also claimed that Martin's valuations of the trust assets
did not reflect market values, and appellant believed the Rosecrans property was
presently worth under $1 million rather than $1.4 million. Appellant stated that once he
was provided the information withheld by Martin, he planned to submit a different final
distribution plan. Appellant requested that the court grant relief by, inter alia, ordering
discovery and additional accounting from Martin, appointing a temporary trustee in lieu
of Martin, and imposing liability on Martin for his breach of duties.
5
B. Martin's Preliminary Distribution Proposal and Appellant's Objections
On April 8, 2013, Martin filed a supplemental pleading seeking authority to make
preliminary distributions from the trust (the Preliminary Distribution Proposal or the
Proposal). Martin explained that Burton was in dire financial straits and needed money
to move out of the San Marino property and to sustain himself financially.5 To
accommodate Burton's request, Martin filed the Preliminary Distribution Proposal,
requesting that—pending determination of appellant's objections to the Final Distribution
Plan—the court grant him authority to distribute a value of $1.4 million to each
beneficiary and to sell the San Marino property. Martin stated that appellant had
expressed a desire to receive an in-kind distribution of the Rosecrans property, and
accordingly Martin incorporated this request into the Proposal.
In the Proposal, Martin stated that the estate had a value of about $5,750,000, of
which 96 percent was in residential real estate. The cash assets totaled about $90,000.
Martin proposed that each beneficiary receive $1.4 million of the trust assets, except that
Burton's share would be reduced by $186,000. Appellant would receive the Rosecrans
property valued at $1.4 million; Burton would receive $1,214,000 in cash ($1.4 million
minus $186,000); and Martin would receive the Bogue property (valued at $1.75 million)
and make a $350,000 cash contribution to the estate (to equalize the difference between
$1.75 million and $1.4 million). Also, to provide the trust with the cash necessary to
5 According to Martin's pleading, Burton had appeared in court at a hearing on April 4, 2013, and made a plea for immediate funds because he was " 'broke,' " and the court had suggested that Martin file a request for approval of a preliminary distribution. 6
make the preliminary cash distribution to Burton, Martin would make a personal loan of
$1,214,000 to the trust, which would bear interest "at [the] market rate" and be secured
by deeds of trust on the remaining trust properties (Padilla, Park, and San Marino). The
total net distribution from the trust would be $4,014,000 ($4,364,000 total distribution
minus Martin's $350,000 equalizing payment).
After the preliminary distributions, the trust would retain assets having a total net
value of approximately $1,600,000. That is, the trust would have (1) the Padilla, Park,
and San Marino properties (total value of $2,355,000); and (2) cash assets of $440,000
(the existing $90,000 plus the $350,000 equalizing payment by Martin).6 After
subtracting Martin's $1,214,000 loan to the trust, the net value of the trust would be
$1,581,000.
Martin stated that if appellant prevailed on any of his objections to the Final
Distribution Plan and/or on the issues raised in his pending appeal, there would be
sufficient assets in the trust to make the necessary adjustments in appellant's favor.
Martin explained that if appellant prevailed in his pending appeal, this could alter the
$120,000 that was allocated to appellant's share of the trust estate as court costs he owed
to the estate, and if appellant prevailed in his challenges to the real estate appraisals, it
was unlikely the necessary adjustments would exceed $100,000 to $150,000.
6 Martin listed the Padilla, Park, and San Marino properties as valued at $575,000, $880,000, and $900,000, respectively. He listed the cash assets as $10,000 with Bank of America, $80,000 with Schwab Brokerage, and $350,000 from his equalizing payment. 7
Appellant's Objections
On April 30, 2013, appellant filed an objection to Martin's Preliminary
Distribution Proposal. Appellant stated the Proposal "suffers from the same fundamental
problem as the proposed final distribution in that it calls for distributions 'in-kind' based
upon value and allocations that are not acceptable" to appellant. Appellant stated that he
"has not agreed to accept certain properties as his share of the Trust estate and cannot
accept such properties without information concerning trust administration and the
establishment of acceptable distribution values for all properties." Appellant also
objected to Martin becoming a secured creditor of the trust estate, contending that this
created a conflict of interest based on his role as trustee and beneficiary. Appellant
suggested that to meet Burton's need for cash, the trust should make an immediate
$25,000 cash distribution to each beneficiary and distribute $2,000 per month to each
beneficiary, which would allow Burton to continue living in the San Marino residence.
Martin's Response
On May 3, 2013, Martin filed a response to appellant's objections to the
Preliminary Distribution Proposal. Martin noted that the trust gave the trustee broad
powers to allocate the trust estate; make preliminary distributions "in kind"; withhold
final distribution based upon competing claims; make loans with his own funds to the
trust with interest at current rates and secured by trust assets; and purchase assets of the
trust at their fair market value as determined by an independent appraiser. He repeated
the terms of his Preliminary Distribution Proposal, and reiterated that the $1.6 million
assets remaining in the trust after the proposed preliminary distribution would be "more
8
than sufficient to address any possible adjustments among the three remainder
beneficiaries."
Further, Martin stated that Burton and his wife wanted to move out of the San
Marino residence; Burton indicated he would do so as soon as he received the proposed
distribution; and this would allow Martin to sell the residence. As to the in-kind
distribution to appellant, Martin stated that appellant had requested in writing that the
Rosecrans property be distributed to him; appellant had been living there for over three
years; and if appellant did not want to receive the Rosecrans property he needed to make
this clear to Martin and the court.
II. Trial Court's Order Approving the Preliminary Distribution Proposal
At a hearing on May 6, 2013, the court ruled that Martin could make the requested
preliminary distributions from the trust, ordering as follows: (1) Martin could distribute
$1,214,000 cash to Burton; Burton should vacate the property by July 8, 2013; and
Martin could sell the property; (2) Martin could distribute the Bogue property to himself,
and the value of the property "shall be determined at a later date"; (3) appellant should
inform Martin by July 1, 2013, whether he wishes to have the Rosecrans property
distributed to him "at a value as of the time of distribution to be determined at a later
date," or whether he wishes to vacate the Rosecrans property and receive a cash
distribution upon the sale of the Rosecrans property.
DISCUSSION
A preliminary distribution from an estate is proper when "it appears that the
distribution may be made without loss to creditors or injury to the estate or any interested
9
person." (Prob. Code, § 11621, subd. (a); Estate of Toler (1957) 49 Cal.2d 460, 468.)7 A
preliminary distribution may be made even when there are pending disputes about the
estate distribution, as long as there are sufficient assets available to properly
accommodate the outstanding matters. (See Estate of Anderson (1977) 68 Cal.App.3d
1010, 1016-1017; Estate of Morelli (1951) 102 Cal.App.2d 39, 42.)
On appeal, we review a preliminary distribution order for abuse of discretion,
drawing all reasonable inferences in favor of the court's order. (Estate of Beard (1999)
71 Cal.App.4th 753, 780.) "In the absence of a clear showing that the probate court
abused its broad discretion in concluding that the estate was in such condition that the
preliminary distribution could be safely made, its determination in that regard may not be
reversed on appeal." (Estate of Toler, supra, 49 Cal.2d at p. 468.)
On appeal, appellant raises a variety of arguments to support his claim that the
trial court abused its discretion by approving Martin's Preliminary Distribution Proposal,
including that the distribution violates the trust terms; the court failed to evaluate the
financial impact of the distribution; it was improper to make a distribution when the real
estate valuations are undetermined; the distribution terms favor Martin's interests and
create a conflict of interest; and the court failed to follow various rules.
7 Although these authorities concern a probate estate rather than a trust estate, the probate and trust estate rules may be used interchangeably to the extent they involve substantially the same considerations. (See, e.g., Newman v. Wells Fargo Bank (1996) 14 Cal.4th 126, 134; Estate of Thompson (1958) 50 Cal.2d 613, 616; Edwards v. Gillis (2012) 208 Cal.App.4th 1318, 1329.) 10
We note that several of the issues raised by appellant were not raised before the
trial court at all, or were not raised until after the court's ruling in a motion for
reconsideration. The record on appeal does not show how the reconsideration motion
was resolved. Moreover, the record does not include a reporter's transcript or settled
statement of any of the hearings before the trial court. To obtain appellate review of an
issue, the appellant must pursue the claim before the trial court and provide an adequate
record on appeal to permit meaningful review. (In re Marriage of Freeman (1996) 45
Cal.App.4th 1437, 1450-1451; Bianco v. California Highway Patrol (1994) 24
Cal.App.4th 1113, 1125-1126.) A self-represented litigant is held to these same rules.
(Bianco, supra, at pp. 1125-1126.) As we consider each of appellant's contentions, our
review is in some instances forestalled or limited due to appellant's failure to comply with
these requirements.
11
A. Claim of Delayed Distribution to Appellant in Violation of Trust Terms
Appellant asserts the Preliminary Distribution Proposal approved by the court
failed to follow the terms of the trust which—to accommodate the $186,000 unpaid loan
to Burton—require that appellant receive an affirmative distribution of $186,000 before
the assets are divided among the three sons. Appellant contends the effect of the court's
order is to delay distribution to him, and the court violated the trust terms by approving
distributions to Martin and Burton before him.8
To determine whether the court's order violates the trust terms, we give the words
used in the trust their ordinary and common sense meaning, with a view to carrying out
the trustors' intent. (Estate of Simoncini (1991) 229 Cal.App.3d 881, 888-889.) The trust
states that appellant and Martin should each receive a distribution of "[a]ssets of the
estate equal in value to $186,000" and that the balance of the estate should be distributed
in equal shares to the three sons. (See fn. 3, ante.) The preliminary distribution order
provides for a distribution of the Rosecrans property to appellant, either as an in-kind
distribution of the property or a cash distribution upon the sale of the property, at
appellant's election. There is no dispute that the Rosecrans property is worth far more
than $186,000.
The plain language of the trust allows the $186,000 distribution to be based on
assets that are equal to this monetary amount. This language does not suggest or imply
8 Appellant's claim that the Preliminary Distribution Proposal violates the trust terms was not raised before the trial court until appellant filed the motion for reconsideration after the court's ruling. We exercise our discretion to consider this particular claim because it does not require us to resolve any factual disputes. 12
that appellant must receive $186,000 cash before any one-third division of the assets can
occur among the beneficiaries, nor does it preclude deriving the $186,000 distribution
from the receipt, or sale, of real estate. The trustors' clear intent was to ensure that
appellant and Martin were placed on an equal financial footing with Burton given
Burton's receipt of $186,000 before the trustors' deaths. The preliminary distribution
satisfies this directive by distributing the Rosecrans property to appellant either in kind or
in cash upon sale, as elected by appellant.
B. Claim that Court Failed To Evaluate the Financial Impact of the Proposal
Appellant argues the court failed to evaluate the financial impact of the
preliminary distribution on the trust. He contends the distribution removed the largest
income producing property from the trust (the Bogue property), and it encumbered the
two remaining income producing properties (the Padilla and Park properties) with a
promissory note. Further, he claims it was improper to allow Martin to encumber the
trust with a promissory note without disclosing the terms of the note and the interest rate
other than Martin's statement it would be at the market rate. He asserts the trust could
suffer a negative cash flow problem because of the loss of income from the Bogue
property, the fact that the remaining real estate assets are illiquid, and the creation of the
debt service obligations.
Based on these claims, appellant contends a cash flow analysis was needed to
determine if the plan was reasonable. He asserts Martin did not provide a financial
evaluation to the court; the court should have continued the hearing and ordered Martin to
13
provide the basic details of the plan to the beneficiaries; and the court did not give
appellant time to prepare an analysis.
Appellant has not cited to anything in the record showing that he objected to the
preliminary distribution because of a potential cash flow concern, or that he requested
more time to respond to the proposal for purposes of preparing his own cash flow
analysis. Accordingly, these claims are forfeited on appeal. (Santantonio v.
Moreover, the record supports a finding that the trust would remain financially
viable after the preliminary distribution. In the Preliminary Distribution Proposal, Martin
set forth information showing that after the preliminary distribution, the trust would
retain a net value of about $1.6 million, including $440,000 in cash ($350,000 which was
derived from Martin's equalizing payment). Appellant has not shown the liquid assets
would be insufficient to meet the debt service obligations or other trust expenses until the
San Marino property is sold. We note that although the court's order does not explicitly
state that Martin must make the proposed $350,000 equalizing payment (apparently
because the court decided to leave the real estate valuations open), the court could
reasonably assess that Martin, as a beneficiary, had a personal interest in maintaining the
value of the trust estate and hence would carry out the preliminary
14
distribution in a manner that would ensure an adequate cash flow.9
Appellant's contention that the court could not properly approve a distribution
proposal that failed to disclose the terms and interest rate for the promissory note is
unavailing. The trust allows the trustee to loan the trustee's own funds "to the trust for
any trust purpose, with interest at current rates" and to encumber the trust assets to secure
any such loan.10 Given this broad authority provided to the trustee under the trust,
appellant has not shown that the court was required to order the trustee to specify further
details of the promissory note needed to make the cash disbursement to Burton.
C. Challenge to Later Valuation of Real Estate
Appellant asserts the trial court erred in allowing the values of the real estate to be
determined at a later date. He contends the valuations affect how the distributions should
be made to the beneficiaries, and thus the valuations should be agreed upon before any
partial distribution of the trust assets.
9 Consistent with this, in written communications to appellant discussing proposed wording for the court's written order, Martin's attorney stated that Martin intended to make the $350,000 cash contribution: "Rest assured that while Martin intends to proceed with the equalizing payment to the Trust in the amount of $350,000 as set forth in the [Preliminary Distribution Proposal], in our view since it is not set forth in the Court's minute order, it need not be spelled out in the written order."
10 This provision setting forth the trustee's powers states: "To loan or advance the Trustee's own funds to the trust for any trust purpose, with interest at current rates; to receive security for such loans in the form of a mortgage, pledge, deed of trust, or other encumbrance of any assets of the trust; to purchase assets of the trust at their fair market value as determined by an independent appraisal of those assets; and to sell property to the trust at a price not in excess of its fair market value as determined by an independent appraisal." 15
The trial court's decision to leave open the real estate valuations reasonably
accommodated the competing interests arising from Burton's need for immediate cash
and appellant's challenge to the real estate valuations presented by Martin. Again, the
information provided by Martin supports that in the event the court finds any of Martin's
valuations are inaccurate, the $1.6 million net value remaining in the estate after the
preliminary distributions is sufficient to make any needed equalizing adjustments in the
final distribution. Under these circumstances, the trial court was not required to delay all
distributions until the valuation dispute was resolved.
D. Claim that Proposal Favors Martin's Interests and that
Martin Has a Conflict of Interest
Appellant asserts that Martin's distribution favored Martin's interests over his
interests because Martin gave himself a property valued at $1.7 million, whereas
appellant was given an option of receiving a property valued at $1.4 million. Further, he
contends that Martin at first proposed making a $350,000 equalizing payment into the
trust (i.e., in the Preliminary Distribution Proposal), but then Martin removed this
contribution in his subsequent pleading to the court (i.e., in his response to appellant's
objections to the Preliminary Distribution Proposal).
Appellant's assertion that Martin submitted a proposal that eliminated the
$350,000 equalizing payment misstates the record. Contrary to appellant's summation of
Martin's pleadings, Martin's response to appellant's objections to the Preliminary
Distribution Proposal was not a third distribution proposal; rather, it was merely a
response to appellant's objections, and it reiterated the terms of the Preliminary
16
Distribution Proposal, including the $350,000 equalizing payment. Thereafter, in its
order approving the Preliminary Distribution Proposal the court left the real estate
valuations open. Given that the valuations were left undecided in the preliminary
distribution order, the court reasonably declined to calculate what equalizing payments
should be made. It is clear from Martin's various submissions to the court that when the
valuations are ultimately determined, equalizing payments will be calculated and ordered
at that time. Appellant's claim of unfairness in this regard is unavailing.
Appellant further asserts that Martin "prematurely allocated himself the largest
income producing property and the biggest cash flow generator of the trust for his own
benefit while arbitrarily allocating a non-income-producing residential property to
[appellant] in a 'take it or leave it' manner." Appellant has not cited to anything in the
record showing that the Bogue property is the largest income producing property. Even
assuming that it is, the income producing characteristics of the Bogue property will be
reflected in the market valuations that are still to be determined and appropriate
equalizing payments will be ordered.
In his motion for reconsideration filed after the court's order approving the
Preliminary Distribution Proposal, appellant—apparently for the first time—told the
court that he wanted to be allocated the Bogue property and other income producing
property. As noted, the record on appeal does not indicate how the reconsideration
motion was resolved. On appeal, appellant complains in general fashion that the
distribution of the Bogue property to Martin was premature and arbitrary, but he does not
specifically claim that he wanted to receive this property and be subjected to any required
17
equalizing payment. An issue not raised on appeal is deemed abandoned. (Multani v.
Witkin & Neil (2013) 215 Cal.App.4th 1428, 1442, fn. 6.) Given that appellant's
challenge to the allocation of the Bogue property to Martin was raised in belated fashion
before the trial court and was not squarely raised on appeal, appellant has not shown the
trial court abused its discretion in approving the distribution of the Bogue property to
Martin.
To support his challenge to the court's distribution order, appellant also states that
he never requested that the Rosecrans property be distributed to him, but rather he told
Martin that he was interested in purchasing it.11 He posits that a purchase "involves a
reasonable price with offsets for deferred maintenance." Deferred maintenance issues
can be addressed in the valuation of the Rosecrans property regardless of whether it is
purchased by, or distributed to, appellant. Appellant has not established that distribution
of the Rosecrans property to him (either in kind or in cash upon a sale) will prejudice his
interests as compared to his purchase of the residence.
Appellant further contends that Martin has a conflict of interest because under the
court's order he is a secured lender with the right to foreclose, a beneficiary, and a trustee.
Appellant acknowledges that under the trust terms, Martin could properly loan his own
funds to the trust. (See fn. 10, ante.) Thus, he apparently recognizes that a trustee's loan
to a trust permitted under the trust terms is not viewed as a conflict of interest. (See
11 Appellant's request to purchase the property is contained in a letter written to Martin shortly after his father's death, stating: "Now that the Trust has entered a new phase, I am interested in purchasing 541 Rosecrans when it is the appropriate time." 18
Estate of Thompson, supra, 50 Cal.2d at pp. 616-617 [trust may authorize transactions by
trustee that might otherwise constitute prohibited self-dealing]; Copley v. Copley (1981)
126 Cal.App.3d 248, 278-279.) However, he contends that Martin's wife, along with
Martin, is a holder of the promissory note, and this is improper because she is a stranger
to the trust. The record on appeal does not show that the court was presented with a
proposed promissory note at the time of its order approving the Preliminary Distribution
Proposal. Our review is confined to matters submitted to the trial court. (See In re Zeth
S. (2003) 31 Cal.4th 396, 405.) In any event, even assuming Martin's wife is a holder of
the promissory note, the trust broadly permits the trustee to "borrow money and to
encumber trust property," which can reasonably encompass a promissory note from a
third party such as Martin's wife.12
E. Claim that Court Failed To Follow Rules
Appellant asserts the court failed to follow various rules, including the rule placing
the burden of proof on Martin as the petitioner. Absent a contrary indication in the
record, we presume the court properly followed the law. (Ross v. Superior Court (1977)
19 Cal.3d 899, 913.) The record on appeal does not include any reporter's transcripts or a
settled statement which might have reflected the reasoning underlying the court's order,
and the record before us does not show the court failed to place the burden of proof on
Martin.
12 The trust states that the trustee has the power to "borrow money and to encumber trust property by mortgage, deed of trust, pledge, or otherwise, for the debts of the trust . . . ." 19
Appellant also contends the court erred in accepting Martin's response to
appellant's objections to the Preliminary Distribution Proposal even though the response
was filed late. He asserts that because of the late filing, he was unable to prepare a timely
objection to the response. The record shows that in March and April 2013, appellant
filed objections to Martin's Final Distribution Plan and Preliminary Distribution Proposal.
Thereafter, on May 3, 2013, Martin filed a response (which was stamped "LATE" but
accepted for filing) to appellant's objections to the Proposal. The hearing on the
Preliminary Distribution Proposal was held on May 6, and appellant appeared at this
hearing with counsel. Appellant has not cited to anything in the record showing that he
requested more time to respond to Martin's response, or that he was impeded from
presenting any significant information to the court because Martin's response was filed
late. Significantly, Martin's response was not a new or revised distribution plan, but
simply a response to appellant's objections to the Preliminary Distribution Proposal.
In the reconsideration motion presented to the trial court after the May 6 hearing,
appellant's attorney stated that he did not have an opportunity to adequately review the
late-filed response. This pleading, standing on its own and with no information as to its
resolution, does not suffice to show prejudicial error arising from the court's acceptance
of Martin's late response. Moreover, the specific claims of error raised in the
reconsideration motion have been resolved in this appeal.
Appellant also cites various local court rules relating to timeliness, notice, and
other matters, and claims these rules were violated. We reject these assertions because he
20
fails to present an adequate record and/or arguments to support his claims of prejudicial
error on these points. (See Multani v. Witkin & Neil, supra, 215 Cal.App.4th at p. 1457.)
Appellant has not shown the court abused its discretion.
DISPOSITION
The order is affirmed. Appellant to pay respondent's costs on appeal.
HALLER, J.
WE CONCUR:
MCCONNELL, P. J.
MCINTYRE, J.
21
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Holding. The court did not abuse its discretion in approving a preliminary distribution of trust assets, as the trust contained sufficient remaining assets to satisfy potential future adjustments and the distribution plan was consistent with the trustors' intent.
Issues
Whether the probate court abused its discretion in approving a preliminary distribution of trust assets.
Whether the preliminary distribution plan violated the terms of the trust regarding the distribution of assets to the beneficiaries.
Whether the court erred in allowing real estate valuations to be determined at a later date.
Disposition. Affirmed
Quotations verified verbatim against the opinion
“In the absence of a clear showing that the probate court abused its broad discretion in concluding that the estate was in such condition that the preliminary distribution could be safely made, its determination in that regard may not be reversed”