Matter of Robert and Wanda Livernois Trust

Case Number

22PR00128

Case Type

Hearing Date / Time

Thu, 10/12/2023 - 09:00

Nature of Proceedings

Motion: Dismiss AMENDED Motion to Dismiss Interested Party Joel Buteras Petition; Expunge Lis Pendens; Request for Attorneys Fees & Costs

Tentative Ruling

This is a contested matter, appearance required.

UPDATED 10/11/2023

In the Matter of The Robert and Wanda Livernois Trust Agreement dated September 9, 2010 (Judge Sterne)

Case No. 22PR00128      

Hearing Date: October 12, 2023                                                         

HEARING:              Motion of Respondent Robert Mitchell to (1) Dismiss Petition of Petitioner Joel Butera, (2) Expunge Lis Pendens, and (3) Award Attorney Fees and Costs     

ATTORNEYS:        For Petitioner Joel Butera, Trustee: Cristi Michelon Vasquez

                                    For Petitioner Karren Gougeon, Beneficiary: Alexander E. Saunders

                                    For Respondent Robert Mitchell, Trustee: John R. Rydell II, John C. Eck, Griffith & Thornburgh, LLP

                                TENTATIVE RULING:

As set forth herein, the motion of respondent Robert Mitchell is granted in part, denied in part, and continued in part. The motion to dismiss the petition of petitioner Joel Butera is denied. The motion is granted to expunge the notices of pending action recorded as to real property located at 507, 509, and 533 Brinkerhoff Avenue, Santa Barbara.

Background:

On March 7, 2022, petitioner Joel Butera, as trustee, filed his petition in this matter (Butera petition) to: (1) to compel trustee to provide documents, books, records, and information concerning the trust and to account; (2) to confirm petitioner’s authority to serve as successor trustee; (3) to instruct and direct the trustee to fund subtrusts; (4) to confirm beneficiaries and to whom and how the trust property is to be distributed at the death of surviving settlor; (5) to reform agreement which attempted to modify the trust; (6) to establish trustee’s claim of ownership to property and for order directing its transfer to trustee; (7) for damages; and (8) for other proper equitable relief. The petition is stated to be brought under Probate Code sections 850, 16060, 16061, 16061.7, 16062, and 17200, subdivision (b)(4), (6), (7), and (10).

On June 14, 2022, Butera filed notices of pending action as to real property located at 507, 509, and 533 Brinkerhoff Avenue, Santa Barbara.

On January 18, 2023, petitioner Karren Gougeon, as beneficiary, filed her petition in this matter (Gougeon petition) to: (1) remove trustee and counsel, (2) appoint new trustee, (3) compel accounting and inventory, (4) provide instructions to trustee, and (5) award damages from the trust, trustee, and trust attorney.

On March 15, 2023, respondent Robert Mitchell, as trustee, filed his responses to the petitions of Butera and of Gougeon.

On April 6, 2023, the court set a trial confirmation conference for trial of the two petitions for August 7, 2023, with an estimated court trial of two to three days.

On June 30, 2023, Mitchell filed his motion to: (1) dismiss Butera’s petition; (2) expunge the notices of pending action recorded by Butera; and (3) award attorney fees and costs. The hearing on this motion was originally set for August 31, 2023.

On July 6, 2023, Mitchell filed an amended motion to: (1) dismiss Butera’s petition; (2) expunge the notices of pending action recorded by Butera; and (3) award attorney fees and costs. The hearing on this amended motion was set for August 3.

On July 7, 2023, Mitchell filed a “corrected” notice of hearing on the amended motion as set for August 3.

The motion is opposed by Butera both procedurally and substantively.

On August 3, 2023, the court continued the hearing on the motion to September 7, 2023, to address service issues, and vacated the August 7, 2023, trial confirmation conference.

On August 23, 2023, the court continued the hearing on the motion to September 14, 2023, at which time it was continued to October 12, 2023.

Analysis:

Mitchell’s motion seeks three types of relief: (1) dismissal of Butera’s petition; (2) expungement of lis pendens; and (3) an award of attorney fees and costs.

“Except to the extent that this code provides applicable rules, the rules of practice applicable to civil actions, including discovery proceedings and proceedings under Title 3a (commencing with Section 391) of Part 2 of the Code of Civil Procedure, apply to, and constitute the rules of practice in, proceedings under this code. All issues of fact joined in probate proceedings shall be tried in conformity with the rules of practice in civil actions.” (Prob. Code, § 1000, subd. (a).)

(1)       Motion to Dismiss

The first type of relief sought by Mitchell is styled as a motion to dismiss on the grounds that Butera lacks standing to bring an action because he is not a beneficiary under the Trust. While the motion makes a legal and factual argument with respect to lack of standing, Mitchell fails to identify the procedural authority by which Mitchell makes this motion. Butera argues in opposition that the lack of procedural authority is telling because there is no permissible procedural basis for the motion.

The Trust law provides only one basis for dismissal potentially relevant to this motion: “The court may dismiss a petition if it appears that the proceeding is not reasonably necessary for the protection of the interests of the trustee or beneficiary.” (Prob. Code, § 17202.) “To preserve the trust and to respond to perceived breaches of trust, the probate court has wide, express powers to ‘make any orders and take any other action necessary or proper to dispose of the matters presented’ by the section 17200 petition. [Citation.]” (Schwartz v. Labow (2008) 164 Cal.App.4th 417, 427.) “Being permissive and not mandatory, a dismissal under section 17202 invokes the discretion of the trial court.” (Gregge v. Hugill (2016) 1 Cal.App.5th 561, 567.)

The underlying dispute as raised by this motion is whether Butera is properly acting as trustee as to all assets at issue or whether Mitchell is properly acting as trustee by virtue of an amendment to the Trust. The resolution of this dispute also affects the Gougeon petition, which is not at issue in this motion. Given the overlapping issues and overall factual disputes, the court does not exercise its discretion under section 17202 to dismiss the petition.

Apart from the Trust Law, the civil procedures incorporated into Probate practice by section 1000 do not permit a speaking motion to dismiss. “The procedure of moving to dismiss an action based on extrinsic evidence is disapproved in California and the motion is permitted only where it complies with the requirements for a motion for summary judgment.” (Saltarelli & Steponovich v. Douglas (1995) 40 Cal.App.4th 1, 5.) The procedural requirements for a motion for summary judgment have not been met for this motion.

The only remaining civil procedures are those attacking the pleadings. However, Mitchell has filed a response to the Butera petition, thus precluding a timely demurrer (see Code Civ. Proc., § 430.40, subd. (a)), and it is not timely as a motion for judgment on the pleadings (see Code Civ. Proc., § 438, subd. (e)), even if the motion could be construed as either of these motions.

The motion to dismiss will therefore be denied.

(2)       Motion to Expunge Lis Pendens

“If a proceeding under this code affects the title to or the right of possession of real property, notice of the pendency of the proceeding may be filed pursuant to Title 4.5 (commencing with Section 405) of Part 2 of the Code of Civil Procedure.” (Prob. Code, § 1004.)

“At any time after notice of pendency of action has been recorded, any party, or any nonparty with an interest in the real property affected thereby, may apply to the court in which the action is pending to expunge the notice. However, a person who is not a party to the action shall obtain leave to intervene from the court at or before the time the party brings the motion to expunge the notice. Evidence or declarations may be filed with the motion to expunge the notice. The court may permit evidence to be received in the form of oral testimony, and may make any orders it deems just to provide for discovery by any party affected by a motion to expunge the notice. The claimant shall have the burden of proof under Sections 405.31 and 405.32.” (Code Civ. Proc., § 405.30.)

“In proceedings under this chapter, the court shall order the notice expunged if the court finds that the pleading on which the notice is based does not contain a real property claim. The court shall not order an undertaking to be given as a condition of expunging the notice where the court finds the pleading does not contain a real property claim.” (Code Civ. Proc., § 405.31.)

“In proceedings under this chapter, the court shall order that the notice be expunged if the court finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim. The court shall not order an undertaking to be given as a condition of expunging the notice if the court finds the claimant has not established the probable validity of the real property claim.” (Code Civ. Proc., § 405.32.)

Butera recorded notices of pending action (i.e., notices of lis pendens) as to three parcels on August 11, 2022. (Eck decl., exhibit 4.) The notices were filed with court on June 14, 2022, with attached proofs of service by regular mail.

Mitchell asserts that these notices are void because of a failure to comply with the requirements of Code of Civil Procedure section 405.22, which provides:

“[With an exception not present here], the claimant shall, prior to recordation of the notice, cause a copy of the notice to be mailed, by registered or certified mail, return receipt requested, to all known addresses of the parties to whom the real property claim is adverse and to all owners of record of the real property affected by the real property claim as shown by the latest county assessment roll. If there is no known address for service on an adverse party or owner, then as to that party or owner a declaration under penalty of perjury to that effect may be recorded instead of the proof of service required above, and the service on that party or owner shall not be required. Immediately following recordation, a copy of the notice shall also be filed with the court in which the action is pending. Service shall also be made immediately and in the same manner upon each adverse party later joined in the action.”

“Any notice of pendency of action shall be void and invalid as to any adverse party or owner of record unless the requirements of Section 405.22 are met for that party or owner and a proof of service in the form and content specified in Section 1013a has been recorded with the notice of pendency of action.” (Code Civ. Proc., § 405.23.)

There is no dispute that Butera has failed strictly to comply with section 405.22 because there is no evidence of mailing by registered or certified mail, return receipt requested, and no filing of a copy of the notice after recording. Mitchell argues that this is sufficient to find the notices void and subject to expungement. While acknowledging the lack of strict compliance, Butera argues that there was substantial compliance and that Mitchell has waived any defects under the doctrine set forth in Biddle v. Superior Court (1985) 170 Cal.App.3d 135 (Biddle), “which essentially created an exception to strict application of section 405.23 in some cases involving service defects, apply. There, the petitioners recorded a lis pendens, but served it defectively by not using all of the defendants’ known addresses and by failing to request a return receipt.” (Rey Sanchez Investments v. Superior Court (2016) 244 Cal.App.4th 259, 264.) “[T]he reasoning in Biddle had two prongs: First, the plaintiffs substantially complied with the mailing requirement; and second, the defendants waived any defects.” (Carr v. Rosien (2015) 238 Cal.App.4th 845, 855.)

As it relates specifically to Mitchell, the evidence supports the application of the Biddle exception. First, the service was defective here only by failing to send by registered or certified mail with return receipt requested; instead, ordinary mail was used. “The notice requirement is intended to assure that property owners receive prompt notice of the recording of a lis pendens.” (Biddle, supra, 170 Cal.App.3d at p. 137.) Mitchell has not disputed receipt of notice. (See Eck decl., ¶ 4 & exhibit 3.) There is therefore substantial compliance with the mailing requirement. Second, Mitchell waited just over one year from the service of the notices on June 14, 2022, to file this motion on July 6, 2023. During this time Mitchell had filed substantive opposition to the Butera petition and numerous reports with the court. From these actions and inactions, the court finds that Mitchell waived any technical defects by the delay in making the motion to expunge.

In further addressing this issue, it is important to point out that neither Butera nor Mitchell assert present title to any of the affected properties in their individual capacities, but solely in their capacities as trustees (which capacity is disputed). Regardless of whether the lis pendens continues, in order to address the issues raised in both petitions, the court would be concerned that the ultimate disposition of these properties complies with the substantive provisions of the trust. Correspondingly, where a specific property would be properly distributed out of the trust or otherwise disposed of from the trust, regardless of who is the rightful trustee, the purpose of the lis pendens would cease and would be ordered expunged in any event.

Also, there are two petitions which are pending involving the status of the position as trustee. Although Mitchell’s principal argument in this motion is Butera’s lack of standing to bring the petition, essentially the function of the notice is to identify that legal title is disputed either retrospectively or prospectively in these petitions. As noted above beneficial ownership is unaffected by who holds the office of trustee.

With these in mind, the initial issue is the pleading of a real property claim.

“ ‘Real property claim’ means the cause or causes of action in a pleading which would, if meritorious, affect (a) title to, or the right to possession of, specific real property or (b) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.” (Code Civ. Proc., § 405.4; accord, Prob. Code, § 1004.)

“ ‘If the pleading filed by the claimant does not properly plead a real property claim, the lis pendens must be expunged upon motion under CCP 405.31.’ [Citation.]” (Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 647 (Kirkeby).) “In making this determination, the court must engage in a demurrer-like analysis. ‘Rather than analyzing whether the pleading states any claim at all, as on a general demurrer, the court must undertake the more limited analysis of whether the pleading states a real property claim.’ [Citation.] Review ‘involves only a review of the adequacy of the pleading and normally should not involve evidence from either side, other than possibly that which may be judicially noticed as on a demurrer.’ [Citation.] Therefore, review of an expungement order under section 405.31 is limited to whether a real property claim has been properly pled by the claimant.” (Id. at pp. 647–648.)

The Butera petition does not identify any specific real property over which the petition would affect title or right to possession. Accordingly, applying a demurrer-like analysis of whether the claimant properly pleads a real property claim as to any of the three properties to which the notices have been recorded, the court concludes that the Butera petition does not plead the requisite real property claim. The Butera petition references Probate Code section 850, but no other petition under section 850 is now pending before the court relating to the specific real property. (See Butera petition, ¶ 45.) The motion to expunge lis pendens will therefore be granted for failure to properly plead a real property claim specific to any of the three affected properties.

The matter is currently set for an MSC on 3/8/24  and an evidentiary hearing on 4/15/24  as to the remaining issues.