Matter of Edward J Charvet Jr Revocable Trust

Case Number

23PR00189

Case Type

Hearing Date / Time

Thu, 09/28/2023 - 09:00

Nature of Proceedings

Motion: Abate Petition Pending Resolution of Civil Action; Petition to Determine Deceased Settlers Heirs

Tentative Ruling

In the Matter of The Edward J. Charvet, Jr. Revocable Trust dated July 2, 2014

                                                                              (Judge Sterne)

Case No. 23PR00189

           

Hearing Date: September 28, 2023                           

HEARING:              Respondents’ Motion to Abate Petition Pending Resolution of Civil Action

ATTORNEYS:        For Petitioner Sharon C. Kennedy, Trustee of the Edward J. Charvet, Jr. Revocable Trust dated July 2, 2014: Stephen N. Yungling, Mullen & Henzell, LLP

                        For Respondents Susan Smyth, Pedro Baltadano, Martin Engriser, and Don McIntyre: Louis Pacella, Stephen L. Cohen, The Pacella Law Group

                                   

TENTATIVE RULING:

For the reasons set forth herein, the motion to abate petition pending resolution of the civil action is granted. The court retains jurisdiction to determine any remaining probate issues once the civil action is completed.

Background:

On October 6, 2022, Susan Smyth, Pedro Baltadano, Martin Engriser, and Don McIntyre (collectively “Respondents”) filed their original civil complaint in Civil Case No. 22CV03893. On January 11, 2023, respondents filed a first amended complaint (FAC) against defendant Mullen & Henzell, LLP alleging a single cause of action for intentional interference with expected inheritance.

As alleged in the Civil FAC, plaintiffs were close friends of Edward J. Charvet, Jr. (decedent). (FAC, ¶ 15.) Decedent spent nearly all his time with plaintiffs and repeatedly told plaintiffs he wished for them to inherit his estate. (Id. at ¶¶ 14, 15.) Decedent died on August 22, 2021. (Id. at ¶ 10.) At his death, decedent was “unmarried[,] had one (1) child … who was adopted out as a child and with whom decedent had no relationship[,] had no siblings, living or deceased, and had no blood-line family with whom he had a relationship or that he was even aware existed.” (Id. at ¶ 14.)

While decedent was alive and after discovering that decedent was the target of attempted elder abuse, Smyth made an appointment with Jana S. Johnston (Johnston) who is a partner in defendant’s law firm. (FAC, ¶¶ 9, 16, 17.) Johnston consulted with Smyth and decedent in June 2014. (Id. at ¶ 18.) During the consultation, Johnston recommended the creation of a trust. (Id. at ¶ 19.) Decedent informed Johnston that he did not know who his heirs were and did not know the name of his son who was given up for adoption as a child. (Ibid.) When asked to whom he wanted to leave his assets, decedent told Johnston that he wanted to leave his assets to his friends who decedent identified as plaintiffs. (Ibid.) Johnston acknowledged decedent’s desire to name his friends as the beneficiaries of the trust. (Ibid.) Johnston recommended Sharon C. Kennedy of Sharon Kennedy Estate Management (Kennedy) as a professional fiduciary to oversee the trust. (Ibid.) Decedent agreed to name Kennedy as the trustee of the trust.

On June 13, 2014, Johnston emailed Smyth regarding the status of the drafting of trust, stating that “[t]he trust is not a simple or standard agreement in that we are drafting special provisions specifically to address [decedent’s] wishes, preferences, and unique circumstances.” (FAC, ¶ 21 & Exh. B.) On July 2, 2014, Smyth drove decedent to defendant’s offices to meet with Johnston for the purpose of signing the trust. (Id. at ¶ 23.) The Edward Charvet, Jr. Revocable Trust (the revocable trust) was executed by decedent on July 2, 2014. (Id. at ¶¶ 10, 23 & Exh. A.) Kennedy is named as the trustee of the revocable trust. (Id. at ¶ 10 & Exh. A.) Concurrent with the signing of the revocable trust, decedent executed a pour-over will prepared by defendant and naming the revocable trust as its residual beneficiary. (Id. at ¶¶ 25, 27 & Exh. D.) Decedent also executed grant deeds transferring title to properties located in Santa Barbara and Ventura County to the revocable trust. (Id. at ¶ 24 & Exhs. C-1 through C-4.)

The revocable trust is a standard trust that leaves all assets to decedent’s “heirs”. (FAC, ¶ 22.) The only modification to a traditional revocable living trust is language specifically disinheriting decedent’s biological son. (Ibid.) The will executed by decedent makes no reference to the general testamentary power of appointment referenced in section 5.2.3 of the revocable trust. (Id. at ¶ 27.) Plaintiffs have not discovered any other will executed by decedent that exercised the testamentary power of appointment referenced in section 5.2.3 of the revocable trust. (Id. at ¶ 28.) Plaintiffs believe that Johnston’s June 13, 2014, email referencing special provisions to address decedent’s unique circumstances were designed to deceive decedent, through Smyth, as to the identity of the named beneficiaries of the revocable trust. (Id. at ¶¶ 22, 44.) Johnston drafted the revocable trust in contravention to decedent’s intent with the goal of deriving an improper benefit from decedent’s estate in the form of a deprivation of plaintiff’s expectation of an inheritance due to internal perceptions of them, which they otherwise would have received. (Id. at ¶ 47.) Had defendant prepared the revocable trust in a manner consistent with decedent’s wishes, there is a reasonable certainty that plaintiffs would have received the inheritance they were promised and expected. (Id. at ¶ 48.)

Respondents seek compensatory and punitive damages in the civil action. A settlement conference is scheduled for November 3, 2023, and the trial confirmation conference is scheduled for November 22, 2023.

On April 5, 2023, Kennedy, through her attorneys Mullen & Henzell, LLP, filed a petition for instructions to determine deceased settlor’s heirs and identify beneficiaries of the trust. By way of the petition, Kennedy seeks, among other relief, orders: (1) Confirming that the Trust accurately reflects Settlor’s wishes and intentions at the time that he executed it, that the Trust’s dispositive provisions are not the result of scrivener’s error or tortious interference, and that Settlor did not exercise his power of appointment or direct his attorneys in regard to the exercise of his power of appointment; (2) Confirming that the beneficiaries of the Trust are Edward J. Charvet, Jr.’s hears at law; (3) Confirming the findings of the heir search investigator that identified the heirs at law; (4) Approving the Trustee’s intention to distribute the Trust estate, after the payment of all taxes, debts and expenses of administration, one-fifth each to Michael L. Charvet, Mary V. Bateman Devenot, Louann Charvet, Jo Ann Charvet-Pond, and Daniel P. Charvet.

On June 14, 2023, respondents filed an objection to the petition as well as the present motion to abate the petition pending resolution of the civil action.

Kennedy has not filed an opposition or any other response to the motion.

Analysis:

“If a civil action is pending with respect to the subject matter of a petition filed pursuant to this chapter and jurisdiction has been obtained in the court where the civil action is pending prior to the filing of the petition, upon request of any party to the civil action, the court shall abate the petition until the conclusion of the civil action. This section shall not apply if the court finds that the civil action was filed for the purpose of delay.” (Prob. Code, § 854.)

Here, as noted above, the civil action was commenced approximately six months prior to Kennedy filing the probate petition. The probate petition is based upon the same subject matter as the civil complaint in that the primary objective of both is to determine, and obtain orders, regarding the intent of the decedent. The court does not find that the civil action was filed for the purpose of delay.

Also applicable is the rule of exclusive concurrent jurisdiction.

“ ‘Under the rule of exclusive concurrent jurisdiction, ‘ “when two [California] superior courts have concurrent jurisdiction over the subject matter and all parties involved in litigation, the first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved until such time as all necessarily related matters have been resolved.” ’ [Citations.] The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, and preventing vexatious litigation and multiplicity of suits.’ ” [Citation.] Ordinarily, “ ‘[p]riority of jurisdiction resides in the tribunal where process is first served.’ ” [Citation.]” (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 769-770.)

“ ‘Although the rule of exclusive concurrent jurisdiction is similar in effect to the statutory plea in abatement, it has been interpreted and applied more expansively, and therefore may apply where the narrow grounds required for a statutory plea [in] abatement do not exist. [Citation.] Unlike the statutory plea [in] abatement, the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions. [Citations.] If the court exercising original jurisdiction has the power to bring before it all the necessary parties, the fact that the parties in the second action are not identical does not preclude application of the rule. Moreover, the remedies sought in the separate actions need not be precisely the same so long as the court exercising original jurisdiction has the power to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings.’ ” [Citation.]” (Id. at p. 770.)

As stated above, one of the orders that Kennedy is requesting is that the court find that the Trust accurately reflects Settlor’s wishes and intentions at the time that he executed it, that the Trust’s dispositive provisions are not the result of scrivener’s error or tortious interference, and that Settlor did not exercise his power of appointment or direct his attorneys in regard to the exercise of his power of appointment. These are the same issues in dispute in the civil action. Allowing the subsequently filed petition in the probate court to go forward could result in conflicting rulings.

Here, the two actions involve the same subject matter regarding the proper trust beneficiaries. There are multiple common issues in the civil and probate cases and the civil case was filed prior to the petition being filed in the probate case and the court.

“An order of abatement issues as a matter of right not as a matter of discretion where the conditions for its issuance exist.” (Lawyers Title Ins. Corp. v. Superior Court (1984) 151 Cal.App.3d 455, 460.) The conditions for issuance of an order of abatement exist in this case, making the order mandatory. As such, the motion will be granted.