ELIZABETH LEVIN, Plaintiff and Appellant, v. DEBRA WINSTON-LEVIN, Individually and as Trustee, etc., Defendant and Respondent.
G056353
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE
Filed 9/13/19
(Super. Ct. No. 30-2017-00912251)
CERTIFIED FOR PUBLICATION
Appeal from a judgment of the Superior Court of Orange County, Jacki C. Brown, Judge. Affirmed.
Lurie, Zepeda, Schmalz, Hogan & Martin and Troy L. Martin for Plaintiff and Appellant.
Hart | King, William R. Hart, Andrew C. Kienle, and Rhonda H. Mehlman for Defendant and Respondent.
O P I N I
In 1986, Robert Levin established a revocable trust named, quite simply, the Robert Levin Trust (the Levin Trust). The Levin Trust was thereafter amended several times: in 1993, 2002, 2005, 2006, 2008, 2011 and 2012. After Robert passed away in 2015, litigation erupted, principally over the 2008 and 2012 amendments to the Levin Trust. Elizabeth Levin, Robert‘s daughter from a prior marriage, sued Robert‘s widow, Debra Winston-Levin, on multiple grounds which, by the time the matter went to trial, had devolved into causes of action for an order compelling the return of certain Levin Trust property pursuant to
Debra, however, did not appeal; Elizabeth did. Elizabeth contends the court erred in three ways. First, she argues the court‘s finding of undue influence compelled a finding that Debra was liable for financial abuse of an elder, which, in turn, compels an award of double damages under
FACTS
History of the Levin Trust Amendments
Debra was Robert‘s wife for the last 20 years of his life. Elizabeth is Robert‘s only child from a prior marriage, an adult whom he supported financially between 1985 and 2012.
Robert purchased residential property on Balboa Island in 1987, which was after divorcing Elizabeth‘s mother, but before meeting Debra. The court described the property as “his dream, which he renovated to his taste and specifications.” He married Debra in 1992. In 1993, Robert quitclaimed the Balboa Island property to another trust he had established named the Robert Levin Personal Residence Trust (Residential Trust). Around the same time, he restated the Levin Trust to grant Debra a life estate in the net income of the trust upon Robert‘s death, as well as principal, as needed, to support her standard of living. Upon Debra‘s death, the res of the Levin Trust would flow into a trust created for Elizabeth.
In 2005, Robert amended the Levin Trust to make Debra the first successor trustee.
In 2006, Robert executed a codicil to his will in which he elected to distribute property, which was subject to his power of appointment in the Residential Trust, to a trust created for Debra upon his death under the terms of the Levin Trust. Under the 2002 amendment to the Levin Trust, the effect of this election was that Debra would be free to reside in the Balboa Island house rent free for the remainder of her life.
In January 2008, Robert underwent an MRI brain scan because he was experiencing memory loss. A doctor found “mild atrophy” in the brain, but noted Robert was “alert and oriented. Memory and abstracting ability were normal.” In September 2008, Robert underwent a major surgical operation on his back.
Robert amended the Levin Trust again in December 2008—this amendment is a focus of the present appeal. The most significant change was that, upon Robert‘s death, the residence was to be distributed to Debra “outright and free of trust.” Debra was present at the meeting between Robert and his attorney that led to this amendment.
In April 2009, Robert‘s doctor wrote a letter indicating Robert‘s mental condition was beginning to deteriorate. After summarizing Robert‘s recent history, the doctor stated, “[Robert‘s] wife is now complaining that he is becoming progressively more forgetful and he is losing executive function and can‘t make decisions, and is sometimes irritable. He is excessively drowsy and sleeps 12 hours or more a day.” The doctor examined Robert and found him to have “normal speech. He is cooperative and alert. He is able to name objects and repeat phrases. On the Mini Mental Status Examination he scored 29 out of 30, short-term memory being a bit poor.” The doctor concluded Robert had “mild cognitive impairment.”
In November 2011, Robert amended the Levin Trust again to name Debra as co-trustee of the trust. Debra testified he did this because he was thinking of the future and cognizant of his advancing age and declining physical condition. Prior to amending his trust, his attorney urged him to obtain a letter from his doctor affirming Robert‘s capacity to make financial decisions. In
In February 2012, Robert‘s mental condition was assessed by a different doctor. He had been referred by Debra “in order to evaluate changes in cognitive and mood symptoms.” Robert had “reported lapses in short-term memory and mood symptoms, which he described as ‘stubbornness.‘” Debra further reported that she was having to take over certain daily tasks for Robert. For example, she managed his medications, selected his clothes and reminded him when to change them. Debra reported that if Robert‘s meal was interrupted with a phone call, afterward he would forget that he had been eating. Debra also complained that Robert had recently started making impulsive financial decisions, such as opening and closing bank accounts, and that his driving was becoming dangerous. Both Debra and Robert said his mental condition declined after his back surgery. Debra also noted that he was “unofficially diagnosed with dementia of the Alzheimer‘s type by a research assistant but no formal assessment was done.” That resulted in Robert taking an experimental drug for dementia. As part of the assessment, Robert described his family relations. He described his relationship to Elizabeth as “strained with minimal communication.” “He also reported that his daughter has caused some emotional strain in his marriage.” After performing a series of tests, the doctor concluded his condition was “most consistent with a diagnosis of mild Vascular Dementia.”
Approximately three months later, in May 2012, Robert resigned as trustee of the Levin Trust, leaving Debra as the sole trustee.
In July 2012, Robert again restated and amended the Levin Trust. This is the amendment the court ultimately voided.2 This amendment contained four changes relevant here. First, upon Robert‘s death, Debra was to receive a lump sum payment of $2 million, together with lifetime support from the net income of the trust and partial distributions of the principal. Also, the restated trust no longer would give the residence to Debra outright and free of trust. Instead, 11 days later, Robert simply quitclaimed the residence to Debra.
The attorney who drafted the 2012 amendment testified at trial that Robert seemed “as competent as any client that I have ever talked to.” The attorney explained Robert‘s reasoning for the change: “Mr. Levin was very concerned about Debra being, basically, harassed and dragged into court by his daughter, Elizabeth, after Robert had passed away. And so what he wanted to do was change his trust around a little bit so that
there would be a third-party trustee, not Debra, dealing with the trust after Robert‘s death, number 1, and he wanted to, number two, make sure that Debra at least had secured the home that they lived in with a minimum of conflict and contact with his daughter.”
As a result of Robert‘s declining mental and physical condition, he was moved into an assisted living home in June 2013. He ultimately passed away in 2015.
Trial and Ruling
Elizabeth filed the underlying petition in April 2017. Her first amended petition asserted causes of action for an order compelling the return of trust property pursuant to
The testimony at trial devolved into a tit-for-tat matchup between Debra and Elizabeth. Both attempted to beautify themselves and vilify the other. And both brought in third-party witnesses to corroborate their version of the story. As the court summarized in its statement of decision, “Both Elizabeth and Debra testified, as did Cheryl Campbell-Lane [the family masseuse] and Dr. Trader [an expert testifying about Robert‘s mental state] for Elizabeth, and Judy Craighton, Daniel Montano [long-time friends of Robert‘s] and Brian Mandel [an estate planning attorney] for Debra. From these two, diametrically opposed sets of witnesses, two descriptions of Robert Levin emerged: (1) A man who intentionally defrauded his only child of her inheritance from her grandfather, but who adored that daughter and always intended to fully provide for her, in part because he had robbed her of his
The court was, to say the least, not impressed with either side: “Both Elizabeth and Debra lacked credibility as witnesses; both made denials clearly refuted by other evidence in the record. Both were difficult personalities, yet they shared one common characteristic: They preferred to manipulate the man who held the purse-strings instead of standing on their own two feet, financially and psychologically. Individually, each understood Levin to be loving and generous with her, while depicting him as distanced from, and distrusting of the other. The reality undoubtedly was that Robert loved them both, and, preferring to minimize conflict, pursued his relationship with each one of them separately, as best he could.” (Fn. omitted.)
The court ultimately hewed a middle ground between Debra‘s and Elizabeth‘s positions. It found that the circumstances of the 2012 amendment triggered a presumption of undue influence, which Debra failed to rebut. However, the court found that the mild cognitive decline Robert was suffering in 2008, and the less drastic changes to his estate, were insufficient to trigger the same presumption as to the 2008 amendment. The court ordered that the residence be returned to the Levin Trust as restated and amended in 2008 and disregarded the 2011 and 2012 amendments to the trust.
The court also rejected Elizabeth‘s claim for double damages under
DISCUSSION
Elizabeth raises three issues on appeal. First, she contends the court‘s finding of undue influence as to the 2012 amendment compelled a finding
Absent a Finding of Bad Faith, Double Damages Under Probate Code Section 859 May Not be Awarded Based on an Undue Influence Theory of Elder Abuse
Elizabeth contends the court erred in interpreting
Elizabeth relies on the third prong in
In its statement of decision, the court made findings on each of these four factors: (1) “[T]he evidence of his medical and cognitive decline paints a picture of a dependent personality . . . .” “By 2012, he was completely dependent on Debra and fearful that she might leave him which would directly affect his survival possibilities“; (2) Debra “was a family member and the primary confidante, advisor and medication supervisor to [Robert], at least after 2008“; (3) “According to Campbell-Lane, Debra actually talked about leaving [Robert] if he failed to turn over the house to her, a tactic that would have been overwhelmingly devastating to a man whose life and self-sufficiency was draining away“; and (4) “[T]he equity of the estate changes and title transfers of July 2012 was entirely of a substantial benefit to Debra.”
From these findings, Elizabeth draws a straight line to double damages: the findings equate to undue influence (
While there is certainly appeal in Elizabeth‘s straightforward reading of the statutes, the result—double damages for undue influence even without bad faith—is at odds with the text of
In interpreting a statute, we begin with its words. “If the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature . . . .” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) “But the ‘plain meaning’ rule does not prohibit a court from determining whether the literal meaning of a statute comports with its purpose or whether such a construction of one provision is consistent with other provisions of the statute. The meaning of a statute may not be determined from a single word or sentence; the words must be construed in context, and provisions relating to the same subject matter must be harmonized to the extent possible. [Citation.] Literal construction should not prevail if it is contrary to the legislative intent apparent in the statute. The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” (Ibid.) Our high court has repeatedly stressed that “interpretations that render statutory terms meaningless as surplusage are to be avoided.” (People v. Hudson (2006) 38 Cal.4th 1002, 1010.)
We do not believe the Legislature intended to provide double damages for undue influence without bad faith for several reasons. First, it said so: “by the use of undue influence in bad faith.” (
Second, there is nothing in the legislative history of
Third, a double standard makes little sense in the context of the statute.
Also on the topic of context: this is a penalty statute with a common theme of bad faith. The first two branches of
And not all instances of undue influence entail bad faith. Undue influence is defined in terms of “excessive persuasion” (
These considerations highlight a fourth reason to reject Elizabeth‘s position that all undue influence compels double damages: such a rule could create a chilling effect on the willingness of trial courts to find undue influence.
Accordingly, we hold that under
The first is Hill v. Superior Court (2016) 244 Cal.App.4th 1281 (Hill). There, the petitioners alleged their stepfather had wrongfully concealed property in their mother‘s estate, entitling them to double damages under
The Hill court rejected that argument for several persuasive reasons, concluding that statutory penalties are distinct from punitive damages. Amidst its analysis, the court highlighted some differences between
To an extent, we agree with this comment.
The second case is Kerley v. Weber (2018) 27 Cal.App.5th 1187 (Kerley). In Kerley the defendant (Weber) had been convicted of theft from an elder under
Weber appealed, contending the criminal action did not establish bad faith, a required finding under
As was the case with Hill, we generally agree with both the result and the reasoning in Kerley. However, once again, Kerley was not an undue influence case. Instead, the court found the criminal conviction had established the elements of
Substantial Evidence Supports the Finding the 2008 Amendment Was Free of Debra‘s Undue Influence
Elizabeth‘s next argues the court erred in failing to apply a presumption of undue influence to the 2008 amendment, which, had the court applied it, would have gone unrebutted by Debra.
“In property-related transactions between spouses,
The parties have argued at some length over whether the transaction here qualified as the sort of inter-spousal transaction that could trigger a presumption of undue influence. In our view, however, that issue has no effect on the outcome. Assuming the presumption is triggered, it is a presumption affecting the burden of proof (
Substantial evidence does indeed support the court‘s finding. In July 2008, Robert‘s neurologist and long-time friend reported that Robert “was alert and oriented” and his “[m]emory and abstracting ability were normal.” In April 2009 the same neurologist noted Robert‘s history and examination suggested only “mild cognitive impairment.” The same neurologist opined in November 2011, three years later, that Robert was still “capable of taking care of his own affairs including financial decisions.” Around the same time, another doctor offered a similar opinion. Even Elizabeth‘s expert noted that in February of 2012, “compared to earlier records . . . from at least 2009 and 2008, that there was a significant decline in [Robert‘s] cognitive functioning,” suggesting Robert‘s mental decline was far less pronounced at the time of the 2008 amendment.
Moreover, the evidence showed Robert made a reasoned decision in deciding upon the allocation of property reflected in the 2008 amendment. Robert‘s long-time friend, Judy Creighton, testified that on multiple occasions Robert discussed with her that he was upset about Elizabeth constantly asking for money. She testified about one visit in particular where, in her presence, Robert received a phone call from Elizabeth and answered it on speaker phone so she could hear. Elizabeth said to Robert, “Dad, we need to talk about the Balboa house without [Debra] and the attorney.” Robert responded, “Liz, I have talked to you about this before. I told you, we are not speaking about it again. The house goes to [Debra].” Afterwards, Robert commented, “This is what I put up with all the time on a daily basis.” Robert explained to Creighton that he had decided to give the residence to Debra and instead provide a sizeable life insurance policy for Elizabeth. In fact, Elizabeth ultimately received $1.3 million from that policy.
Collectively, this evidence was sufficient to support a finding that the 2008 amendment was a rational decision made by Robert, uninfluenced by Debra, at a time when his mental health was still adequate for the task. Accordingly, the court‘s finding that Debra did not exert undue influence in 2008 was supported by substantial evidence.
The Court Did Not Err in Invalidating the Entire 2012 Amendment and Related Deed
Elizabeth‘s final contention is that the court erred in voiding the entire 2012 amendment, as opposed solely to those portions tainted by undue influence (i.e., the $2 million gift and the separate transfer of the residence). “It is the general rule that if the whole will is the result of the presence of undue influence, the will is totally invalidated; but if only a part of the will was thus procured, that part may be rejected as void, but the remainder, which is the outcome of the testator‘s free will, is valid if it is not inconsistent with and can be separated from the part which is invalid.” (Estate of Molera (1972) 23 Cal.App.3d 993, 1001; see Burkett v. Capovilla (2003) 112 Cal.App.4th 1444, 1449 [“The California Probate Code applies the same general rules of interpretation to ‘a will, trust, deed and any other instrument‘“].) In general, a court‘s finding of undue influence is reviewed for substantial evidence (In re Marriage of Bonds (2000) 24 Cal.4th 1, 31), and since the question here is the extent to which undue influence affected the 2012 amendment, the same standard applies.
Here is what is at stake on this issue. First, under the 2012 amendment, after Debra dies 90 percent of the residue of the estate is granted to Elizabeth free of trust. The 2008 amendment granted Elizabeth a life estate in the income of the trust following the death of Debra, but upon Elizabeth‘s death the residue was to be given to Shriner‘s Hospital. Second, the 2012 amendment does not specifically address the residence. The court addressed this omission by effectively setting aside the 2012 deed to Debra and ordering the property returned to the Levin Trust. Under the 2008 amendment, the residence goes to Debra free and clear of trust upon Robert‘s death. Thus, setting aside the 2012 amendment and deed results in Debra ultimately receiving the residence free of trust and Elizabeth enjoying a life estate in the trust income following Debra‘s death instead of 90 percent of the residue free of the trust.
DISPOSITION
The judgment is affirmed. Debra shall recover her costs incurred on appeal.
IKOLA, J.
WE CONCUR:
O‘LEARY, P. J.
MOORE, J.