Judge: Daniel S Belsky, Case: 37-2019-00067416-PR-TR-CTL, Date: 2023-09-14 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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CENTRAL COURTHOUSE TENTATIVE RULINGS - September 13, 2023

09/14/2023  02:00:00 PM  504 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Daniel S. Belsky

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Probate  Trust Proceedings Motion Hearing (Probate) 37-2019-00067416-PR-TR-CTL 2017 RESTATEMENT OF THE ELAINE TUTTERROW FAMILY TRUST DATED FEBRUARY 16, 2017 [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 04/17/2023

Pursuant to Superior Court of San Diego County, Local Rules, rule 4.23.7, the court's tentative ruling is as follows: The Motion to Set Aside Order for Extrinsic Fraud filed by Eric Tutterrow is DENIED.

The Request for Judicial Notice (ROA 48) is GRANTED pursuant to EC § 452(d) as court records.

I. Background Elaine Tutterrow, settlor of the 2017 Restatement of the Elaine Tutterrow Family Trust dated February 16, 2017 ('Trust'), died on November 8, 2018. Jennifer Tutterrow-Koenig ('Trustee'), settlor's daughter, was the nominated successor trustee and has been serving in that capacity since the settlor's death.

Eric Tutterrow ('Respondent') and James Tutterrow are the settlor's children and beneficiaries under the Trust.

On December 19, 2019, Trustee filed a Petition for Instructions pursuant to Probate Code § 17200 regarding the interpretation of the trust terms ('Petition'). (ROA 1.) The Petition was supplemented twice. (ROA 13, 20.) On January 13, 2021, the Court granted the Petition and made certain orders. (ROA 22, Minute Order dated Jan. 13, 2021; ROA 23, Notice of Ruling.) Trustee also filed a Petition to Settle, Allow and Approve Account and Report of Trustee (November 8, 2018); To Approve Preliminary Distributions of Trust Property (ROA 25), which is pending and set for a hearing on November 27, 2023. (ROA 100, Minute Order filed Jul. 7, 2023.) On April 17, 2023, Respondent filed the instant Motion to Set Aside Order for Extrinsic Fraud, seeking to set aside the Minute Order filed on January 13, 2021. (ROA 46.) Petitioner opposes the motion. (ROA 104.) II. Discussion The instant motion concerns the Court's ruling on the Petition at ROA 1.

Respondent argues that Trustee falsely represented the Trust was cash poor. The First Report falsely Calendar No.: Event ID:  TENTATIVE RULINGS

2967546 CASE NUMBER: CASE TITLE:  2017 RESTATEMENT OF THE ELAINE TUTTERROW FAMILY  37-2019-00067416-PR-TR-CTL claimed the Trust only had $62,687.21 in cash when the settlor died, but in truth, the Trust had $952,274.56 in cash and liquid assets. Based on Trustee's fraudulent misrepresentation of the Trust's assets, Respondent did not object to the Petition.

Respondent contends that as the trustee, Trustee had a fiduciary duty to report information to the beneficiaries, to report information about the trust on request, and to account. Trustee violated each of these duties by concealing the Trust's actual financial condition before Trustee filed the Petition.

Respondent claims the sale of trust real property '4635 Trieste,' once it was distributed from the Trust, allowed Trustee to force its sale to her benefit. Respondent argues the foregoing indicates a plan by Trustee to withhold information she had a duty to provide, to keep Respondent from objecting to her Petition.

In opposition, Trustee explains that previously, on November 26, 2019, Trustee's attorney, who was unaware of the Merrill Lynch account at the time due to a miscommunication, sent the beneficiaries a First Report and Account of Trustee that did not include the Merrill Lynch account. Trustee claims that once her attorney became aware of the Merrill Lynch account, he advised Trustee it was necessary to send an updated accounting including the assets in the Merrill Lynch account even though the beneficiaries already knew about the account. Trustee claims that on June 6, 2022, Trustee's attorney mailed Respondent updated accounting schedules which included the Merrill Lynch account.

Respondent, having been informed of the Merrill Lynch account in 2019, did not reach out to Trustee with questions or concerns.

Trustee also claims she fully disclosed the Merryll Lynch account information to Respondent shortly after trustor's death and in no way concealed any information which she had a fiduciary duty to disclose.

(ROA 107, Tutterrow-Koenig Decl.) Trustee denies that she ever told Respondent the Trust did not have enough cash to pay for 4635 Trieste. Trustee argues that Respondent was served with the Petition and knew that he could object to the Petition but chose not to do so because he wanted his one-third interest in 4635 Trieste transferred to him immediately.

Trustee asserts that on November 14, 2020, Trustee and all the beneficiaries, including Respondent, signed an Authorization of Successor Trustee and Beneficiary Consent for Distribution of Real Property, which stated in relevant part that the beneficiaries desired for all the interest in 4635 Trieste to be distributed free of the trust in equal shares.

A. Analysis Res judicata applies in probate to bar relitigating a claim that has been previously determined. (Hudson v. Foster (2021) 68 Cal.App.5th 640, 663.) 'However, the probate court has inherent equitable authority to set aside an order or decree when extrinsic factors have deprived a party of a fair adversary hearing.' (Ibid.) A showing of extrinsic fraud or mistake is required, to balance the public policy in favor of the finality of judgments on the one hand, with the policy in favor of providing litigants a fair opportunity to present a case on the other. (Ibid.) 'The fraud which will justify the setting aside of a final judgment by a court of equity must be of such character as prevents a trial of the issues presented to the court for determination.' (Gale v. Witt (1948) 31 Cal.2d 362, 365.) On January 13, 2023, the Court ruled as follows: - Notice is given in the time and manner requested by law; - Petitioner also requests that the distributions and conclusion of the trust administration is concluded with this petition; Calendar No.: Event ID:  TENTATIVE RULINGS

2967546 CASE NUMBER: CASE TITLE:  2017 RESTATEMENT OF THE ELAINE TUTTERROW FAMILY  37-2019-00067416-PR-TR-CTL - Petitioner requests that the real property of 4635 Trieste, Carlsbad CA 92010 is to be removed from the Trust and transferred to Jennifer Tutterrow-Koenig, Eric D. Tutterrow and James H. Tutterrow in equal shares as tenants in common; - With there being little cash assets left in the estate, the petitioner and beneficiaries request that the distributions are to be expedited and not held in sub-trusts per terms of the trust until the age of 60; - Petitioner is permitted to withhold from distribution a sum for payment of legal fees that were outstanding prior to this Petition's preparation and that petitioner be permitted to pay legal counsel and legal fees incurred in connection with this petition; - The preliminary distributions as set forth herein are confirmed, approved, and ratified.

(ROA 100, Minute Order dated Trustee presented excerpts from the transcript of Respondent's deposition taken on July 5, 2023, that contradict Respondent's claims. Trustee's evidence shows that Respondent knew about the account before the time of the trustor's death in November 2018 and admitted to knowing about the account in 2019. James Tutterrow, who lived with Respondent during the relevant times, states that he personally observed Respondent and his wife reviewing the Merryll Lynch account statements found among the settlor's belongings. (ROA 106, James Tutterrow Decl., at ¶¶ 2, 3.) On November 14, 2020, Respondent signed a consent to distribution of the interest in 4635 Trieste. (ROA 107, Jennifer Tutterrow Decl., Exh.

3.) The Petition was heard on January 13, 2021, well after the time the evidence shows Respondent knew of the existence of the Merryll Lynch account. Indeed, Respondent presumably knew about the account at the time the Petition was filed. Respondent also had time to withdraw his consent to distribution before the hearing on January 13, 2021, but did not. There is no indication that Trustee intentionally concealed or misrepresented information about the Merryll Lynch account.

The Court is not in receipt of any reply from Respondent rebutting Trustee's evidence or claims in opposition to the motion. Based on the evidence presented, the Court finds Respondent knew of the Merryll Lynch account before the petition was heard and Respondent had time to object. There is no evidence to support a finding of extrinsic fraud, or a finding that Respondent was deprived of a fair trial on all the issues.

Therefore, the motion is DENIED.

Attorney for Trustee is directed serve notice of ruling in accordance with the provisions of CCP § 1019.5(a).

IT IS SO ORDERED.

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