Judge David J. Cowan, Case Number: 17STPB03474, Date: 2023-08-24 Tentative Ruling

TENTATIVE RULING ON MOTION OF ESTATE OF DENNIS J. HEALEY TO DISQUALIFY PHILIP J. FRENGS AS PETITIONER OR, IN THE ALTERNATIVE, TO DISMISS HIS CLAIMS, ON EX PARTE APPLICATIONS OF RICHARD L. SOLOMON RE: SERVICE AS GAL & OF ALEX R. BORDEN FOR APPROVAL OF SETTLEMENT AGREEMENT AND APPOINTING SUCCESSOR TRUSTEE, ON OSC RE: STANDING AND SETTING FINAL STATUS CONFERENCE AND TRIAL DATES ON PETITION AGAINST HEALEY

In the Matter of the MSF 2014 Trust dated May 1, 2014, Case No. 17STPB03474 (related to Case No. 16STPB05554)

On August 17, 2023, the Court issued an OSC re: dismissal of the petition against the estate of Dennis J. Healey (“Healey”) as to whether Philip J. Frengs (“Philip”) might properly bring that petition as conservator of the estate of his wife, Mimi Frengs (“Mimi”), as set forth in detail therein.[1]

On August 30, 2023, Philip filed a Response to the OSC. Philip contended that he had standing under Probate Code sec. 2462(a), providing in relevant part: “…unless another person is appointed for that purpose, the conservator may commence and maintain actions and proceedings for the benefit of the…conservatee.” Philip contends that the GAL for Mimi, Richard L. Solomon (“Solomon”) was not appointed for the purpose of bringing the action against Healey.[2] He argues further that, under CCP sec. 372(a)(2)(B)(iii), he cannot be replaced unless an application is filed showing why the “conservator of the estate is inadequate to represent the interests” of the conservatee in the action. Philip acknowledges that he is using personal funds to pursue this petition and that he will seek reimbursement of those fees in the events he prevails herein based on statute or a “substantial benefit” theory. Finally, he asserts that by pursuing this petition he is seeking to vindicate Mimi’s personal estate, independent of her interests as trustor of the Trust. In turn, Solomon asserts in support of the Response that he does not believe Philip is “inadequate to represent Mimi’s interests in the action against Healey…and would recommend that Philip continue to fund the litigation without cost or expense to the Trust or Mimi.”

On September 13, 2023, the Court held a hearing on the OSC. The Court continued the OSC to the date of the hearing on this motion to allow the parties in the interim to conclude an asserted agreement to the appointment of Alex Borden as successor trustee.

On October 2, 2023, Healey filed a motion to disqualify Philip from continuing to maintain the petition against Healey. Healey makes four arguments:

1. Philip cannot bring this action as Mimi’s conservator, rather than as trustor of the Trust, on behalf of Mimi given Probate Code sec. 2462(a).

2. Any damages sought herein would be for the benefit of the Trust, not Mimi’s personal estate as to which Philip is acting as conservator. Specifically, Healey points to (a) paragraph 10 of the petition, wherein Philip alleges that he “has brought the action on behalf of the Conservatee individually and as the sole beneficiary of the Trust…” (emphasis added), as well as (b) statements of Philip wherein he acknowledges that the damages he secured for Mimi against the estate of Buddie Reinbold (with whom he contends Healey was acting) were for the benefit of the Trust, not Mimi per se.

3. Philip has an impermissible conflict of interest in having a personal interest in the outcome of the petition.

4. Philip has an impermissible conflict by reason of his intent to seek recovery of fees and costs incurred herein in the event he has created a substantial benefit for others.

On October 12, 2023, Solomon filed an ex parte application for order providing for his continued involvement herein. The hearing on that application is concurrent with this motion.

On October 18, 2023, Philip filed Opposition to the motion. Philip contends that Healey has no standing to seek his disqualification – as merely the attorney who drafted the Trust - and that even if he can bring the motion, he provides no legal basis to contend either that he cannot bring this petition as conservator or has a conflict in doing so. Philip also requested sanctions against Healey for bringing a frivolous motion and that the Court hold Healey in contempt for bringing a motion to dismiss, as well as to disqualify, in alleged violation of the order authorizing filing solely a motion to disqualify.

On October 24, 2023, Healey filed a Reply. He now also argues Philip lacks standing where the petition alleges that he is suing only as a beneficiary of a revocable trust whose interests are contingent where the trustor could still change that interest. (Probate Code sec. 15800, Estate of Giraldin (2012) 55 Cal.4^th 1058, 1071)[3] Finally, he argues that sanctions or other similar is not warranted where he has not violated any order. Similarly, that the motion is not one for reconsideration where the Court made no order on the OSC.

Initially, Healey has not shown why he should have any right to dictate who brings this petition against him - whether it be Philip, Solomon, as Mimi’s GAL, or Borden, as proposed successor trustee. He has not shown why it would make any difference as far as any unfairness to him in having to respond to this petition or how it might impact the validity of the petition. Nonetheless, the Court will still reach the substance of the motion:

Probate Code sec. 2562(a) permits Philp to pursue this petition given the facts here: It does not appear that Solomon was appointed in this Trust case to bring this petition; rather, only to look out for Mimi’s interests. Philip was already acting to represent Mimi’s interests when Solomon was appointed GAL. In turn, Solomon was not appointed at all as GAL in the conservatorship case. That he was appointed as CAC for Mimi in the conservatorship does not mean he was appointed to bring this petition.

That Philip is acting for Mimi’s personal interests as conservator of her personal estate, as opposed to as a trustee on behalf of the Trust, is an insufficient basis for disqualification:

First, Healey has not presented any evidence to show that a trustee (such as Borden) would act differently than a conservator such that Philip should not be pursuing this matter against Healey. Borden stated no objection to Philip proceeding on this petition at the September 13 hearing.

Second, Healey has not presented any evidence to show that Mimi does not have a personal interest as conservatee in pursuing this matter, independent of her interest as trustor or sole beneficiary. It also does not appear these different interests are in conflict or that ultimately the distinction between these interests is material - at least for purposes of pursuing this petition against a third party.

Third, even if the damages here are solely to Mimi, as trustor, Healey has not shown how that interest is not itself a personal interest Philip can pursue. Indeed, as conservator, Philip holds Mimi’s right to revoke the Trust.[4]

Fourth, even if Mimi’s interests herein are purely as trustor, and those rights are independent of Mimi’s personal interests, Healey has not shown any restriction on what rights of Mimi Philip can pursue, even if the assets under the Trust differ from those in the conservatorship estate. Significantly, the Court notes that the court appointed GAL for Mimi is in favor of Philip pursuing this petition. Further, where Philip is Mimi’s long-time husband the Court has been given no reason to believe he would not act in her best interests (leaving aside the separate concern raised by Mimi’s daughter, Kathryn Frengs, as to what Philip’s interest should be in the Trust.)

Fifth, if Philip was pursuing this petition solely for Mimi as a Trust beneficiary, as he contends, Healey might be correct that Philip lacks standing.[5] However, where he is also acting for her as trustor, this itself is a sufficient basis to do so, as discussed above.

That Philip may seek to recover herein what attorney fees or costs he is incurring personally in pursuit of this petition does not in and of itself give rise to any impermissible conflict. This is not a situation where he is also seeking damages himself, separate and apart from damages incurred by Mimi, where there might be a conflict.[6] Whether Philip might be able to recover those fees or costs is premature at this point: It is unclear who will prevail here. In the event he was to prevail, for sake of argument, whether he would be able to recover fees or costs the Court will then be able to assess. Further, the GAL can weigh in on any such request. By contrast, if Philip does not prevail herein, it may be that the fees and costs he is electing to himself incur will not be subject to reimbursement. The Court reserves that issue until such time - if that happens.

In sum, the Court does not find any basis to now disqualify Philip or find that he would be “inadequate to represent Mimi’s interests.” Should any conflict or other similar issue develop, Solomon, as Mimi’s GAL, can bring that issue to the Court’s attention. Similarly, the motion does not provide any basis to dismiss the case even if the issues raised proved to be material.

For these reasons, the Court denies the motion to disqualify Philip, or in the alternative, to dismiss the petition. Neither is warranted.

The Court also denies Philip’s requests: While the motion did not add anything other than was discussed at the earlier hearing, the concerns are not frivolous. The Court did not order that Healey could not file a motion to dismiss this case to give rise to any potential violation of a court order. Likewise, the Court made no order at the hearing that this motion should be treated as a motion for reconsideration.

The Court grants Solomon’s ex parte application for an order as to his continued involvement herein and orders that he continue to act in the capacity he has to date.

The Court grants Borden’s ex parte application for order approving settlement agreement and appointing successor trustee. If there are no persons, other than those who signed the agreement, who Borden believes is entitled to notice, the Court will sua sponte appoint Borden as successor trustee. Borden is then requested to submit a revised order consistent therewith. If Borden believes there is any person who is required to receive notice, or there is some other reason a separate petition for appointment is required, the Court will enter the proposed order submitted. Borden shall then promptly file a petition for appointment.

The Court discharges the OSC in view of entry of an order appointing Borden as successor trustee.

The Court has reviewed the joint statement re: remaining issues for trial on the petition against Healey. The Court sets the following dates:

The trial date is for purposes of triggering all other statutory pre-trial dates, including for filing a motion for summary judgment and to designate experts. Trial will proceed as soon as possible after the Court has determined there was compliance with the requirements for a FSC and the case is ready to proceed.

In the joint statement, Philip indicates trial will be by the court whereas Healey indicates trial will be by jury. “Except as otherwise expressly provided in this code, there is no right to a jury trial in proceedings under this code.” Probate Code sec. 825. However, see Estate of Phelps (1990) 223 Cal.App.3d 332. If either party is requesting a jury trial, that party should file a motion on the issue within thirty days.

[1] The Court uses the first name of family member parties for ease of reference, without intending any disrespect.

[2] Judge Brenda Penny had appointed Solomon as GAL in the Trust case on January 31, 2019. Previously, Solomon was appointed as court appointed counsel (“CAC”) for Mimi in the conservatorship case. He was never appointed as GAL in the conservatorship case.

[3] Here, Mimi’s conservator would have that power if she lacked capacity to revoke or amend the trust. (Johnson v. Kotyck (1999) 76 Cal.App.4^th 83, 88)

[4] While holding the right to revoke may conflict with Philip’s own individual interest as beneficiary, if there were grounds to revoke the Trust, no such grounds have been identified. Moreover, ultimately any actions he does or does not take will be subject to judicial review on his seeking discharge and submitting a final accounting for approval. In the interim, Solomon as Mimi’s GAL has raised no concern.

[5] In fact, para. 9 of the petition does not allege Philip is bringing the petition for Mimi as sole beneficiary, though he does allege she is sole beneficiary. Para. 1 alleges his status as conservator of her estate.

[6] Healey has also not shown how that Philip is a Trust beneficiary himself is now relevant.