Judge David J. Cowan, Case Number: SP007923, Date: 2023-11-02 Tentative Ruling

TENTATIVE RULING ON MOTION OF BRIAN CORMAN OBJECTING TO PROPOSED ORDER SUBMITTED BY GUARDIAN AD LITEM (“GAL”) FOR MINOR BENEFICIARY CAROLINE CORMAN

In the Matter of the Pacific Trust, Case No. SP007923 (Related Cases: BC664811, SP007984 and 17STPB07675)

Initially, Brian did not serve Elizabeth Weaver, Caroline’s mother, with notice of this motion.[1] Even if Elzabeth is not a beneficiary of the Trust nor technically a party to this case, she is still an “interested person,” under Probate Code sec. 48(a)(1), at least entitled to notice of the motion and what is transpiring herein, including Brian attaching an article about her. This motion will have to be continued to the hearing on the scheduled petition for an accounting.[2]

That said, the Court will now dispense with Brian’s argument that the Court lacks the ability to now decide this matter. This belated attempt to derail these proceedings fails. The substance of the motion is likewise without merit: Brian argues over a distinction without a difference. Given the alleged intransigence of the trustee, the Court will not narrow the scope of the proposed order in a way that would make the order hollow. The order is intended to assure that the trustee produces all necessary relevant documents whereby GAL can determine if trustee is complying with its duties.

On August 16, 2023, GAL filed a petition for instructions concerning his requests for distributions for Caroline.

On January 9, 2024, after the Court had earlier issued a tentative ruling in advance of the initial November 2, 2023 hearing, and the parties had thereafter an opportunity to meet and confer, the Court held a further hearing on the petition for instructions. The parties reached an agreement that resolved the petition. The stipulation, signed by among others Brian’s counsel, provided that this case would not be controlled by the stipulation and order filed on December 12, 2019 in the family law parentage case.

On February 17, 2024, GAL submitted a proposed order amending the April 24. 2019 appointing Fridman as GAL, consistent with what the Court had indicated at the January 9 hearing.

On March 6, 2024, Brian filed this motion objecting to the proposed order amending the order appointing the GAL. Brian asserts that the GAL was given the authority to determine how the February 7, 2020 Deal Point Memorandum impacted Caroline’s rights, which settlement and subsequent and ensuing order of December 7, 2021 is now on appeal, and that therefore the GAL cannot now act. Brian contends further that the December 7. 2021 order resolved all issues affecting this case and therefore again that the authority of GAL lapsed. In the alternative, he argues there is a stay on further activity in this case pending appeal and that there are no “exceptional circumstances” under Probate Code sec. 1310(b) warranting an exception to a stay. Similarly, he argues that the Court has lost jurisdiction over this case while the appeal is pending.

On the merits, Brian argues that the proposed order is broader than the Court’s minute order from the January 9 hearing and should be rejected. Specifically, he objects to the paragraph that would allow GAL to obtain financial information from the trustee of Brian’s sub-trust that are necessary to assure Caroline has her expenses paid, per her “station in life,” consistent with the January 9 stipulation. Brian requests that the Court instead enter a proposed revised order attached to the motion that narrows what the GAL may seek to what is “reasonable” and necessary” rather than broadly “relevant.”

On March 14, 2024, GAL filed his response to the motion. Friedman indicates he served the proposed order on counsel for Brian and other parties on January 17, 2024 and heard nothing before submitting it to the Court a month later. He contends that the proposed order is consistent with the Court’s ruling on January 9 – to which Brian did not object. He argues that the GAL order has not lapsed. He claims further that the trustee is not meeting his fiduciary obligations to Caroline and that under these circumstances he does not feel it appropriate to seek his discharge as GAL. Finally, he asserts that it is not clear why Brian would be paying four law firms to prevent distributions to Caroline and that he is considering filing a petition for removal of trustee given its no longer paying Caroline’s expenses.

On March 14, 2024, GAL also filed a petition for accounting from the trustee of Brian’s sub-trust, Crawford Trust Company.

On March 21, 2024, Brian filed a Reply. He reiterates his argument that GAL now lacks any powers. In addition, he contends that GAL required a court order before filing the petition that led to the proposed order. He emphasizes that he is already paying Caroline’s expenses himself without need for the trustee to do so in a tax disadvantageous way. He argues that the proposed order would conflict with the stipulation that resolved the instructions petition. Finally, he argues that it is Elizabeth, not him, who is causing the additional fees by her refusing to communicate with him.

Brian has waived and or is estopped from asserting any claim that this Court either now lacks jurisdiction or that this case is stayed by virtue of the pending appeal. Brian has already himself been litigating this case, notwithstanding the appeal: Specifically, Brian and his brother moved to enforce the Deal Point Memorandum, after filing of the notice of the appeal, which led to an order filed June 27, 2023 in the related civil case. In addition, Brian has been participating in this separate litigation involving Caroline since the notice of appeal was filed and stipulated herein to an order concerning the Family Law Court’s order applicability to this case. Brian cannot argue that the Court lacks the basis to proceed only after he believes the decisions may not be in his favor.

Even absent such finding, a court does not lose jurisdiction by reason of an appeal and Brian cites to no such authority. Unlike in a civil case with an appeal from the final judgment, in a Probate case there can be an appeal from an order that does not otherwise affect the court’s supervision of the administration of an estate or here a trust. (See Estate of Kennedy (1948) 87 Cal.App.2d 795, 798) The appeal here is from an order from a petition pertaining to the Deal Point Memorandum. The Deal Point Memorandum did not concern Caroline’s rights of distribution from Brian’s sub-trust. That appeal does not stay the entire Trust case. Indeed, as discussed above, the Court has heard other matters while that appeal has been pending - at Brian’s urging that there is no applicable stay.

Under CCP sec. 916(a), the scope of a stay is only as to the subject matter of the appeal or matters “embraced in or affected by” the appeal. Again, the appeal concerns the December 7, 2021 order pertaining to the Deal Point Memorandum. Neither Caroline nor the GAL were signatories to the Deal Point Memorandum and were not involved in the wholly different issues settled by that memorandum – distinct from the discrete issue involving Caroline’s rights in Brian’s sub-trust.[3] Brian does not show how issues involving distributions to Caroline are “embraced in or affected by” the Deal Point Memorandum. Hence, the Court does not need to reach whether there are “exceptional circumstances” under Probate Code sec. 1310(b), warranting proceeding notwithstanding an appeal.

The December 7, 2021 order did not finally resolve all issues in this case. In fact, Brian’s appeal is preventing the Court resolving a plethora of other complex issues that were not definitively settled. Hence, that order does not cause the GAL order to lapse.[4] Friedman also disputes that the order has lapsed, contrary to the claim he agreed that it did. Moreover, Friedman indicates there remain unresolved issues with the trustee making distributions to Caroline – which issues again were not the subject of nor had arisen when the Deal Point Memorandum was executed. Hence, there appears to still be need for a GAL. If Friedman no longer wishes to serve as GAL, the Court can appoint another person to do so.

The underlying issue on the motion is whether the order should read, as set forth in the minute order, whether Friedman can “request reasonable financial information to determine if the trust has sufficient funds to meet Caroline’s needs per her ‘station in life’ per the prior order, and to obtain from the trust such financial information as is necessary to assure that Caroline has the expenses paid per her station in life” or, as Friedman proposed, “obtain all relevant financial information from the trustee to assess whether Caroline’s expenses are being paid per her “station in life.”” The Court does not see that the latter proposal unreasonably expands the nature of what Friedman can request - if it expands the scope at all. Brian does not explain how the difference would be meaningful. Moreover, where the trustee is allegedly not making distributions as requested, and this Court has had to intervene, GAL should have some leeway to assure that the trustee is complying with his responsibilities and GAL can assure that by reviewing relevant financial records. The Court also does not see how the proposed order conflicts with the stipulation and order concluding the petition for instructions – which does not address what the proposed order concerns. Finally, as discussed previously, whether expenses of Caroline should be paid by Brian or Elizabeth is an issue for the Family Court, not this Court.

For these reasons, the Court continues the motion to the hearing on the petition of the GAL for an accounting set for April 23, 2024 at 8:30 a.m. The Court further orders that any objections to that petition for accounting be filed and served one week prior to the hearing. In this way, the Court and parties can better evaluate the respective positions at the hearing and likely save time and expense.

[1] For ease of reference, the Court refers to family members by their first name, without intending any disrespect.

[2] GAL should also serve Elizabeth with notice of that petition.

[3] The Court acknowledges that, by order filed October 2, 2020, GAL was authorized to review the Deal Point memorandum as far as it how affected Caroline’s rights. However, this does not change the scope of the appeal or the resulting stay.

[4] Whether GAL lacks authority to file a petition is not properly before the Court on this motion related to a proposed order. To the extent the issue is before the Court, it is rejected as without basis:

Brian is misreading the April 24, 2019 order: It states: “The Court further orders that at this time, the Guardian ad litem, Mr. Friedman is only authorized to address Caroline’s distribution rights from the Pacific Trust. Mr. Friedman is not authorized to start filing pleadings in any pending petitions, or initiate other litigation without an order from the Court.” (Emphasis added). The purpose of this language was to make sure that GAL did not participate in any of the other considerable pending litigation involving the Trust (that were resolved in part by the Deal Point Memorandum), including the related civil case, and to focus only on Christine’s distribution rights, given the number of lawyers already involved in the underlying issues. The proposed order in question, however, arises from a petition for instructions related to Christine’s distribution rights. A GAL, as an agent of the Court, is entitled to seek instruction – precisely to avoid litigation. Similarly, the petition for accounting again goes to what rights of distribution Caroline may have.

If Brian contends GAL required a court order to file the pending petition for accounting, he can file objection thereto and the Court will consider the issue further, if necessary, in deciding that petition.