Judge: Theresa M. Traber, Case: 22STCP02257, Date: 2022-12-16 Tentative Ruling

Case Number: 22STCP02257    Hearing Date: December 16, 2022    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     December 16, 2022                TRIAL DATE: NOT SET

CASE:                         Western Progressive, LLC v. Heidi Gates-Robinson, et al.

CASE NO.:                 22STCP02257           

PETITION FOR INSTRUCTION OR REMOVAL OF TRUSTEE

MOVING PARTY:               Respondent Ryan Gates

RESPONDING PARTY(S): Respondent Heidi Gates-Robinson

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a petition, filed on June 15, 2022, regarding unresolved claims originating from a trustee’s sale.

Respondent Ryan Gates petitions for instruction or removal of the trustee.

TENTATIVE RULING:

Respondent Gates’s Petition is DENIED.

DISCUSSION:

            Respondent Gates seeks an order instructing Respondent Gates-Robinson, as the trustee, to disburse surplus funds from the foreclosure sale of a parcel of real property known as 5158 S. Gramercy Place, Los Angeles, CA 90062, or, in the alternative, an order removing Respondent Gates-Robinson as the trustee.

Legal Standard

            Probate Code section 17200(a) authorizes any beneficiary to petition the court concerning the internal affairs of the trust. (Probate Code § 17200(a).) Proceedings concerning the internal affairs of a trust include proceedings for the purposes of instructing the trustee or for appointing or removing a trustee. (Probate Code § 17200(b)(6), (10).) A trustee may be removed by the court for (1) a breach of trust, (2) insolvency or unfitness to administer the trust; (3) hostility or lack of cooperation among co-trustees impairing administration of the trust; or (4) for failing or declining to act. (Probate Code § 15642(b).)

Analysis

            Respondent Gates, as a named beneficiary of the James Chester Gates Living Trust, contends that Respondent Gates-Robinson, as the trustee, mismanaged the trust by failing to marshal the trust assets, resulting in the foreclosure sale of the 5158 S. Gramercy Place property, which Respondent Gates was to receive under the terms of the trust. (Respondent Exh. A. § 6(a)(1).) Respondent Gates further contends that, following the foreclosure sale, Respondent Gates-Robinson refused to disburse proceeds from the sale to Respondent Gates to which he was entitled.

            In opposition, Respondent Gates-Robinson first contends that, because she is the trustee, distribution of trust assets was purely within her discretion. Respondent does not reference any portion of the Trust Declaration in support of the contention that she had absolute discretion regarding the distribution of trust assets. Respondent further argues that the foreclosure sale of the subject property was not due to negligence and, separately, that the Trust Declaration is ambiguous as to the distribution of funds if a specifically bequeathed property is liquidated before distribution. Respondent contends that these are factual questions that are properly put before the probate court, and not resolved in an interpleader action. The Court concurs. Under the Local Rule 2.13 of the Superior Court of California, County of Los Angeles, any matter arising under the Probate Code is properly assigned to the Probate Division, not to an Independent Calendar Court such as this.

Respondent Gates also contends that Respondent Gates-Robinson did not provide notice that the trust became irrevocable pursuant to Probate Code section 16061.7. This section provides that, when a trust or portion of a trust becomes irrevocable, the trustee shall send notice to all legal heirs of the decedent and beneficiaries of the trust within 60 days of the trust becoming irrevocable. (Probate Code § 16061.7.) Respondent Gates contends that no such notice was ever given. Respondent Gates contends, and Respondent Gates-Robinson does not dispute that the trust became irrevocable on June 14, 2018, with the death of the decedent, James Gates. In opposition, Respondent Gates-Robinson states that she served a notice of trust administration pursuant to this code section on November 17, 2022, but otherwise does not address this contention, except to argue that all beneficiaries had a copy of the trust declaration for “years,” and therefore, implicitly, had constructive notice of when the trust would become irrevocable.

            Respondents have placed several questions of fact at issue in this matter: whether proper notice was given under Probate Code section 16061.7, whether the foreclosure sale of the property was due to the trustee’s negligence, and whether the terms of the Trust Declaration obligate the trustee to disburse the foreclosure proceeds to Respondent Gates. As to the first two questions, neither party has presented any evidence to address these contentions. Further, with respect to the effect of the trust documents, the only evidence provided is the Trust Declaration itself, which states that, after all specific bequests have been made, the residual is to be distributed 50% to Ryan Gates, 25% to Jasmine Gates, and 25% to Brandon Gates. (Respondent’s Exh. A. § 6(b).) The Trust Declaration does not specifically set forth the effect of liquidation of a specific bequest, and neither party offers any evidence of the intended disposition of such assets. Assuming arguendo that this Court is the proper court to hear this issue, the Court concludes, in light of the lack of evidence presented, that Respondent Gates has not established that he is entitled to the relief requested.

CONCLUSION:

            Accordingly, Respondent Gates’s Petition is DENIED.

            Moving Party to give notice.

IT IS SO ORDERED.

Dated: December 16, 2022                             ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.