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Filed 9/16/13 Paluda v. Young CA3 NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

----

LINDA M. PALUDA et al.,

Plaintiffs and Appellants,

v.
CAROLYN M. YOUNG, as Trustee, etc.,

Defendant and Appellant. C068882 (Super. Ct. No. 05PR01793)

Plaintiffs Linda Palud a and Terry Peterson are sisters and beneficiaries of a family

trust

. Their father , Bob Hamblen, was the trustee until it was alleged that he had wasted
or transferred substantial trust assets . A s tipulated judgment provided for Hamblen to encumber his hous e in favor of the trust and for the appointment of d efendant Carolyn M. Young as successor trustee

. Despite the terms of the stipulated judgment, Hamblin did not assign an interest in the house to the trust. Instead, he took out a mortgage against the house. Young2

subsequently perfected the trust’s interest in the house , but that interest was subordina te to the mortgage lender’s interest

. When the house was sold , the lender was fully repaid
and the trust was not.
The sisters sued Young for breach of trust in late 2010, alleging that she should
have prevented the mortgage lender from taking a n interest in the house. Young m oved for summary judgment , asserting that the action is time

- barred and that she is protected from liability by an excu lpatory clause in the trust instrument

. The trial court granted summary judgment , agreeing with Young that she is protected from liability by the exculpatory clause

. The sisters now appeal the judgment of dismissal , arguing that the exculpatory
clause is not applicable because Young was grossly negligent or recklessly indifferent. Young cross

- appeals , claiming the trial court should have applied a record notice
standard rather than an actual notice standard in analyzing the statute of limitations

. We conclude the trial court did not err in granting summary judgment. The sisters did not offer any e vidence to refut e the undisputed material facts set forth in Young’s moving papers. Accordingly, we need not address the contentions in Young’s cross

appeal. We will affirm the judgment of dismissal.
BACKGROUND
Bob and Evan geline Hamblen established a revocable family trust in 1982. They
named as beneficiaries their three children, Paluda, Peterson and a now

- deceased son

. After Evangeline’s death in 1996, Hamblen divided the trust into subtrusts, including
Trust B , which is at issue

. 1

1 Trust A was designed to hold the surviving spouse’s interest in the trust (Hamblen’s, as it turned out); Trust B was to hold an amount equivalent to the maximum federal estate3

In November 2005, Peterson petitioned the trial court to remove Hamblen as
trustee , to suspend his powers, to appoint a successor trustee , and for an accounting. The petition alleged that Hamblen had transferred assets valued at more th an one million
dollars from Trust B to a woman named Wa gma Safi and had given Safi a joint t enancy interest in his home

. In May 2006, Hamblen and the trust beneficiaries entered into a stipulated judgment. The stipulated judgment defined Trust B to include , among other things, a “p romissory note

. . . secured by a first deed of trust as to an undivided one

- half
interest [ in ] ” the house he shared with Safi . By stipulation, the parties also agreed that Hamblen had resigned as t rustee and that Young would be appointed as successor tru stee. It is undisputed that Young was not a party to the stipulation and was not involved with its drafting or execution.
In the months between execution of the stipulated judgment and Young’s appointment, Hamb len failed to prepare or execute the promi ssory note mentioned in the stipulated judgment or to file a deed of trust encumbering his home in favor of the trust. None of Hamblen’s children took any action to enforce the judgment against their father
or to file it at the county recorder’s office as a claim against the house

. Among the undisputed material facts presented by Young in support of her motion for summary judgment were these : Peterson notified Young on January 16, 2007 , that Hamblen was attempting to ob tain a loan and to use his home as security. Before January 16, 2007 , Peterson did not inform Young about the existence or terms of the

s tipulat ed judgment or of Hamblen’s failure to comply w ith it. Young bel ieved Trust B
owned the house outright and t hat Hamblen could not borrow against it without her

consent

. On or about January 18, 2007, Young attempted to hin der Hamblen’s effort to borrow against the house by sending an affidavit to the Placer County Recorder declaring

tax exemption ($600,000); and Trust C was to hold the interest, if any, of the first of the spouses to die.4

her role as successor trustee of Trust B, which she asserted had an interest in the property

. On January 19, 2007, Young had her attorney send a letter to Hamblen warning him that he could not encumber the property without Young’s consent

. On January 26, 2007, Countrywide Home Loans , Inc., recorded its secured interest in the house as collateral for a $200,000 loan to Hambl en and S a fi.
T he re was an exculpatory clause in the t rust instrument defining the duties and obligations of trustees

. On page 15 at paragraph F, the trust instru ment provided : “A Trustee, except a Trustee who is also a beneficiary, shall be responsible only for such Trustee’s own acts and omissions in bad faith.” It continued : “Moreover, a successor Trustee shall not be liable for any action taken by a Tr ustee prior to the time such successor Trustee becomes a Trustee.” Young declared under oath that Peterson first informed Young about the existence
of the st ipulat ed judgment and about Hamblen’s failure to comply with its terms in February 2007 , after t he mortgag e interest at issue had been perfected. Th at evidence was designated u ndisputed m aterial f act No. 19 in Young’s s eparate s tatement. The
sisters disputed f

act No. 19, but they did not cite contrary evidence. 2 In fact, the trial court’s tentative order noted that the declarations accompanying the sisters’ opposition to summary judgment “did not contain any statements contravening material facts relied upon by Young . Nor did the [sisters’] declarations contain any facts asserted b y [the sisters] to be material. Indeed, [the sisters] did not submit any statement of additional material facts to support their opposition to the motion.” The sisters made no effort to supplement the record with evidence.

2 In their opposition brief, the sisters asserted, with no citation to authorit y or evidence: “Young had a duty to review all relevant documents and pleadings and to take all reasonable steps within her power to protect and preserve” the trust assets. In a supporting declaration, Peterson said she had spoken to her lawyer in Januar y 2007 but did not know her father had failed to sign the promissory note or record the deed of trust.5

The sisters also disputed Yo ung’s u ndisputed m aterial f act No. 20, which asserted
that “Peterson provided a copy of the [stipulated judgment] to Young, for the first time,
in Febru ary 2007

. ” B ut again the sisters offered no contrary evidence. They did not dispute any of the evidence Young submitted about her successful effort to f orce Hamblen to comply with the requirements of the s tipulation and to have documents encumbering his home in favor of the trust recorded in the officia l records of Placer County.
The trial cour t granted summar y judgment in favor of Young and dismissed the sisters’ petition for breach of trust.
DISCUSSION Summary judgment is granted when a party establishes that there is no triable issue of any material fact and that the moving party is entitl ed to judgment as a matter of
law

. ( Code Civ. Proc. , § 437c , subd. (c). ) If t he moving party establishes the absence of a triable fact, the burden shifts to the o pposing party . ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 861.) The opposing party may not simply rely o n the pleadings. ( Co m mittee to Save the Beverly Highlands Homes Ass n. v. Beverly Highlands Homes
Assn

. ( 2001) 92 Cal.App.4th 1247, 1260

. ) An opposition to summary judgment must include a separate statement that re sponds to each of the facts declared to be material and undisputed by the moving part y and to set forth any other facts that the opponent asserts are material and disputed. (Code Civ. Proc. , § 437c , subd. (b)(3).)
The California Rules of C ourt describe the format for the separate statement and
for the required c itations to evidence

. (Cal. Rules of Court, rule 3.1350(d).) The separate statement is an indispensable part of the summary judgment process a nd an opposing party’s failure to submit one can be a significant factor in the court’s judgment. ( Koj a babian v. Genuine Home Loans, Inc . (2009) 174 Cal.App.4th 408, 418;
Whitehead v. Habig (2008) 163 Cal.App.4th 896 , 902 .)6

As this court has explained, in the absence of a separate statement with referen ces to supporting evidence, “it is impossible for the plaintiff to demonstrate the existence of disputed facts.” ( Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107 , 116. ) In support of her motion for summary judgment, Young set forth undisputed material facts establishing that she was a suc cessor trustee to Hamblen, and that while he was serving as trustee, Ha mblen failed to comply with a stipulated judgment requiring
him to encumber his house ; she also established that she took appropriate steps to force his complia nce as soon as she discovered it. Given those and the other undisputed
material facts set out above , we agree that the exculpatory clause provided Young with an affirmative defense to the sisters’ claims. (Prob

. Code , § 16461 [except in case of gross negligence, reckless indifference or self

- dealing, exculpatory clause in trust instrument is effective]. ) On appeal, the sisters do not cite evidence in the record that would defeat summary judgment, and the only law they cite involves general principles . Th eir argument is based solely on a paraphrase of Young’s declaration : in January 2007, Young was unaware of the stipulated judgment , its terms and Hamblen’s failure to comply with the terms ; as of that date, the sisters had not infor med Young of the
existence or contents of the stipulated judgment

. Thus, the sisters concede that they kept
information about the stipulated judgment from Y oung until after the date of the alleged
breach of trust . Nonetheless, the sisters contend , with out citation to supporting evidence

or authority, that Young was recklessly indifferent or grossl y negligent because she did

not find and record a copy of t he stipulated judgment

. The sisters did not dispute Y oung’s evidence that she believed the trust owned the house and took steps that would have been effective to stop Hamblen from encumbering
the house if her belief had been true. In addition, they did not dispute evidence that Young made Hamblen comply with his obligation to the trust promptly after Peterson
sent her a copy of the stipulated judgment

. The sisters instead assert that there is “at least7

one, and possibly more, material facts that remain in dispute .” The disputed facts, they say, are whether Young was grossly negligent or recklessly i ndifferent, and whether Young’s breach of trust resulted in a financial loss to the trust. But th ose assertions, without facts, do not satisfy their burden to establish that the trial court erred in granting summary judgment.
DISPOSITION
The judgment of dismissal is affirmed

.

MAURO , J.

We concur:

ROBIE , Acting P. J.

HOCH , J.