Court Opinion

ID: 3180581
Source: CourtListenerOpinion
Date Created: 2016-02-26 00:11:58.455+00
Date Added: 2024-06-11T14:34:42.023163
License: Public Domain

Filed 2/25/16 (unmodified opn. attached)

                                CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   FIRST APPELLATE DISTRICT

                                           DIVISION TWO

DEIRDRE HILL et al.,
        Petitioners,
v.
THE SUPERIOR COURT OF ALAMEDA                         A145893
COUNTY,
                                                      (Alameda County
        Respondent;                                   Super. Ct. No. RP12630780)
FRANK E. STAGGERS, JR.,
        Real Party in Interest.                     ORDER MODIFYING OPINION
                                                    [NO CHANGE IN JUDGMENT]

BY THE COURT:
        The opinion filed herein on February 18, 2016 is modified as follows:
        On page 12, the first and second lines under the heading “DISPOSITION” are
modified to read as follows:
        Let a peremptory writ of mandate issue commanding respondent court to set aside
its order granting real party’s motion for summary adjudication and to

        This modification does not effect a change in the judgment.

Date: ______________                                       ________________________ P.J.

                                                1
Trial Court:                                  Alameda Superior Court

Trial Judge:                                  Honorable Sandra K. Bean

Attorneys for Petitioners:                    Michael Ryan Dougherty, Steven Jay Rood

Attorneys for Real Parties in Interest:       Triay Law Office, Paul D. Epstein, Charles
                                              A. Triay; Kong Law Firm, Miguel O.
                                              Barquera

                                          2
Filed 2/18/16 (unmodified version)
                                CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FIRST APPELLATE DISTRICT

                                          DIVISION TWO

DEIRDRE HILL et al.,
        Petitioners,
                                                    A145893
v.
THE SUPERIOR COURT OF ALAMEDA                       (Alameda County
COUNTY,                                             Super. Ct. No. RP12630780)
        Respondent.

FRANK E. STAGGERS, JR. et al.,
        Real Parties in Interest.

        Petitioners in this writ proceeding are Deirdre Hill and Vincent G. Hughes
(collectively petitioners), co-executors of their mother’s estate. They filed a proceeding
against their stepfather, Frank Staggers, Sr., to recover property belonging to the estate,
which among other things requested a judgment for twice the value of the property
recovered, as provided for by Probate Code section 859 (usually, double damages).
Petitioners’ stepfather died, and his son was substituted as his successor. He moved for
summary adjudication on the double damages claim, on the basis that those damages
could not be recovered against him. The motion was based on Code of Civil Procedure
section 377.42, which excepts from recovery against a successor “damages recoverable
under Section 3294 of the Civil Code or other punitive or exemplary damages.”
        The superior court granted summary adjudication against petitioners, concluding
that the double damages sought were precluded under Code of Civil Procedure section

                                                1
377.42. We conclude otherwise and we grant the writ, ordering the superior court to
vacate its order granting the motion and to enter a new order denying it.
                                       BACKGROUND
       On March 25, 2013, petitioners filed a petition against their stepfather, Frank
Staggers Sr., to recover property belonging to their mother’s estate. The prayer of the
petition requested among other things “[t]hat the court determine whether Frank Staggers
acted wrongfully in bad faith concealing assets of the estate from petitioners as co-
executors, and if so, compelling Frank Staggers to pay a penalty of twice the value of the
assets recovered.” The basis of the claim for twice the value of the property was Probate
Code section 859, 1 which provides in pertinent part as follows: “If a court finds that a
person has in bad faith wrongfully taken, concealed, or disposed of property belonging
to . . . an elder, . . . or the estate of a decedent, or has taken, concealed, or disposed of the
property by the use of undue influence in bad faith or through the commission of elder or
dependent adult financial abuse, as defined in Section 15610.30 of the Welfare and
Institutions Code, the person shall be liable for twice the value of the property recovered
by an action under this part. In addition, . . . the person may, in the court’s discretion, be
liable for reasonable attorney’s fees and costs. The remedies provided in this section
shall be in addition to any other remedies available in law to a person authorized to bring
an action pursuant to this part.”
       Frank Staggers Sr. died during the proceeding, and his son, Frank Staggers, Jr.
(real party), was substituted in as the respondent in the probate proceeding.
       On April 8, 2015, real party filed a motion for summary adjudication that the
claim for double damages had no merit because those damages cannot be recovered
against him as the successor to his father. The basis of the motion was Code of Civil
Procedure section 377.42, which states in its entirety as follows: “In an action or
proceeding against a decedent’s personal representative or, to the extent provided by
statute, against the decedent’s successor in interest, on a cause of action against the

       1
           All undesignated statutory references are to the Probate Code.

                                                2
decedent, all damages are recoverable that might have been recovered against the
decedent had the decedent lived except damages recoverable under Section 3294 of the
Civil Code or other punitive or exemplary damages.” The memorandum of points and
authorities supporting the motion cited one case: Estate of Young (2008)
160 Cal. App. 4th 62 (Young).
       Petitioners filed their memorandum in opposition, which also relied on one case:
Jahns v. Nolting (1866) 29 Cal. 507 (Jahns).
       Real party filed his reply, and the matter came on for argument on July 14, prior to
which the court had issued a tentative ruling favorable to real party. After conclusion of
argument, the trial court confirmed the tentative ruling and entered a minute order
granting the motion. The sole substantive paragraph of the order read as follows:
“Double damages provided in Probate Code Section 859 are punitive in nature. Estate of
Young (2008) 160 Cal. App. 4th 88. The court finds that the attorney’s fees provision in
Probate Code Section 859 is also punitive in nature as it is intended to be awarded in
addition to the double damages after a finding of bad faith. The court does not find Jhans
[sic] v. Nolting (1866) 29 Cal. 507 controlling as the analysis is based on a predecessor
statute.” (Italics added.)
       Petitioners sought a writ in this court, arguing essentially that Jahns is controlling
authority and that the superior court erred in following what was mere dictum in Young.
On September 29, we issued an alternative writ, stating that “respondent superior court
erred when it held that Probate Code section 859 is a punitive-damage statute,” and
commanded the superior court “to set aside and vacate its order of July 14, 2015, and to
enter a new and different order denying real party’s Motion for Summary Adjudication;
or, in the alternative, to appear and show cause before Division Two . . . .”
       On October 6, the superior court advised that it would take no action in response
to the alternative writ, and would let real party file a return. On October 23, real party
filed a return to the petition for peremptory writ. On November 5, petitioners filed a
reply and opposition to the return.

                                              3
                                      DISCUSSION
        As quoted, Code of Civil Procedure section 377.42 allows one to recover against a
decedent’s successor in interest “all damages . . . that might have been recovered against
the decedent . . . except damages recoverable under Section 3294 of the Civil Code or
other punitive or exemplary damages.”
        The question here is whether double damages provided for under section 859 are
within that exception. We conclude they are not.
        Civil Code section 3294, subdivision (a) provides in pertinent part as follows: “In
an action for the breach of an obligation not arising from contract, where it is proven by
clear and convincing evidence that the defendant has been guilty of oppression, fraud, or
malice, the plaintiff, in addition to the actual damages, may recover damages for the sake
of example and by way of punishing the defendant.” This is the statute that allows
recovery of punitive, sometimes referred to as exemplary, damages. The purpose of
punitive damages is to punish defendant and to deter future misconduct by making an
example of him or her. (PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal. 4th
310, 317.) The purpose “is a purely public one. The public’s goal is to punish
wrongdoing and thereby to protect itself from future misconduct, either by the same
defendant or other potential wrongdoers.” (Adams v. Murakami (1991) 54 Cal. 3d 105,
110.)
        Witkin has an exhaustive discussion of “[p]unitive or [e]xemplary [d]amages.”
(See 6 Witkin, Summary of Cal. Law (10th ed. 2005) Torts §§ 1559–1623, pp. 1035–
1137.) In the course of that discussion, the author makes several observations pertinent
here, which begin in a section entitled “Statutory Penalties Distinguished.” (Italics
added.) The discussion first observes that “[s]ometimes a statute imposes a penalty in an
arbitrary sum irrespective of actual damage suffered.” (Id., § 1569, p. 1057.) The next
section says that “[a]nother type of statue allows treble damages, i.e., on proof of actual
damage, an award of three times the amount may be given.” (Id., § 1570, pp. 1059–
1060.) And then comes section 1571. It is entitled “Recovery of Both Penalty and
Punitive Damages,” and it says this: “Dual Remedies Permitted. The fact that a statutory

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penalty or even criminal liability is imposed for a particular wrongful act does not
preclude recovery of punitive damages in a tort action where the necessary malice or
oppression is shown, and it is possible that the defendant may be punished criminally and
forced to respond in punitive damages for the same act. [Citations.]” (Id., § 1571,
pp. 1060–1061.)
       Many cases illustrate the point, including Greenberg v. Western Turf Assn. (1903)
140 Cal. 357, where the Supreme Court authorized both punitive damages under Civil
Code section 3294 and a statutory penalty, both in addition to actual damages. The court
distinguished between punitive damages that depend upon a showing of malice or
oppression by the plaintiff, and a penal provision awarded to the plaintiff because a “law
has been violated and its majesty outraged.” (Id. at p. 364.)
       Marshall v. Brown (1983) 141 Cal. App. 3d 408, 418–419, is similar. There, the
court stated that “[b]oth plaintiff and defendants concur on appeal that statutory damages
and punitive damages arising out of the same cause of action are not mutually exclusive.
‘The fact that such a statutory penalty [treble damages] . . . is imposed for a particular
wrongful act does not preclude recovery of punitive damages in a tort action where the
necessary malice or oppression is shown . . . .’ ”
       In sum, statutory damages awarded as a penalty are “distinguished” from punitive
damages. And recovery of both is “permitted.”
       That double damages under section 859 are not punitive “damages recoverable
under Section 3294 of the Civil Code” is also demonstrated by the many differences
between them. For example:
       The proof required for punitive damages includes that plaintiff show oppression,
fraud, or actual malice. (Davis v. Hearst (1911) 160 Cal. 143, 162; Food Pro. Internat.,
Inc. v. Farmers Ins. Exchange (2008) 169 Cal. App. 4th 976, 984.) Section 859 does not.
       The proof required for punitive damages is “clear and convincing evidence.” The
proof required under section 859 is not.

                                              5
       The proof required to recover punitive damages requires that plaintiff provide
evidence of defendant’s net worth. (Baxter v. Peterson (2007) 150 Cal. App. 4th 673, 679;
Kelly v. Haag (2006) 145 Cal. App. 4th 910, 916.) Section 859 has no such requirement.
       As quoted above, Civil Code section 3294 always requires proof of some form of
aggravated misconduct. As also quoted above, section 859 provides for double damages
if a person has in “bad faith” done certain things and also if the wrongdoer has “taken,
concealed, or disposed of the property by the use of undue influence in bad faith or
through the commission of elder or dependent adult financial abuse, as defined in Section
15610.30 of the Welfare and Institutions Code . . . .” (Italics added.) So, the last
alternative of section 859 allows for double damages without any requirement that
petitioners show any aggravated misconduct—only financial elder abuse.
       And to the extent the alternative bases of recovery under section 859 require proof
of any such misconduct, the section requires only a showing of “bad faith,” which is not
the equivalent of malice required under Civil Code section 3294. Rather, “bad faith” can
be many different things, depending on the context. For example:
       The general rule is that an agent is not liable on a written contract in the name of
the principal. So, if the agent has no authority to make the contract, the usual remedy of
the third party is on the warranty of authority. But if, in addition to the lack of authority,
there is “bad faith”—that is, the agent enters into the contract without believing, in good
faith, that he or she has authority to do so—the California rule makes the agent liable on
the contract as a principal. (Civ. Code, § 2343, subd. (2); Nichols Grain & Milling
Co. v. Jersey Farm Dairy Co. (1933) 134 Cal. App. 126, 129–130.)
       Code of Civil Procedure section 580b is the anti-deficiency statute, shielding a
mortgagor from liability in damages. However, if the mortgagor commits waste in “bad
faith,” he or she can be liable for damages. (Hickman v. Mulder (1976) 58 Cal. App. 3d
900, 907–908.)
       The most frequent application of “bad faith” is in insurance cases, the concept
based on a tortious breach of the covenant of good faith and fair dealing. (See generally
Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co. (2001)

                                              6
90 Cal. App. 4th 335, 345.) And in the insurance context, bad faith and punitive damages
are not coextensive, as held in Silberg v. California Life Ins. Co. (1974) 11 Cal. 3d 452,
462–463, where the Supreme Court was careful to point out that an insurer’s breach of
the implied covenant of good faith—that is, bad faith—did not automatically justify an
award of punitive damages. Rather, a separate showing of “oppression, fraud or malice”
within the meaning of Civil Code section 3294, subdivision (a) was required. (Ibid.)
       Finally, and not incidentally, section 859 ends with this sentence: “The remedies
provided in this section shall be in addition to any other remedies available in law to a
person authorized to bring an action pursuant to this part.”
       Jahns, the old Supreme Court case relied on by petitioners, lends support to our
conclusion. Jahns involved application of former section 116 of the 1851 Act to
Regulate the Settlement of the Estates of Deceased Persons (Probate Act), which
provided as follows: “If any person before the granting of Letters Testamentary or of
Administration shall embezzle or alienate any of the moneys, goods, chattels, or effects
of any deceased person, he shall stand chargeable and be liable to the action of the
Executor or Administrator of the estate, for double the value of the property so
embezzled or alienated, to be recovered for the benefit of the estate.” The issue in Jahns
was whether section 116 of the Probate Act provided a basis for the administrator’s
action against the defendant, which meant the court had to determine whether section 116
was punitive or remedial.
       The trial court found that the defendant did not “ ‘embezzle or alienate and convert
to his own use.’ ” Plaintiff took exception to the finding on the ground, among others,
that defendant took and carried away the property. The court rejected plaintiff’s position,
and plaintiff moved for a new trial, which was denied. In the Supreme Court’s words:
“In denying the plaintiff’s motion for a new trial, the Court was of the opinion that the
action was for embezzlement, and was brought under section one hundred and sixteen of
the Probate Act, which alone gave the plaintiff a remedy for the alleged wrong, and that
under the allegations of the complaint, the plaintiff was not entitled to recover for the
wrongful conversion, as in the action of trover at common law—that he must prove the

                                              7
embezzlement or fail in the action. The counsel for the defendant holds to the same
views, and offers as a further reason why the plaintiff could not recover, as in trover,
upon the complaint in the cause, that the action given by section one hundred and sixteen
is a penal action.” (Jahns, supra, 29 Cal. at p. 510.)
       The Supreme Court reversed, holding that a statute is penal if it “imposes a
penalty, or creates a forfeiture as the punishment for the neglect of some duty, or the
commission of some wrong, that concerns the good of the public, and is commanded or
prohibited by law.” (Jahns, supra, 29 Cal. at p. 512.) The court explained that a statute
that does not create any new rights of action or remedies but simply enhances the
damages is remedial—and that section 116 was a remedial, not punitive, statute.
(Id. at p. 513.) We perceive no meaningful difference between the language used in
section 859, and the language in former section 116.
       Real party’s return asserts that “[t]he First District has long held that the enhanced
remedies for cutting and removing timber provided for section [sic] Civil Code § 3346
are punitive,” citing Drewry v. Welch (1965) 236 Cal. App. 2d 159, 176 (Drewry) and
Hassoldt v. Patrick Media Group, Inc. (2000) 84 Cal. App. 4th 153, 169 (Hassoldt). And,
real party continues, “[a]pplying these principles, modern courts that have considered the
character of the double damages in Probate Code § 859 have held that they are punitive
damages. Estate of Young (2008) 160 Cal. App. 4th 62, 68. Estate of Krause [sic] (2010)
184 Cal. App. 4th 103, 112 [(Kraus)] (citing Garrett v. Coast & Southern Fed. Sav. &
Loan Assn. (1973) 9 Cal. 3d 731, 739; County of San Diego v. Milotz (1956) 46 Cal. 2d
761, 766; People v. Union Pacific R. [sic] Co. (2006) 141 Cal. App. 4th 1228, 1257–58.)
See also In re Pereira and Melo Dairy (2005) 325 B.R. 1.”
       Real Party’s assertions are more than slightly misleading. While Drewry on
occasion used the word “punitive,” it also used other words, like “remedial” and “penal.”
(Drewry, supra, 236 Cal.App.2d at p. 172.) Hassoldt is not a First District case. And
neither Young nor Kraus holds that section 859 damages are punitive damages.
       Young will be discussed in detail below. And the actual language of Kraus—the
case from which real party apparently gets all his cited authorities save Young—is this:

                                              8
“Section 859 provides for recovery of twice the value of property taken in bad faith.
[Citations, including Young.] . . . Some version of this civil penalty statute has been
operative since 1850. [Citing Young.] Section 859 is punitive in nature. (Estate of
Young, supra, 160 Cal.App.4th at p. 88; cf. Garrett v. Coast & Southern Fed. Sav. &
Loan Assn. (1973) 9 Cal. 3d 731, 739; County of San Diego v. Milotz (1956) 46 Cal. 2d
761, 766; People v. Union Pacific Railroad Co. (2006) 141 Cal. App. 4th 1228, 1257–
1258 [civil penalties are punitive in character].) The section 859 penalty is imposed
when an interested party establishes both that the property in question is recoverable
under section 850 and that there was a bad faith taking of the property. (Estate of Young,
supra, 160 Cal.App.4th at p. 89; In re Pereira and Melo Dairy, supra, 325 B.R. at p. 5.)”
(Kraus, supra, 184 Cal.App.4th at pp. 111–112.)
       Punitive in nature, Kraus said. Not punitive damages. Kraus does not support
real party. To the contrary, Kraus supports our conclusion here.
       In Kraus, decedent’s brother David had acted in bad faith, and the trial court
awarded double damages against him. (Kraus, supra, 184 Cal.App.4th at pp. 115–116.)
On appeal, David made several arguments in which he referred to the award against him
as “ ‘exemplary damages’ ” or “ ‘punitive damages.’ ” (Id. at p. 116.) The Court of
Appeal rejected all of David’s arguments, ending its discussion with this: “David
generally mischaracterizes this case as involving an award of actual and exemplary
damages to a nonparty. But the probate court did not award damages. It ordered David to
hand over misappropriated funds together with a statutory penalty for his bad faith
conduct. . . .
       “David further asserts the ‘punitive damage award’ must be reversed because the
amount of ‘actual or compensatory damages’ awarded to the beneficiaries (zero) bore no
rational relation to the ‘punitive damages’ ($ 394,804). This argument proceeds from a
misdescription of the underlying facts. No actual or compensatory damages were
awarded to anyone. . . .
       “David argues the section 859 penalty would be excessive because it is
disproportionate to his ability to pay, but the trust beneficiaries did not introduce

                                              9
evidence of David’s financial condition. The ability to pay argument was not raised in
the probate court. Even if the issue were properly raised, we would conclude David’s
financial condition under these circumstances was not a relevant consideration. The
Courts of Appeal have held evidence of a defendant’s financial status is not essential to
the imposition of statutory penalties, and financial inability to pay is a matter to be raised
in mitigation. [Citations.] The trust beneficiaries had no obligation to present evidence
of David’s financial condition or his ability to pay the mandatory statutory penalty.
(Kraus, supra, 184 Cal.App.4th at p. 118.)
       In short, Kraus makes two points noted above: section 859 double damages are
not punitive damages, and the proof required for punitive damages is not required for
section 859 damages.
       Young, too, has no holding favorable to real party. Young was a section 850
proceeding by an administrator of decedent’s estate against two individuals and a trust
(called objectors) to return property, based on claims of fraud and undue influence.
(Young, supra, 160 Cal.App.4th at pp. 67–68.) As described by the Court of Appeal,
“The amended petition requested an accounting of all revenues and expenses for the three
operational or business trusts . . . . Entitlement to punitive damages was pled, along with
an order holding Objectors liable to the Estate ‘for twice the value of the property
recovered hereby,’ under section 859.” (Id. at p. 73.) The court adjudged double
damages against objectors, but no damages were awarded due to lack of supporting
evidence as to the value of the property. Both sides appealed, the objectors claiming lack
of substantial evidence, and the estate claiming that the trial court erroneously denied it
the opportunity to present evidence of the value of the real property taken. (Id. at p. 68.)
It was in connection with the estate’s appeal that the language real party relies on
appears.
       Setting the stage for that discussion, the Court of Appeal began its discussion with
language demonstrating that section 859 double damages and punitive damages are
different. Thus: “The Estate challenges the judgment with respect to the trial court’s
rulings on the double damages issues. First, it contends that when the trial court agreed

                                              10
to bifurcate the issue of net worth for punitive damages purposes, at the request of
Objectors, this amounted to an implied bifurcation ruling regarding liability and damages
as to another type of damage request that is also punitive in nature, i.e., double damages
under section 859.” (Young, supra, 160 Cal.App.4th at p. 82, italics added.) The next
page then again describes the petition: “Orders were requested directing Objectors to
transfer to the Estate any remaining personal property. Breach of fiduciary duty was
pled, and an accounting of all revenues and expenses for the three operational or business
trusts was sought. Punitive damages were sought, along with an order holding Objectors
liable to the Estate ‘for twice the value of the property recovered hereby’ under section
859.” (Id. at p. 83, italics added, fn. omitted.)
       Nowhere, we note, does the Court of Appeal say that punitive damages and double
damages are the same. Or duplicative.
       The Court of Appeal then went on for 10 pages discussing the proceedings below,
and the statutory scheme of section 859 and its predecessors. After all that, the Court of
Appeal made its comments—comments unnecessary to its holding—about section 859
damages being “punitive in nature” (Young, supra, 160 Cal.App.4th at p. 88) and having
a “punitive effect upon Objectors.” (Id. at p. 90.) The court then made its holding, that
the estate prevail in its claim for a separate damage phase. And so the court concluded:
“For all of these reasons, we determine that the trial court erred in its statutory
interpretation that an element of the Estate’s claim under section 859 was proof of value
of the subject real estate at the liability phase of adjudicating the petition. Rather, the
more appropriate approach was to determine the merits of the petition to reestablish title
to the real property in the Estate, and then to defer the valuation process until the
accounting phase of the proceedings; it is not possible to double an amount without
knowing what it is. Further, double damages are punitive in nature, or a ‘species’ of
punitive damages, and therefore section 859 should be read to allow these issues to be
addressed separately. At all times, bifurcation and the order of proof remain in the
discretion of the trial court, and we express no opinion on whether these issues could
sometimes be tried together, upon an appropriate case. We decide only that under the

                                              11
circumstances of this case, the trial court should have allowed the evidence to be
reopened for the purpose of valuing the property and then setting a double damages
amount under section 859, since the remainder of the requirements for such damages had
previously been established.” (Id.at p. 92.)
       “[P]unitive in nature.” “[P]unitive effect.” Maybe. But not punitive damages.
Whatever the observations about “punitive,” they were just that—observations. They
were dicta. Young merely concluded that there should have been a bifurcation of the
liability and damages phases because it would save the estate from incurring the costs of
appraisals before prevailing on the liability issue. Whether the double damages were
remedial or punitive was irrelevant to the holding.
                                     DISPOSITION
       The order is reversed, and the matter is remanded to the superior court with
instructions to vacate the order granting the motion for summary adjudication and to
enter an order denying the motion. Petitioners shall recover costs.

                                                        _________________________
                                                        Richman, J.

       We concur:

       _________________________
       Kline, P.J.

       _________________________
       Stewart, J.

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Trial Court:                               Alameda Superior Court

Trial Judge:                               Honorable Sandra K. Bean

Attorneys for Petitioners:                 Michael Ryan Dougherty, Steven Jay Rood

Attorneys for Real Parties in Interest:    Triay Law Office, Paul D. Epstein, Charles
                                           A. Triay; Kong Law Firm, Miguel O.
                                           Barquera

                                          13