Court Opinion

ID: 2682452
Source: CourtListenerOpinion
Date Created: 2014-07-09 23:01:16.368595+00
Date Added: 2024-06-11T13:12:45.568965
License: Public Domain

Filed 7/9/14 Dilworth v. Tierrnan CA1/2
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication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

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION TWO

ROSEMAE B. DILWORTH,
         Plaintiff and Appellant,
                                                                     A139476
v.
MARILYN M. GRAY TIERNAN, as                                          (Contra Costa County
Trustee, etc.,                                                       Super. Ct. No. MSP12-01384)
         Defendant and Respondent.

         Magnolia Dilworth Austin established the Magnolia Dilworth Austin Trust (the
trust) in 1990 and amended its terms in 2002. Austin died in 2012. The trust document
provided that on her death, after payment of certain expenses and taxes, the “remaining
balance” of the trust estate was to be distributed in two shares. One share was to go to
her niece, Cassandra Lyles, but if Lyles died before Austin, that share was to go to her
friend, Virginia Saxton. Both Lyles and Saxton died before Austin, so the share in
question is a failed bequest. The other share was to go to Saxton, but if Saxton died
before Austin, the share was to go to Saxton’s surviving issue, by right of representation.
         Rosemae Dilworth is another of Austin’s nieces. She petitioned the probate court
for an order declaring that the share in question be distributed to Austin’s estate, from
there presumably to be distributed according to the rules governing intestacy. Marilyn
Tiernan is the daughter of Saxton and a beneficiary of the trust. Tiernan maintained that

                                                             1
under Probate Code1 section 21111, subdivision (b), the share in question, like the other
share, should go to Saxton’s surviving issue. The probate court agreed with Tiernan and,
after issuing an order interpreting the beneficiary provisions of the trust document,
dismissed Dilworth’s petition.
       The sole issue on appeal is how the share of the trust that is a failed bequest should
be distributed. Following de novo review, we affirm the judgment of the probate court.
                                      BACKGROUND
I. Factual Background2
       Austin died on March 23, 2012, at 99 years of age. She had no surviving children
or siblings, but did have seven nieces and nephews, including Dilworth. Virginia Saxton
was a friend of Austin and Tiernan is Saxton’s daughter. Rosemae Lyles (Rosemae),
Austin’s sister, had a daughter, Cassandra Lyles (Lyles). Rosemae, Lyles, and Saxton all
predeceased Austin.
       In May 1990, Austin created the trust. When it was created, Austin transferred 11
properties to the trust—five items of real property, two automobiles, three bank accounts,
and a retirement account.3 Austin reserved the rights to add additional property to the
trust and to remove property from the trust.
       Article VI of the trust document specified: “A. Upon the death of Trustor,
Trustee shall pay all expenses of last illness, funeral and burial expenses and all
inheritance, estate or other death taxes that may be amassed by reason of Trustor’s death.
[¶] B. The Trustee shall distribute all bank accounts to Cassandra Lyles and divide the

       1
           Unless otherwise indicated, all statutory references are to the Probate Code.
       2
          Personal information concerning the people involved in this matter is taken from
the parties’ briefs on appeal. The personal facts briefly provided here are not in dispute.
       3
         An exhibit attached to the trust document lists these properties, but the record
before us does not include evidence that title to any of these properties was actually
transferred to the trust. The probate court observed in its order interpreting the trust
document that “Tiernan notes in her opposition to [Dilworth’s] opening brief that trust
assets have been exhausted in the care of Ms. Austin. To the extent this is true, the trust
dispute may not have any practical consequence.”

                                               2
remaining trust assets into two equal shares and distribute one share to Trustor’s sister
Rosemae Lyles and distribute the other share to Trustor’s niece Cassandra Lyles. Should
Rosemae Lyles not survive Trustor, then her share shall be distributed to Cassandra
Lyles. Should Cassandra Lyles not survive Trustor, then her share shall be distributed to
her issue, by right of representation.”
       In 2002, Austin executed an amendment to the trust. The amendment replaced
paragraph B of article VI with the following: “B. The Trustees shall distribute the
remaining balance of the Trust Estate in two equal shares as follows:
       “1. One (1) such equal share to Trustor’s niece Cassandra Lyles if she is then
surviving, and if not, then to Trustor’s friend Virginia D. Saxton, whose address was set
forth previously.
       “2. One (1) such equal share to Trustor’s friend Virginia D. Saxton, whose
address was set forth previously, if she is then surviving, and if not, then to her surviving
issue by right of representation.”4
       On the same day that Austin executed the amendment to the trust, she also
executed a will. In the will, Austin made the specific bequest of a gold coin to Lyles.
Remaining personal effects were to go first to Lyles; then to Saxton, should Lyles
predecease Austin; then to Saxton’s surviving children, should Saxton predecease Austin.
The will specified that the remainder of the estate was to be distributed to the trust.
Further, Austin made clear that she intended to dispose of all of her remaining property
through the will and the trust, and not to leave anything to pass through intestacy.
       In January 2013, Dilworth filed a first amended “class action” petition, on behalf
of herself and unnamed nieces and nephews of Austin, seeking: (1) “a determination of
the court that Dilworth herself, and in addition as a class representative of the group of
seven nieces and nephews that survived Austin’s death, are collectively heirs at law and
are thereby entitled to share of one-half of Austin’s estate under the laws of intestacy”;

       4
         We refer to article VI(B) of the trust document as “paragraph B.” When
referring individually to B(1) and B(2), we refer to them as “part B(1)” and “part B(2).”

                                              3
(2) injunctive relief requiring the trustee to divide trust assets and to place one-half of
such assets under control of a special administrator for Austin’s estate; (3) an accounting
of Austin’s estate; and (4) appointment of a special administrator for Austin’s estate.5
       In March 2013, Dilworth submitted a petition seeking the court’s declaration that
one-half of the assets of the trust be distributed to Austin’s estate, from there to benefit
Dilworth and the other six surviving nieces and nephews. Tiernan opposed Dilworth’s
petition.
       On April 17, 2013, the court filed an order interpreting paragraph B of the trust as
a residuary clause. Part B(1) fails because Saxton and Lyles both predeceased Austin.
The court concluded that by operation of section 21111, subdivision (b), the share
specified in part B(1) was to be distributed as directed in part B(2). Accordingly, the
failed share would pass to the surviving issue of Saxton and not to Dilworth and the other
surviving nieces and nephews of Austin.
       On September 5, 2013, the court entered final judgment in the case, dismissing
Dilworth’s “class action”6 petition and incorporating its prior order interpreting paragraph
B.
       Dilworth timely filed a notice of appeal.

       5
          The petition named as respondents Tiernan, as former conservator of the estate
and person of Austin, and her husband, Kevin Tiernan (Kevin), as trustee of the trust.
The 2002 amendment to the trust named Saxton as successor trustee, followed by Kevin
if she were unable to serve, followed by Tiernan. Kevin filed no response to the petition
and Tiernan’s response identified herself as former conservator and trustee. The probate
court’s order interpreting the trust document identified Kevin as the trustee, but noted that
it had been unable to ascertain whether he had been served with the petition. Thus, there
is confusion in the record as to whether Tiernan or Kevin is the current trustee. Given
that Tiernan identified herself as trustee in the probate court and Dilworth identifies her
as trustee in her opening brief on appeal, we refer to Tiernan as the trustee here. The
issue presented on appeal is independent of the identity of the trustee.
       6
         The probate court did not address Dilworth’s attempt to proceed as a class action
and neither do we.

                                               4
                                       DISCUSSION
       The sole issue on appeal is how the lapsed gift specified in part B(1) should be
distributed. We review de novo the interpretation of a trust. (Estate of Stoddart (2004)
115 Cal.App.4th 1118, 1130.) Following de novo review, we conclude that the probate
court’s analysis was thorough, competent, and correct.
I. Austin did not Intend to Benefit Dilworth and Unnamed Nieces and Nephews
       The Probate Code contains general provisions for the interpretation of wills, trusts,
and other instruments. (§ 21101 et seq.) “(a) The intention of the transferor as expressed
in the instrument controls the legal effect of the dispositions made in the instrument.
[¶] (b) The rules of construction in this part apply where the intention of the transferor is
not indicated by the instrument.” (§ 21102, subds. (a)-(b).)
       Although Dilworth bases the bulk of her argument on the provisions of section
21101 et seq., she also refers to Austin’s “manifest intent” and states: “[T]he trust
instrument speaks for itself: Austin . . . did not want [both shares of the trust estate] to go
to Saxton’s heirs.” If we agreed with Dilworth that the trust document shows that Austin
intended the gift specified in part B(1) to lapse if both Lyles and Saxton predeceased her,
and for that gift to then pass via intestacy provisions, then section 21101 et seq. would
not apply at all and our inquiry would be at an end. However, Dilworth reads too much
into the simple fact of a lapsed gift, which in this case could easily mean nothing more
than a failure on Austin’s part to contemplate that both Lyles and Saxton would
predecease her, or a lack of understanding that part B(2) might not be read to supply a
beneficiary of the gift in part B(1) should both Lyles and Saxton predecease her.
       In order to determine Austin’s intent with regard to part B(1) if both Lyles and
Saxton predeceased her, we may employ extrinsic evidence “to the extent otherwise
authorized by law.” (§ 21102, subd. (c).) Tiernan urges us to find Austin’s intent by
reference to Austin’s will and by reference to part B(2).
       The will and the trust together identify only two specific and two class
beneficiaries: Lyles, Saxton, the surviving children of Saxton, and the surviving issue of
Saxton. The will, executed at the same time as the amendment to the trust document,

                                              5
expressly states Austin’s intent to “omit[] to provide herein for any of my heirs.”
Whatever Austin’s intent concerning how the lapsed gift specified in part B(1) should be
distributed, we can safely conclude that it was not to benefit Dilworth and the other
unnamed nieces and nephews.
       Among the provisions of Austin’s will is: “. . . all of my remaining personal
effects shall be distributed by the Executors to my niece Cassandra Lyles. If my niece
Cassandra Lyles should die prior to distribution, then my personal effects shall instead go
to my friend, Virginia D. Saxton. If my friend Virginia D. Saxton should die prior to
distribution, then my personal effects shall go to her surviving children . . . .” Tiernan
argues that this indicates an intent that should Lyles and Saxton predecease her, the share
of the trust disposed of by part B(1) should go to Saxton’s issue. While the provision of
the will was limited to personal effects and Austin could have had a separate intent
concerning the contents of the trust, it does suggest an “apparent intent” (as the probate
court put it) for Saxton’s issue to take under part B(1) should both Lyles and Saxton
predecease her. We need not decide, however, whether this apparent intent is so well
established that we can declare it to be Austin’s actual intent, because, if not, application
of section 21111 forces the same result.
II. Application of Section 21111
       Both Dilworth and Tiernan rely on section 21111, but differ in their theories of
how its provisions apply to part B(1).
       Section 21111 provides, in relevant part: “(a) Except as provided in subdivision
(b) and subject to Section 21110,[7] if a transfer fails for any reason, the property is
transferred as follows:

       7
          Section 21110, subdivisions (a) and (b), provide that “if a transferree is dead
when the instrument is executed, or fails . . ., the issue of the deceased transferee take in
the transferee’s place in the manner provided in Section 240,” unless “the instrument
expresses a contrary intention or a substitute disposition.” Section 21110, subdivision
(c), specifies that “[a]s used in this section, ‘transferee’ means a person who is kindred of
the transferor or kindred of a surviving, deceased, or former spouse of the transferor.”
Here, Lyles was kindred of Austin, but her issue do not take in her place because the trust

                                               6
       “(1) If the transferring instrument provides for an alternative disposition in the
event the transfer fails, the property is transferred according to the terms of the
instrument.
       “(2) If the transferring instrument does not provide for an alternative disposition
but does provide for the transfer of a residue, the property becomes a part of the residue
transferred under the instrument.
       “(3) If the transferring instrument does not provide for an alternative disposition
and does not provide for the transfer of a residue, or if the transfer is itself a residuary
gift, the property is transferred to the decedent’s estate.
       “(b) Subject to Section 21110, if a residuary gift or a future interest is transferred
to two or more persons and the share of a transferee fails for any reason, and no
alternative disposition is provided, the share passes to the other transferees in proportion
to their other interest in the residuary gift or the future interest.
       “(c) A transfer of ‘all my estate’ or words of similar import is a residuary gift for
purposes of this section.”
       Dilworth’s theory is that paragraph B is not a residuary clause and instead
represents “two specific bequests, neatly dividing up the eleven specifically identified
pieces of property covered in the trust.” With this understanding of paragraph B of the
trust document, section 21111, subdivision (a)(3) applies because there is no residuary
clause, and the share disposed of by part B(1) is transferred to Austin’s estate, from
which Dilworth presumes it would be disposed of under provisions governing intestacy.
       Tiernan’s theory is that paragraph B is a residuary clause and therefore section
21111, subdivision (b) applies. Under that provision, the transfer of the share specified in
part B(1) fails, so it is distributed to the other transferees of the residuary gift, in this case
to the issue of Saxton, under part B(2).

document expresses a substitute disposition (Saxton). Saxton’s issue do not take under
section 21110 because Saxton was not kindred of Austin. Accordingly, section 21110
does not govern the failed transfer specified in part B(1).

                                                7
       Whether we accept Dilworth’s or Tiernan’s theory depends on whether paragraph
B is or is not a residuary clause. “A residuary clause is one by which the testator
disposes of property that remains after other devises are satisfied.” (14 Witkin, Summary
of Cal. Law (10th ed. 2005) Wills and Probate, § 243, p. 322.) “No particular language is
necessary; the clause is sufficient if it shows an intention that the surplus after payment of
other gifts shall go to some designated person or persons.” (Ibid.) What may seem to be
a residuary clause may be “spurious”: “A single gift of ‘all’ property does not constitute
a residuary clause.” (Id. at p. 323, citing Estate of Mathie (1944) 64 Cal.App.2d 767,
779.) However, section 21111, subdivision (c), renders such a single gift of “all”
property a residuary clause for purposes of that section. We make this observation
because paragraph B is the only actual bequest contained in the trust document.8
       Paragraph B begins with the words: “The Trustee shall distribute the remaining
balance of the Trust Estate in two equal shares as follows” (italics added). Because there
are no preceding dispositions of property in the trust, the effect of these words is to
transfer the entire trust estate (after payment of expenses and taxes). We can draw no
conclusion other than that the words used have “similar effect” to a disposition of “all my
estate” and, thus, that paragraph B is, for purposes of section 21111, a residuary clause.
       Dilworth’s argument that paragraph B is not a residuary clause and represents two
specific gifts, shares of the 11 properties identified as being part of the trust in 1990, is
unsupported. “A specific gift is a transfer of specifically identifiable property.”
(§ 21117, subd. (a).) Paragraph B refers to no specifically identifiable property. 9
Instead, it refers to whatever happened to be owned by the trust at the time of Austin’s
death. Because Austin had the power to dispose of properties in the trust or transfer other
properties to the trust during her lifetime, there was no reason to contemplate, when
       8
         The direction in paragraph A of Article VI that the trustee pay certain expenses
and taxes is not a bequest. (Estate of Mathie, supra, 64 Cal.App.2d at p. 779.)
       9
          We note that before amendment, the trust made a specific gift of all bank
accounts held by the trust to Lyles before disposing of the remainder in two shares. The
2002 amendment eliminated reference to the bank accounts and instead disposed of the
entire trust estate in two shares.

                                               8
Austin created the trust in 1990 or amended it in 2002, that upon her death the trust estate
would bear any necessary relationship to the original 11 properties to which the trust held
title.
         Dilworth argues that “Austin identified her trust estate with great specificity by
describing eleven individual properties in detail, and then divided these properties with
equal specificity.” Austin did no such thing. Austin simply listed the initial assets held
in trust in 1990; she was not attempting to describe what the trust estate would comprise
when she died 22 years later. Further, accepting Dilworth’s argument would seem to
mean that whenever a trust document identifies the properties to which the trust holds
title when it is created, the trust could not contain a residuary clause because any
reference to the remainder of the trust could refer only to the specifically identified
properties. That is not the law.
         Finally, Dilworth misreads the Law Revision Commission’s comments on section
21111, stating: “Indeed, the Law Revision Commission’s comment to [section] 21111
(which the probate court cited to approvingly) expressly relies upon Estate of Russell
[(1968) 69 Cal.2d 200, 215-216]; [] Estate of Kelleher [(1928) 205 Cal. 757, 760-761];
and Estate of Anderson [(1985) 166 Cal.App.2d 39, 42], three cases that predate the
current statutory scheme and that support the rule that if a bequest lapses, the property
must pass by intestacy laws, since that is manifestly the testator’s intent. The Law
Revision Commission’s reference to Estate of Russell is an especially telling one.”
         The Law Revision Commission’s comments to section 21111 state: “With respect
to a residuary devise, subdivision (b) abolishes the ‘no residue of a residue’ rule,
illustrated by Estate of Murphy [(1910) 157 Cal. 63, 106]. It preserves the change made
by former Section 6148 in the California case law rule that if the share of one of several
residuary devisees fails, the share passed by intestacy. [Citations to Estate of Russell,
Estate of Kelleher, and Estate of Anderson.]” (31 Cal. Law Revision Com. Rep. (2001)
p. 198.) Rather than approving of Estate of Russell, the comments note that the common
law rule on which Dilworth relies had been previously superseded by statute and that this
change was preserved in section 21111.

                                               9
       We conclude that paragraph B is a residuary clause and that, by operation of
section 21111, subd. (b), the failed bequest of part B(1) is to be distributed to Saxton’s
issue, by right of representation, as specified in part B(2). This conclusion is in accord
with Austin’s apparent intent and with the rule of interpretation that intestacy is to be
avoided: “The words of an instrument are to receive an interpretation that will give every
expression some effect, rather than one that will render any of the expressions
inoperative. Preference is to be given to an interpretation of an instrument that will
prevent intestacy or failure of a transfer, rather than one that will result in an intestacy or
failure of a transfer.”10 (§ 21120.)

       10
           Dilworth relies on Estate of Mathie, supra, 64 Cal.App.2d at page 781
[forfeiture provision cut off contesting husband, but, in absence of residuary clause,
intestacy resulted as to that portion, and he took share as heir], which Witkin cites for the
proposition that “[w]here the language of a will is clear and certain, the fact that the
testator failed to provide for a contingency does not justify application of the rule against
intestacy. It is improper to read into the will changes based on speculation about what
might have been the testator’s intent had the testator foreseen the development.” (14
Witkin, Summary of Cal. Law, supra, § 202, p. 274.) Whatever common law rules might
apply in other circumstances, statutory provisions compel the outcome here, as we have
discussed.

                                              10
                                   DISPOSITION
      The judgment of the probate court is affirmed.

                                               _________________________
                                               Brick, J.*

We concur:

_________________________
Kline, P.J.

_________________________
Richman, J.

      * Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

                                          11