Court Opinion

ID: 2678740
Source: CourtListenerOpinion
Date Created: 2014-06-17 19:01:24.797389+00
Date Added: 2024-06-11T13:10:49.660964
License: Public Domain

Filed 6/17/14 Estate of Dickson 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                                           NOT TO BE PUBLISHED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 This opinion has not been certified for publication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)
                                                            ----

Estate of ALVIN C. DICKSON, JR., Deceased.                                                   C074221

REGINALD BRYAN WATKINS,                                                           (Super. Ct. No. 34-2012-
                                                                                  00129243-PR-OP-FRC)
                   Petitioner and Appellant,

         v.

KENT R. ORR et al.,

                   Defendants and Respondents.

         In this case arising from the estate of decedent Alvin C. Dickson, Jr., appellant
Reginald Bryan Watkins appeals from an order declining to vacate a judgment previously
entered in favor of respondents Kent R. Orr, et al. (Orr), heirs of Dickson who managed
to reverse the escheat of Dickson’s estate to the State of California and have the estate
transferred to them. We shall affirm the trial court’s order denying the motion to vacate.

                                                             1
                                     BACKGROUND
        On September 10, 2012, Orr sued the State Controller to recover escheated
property. (See Code Civ. Proc., § 1355.)1 He alleged Dickson died intestate on
September 4, 2009, and that the San Bernardino County Superior Court had entered an
order of final distribution on February 14, 2012, declaring the estate escheated. Orr
alleged he was Dickson’s heir under the intestacy laws, being Dickson’s second cousin
once removed, and had learned of the San Bernardino case via an heir tracing company.
On October 18, 2012, the Sacramento Superior Court filed a judgment granting Orr’s
petition.
        On December 20, 2012, Watkins filed what was captioned as a petition to modify
the Sacramento County judgment, alleging he was a “paternal first cousin” of Dickson.
He alleged that, through another heir tracing service, he notified the State Controller of
his status as Dickson’s heir on September 10, 2012, but did not hear back until
October 22, 2012, when the State Controller advised him of the Sacramento County
judgment. Watkins argued that the State Controller was on notice of his claim and had a
duty to notify him of the Sacramento action, and the failure to do so justified relief, in the
form of vacating the judgment in favor of Orr, and entering a judgment in Watkins’s
favor. He also alleged that the State Controller improperly released the funds to Orr.
Watkins listed 17 first cousins he alleged collectively were entitled to Dickson’s estate in
preference to Orr’s claims.
        Orr opposed the motion, arguing the State Controller had a duty to distribute the
funds pursuant to the Sacramento County judgment, regardless of allegedly closer-in-
blood heirs, and alleging fatal defects in Watkins’s papers, including his failure to

_____________________________________________________________________
1   Further undesignated statutory references are to the Code of Civil Procedure.

                                              2
provide a section 1355 petition.2 The State Controller, too, opposed the motion, in part
echoing Orr’s opposition, and due to statutory immunity.
        Watkins’s reply emphasized a theory of extrinsic fraud by the State Controller,
and argued his petition complied with section 1355. For the first time, he pointed to an
October 15, 2012, e-mail by a State Controller employee to him, stating in part: “No
activity on this Estate except inquiries. A court order will be required for payment to be
made, funds are available until 4/2017.” This was in reply to an e-mail asking: “Dear
Penny [Gillman], [¶] When you have a moment would you please let me know if there
has been any claims on this estate?” Watkins characterized the e-mail reply as “an
affirmative false statement by the State Controller.”
        At a hearing on January 31, 2013, the trial court denied the petition to modify.
        On March 1, 2013, Watkins filed a petition captioned as a motion to vacate that
same judgment (filed on October 18, 2012). He replicated some arguments contained in
his prior motion, in pertinent part claiming extrinsic fraud by the State Controller.
        Orr and the State Controller separately opposed the motion to vacate. Watkins’s
reply again alleged he was misled by the e-mail.
        In partial opposition to the motion, the State Controller’s chief counsel filed a
declaration stating in part: “The only thing [Ms. Gillman] noted was that there were on-
line inquires and she indicated as much. Court proceedings are not entered into the
system and are not otherwise reflected in the system until a court order issued.” Mr.
Chivaro had been employed by the State Controller for 32 years, and has been its chief
counsel for 23 years, thereby showing the basis of his knowledge.
        After a hearing on May 5, 2013, the trial court denied the motion in part as
follows: “Mr. Watkins has not identified any legal grounds to invalidate the judgment.

_____________________________________________________________________
2   We explain the section 1355 procedure post.

                                               3
The State Controller had no legal duty to give notice to Mr. Watkins, his counsel or any
heir hunter service of the petition filed by Kent Orr. In addition the State Controller is
immune from suit once a claim is paid. [Citation.] Finally, Mr. Watkins cannot establish
that the judgment was the result of extrinsic fraud because there was no confidential or
fiduciary relationship between the Controller and Mr. Watkins.”
       Watkins timely appealed. The appeal lies. (9 Witkin, Cal. Procedure (5th ed.
2008) Appeal, § 200, pp. 275-277.) After Watkins filed his opening brief, the appeal was
dismissed by stipulation as to the State Controller. Watkins’s reply brief does not
acknowledge this dismissal, but reiterates arguments previously made.
                                      DISCUSSION
       Watkins contends the trial court erred in denying his motion to vacate, arguing
excusable mistake or extrinsic fraud, caused by the State Controller’s e-mail, which
induced Watkins “to not appear in court.”
                                              I
                          The Law Regarding Escheated Estates
       The section 1355 procedure has been summarized as follows:

              “Probate and escheat proceedings are in rem, that is, seek to affect the
       interests of all persons in certain property. [Citations.] In such proceedings,
       constructive notice authorized by statute satisfies the requirements of due process.
       [Citation.]

                “Thus, with regard to probate proceedings, ‘[b]y giving the notice
       prescribed by the statute, the entire world is called before the court, and the court
       acquires jurisdiction over all persons for the purpose of determining their rights to
       any portion of the estate . . . .’ [Citation.] In probate proceedings, ‘ . . . one who
       lives in another state, or in a foreign country, and never in fact received any notice,
       is still bound if the statutory notice was given. [Citations.]’ [Citation.]
       Furthermore, in Mannheim v. Superior Court [(1970) 3 Cal. 3d 678,] 692, our
       Supreme Court applied these principles to escheat proceedings, stating that when
       statutory escheat procedures are followed, ‘[u]nknown heirs who fail to come
       forward . . . cannot later complain of the distribution to other known heirs after it
       has become final . . . . [Citations.]’ [Citation.]

                                              4
              “In the present case, the pertinent statutes authorize constructive notice to
       unknown heirs. The Probate Code permits a public administrator to take control
       of a decedent’s estate subject to loss, injury, waste, or misappropriation [citation],
       and to initiate probate proceedings by petitioning for appointment as personal
       representative of the estate [citation]. Notice of the petition to unknown heirs is
       made by publication. [Citations.]

              “[Statutes authorize] the Attorney General to commence a proceeding to
       obtain a judgment that the state is entitled to unclaimed property by reason of an
       escheat. Following the filing of a petition by the Attorney General, the trial court
       must publish in a pertinent newspaper an order requiring interested persons to
       appear in the action, and file a copy of the order with the papers applicable to the
       estate. [Citation.] After publishing the order, the trial court acquires jurisdiction
       over the property and the rights of all claimants. [Citation.]

               “[S]ection 1355 ‘allows a potential heir five years from the state’s initial
       reception of an escheated estate to file a claim to recover the estate.’ [Citation.]
       With respect to notice, section 1355 requires only that petitioners serve their
       petitions on the Attorney General, and in cases involving real estate, record notices
       in the relevant county. [Citation.] Once the trial court determines that petitioners
       are heirs, they are entitled to immediate distribution of the escheated estate to free
       the state from the burden of managing the estate.” (Parage v. Couedel (1997) 60
       Cal.App.4th 1037, 1042-1043 (Parage).)
                                              II
                                          Analysis
       It was Watkins’s burden, as the claimant, to show entitlement to relief in his
motion to vacate the judgment transferring Dickson’s estate to Orr and the other
respondents. (See Parage, supra, 60 Cal.App.4th at p. 1041.) He attempted to do so by
claiming a lack of actual notice of that court proceeding, and blaming the State Controller
for misleading him about its existence.
       We conclude the trial court properly found no extrinsic fraud.

                                              5
              “ ‘[Extrinsic] fraud is a broad concept that “[tends] to encompass almost
       any set of extrinsic circumstances which deprive a party of a fair adversary
       hearing.” ’ [Citations.] The clearest examples of extrinsic fraud are cases in
       which the aggrieved party is kept in ignorance of the proceeding or is in some
       other way induced not to appear. [Citation.] In both situations the party is
       ‘fraudulently prevented from presenting his claim or defense.’ [Citations.]

              “The courts are particularly likely to grant relief from a judgment where
       there has been a violation of a special or fiduciary relationship.” (Estate of
       Sanders (1985) 40 Cal.3d 607, 614-615.)
       Under this legal standard, Watkins cannot prevail. First, the State Controller is no
longer a party, and Watkins points to no statute or precedent that makes it a “fiduciary”
towards escheat claimants, nor any statute requiring it to give special notice to them. (Cf.
Estate of Jenanyan (1982) 31 Cal.3d 703, 708 [noting that a Probate Code provision
required special notice be given to those who asked for it].)
       Second, the State Controller’s e-mail to Watkins did not reasonably cause Watkins
to fail to take steps to protect his own interests. “Reliance is a key element of [extrinsic]
fraud. [Citation.] ‘[An] inference of reliance arises if a material false representation was
made to persons whose acts thereafter were consistent with reliance upon the
representation.’ ” (Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 292.) Reliance must
be objectively reasonable to be of any legal effect. (See, e.g., Cruz v. Fagor America,
Inc. (2007) 146 Cal.App.4th 488, 507 [default judgment case].)
       Watkins interprets the response “no activity except inquiries” to mean that no
court actions were pending, instead of drawing the more obvious conclusion, which was
that the State Controller’s records reflected no “activity” except for inquiries. To the
extent Watkins or his counsel assumed the State Controller has access to all state probate
records, or at least in the relevant counties subject to section 1355 actions, such
assumption was not reasonable. The chief counsel’s declaration regarding the State
Controller’s records stands factually unrebutted on this record, and reflects common
sense: No reasonable person would interpret the e-mail to be a substitute for a routine

                                              6
court records search. In ruling on a motion to vacate, a trial court has the power to weigh
evidence and find facts, which must be reviewed for substantial evidence on appeal.
(See, e.g., Uriarte v. United States Pipe & Foundry Co. (1996) 51 Cal.App.4th 780, 789-
791.) There is no evidence supporting Watkins’s claims that the e-mail meant anything
but that the State Controller’s own records did not reflect competing claimants to the
escheated estate.
       Watkins points out that escheat actions can be filed in any county where the
Attorney General maintains offices, specifying Los Angeles, San Francisco, San Diego,
and Sacramento counties, although the Attorney General also has offices in Alameda and
Fresno counties. (§§ 401, subd. (1), 1355.) Watkins asserts it would be “impossible” to
check filings “in all those jurisdictions” to look for competing escheat cases. We
disagree. Checking six county courts, online or using legal support companies, does not
seem particularly onerous. More importantly, Watkins points to no statute or evidence
showing the State Controller receives such information.
       Watkins concedes he did not seek relief due to excusable neglect. (§ 473, subd.
(b).) Assuming he meant to seek such relief, it was within the discretion of the trial court
to deny it, inasmuch as the trial court found interpreting the e-mail as Watkins did was
unreasonable. That Watkins did not receive personal notice of the relevant action is
insufficient to establish relief. (See Parage, supra, 60 Cal.App.4th at p. 1044 [“when an
executor gives constructive notice to unknown heirs in accordance with the probate
statutes, lack of personal notice does not amount to extrinsic fraud or mistake”].) Nor
does Watkins allege that anything Orr did induced Watkins to do or not do anything.
Therefore, Watkins did not establish extrinsic fraud as to Orr. (Cf. Estate of McGuigan
(2000) 83 Cal.App.4th 639, 642-643, 649-652 [where section 1355 petitioner knew about
but withheld information about a closer heir, extrinsic fraud demonstrated].) As we have
said before, the statutory scheme creates a “ ‘first come, first served’ policy” that may
seem harsh because in some cases closer-in-blood heirs will lose out to more distant

                                             7
relatives, but that is a lawful result, so long as the section 1355 petitioners have acted
fairly in listing all potential heirs known to them. (McGuigan, pp. 647-648.) So far as
this record shows, Orr did so.
       Accordingly, we affirm the order denying the motion to vacate.
                                       DISPOSITION
       The order denying the motion to vacate the judgment is affirmed. Watkins shall
pay Orr’s costs of this appeal. (Cal. Rules of Court, rule 8.278.)

                                                         DUARTE                 , J.

We concur:

      RAYE                   , P. J.

      MURRAY                 , J.

                                              8