Court Opinion

ID: 6105323
Source: CourtListenerOpinion
Date Created: 2022-01-20 19:02:58.984252+00
Date Added: 2024-06-11T08:53:47.918257
License: Public Domain

Filed 1/20/22 Estate of Kelly CA2/3

  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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(a). This opinion has
not been certified for publication or ordered published for purposes of rule 8.1115(a).

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION THREE

Estate of Eugene C. Kelly,                                      B307908
Deceased.

KERRY KELLY NOVICK et al.,                                      Los Angeles County
                                                                Super. Ct. No.
      Petitioners and Respondents,                              17STPB10219

      v.

PATRICIA WARD KELLY, as
Trustee, etc.,

      Objector and Appellant.

     APPEAL from an order of the Superior Court of Los
Angeles County, Daniel Juarez, Judge. Affirmed.
     Harder, Henry L. Self III and Dilan A. Esper for Objector
and Appellant.
     Marshall & Associates, John A. Marshall and Rodger C.
Jensen for Petitioners and Respondents.
            _______________________________________
                       INTRODUCTION

      Patricia Ward Kelly (Mrs. Kelly), as trustee of the Eugene
C. Kelly Image Trust (Image Trust), appeals from an order
assessing monetary sanctions against her in connection with her
unsuccessful motion for a protective order. The probate court
found the discovery at issue was reasonably calculated to lead to
the discovery of admissible evidence and did not seek personal
financial information, denied Mrs. Kelly’s motion for a protective
order, and assessed $6,300 in sanctions against her. We affirm
the sanctions order.

       FACTS AND PROCEDURAL BACKGROUND

      Eugene C. Kelly (Kelly) was known for his performances in
films such as Singin’ in the Rain (Metro-Goldwyn-Mayer 1952)
and An American in Paris (Metro-Goldwyn-Mayer 1951). In 1992,
Kelly created the Eugene C. Kelly Family Trust which upon his
death called for trust property to be divided into three separate
portions. At issue here is the property held by the Image Trust
consisting of the following: all rights to Kelly’s name, image, and
likeness; all rights under collective bargaining agreements
regarding any artistic, literary, or intellectual work or
performance created in whole or in part by Kelly; and any other
rights of publicity recognized or created upon Kelly’s death.
      Kelly died in 1996. Mrs. Kelly is his widow. Kerry Kelly
Novick, Timothy J. Kelly, and Bridget J. Kelly (collectively, the
children) are Kelly’s children and beneficiaries of the Image
Trust. As such, the children are entitled to income generated by
the Image Trust. In addition to being a beneficiary of the Image
Trust, Mrs. Kelly has been its trustee since 1996. As trustee,
Mrs. Kelly has a duty to keep the children reasonably informed of

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her administration of the Image Trust by providing them with
accountings and a summary of business activities and efforts to
generate income.
       In 2017, the children petitioned to remove and surcharge
Mrs. Kelly as trustee of the Image Trust under Probate Code
sections 17200, 16420, and 15642. They allege Mrs. Kelly
“breached and continues to breach her duty as Trustee under
California Probate Code section 16400, as well as her fiduciary
duty to” the children by failing “to allow [them] access to [Image]
Trust records or [Image] Trust information as required under the
Code.” The children also allege that “as a proximate result of
[her] breach of trust and breach of fiduciary duty, [they] have
been damaged by a loss or depreciation in value of the trust
estate in an amount according to proof and have been impaired in
their ability to evaluate and assert their rights in the estate.”
According to the children, in 2011 Mrs. Kelly formed a
corporation—The Gene Kelly Legacy, Inc.—which competes with
the Image Trust and allows Mrs. Kelly to personally retain
income which rightfully belongs to the Image Trust.
       In early 2020, the children served Mrs. Kelly with discovery
requests. Relevant here, they sought documents relating to
communications between Mrs. Kelly and Warner Bros. about the
use of film clips or other intellectual property by The Gene Kelly
Legacy, Inc., and receipt of income by this corporation for the use
of Kelly’s name, image, and likeness. In Special Interrogatory No.
12, Mrs. Kelly was instructed to “[i]dentify each performance for
which The Gene Kelly Legacy, Inc. received any compensation
from 2011 to the present, and state the date and amount of such
compensation.”

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       In March 2020, Mrs. Kelly filed a motion for a protective
order to shield her from responding to the discovery requests.1
She also sought sanctions against the children in the amount of
$7,560 for the reasonable costs and attorney fees incurred by her
for these proceedings. Mrs. Kelly argued disclosure of the
requested documents and information would violate her and
Warner Bros.’ rights to privacy. She also argued the propounded
discovery was not relevant to the case and the children had failed
to provide Warner Bros. with sufficient notice to allow the studio
to object to the disclosure.2 Finally, Mrs. Kelly disputed the
children’s assertion that The Gene Kelly Legacy, Inc. is actively
promoting and engaging in activities which would have generated
income for the Image Trust.
       The children opposed the motion and requested sanctions
against Mrs. Kelly in the amount of $6,300 for attorney fees
incurred in opposing the motion under Code of Civil Procedure
sections 2030.090, subdivision (d), and 2031.060, subdivision (h).
They argued they were not seeking Mrs. Kelly’s private financial
information such as her tax returns. Instead, the children sought
information regarding productions related to their father whose
image is the subject of the Image Trust. They also contended Mrs.
Kelly’s formation of the competing business of The Gene Kelly

1Throughout the motion for a protective order, Mrs. Kelly referenced
the children’s pending motion to compel responses to demand for
documents. The children’s motion to compel, and Mrs. Kelly’s
opposition to that motion, are not in the appellate record.
2 Mrs. Kelly contended, without any supporting evidence or
documentation, that she was not at liberty to divulge the terms of any
licenses with Warner Bros. because they are the studio’s confidential
proprietary information.

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Legacy, Inc. violated her duty of loyalty and her duty to avoid a
conflict of interest with the Image Trust.
       After hearing argument, and “carefully balanc[ing] the
right of privacy against the need for disclosure[,]” the court
denied Mrs. Kelly’s motion. The court indicated that The Gene
Kelly Legacy, Inc. entity appeared to be competing to some extent
in terms of the funds that would otherwise be available to the
Image Trust. The court also explained that the discovery requests
did not seek Mrs. Kelly’s personal financial information and were
reasonably calculated to lead to the discovery of admissible
evidence. Finding no substantial justification for the motion, the
court assessed monetary sanctions of $6,300 against Mrs. Kelly.
This appeal followed.

                           DISCUSSION

      We do not review the probate court’s order denying the
protective order on its own merits. The only issue before us is the
sanctions order, and we consider the merits of the discovery
dispute only to the extent necessary to resolve the appeal of the
sanctions ruling.3

3 The denial of Mrs. Kelly’s motion for a protective order is not
appealable; review of that order is available solely by way of a petition
for writ relief. (Dodge, Warren & Peters Ins. Services, Inc. v.
Riley (2003) 105 Cal.App.4th 1414, 1421.) Mrs. Kelly filed such a
petition, and this court summarily denied it on October 22, 2020 (case
No. B307839). The order is appealable insofar as it imposes a monetary
sanction exceeding $5,000. (Rail-Transport Employees Assn. v. Union
Pacific Motor Freight (1996) 46 Cal.App.4th 469, 475.)

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1.    The court did not abuse its discretion in imposing a
      monetary sanction against Mrs. Kelly.
       Code of Civil Procedure section 2030.090, subdivision (d),
and section 2031.060, subdivision (h), require a trial court to
impose a monetary sanction against any party who
unsuccessfully makes a motion for a protective order “unless it
finds that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of
the sanction unjust.” Mrs. Kelly, on the losing end of the
discovery dispute, had the burden to prove she acted with
substantial justification. (Doe v. United States Swimming,
Inc. (2011) 200 Cal.App.4th 1424, 1435.) “Substantial
justification” has been held to mean a justification that is well-
grounded in both law and fact. (Diepenbrock v. Brown (2012) 208
Cal.App.4th 743, 747.) We review the court’s sanctions order
under the deferential abuse of discretion standard. (Doe, at p.
1435.)
       On this record, the court did not abuse its discretion in
finding that Mrs. Kelly acted without substantial justification in
making her motion for a protective order. First, she provides no
supporting citations to the record, and offered no such evidence in
the lower court, to support her contention that she “reasonably
believed that, by nonetheless demanding an entire decade of data
and documents relating to her personal project, The Gene Kelly
Legacy, Inc. … including especially ‘all DOCUMENTS which
refer, reflect or relate to receipt of income by’ any of them—[the
children] significantly expanded the scope of their requested
discovery far beyond the Image Trust at issue and well into Mrs.
Kelly’s own private life.” In fact, she did not submit a declaration
in support of her motion for a protective order. As such, there was

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no evidence before the court that explained Mrs. Kelly’s
relationship with The Gene Kelly Legacy, Inc. entity, her role in
administering the Image Trust, or that supported her contention
that The Gene Kelly Legacy, Inc. did not compete with the Image
Trust. Second, there was no evidence before the court to support
Mrs. Kelly’s contention that she sought a protective order to
protect Warner Bros.’ privacy rights or confidential information.
As noted by the children on appeal, Mrs. Kelly did not support
this claim with any documentary evidence such as a signed
confidentiality agreement. Indeed, the only evidence submitted
by Mrs. Kelly in support of her motion was the declaration of her
attorney—and that declaration only authenticated the challenged
discovery requests and meet and confer correspondence, and
provided the basis for Mrs. Kelly’s $7,560 sanctions request.
Accordingly, Mrs. Kelly’s argument that “it would still be unjust
to impose sanctions where a position was taken in discovery to
protect the rights of [nonparty Warner Bros.]” is meritless. Third,
and as noted by the court, the discovery requests were relevant
and within the scope of the pleadings because the petition alleged
the children were damaged by a loss or depreciation in value of
the Image Trust as a result of Mrs. Kelly’s breach of trust and
breach of fiduciary duty.
2.    Mrs. Kelly did not show that $6,300 is an unreasonable
      amount.
       Finally, we reject Mrs. Kelly’s contention that the amount
of sanctions awarded to the children, $6,300, was an abuse of
discretion. Arguably, Mrs. Kelly forfeited this argument by
failing to object to the amount requested in the lower court. In
any event, the record amply supports the amount awarded by the
court: the children’s attorney submitted a declaration explaining

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that she anticipated spending 14 hours at a billing rate of $450
per hour in preparing the opposition and arguing against Mrs.
Kelly’s motion for a protective order. In sum, the court did not
abuse its discretion in assessing a monetary sanction of $6,300
against Mrs. Kelly.

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                           DISPOSITION

      The order is affirmed. Kerry Kelly Novick, Timothy J.
Kelly, and Bridget J. Kelly shall recover their costs on appeal.

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                           LAVIN, J.
WE CONCUR:

      EDMON, P. J.

      LIPNER, J.*

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

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