Court Opinion

ID: 2658229
Source: CourtListenerOpinion
Date Created: 2014-03-28 00:03:09.899514+00
Date Added: 2024-06-11T11:09:06.215215
License: Public Domain

Filed 3/27/14 Jaffer v. Klems CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

RASHIDA JAFFER,

     Plaintiff and Appellant,                                          G048285

         v.                                                            (Super. Ct. No. A221174)

ROBERT V. KLEMS as Trustee, etc.,                                      OPINION

     Defendant and Respondent.

                   Appeal from a judgment of the Superior Court of Orange County, Mary
Fingal Shulte, Judge. Affirmed.
                   Rashida Jaffer in pro. per., for Plaintiff and Appellant.
                   Kendrick, Jackson & Kearl and C. Bennett Jackson, Jr., for Defendant and
Respondent.

                                             *               *               *
              Attorney Rashida Jaffer filed an amended petition for attorney fees seeking
payment from a trust for legal work she performed on behalf of a trust beneficiary. The
trial court sustained the defendant trustee’s demurrer to the amended petition without
leave to amend. Jaffer moved unsuccessfully for reconsideration of the ruling on the
demurrer, and then filed the instant appeal from the order sustaining the demurrer without
leave and from the order denying reconsideration. Construing the appeal to be taken
from the subsequently entered final judgment on demurrer, we affirm.1
                 FACTUAL AND PROCEDURAL BACKGROUND
              In 1986, Ann I. Sargent (Ann)2 established an inter vivos trust (the Trust),
naming herself the sole trustee and beneficiary. The Trust stated Ann’s daughter, Diane
Sargent (Diane), would become income beneficiary upon Ann’s death. In July 1996, Ann
resigned as trustee and her longtime accountant, defendant Robert V. Klems, became
successor trustee.
              Ann lived with and financially supported Diane until the elderly Ann
needed to move to a care facility. Diane then remained in Ann’s home.
              In September 2003, Ann’s sister, Marjorie Cooke, filed a petition for
conservatorship of Ann’s person, seeking the appointment of JoAnn Young, a
professional fiduciary as conservator. Diane retained Jaffer to oppose Cooke’s petition
and to file a competing petition seeking to have Diane appointed Ann’s conservator. On
April 30, 2004, the parties agreed at a mandatory settlement conference to Young’s
appointment as conservator for Ann.

       1 Appellant Jaffer filed a request for judicial notice as to certain documents from
the superior court file she omitted from her designation of the record on appeal. We
deem the request to be a motion to augment the record, and grant the motion.

       2For the sake of clarity, family members Diane and Ann Sargent are identified
throughout this opinion by their first names. No disrespect is intended.

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               At some point in the conservatorship proceedings, the trial court on its own
motion appointed Kim Hubbard as attorney for Ann. On May 21, 2004, Hubbard filed a
petition to modify the Trust. On August 25, 2004, the trial court granted Hubbard’s
petition, modifying paragraph three of the Trust to require the trustee to pay for Diane’s
“shelter” and “reasonable monthly utilities,” either by using the Trust income that
remained after paying Ann’s monthly expenses, or by invading the Trust principal if the
income did not suffice.
               In November 2004, Klems filed an unlawful detainer action to remove
Diane from Ann’s home. Apparently Klems believed maximum value from the house,
the Trust’s largest asset, could be realized by selling the property and moving Diane into
an apartment. Jaffer defended Diane in the unlawful detainer action and in March 2005
succeeded in having it consolidated with the conservatorship proceeding. Around this
time frame, Jaffer also filed on Diane’s behalf a “petition for substituted judgment” and a
petition to appoint Diane conservator of Ann’s person, though she eventually withdrew
the latter petition.
               On May 19, 2005, the trial court granted Diane’s petition for substituted
judgment and specifically modified the Trust “to provide for the ongoing support and
maintenance of Diane Sargent during the lifetime of the conservatee . . . .” To that end,
the trial court ordered trustee Klems to do the following: procure and rent a nearby
apartment for Diane and pay her moving expenses, clean and fix Ann’s home and rent it
out, pay Diane $500 monthly “‘for necessities’” and pay Diane’s health and car insurance
premiums as well as her utilities. The trial court ordered the trustee to continue making
these expenditures for Diane’s benefit for 23 months or until Ann’s death, “whichever
shall first occur,” but also stipulated the payments “may not be terminated without prior
court approval.”

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               Ann died in July 2009.3 Upon Ann’s death, Diane became income
beneficiary of the Trust under paragraph five.
               On August 28, 2012, more than seven years after she last represented
Diane, Jaffer filed a petition for attorney fees in the conservatorship proceeding, seeking
payment from the Trust for the legal work she did for Diane between September 2003
and May 2005. Specifically, Jaffer sought a total of $31,000 for her services in regard to
the “competing” conservatorship petitions, the unlawful detainer action, and the two
“modifications” of the Trust, all of which work was concluded by May 2005. The
petition for attorney fees did not state the legal basis for Jaffer’s demand that the Trust
pay these fees. Jaffer signed the attached verification of the petition, identifying herself
as the petitioner.
               Klems demurred to the petition for fees on three grounds. Klems asserted
Jaffer lacked legal capacity to petition the court for fees because she failed to allege “she
was the attorney for the former conservator, the conservatee, trustee, or . . . the then
current income beneficiary.” Klems also demurred on the ground Jaffer failed to allege
the existence of a formal retainer agreement obligating Diane to pay Jaffer’s legal fees.
Finally, Klems asserted the pleading is uncertain because it failed to state “why and how”
Klems was obligated to pay Jaffer’s fees for “services rendered to a third party.”
               The trial court sustained the demurrer with leave to amend within 15 days.
Jaffer timely filed an amended petition on November 15, 2012. The only new facts
added by the amended pleading were those relating to Diane’s formal retention of Jaffer
as her attorney in late 2003.

       3  The appellant’s opening brief says Ann died on July 6, 2009, but the
respondent’s brief says she died July 24, 2009; neither brief provides a record reference
for the date cited.

                                              4
              Klems demurred to the amended petition on two of the same grounds
asserted against the original petition: Jaffer’s lack of capacity to petition the court for
fees, and uncertainty as to “why and how” Klems was obligated to pay Jaffer’s fees.
              Jaffer opposed the demurrer asserting that it was untimely. On the merits,
Jaffer contended she had legal capacity to petition for fees because her client was “a
beneficiary” of the Trust.
              On January 31, 2013, the trial court sustained the demurrer without leave to
amend. Jaffer moved unsuccessfully for reconsideration of the ruling on the demurrer,
and then filed the instant appeal.
                                       DISCUSSION
1. Appealablilty
              This appeal was taken from the trial court’s January 31, 2013 order
sustaining the demurrer without leave to amend and the order denying reconsideration of
the ruling on demurrer. The appellate record initially contained no judgment of
dismissal. On May 15, 2013 this court dismissed the appeal, because generally speaking,
an order sustaining a demurrer “is neither appealable per se nor as a final judgment.”
(Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 920.)
              Thereafter, Jaffer filed a motion to vacate the dismissal and reinstate the
appeal, together with a signed copy of a “final judgment on demurrer” file stamped by the
trial court on June 3, 2013. On June 11, 2013 this court granted that motion and, as a
result, the final judgment is now part of the appellate record. Under these circumstances,
we exercise our discretion and construe the appeal to be taken from the final judgment.
2. Standard of Review
              On appeal from a dismissal after demurrer, our sole task is to determine as
a matter of law whether the complaint states a cause of action. (People ex rel. Lungren v.
Superior Court (1996) 14 Cal.4th 294, 300; Moore v. Regents of University of
California (1990) 51 Cal.3d 120, 125.) In reviewing the sufficiency of the complaint, we

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treat the demurrer as admitting all properly pleaded material facts, but not contentions,
deductions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
We also consider matters subject to judicial notice. (Ibid.) Standing is an issue of law
subject to our independent review. (Bilafer v. Bilafer (2008) 161 Cal.App.4th 363, 368.)
              “[W]hen [a demurrer] is sustained without leave to amend, we decide
whether there is a reasonable possibility that the defect can be cured by amendment: if it
can be, the trial court has abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm.” (Blank, supra, 39 Cal.3d at p. 318.) The burden of
proving such reasonable possibility rests squarely on the appellant. (Schifando v. City of
Los Angeles (2003) 31 Cal.4th 1074, 1081.)
3. The Demurrer Was Not Untimely
              Jaffer contends the trial court erred in refusing to overrule the demurrer on
the ground of untimeliness. Jaffer asserts she served the amended petition on Klems on
November 8, 2012, and the statutory deadline for filing a demurrer to the new pleading
was 30 days from service, or December 8, 2012. (Code Civ. Proc., § 430.40.) Jaffer
contends Klems missed that deadline by six days when he filed his demurrer on
December 14, 2012. The argument lacks merit.
              The first problem with Jaffer’s argument is it lacks support in the record.
The clerk’s transcript does not contain a file-stamped copy of the amended petition
purportedly served on Klems on Novemer 8, 2012. Instead, the record contains only a
“corrected” version of the amended pleading that was served and filed on November 15,
2012. The December 14 demurrer to this “corrected” version of the amended pleading
was timely.
              Jaffer’s argument fails for the additional reason that trial courts have
discretion to consider untimely demurrers. (See McAllister v. County of Monterey (2007)
147 Cal.App.4th 253, 281-282 [“‘There is no absolute right to have a pleading stricken
for lack of timeliness in filing where no question of jurisdiction is involved, and where,

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as here, the late filing was a mere irregularity [citation]; the granting or denial of the
motion is a matter which lies within the discretion of the court’”]; Jackson v. Doe (2011)
192 Cal.App.4th 742, 749-750.) Consequently, even if Jaffer were correct in
characterizing the demurrer as six days late, Jaffer fails to establish the trial court abused
its discretion in considering the demurrer.
4. The Trial Court Properly Sustained the Demurrer Without Leave Because Jaffer
Lacked Standing to File the Petition
              Though Jaffer’s argument on the merits is a bit difficult to follow, it can be
summed up essentially as this: The amended petition alleged Klems violated his
fiduciary duties as trustee (to follow the terms of the Trust, to account). As beneficiary
under the Trust, Diane had standing to sue Klems for these breaches of trust, and is
entitled to her attorney fees in pursuing her rights under the Trust. Because Diane is
entitled to recover her attorney fees in litigating her rights under the Trust, Jaffer should
be allowed to step into Diane’s shoes and sue for her fees directly: To deny Jaffer her
fees would be a “manifest injustice.”
              The fundamental flaw in Jaffer’s argument is the contention Diane had
standing to sue the trustee for breach of fiduciary duties during the period Jaffer
represented her (Sept. 2003 to May 2005) –– a time when Ann, the trustor/settlor, was
still alive. As we explain below, the beneficiary of a revocable inter vivos trust has no
legally enforceable rights against the trustee during the trustor’s lifetime.
              In Estate of Giraldin (2012) 55 Cal.4th 1058 (Giraldin), the California
Supreme Court explained the rule as follows: “A revocable trust is a trust that the person
who creates it, generally called the settlor, can revoke during the person’s lifetime. The
beneficiaries’ interest in the trust is contingent only, and the settlor can eliminate that
interest at any time. When the trustee of a revocable trust is someone other than the
settlor, that trustee owes a fiduciary duty to the settlor, not to the beneficiaries, as long as
the settlor is alive. During that time, the trustee needs to account to the settlor only and

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not also to the beneficiaries. When the settlor dies, the trust becomes irrevocable, and the
beneficiaries’ interest in the trust vests.” (Giraldin, at p. 1062, fn. omitted.) In other
words, the beneficiaries gain standing to sue under the trust only upon the trustor’s death.
              Importantly, Giraldin recognized a narrow exception to the above rule.
The high court held that after the settlor has died, beneficiaries can sue the trustee for a
breach of fiduciary duty owed to the settlor “to the extent that breach harmed the
beneficiaries.” (Giraldin, supra, 55 Cal.4th at p. 1076.) The high court explained a
breach during the settlor’s life “can substantially harm the beneficiaries by reducing the
trust’s value against the settlor’s wishes.” (Id. at p. 1062.)
              The exception recognized in Giraldin is inapplicable here, however,
because Jaffer’s petition does not allege any breach of duty owed to the settlor during her
lifetime. Instead, Jaffer’s petition alleges Klems breached duties purportedly owed to
Diane during Ann’s lifetime. Under Giraldin, Diane had no enforceable rights under the
Trust until 2009 when Ann died and the Trust became irrevocable. Because Diane had
no legal rights to assert against the trustee, there were no shoes for Jaffer to step into.
              This result does not change because Ann was the subject of a
conservatorship. (See Johnson v. Kotyck (1999) 76 Cal.App.4th 83, 85 [beneficiary of
inter vivos trust was not entitled to receive trust accountings while trustor was under care
and custody of court-appointed conservator, as trust remained revocable despite infirmity
of trustor and ensuing conservatorship, and beneficiary had no right to accounting for a
revocable trust].)
              The trial court properly sustained Klems’s demurrer to the amended
petition because Jaffer lacked standing to assert the attorney fees claim. Moreover, the
trial court acted within its discretion in denying further leave to amend because Jaffer
made no showing as to how she could successfully plead her claim.

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5. Jaffer’s Request for Sanctions Lacks Merit
              Jaffer also renews on appeal a request for sanctions against Klems she first
made in her motion for reconsideration in the trial court. In that motion, Jaffer argued the
trial court should sanction Klems under Code of Civil Procedure section 128.6 for
“dishonesty” in denying Diane was a beneficiary “just to deprive Petitioner of her fees . .
. .” Jaffer now goes further, contending Klems committed constructive fraud and actual
fraud against the trial court by asserting in his demurrer that Diane had only “limited
benefits” under the Trust during Ann’s lifetime, and thus was not entitled to attorney fees.
The request for sanctions has no merit.
              As explained above, during Ann’s lifetime, Diane had no legally
enforceable rights under the Trust, because Ann could have revoked or changed the Trust
at anytime. Klems’s assertion that Diane had only “limited benefits” under the revocable
trust was not “dishonest.” It was and is a correct statement, and thus not sanctionable.
                                     DISPOSITION
              The judgment is affirmed. Respondent is entitled to his costs on appeal.

                                                 THOMPSON, J.

WE CONCUR:

O’LEARY, P. J.

IKOLA, J.

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