Court Opinion

ID: 2681439
Source: CourtListenerOpinion
Date Created: 2014-06-30 22:05:31.060592+00
Date Added: 2024-06-11T13:12:07.380857
License: Public Domain

Filed 6/30/14 Westamerica Bank v. Schultz CA2/1
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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(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 This opinion has not been certified for publication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

                                    SECOND APPELLATE DISTRICT

                                                  DIVISION ONE

WESTAMERICA BANK,                                                      B249522, B249524, B250285

                  Plaintiff and Respondent,
                                                                       (Los Angeles County
                                                                       Super. Ct. Nos. KP010150,
           v.                                                          KP009938, KP009736)

STANLEY R. SCHULTZ,
                   Defendant and Appellant.

         APPEALS from orders of the Superior Court of Los Angeles County. Thomas C.
Falls, Judge. Orders reversed and remanded with directions.

                                                         ______

         Law Offices of William E. Crockett, William E. Crockett and Kenneth C. Bounds
for Defendant and Appellant.

         No appearance for Plaintiff and Respondent.

                                                         ______
       Stanley R. Schultz is the chief executive officer of IBAR Settlement Company
(IBAR), which provides advisory services to trustees of special needs trusts for
substantially disabled children and adults. IBAR’s services include assisting with
Medi-Cal and social security benefits, coordinating reimbursements, evaluating
proposed equipment purchases, reviewing matters with caregivers, making home visits,
assessing long-term care needs and facilitating communication between the beneficiary’s
family, the trustee and health care providers.
       Since the 2003 inception of the three trusts in these appeals,1 IBAR has been the
independent member of the trust advisory committee. Although subject to judicial
review, each court-approved trust authorized the trustee to pay an independent member
of the trust advisory committee, here IBAR, at an annual rate of .75% of the value of trust
assets, and the trustee in all three trusts paid IBAR according to that formula. The trustee
reduced its own fee generally to .75% of the value of trust assets. Schultz maintained that
reduction was the result of the efficiencies IBAR created for the trustee.
       As specified in each trust, at the end of the first year and biennially thereafter, the
trustee provided the trial court an accounting and report and requested authorization to
pay its attorney fees from the trust proceeds. In the reports, the trustee identified the
amounts paid to IBAR for its work as the independent member of the trust advisory
committee and requested approval of those amounts.
       In February 2013, Westamerica Bank, as successor trustee for each of the trusts,
filed petitions for approval of accounting for a specified reporting period. In the
petitions, Westamerica Bank identified the payments it had made to IBAR using the
.75% formula specified in the trusts and requested approval of those payments.
In support of each petition, IBAR presented a log detailing its services and the time it
had spent on each task, and Schultz filed a declaration describing IBAR’s expertise.
No opposition was filed or objection made to any of the petitions.

1
       Each of the three trusts was established as part of the settlement of an action on
behalf of the beneficiary that stemmed from injuries resulting in a permanent disability.

                                              2
       On March 28, 2013, the trial court denied Westamerica Bank’s request to approve
the payments to IBAR for each of the trusts and ordered IBAR to reimburse all of the
funds it had been paid by the trustee for the reporting periods. Without explanation, the
court stated that IBAR’s services had not provided a substantial benefit to the trusts.2
Schultz filed a notice of appeal in each case. (Code Civ. Proc., § 904.1, subd. (a)(10);
Probate Code, § 1300, subds. (c) & (f).) We granted his motion to consider the appeals
together for purposes of oral argument and decision.
       Schultz contends that the trial court abused its discretion by denying approval and
requiring reimbursement of all of IBAR’s fees. We agree. In past proceedings involving
these three trusts, the payments to IBAR have been approved, either in total according
to the .75% formula or in part. For the current reporting periods, IBAR detailed the
services it had performed and the numbers of hours it had spent on each task for the
trusts. The records show that the current services were of the same nature as those IBAR
had performed during prior reporting periods and for which payment had been court
approved. Schultz filed a declaration supporting each of the approval requests,
explaining IBAR’s expertise in handling special needs trusts. No opposition was filed or
objection made to any of the requests to approve. The court nevertheless denied each of
the approval requests, stating that IBAR’s services had not substantially benefited the
trust. But, given the trustee’s requests to approve, IBAR’s supporting documentation, the
fact that the services performed were of the same nature as those that had been rendered
previously by IBAR and approved and the lack of any opposition or objection to the
request, those denials, absent some evidence of lack of benefit, constituted an abuse of
discretion. (Donahue v. Donahue (2010) 182 Cal. App. 4th 259, 268 [abuse of discretion
review standard applied to decision granting fee requests payable from trust assets]; see
Gorman v. Tassajara Development Corp. (2009) 178 Cal. App. 4th 44, 92, 101 [fee award

2
        In each case, the trial court also denied Westamerica Bank’s request to transfer the
matter to the superior court in the county where the trust is administered, but otherwise
approved the trustee’s accounting for the reporting period and authorized the payment of
fees to the trustee’s attorneys.

                                             3
an abuse of discretion when appellate court could not ascertain reasonable basis for
reduction of amount of requested fees].)
       On remand, the trial court has the discretion to approve reasonable fees for IBAR
for the reporting period in each case. The court should consider, at minimum, the nature
of the services performed, their value to the trusts, the hours spent, the cost savings to the
trusts and the .75% formula for payment specified in the trusts. (Donahue v. Donahue,
supra, 182 Cal.App.4th at p. 274 [after reversal of fee order, matter remanded to trial
court for further consideration]; Gorman v. Tassajara Development Corp., supra,
178 Cal.App.4th at p. 101 [same].)
                                      DISPOSITION
       The orders are reversed. The matters are remanded with directions for the trial
court to reconsider the requests to approve IBAR’s fees. Schultz shall bear his own costs
in the appeals.
       NOT TO BE PUBLISHED.

                                                          ROTHSCHILD, Acting P. J.
We concur:

                     CHANEY, J.

                     MILLER, 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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