Court Opinion

ID: 4167335
Source: CourtListenerOpinion
Date Created: 2017-05-09 22:07:12.093638+00
Date Added: 2024-06-11T14:38:30.396457
License: Public Domain

Filed 5/9/17
               CERTIFIED FOR PUBLICATION

       IN THE COURT OF APPEAL OF THE STATE OF
                     CALIFORNIA

               SECOND APPELLATE DISTRICT

                       DIVISION FIVE

ARTHUR C. HIGGINS, as              B265865
Executor, etc.,
                                   (Los Angeles County
       Plaintiff and Appellant,    Super. Ct. No.
                                   KC066345)
       v.

MARIA LUPE HIGGINS,

     Defendant and
Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Dan Thomas Oki, Judge. Reversed and
Remanded.
     Law Office of Robert E. Knudsen and Robert E.
Knudsen; Law Offices of Layne A. Bartholomew, Layne A.
Bartholomew, for Plaintiff and Appellant.
     Kasai Law Group, Wayne T. Kasai and Kristin E.
Reynolds, for Defendant and Respondent.
                  _______________________

      A wife agreed to hold funds in trust for her husband’s
elderly stepmother. After her husband’s death, the wife
changed the form of the accounts and used the funds for her
own purposes. The stepmother died and her personal
representative brought this action to impose a constructive
trust on the funds. At the conclusion of the personal
representative’s case-in-chief, the trial court granted
judgment in favor of the wife under Code of Civil Procedure
section 631.8. The trial court found the husband committed
no wrongdoing in transferring the funds to the accounts, and
the trust designation on the accounts was revocable, so no
constructive trust could be imposed on the funds. We hold
that despite the form of the bank accounts, when clear and
convincing evidence shows funds were transferred to an
account owner to hold in an irrevocable trust for a third
party beneficiary and the trustee repudiates the trust, a
constructive trust may be imposed on the funds for the
beneficiary’s estate to prevent unjust enrichment. We
reverse the judgment and remand for further proceedings.

                             2
     FACTS AND PROCEDURAL BACKGROUND

Estate Plan and Transfer of Assets

      Maria Lopez Higgins (Maria) and her husband,
Bartlett Higgins, prepared a thorough estate plan in 1994.1
They established the Higgins Family Trust dated March 11,
1994 (the Family Trust), and placed real property on Sunset
Boulevard into the trust, along with other assets. The trust
provided for the settlors during their lifetimes. Upon the
death of the second spouse, the trustee would distribute
$10,000 to each surviving grandchild and $10,000 to Maria’s
niece. The primary beneficiaries of the remaining trust
assets would be Bartlett’s sons, who were Maria’s stepsons:
W. Clive Higgins, Arthur C. Higgins, James Higgins, and
Karl Higgins. The trustee would divide the balance by
allocating one share to each living son and one share to each
deceased son with surviving issue.
      Maria’s will provided for her property at her death,
including savings and checking accounts to be added to the
Family Trust and administered under its terms. She
nominated Bartlett to serve as her executor. If he was
unwilling or unable to act as executor, she nominated Clive.
If Clive was unwilling or unable to serve, she nominated

     1Because several participants share the same last
name, we refer to them individually by their first names or
the names they were known by, as necessary for clarity.

                              3
Arthur. Maria and Bartlett executed powers of attorney as
well.
      Bartlett died the following year. Maria was authorized
under the terms of the Family Trust to serve as the sole
trustee after Bartlett’s death, although she was required to
serve with a co-trustee under certain circumstances to avoid
taxes. The individuals nominated to serve as executor under
her will were appointed as successor trustees under the
Family Trust. Maria did not take actions as trustee in the
name of the Family Trust, however. She continued to
conduct transactions during her lifetime in her own name.
      Maria leased the Sunset Boulevard property for
$10,000 per month to a family business operated by Clive,
Arthur, and Karl. After his father’s death, Clive visited
Maria regularly to assist with her finances. He helped her
pay bills, collect rents, and deposit checks. Clive became the
sole owner of the family business when Karl passed away in
August 1999, and Arthur sold his shares to Clive after a
dispute in December 1999. Clive had four sons of his own,
including Michael Higgins and Mark Higgins, prior to his
marriage to defendant and respondent Maria Lupe Higgins
(Lupe). When Clive became the sole owner of the business,
his son Michael took a management position to assist his
father.
      Maria executed a second power of attorney on March
20, 2007, appointing Clive and another individual to make
joint decisions if she became disabled or incapacitated. She
executed a new lease with Clive for the Sunset Boulevard

                              4
property, reducing the rent to $5,000 per month. On March
30, 2007, Maria reported complaints about her short-term
memory to Dr. Nelson Sanchez. She was 91 years old and
had a regular caregiver. In Dr. Sanchez’s opinion, her
cognitive dysfunction was more than normal memory loss
and could progress into dementia. He prescribed a
medication commonly used for dementia or Alzheimer’s
patients.
      During six visits to Dr. Sanchez between May 2007 and
June 2008, Maria was oriented, participated in interviews,
and understood instructions. On August 25, 2008, however,
Maria did not know the year or the president, which was a
cognitive decline from the previous year. Maria’s memory
function further declined by March 16, 2009. Dr. Sanchez
switched her medication to one typically prescribed for more
severe dementia.
      Maria owned checking and savings accounts for many
years at Los Angeles National Bank. On May 4, 2009, Maria
executed new signature cards adding Clive as a joint account
holder to her checking and savings accounts. Maria’s social
security check was deposited directly into the checking
account. In addition to the checking and savings accounts,
Maria had two certificates of deposit.
      By June 2010, Maria had full-time care. On September
30, 2010, Dr. Sanchez included dementia in Maria’s
diagnosis. Clive’s health began to suffer in June 2011. His
son Mark took him to Mexico for treatments. Maria’s
caregiver gave notice and Maria was placed in a nursing care

                             5
facility in February 2012. Clive was diagnosed with cancer
at the end of February 2012. His health declined rapidly. In
March 2012, he was placed under hospice care at home. On
March 25, 2012, he was hospitalized for a few days.
       When Clive returned from the hospital at the end of
March, he could not walk or care for himself. He was
completely dependent on Lupe and hospice. He was not
capable of caring for Maria’s finances. Clive and Lupe
conducted all of their banking transactions through bank
manager Juan Sandoval. At times, Sandoval came to Clive
and Lupe’s home to conduct transactions.
       On March 28, 2012, Clive closed Maria’s checking
account. He transferred the balance of $113,889.75 into a
new account by a check endorsed by Clive and Lupe “in trust
for Maria Lopez.” On the signature card for the new
checking account, the account owners were listed as
“William Clive Higgins [¶] Lupe Higgins [¶] ITF Maria
Lopez Higgins.” The boxes on the form for a joint account,
trust under a separate agreement, Totten trust, or pay-on-
death (POD) designation were not selected. Instead, “ITF:
Maria Lopez Higgins” was typed in.
       Clive withdrew $121,887.74 from Maria’s savings
account, closed the account, and deposited the funds in a
new savings account which he opened on March 30, 2012.
The account owners were listed as “William Clive Higgins [¶]
Lupe Higgins [¶] ITF Maria Lopez Higgins.” In the area to
indicate the ownership of the account and the consumer
purpose, “In Trust for Maria Lopez Higgins” was typed in.

                             6
      That same day, Clive withdrew $100,420.92 from
Maria’s certificate of deposit number 104208447, and
transferred the funds to a new certificate of deposit number
104211312. He also withdrew $99,983.47 from Maria’s
certificate of deposit number 104208465, resulting in early
withdrawal penalties of $73.99, and transferred the funds to
a new certificate of deposit number 104211314. On the
signature cards for the new certificates of deposit, the
owners were listed for both accounts as “William Clive
Higgins [¶] Lupe Higgins [¶] ITF Maria Lopez Higgins.” In
the area for the form of ownership and consumer purpose,
“In Trust for Maria Lopez Higgins” was typed in. The
signature cards state the initial deposits were $100,000 and
$100,375.84. A debit notice for $16.53 was issued for one
account and a credit of $45.08 was issued for the other.
      When Clive asked her to sign the bank documents,
Lupe signed the signature cards at their home without
asking questions. She did not have any discussions with
Clive about the reasons for opening the accounts. Lupe
understood the owners of the checking account to be Maria
and Clive. She understood the savings account to be owned
by “Clive, Lupe, everything on behalf of Maria.” Lupe knew
at the time she signed the signature cards, including the
certificates of deposit, that the purpose for which she was
opening accounts in trust for Maria was that everything was
for Maria to take care of Maria.
      Maria’s social security checks, monthly rent of $5,000
from the Sunset Boulevard property, and checks from life

                             7
insurance companies and other entities made out to Maria
were deposited into the checking account. Clive’s son Mark
helped Lupe pay Maria’s bills by filling out checks for Lupe
to sign.
      In early May 2012, Clive died without a will. His
estate included real property and the stock of the business.
After Clive passed away, Mark helped Lupe every day. Lupe
wanted Maria to move in with her, so Mark helped to move
Maria from the nursing home to Lupe’s house.
      On June 12, 2012, Lupe met with Sandoval at the
bank. She changed the ownership of the checking and
savings accounts to list the account owner solely as “Maria
Lupe Higgins.” The new signature cards did not state that
the funds were being held in trust for Maria. She had a new
signature card prepared for the certificates of deposit listing
the owner as “Maria Lupe Higgins.” Under form of
ownership and consumer purpose, a box was checked for an
individual account. Nothing was stated about Maria’s
interest or the account being held in trust.
       Mark moved Maria to his home while they looked for a
new nursing home. Arthur was notified that his brother
Clive had died, Arthur was the successor trustee under
terms of the Family Trust, and he needed to take care of
Maria. He asked for a copy of the Family Trust.
      A new nursing home was located by June 18, 2012.
Lupe signed checks to pay for the nursing home with a
notation on the checks that she was Maria’s caregiver.
Maria’s social security checks continued to be deposited

                              8
directly into the checking account. The June 2012 statement
for the savings account reflects multiple deposits of checks
made out to Maria.
       Maria died in August 2012. Her funeral expenses were
paid from the checking account that was now in Lupe’s
name. Lupe signed blank checks, which she gave to Mark to
fill in with the information for the funeral expenses.
       Arthur established a bank account for the Family
Trust and obtained a taxpayer identification number. In
September 2012, Mark provided Arthur with a copy of the
lease for the Sunset Boulevard property.
       Lupe paid $10,000 to each of Bartlett and Maria’s eight
grandchildren from the checking account that was now in
Lupe’s name. Mark asked Lupe to distribute $10,000 to
Maria’s niece, but Lupe refused because she was not a
grandchild.
       At the end of September, Lupe changed the name of
the owner on the savings and checking accounts from “Maria
Lupe Higgins” to “Lupe Higgins.” Lupe wired $5,000 to her
mother in Mexico and gave $2,000 to her sister from the
checking account. She paid her attorney from the account.
A check was made out to cash in the amount of $9,706.33 to
close the account.
       In April 2013, the savings account had a balance of
$136,572.02. Lupe withdrew $100,017.26 from certificate of
deposit number 104211314 on April 8, 2013, closed it, and
deposited the funds in the savings account. She closed the
other certificate of deposit, valued at a little more than

                              9
$100,000, and deposited it in the savings account as well.
The money in the savings account represented everything
left after Maria’s bills had been paid and the distributions
had been made to Bartlett’s grandchildren that were
described in the Family Trust. All of Lupe’s transactions
with the bank, while Clive was alive and after his death,
were conducted through Sandoval.
       Lupe arranged wire transfers of $120,000 and $100,000
to open new accounts for herself. In July 2013, she wired
$5,000 to her brother from the savings account. She sent
another wire transfer to her brother. On August 15, 2013,
she withdrew $50,000 and used it for her own expenses. She
used another $40,000 to support herself. Approximately
$22,000 remained in the savings account at the time of trial.

Action for Constructive Trust

      On September 23, 2013, plaintiff and appellant Arthur
Higgins, as executor of Maria’s estate and successor trustee
of the Family Trust, filed the complaint in the instant action
against Lupe to impose a constructive trust on the funds in
the accounts. The complaint alleged that Clive and Lupe
obtained their claim to the funds by reason of fraudulent or
otherwise wrongful conduct, including an agreement that
the funds would be used solely for Maria’s benefit, and Lupe
unduly influenced Clive to transfer the funds to her to
deprive Maria and the trust of the funds. A bench trial
began on May 19, 2015.

                              10
      Arthur’s first witness was Ben Tsugawa, Vice
President at Royal Business Bank, which purchased Los
Angeles National Bank. Tsugawa testified that the bank
views the designation “ITF” like a Totten trust. Clive and
Lupe were the owners of the account, while Maria was the
beneficiary if Clive and Lupe both passed away. Maria had
no present interest in the account and was not an owner or a
signatory. The endorsement on the check depositing funds
into the new account typically reflects the vesting on the new
account. Sandoval left the bank’s employment two months
before the trial and it was not the bank’s practice to provide
contact information for former employees.
      Psychologist Robert Sawicky testified that Maria was
dependent upon Clive to make decisions for her in 2009 and
was susceptible to undue influence. Dr. Sanchez testified as
well. He opined that Maria was not capable of making
decisions about properties or estate planning documents, or
understanding the differences between financial accounts on
March 16, 2009. By September 2010, her symptoms had
progressed to the stage that he could conclusively diagnose
dementia.
      Clive’s sons were witnesses at trial. Mark testified
that he and Lupe found a copy of the Family Trust at
Maria’s house. When Lupe learned Arthur was responsible
for the Family Trust and would serve as executor when
Maria died, she said she would not help Mark with anything.
She asked Mark to drive her to the bank to talk to Sandoval.
Mark waited with the tellers while Lupe conducted her

                             11
business with Sandoval, then he took her home. Lupe also
wanted Maria to move out of her home. Mark and his wife
took Maria into their home to give Lupe a break while they
tried to find a nursing home for Maria. Lupe complained
about the cost of the facility they located, but Mark
reminded her that the money belonged to Maria, so it should
go to her needs, and Lupe signed the checks.
      Michael testified that when Clive returned from the
hospital at the end of March, he was not in any condition to
go to the bank, conduct banking transactions, or make
financial decisions.
      Lupe testified as well. She was not aware that Maria
was suffering from any chronic physical pain or dementia.
Maria did not experience any health problems while she was
living with Lupe. At her deposition, Lupe stated that she
never had a bank account where she held funds in trust for
Maria or funds that belonged to Maria, but she was a
beneficiary of an account with funds that belonged to Maria.
At trial, however, she readily admitted that she signed
documents to open accounts held in trust for Maria and she
knew the funds in the accounts were intended for Maria.
      Lupe referred to the checking account several times
during her testimony as “Maria’s account.” Even after she
changed the ownership of the account to be in her name only
and removed the “in trust for” designation, everything in the
account was for Maria. After Maria’s death, Lupe wrote
checks from the account to Maria’s grandchildren because it

                             12
was Maria’s money. The funds that she gave to the
grandchildren were not a gift from Lupe.
      Lupe believed the funds in the accounts transferred to
her when Maria died. She also believed she was entitled to
keep money electronically deposited into the accounts for
Maria after her death, such as a deposit from Guggenheim
Life Insurance on September 20, 2012, because Maria was
no longer alive. Clive and Lupe were the owners named on
the account, and Clive was no longer alive, so it was logical
that the funds in the account were hers. She explained that
Maria was not around anymore, Clive was not around
anymore, and the account belonged to her.
      At the conclusion of Arthur’s evidence, Lupe brought a
motion for judgment pursuant to Code of Civil Procedure
section 631.8. She argued that the complaint sought a
constructive trust based on undue influence or fraud, but
there was no evidence of undue influence or fraud by Lupe
with regard to Maria. Any cause of action based on undue
influence or fraud by Clive needed to be brought against
him, and the statute of limitations had passed. Clive had
the legal right to withdraw money from the joint accounts he
had with Maria.
      Arthur responded that a constructive should be
imposed on the funds in this case based on evidence of undue
influence, lack of capacity, and violation of a trust. He
argued that even unintentionally, the joint bank accounts
between Maria and Clive were a product of Clive’s undue
influence. When Clive opened new accounts with Lupe, he

                             13
did not intend to make a gift of Maria’s money to Lupe. The
parties to an account can agree that the funds are owned
differently as between the parties, which is what the
evidence showed in this case. Clive made the funds
accessible to Lupe with the understanding, and Lupe’s
acknowledgement, that the funds belonged to Maria. Lupe’s
use of funds that she knew belonged to someone else was
wrongful.
      The trial court found Clive was a loving son-in-law and
father who committed no wrongful act. He did not exercise
any undue influence and sought only to assist Maria. Once
Clive was added to Maria’s accounts as a joint account
holder, he had a legal right to do as he pleased with the
funds. The bank signature cards for the new accounts
clearly indicated his intent to hold the funds in trust for
Maria. Under the agreement with the bank, however, the
funds only went to the beneficiary after the death of the
account owners. If there was a wrongful act by Clive, any
action against him or his estate had to be brought within a
year of his death. Clive made Lupe a joint tenant, and after
Clive passed away, as the surviving joint tenant, she had the
right to do as she pleased with the funds in the accounts.
The trial court stated Lupe had a clear moral obligation to
return the money to the Family Trust, but the court could
not find a legal obligation. The court apologized to the
Higgins family for the court’s inability to restore the funds.
The court granted judgment in favor of Lupe.

                             14
     Judgment was entered in favor of Lupe on June 16,
2015. Arthur filed a timely notice of appeal.

                       DISCUSSION

Standard of Review

       If the trial court determines at the conclusion of the
plaintiff’s case-in-chief that the plaintiff has failed to meet
the burden of proof, Code of Civil Procedure section 631.8
allows the court to forgo the need for the defendant to
present evidence. (Roth v. Parker (1997) 57 Cal. App. 4th 542,
549.) “The substantial evidence standard of review applies
to judgment given under Code of Civil Procedure section
631.8; the trial court’s grant of the motion will not be
reversed if its findings are supported by substantial
evidence. [Citation.] Because section 631.8 authorizes the
trial court to weigh evidence and make findings, the court
may refuse to believe witnesses and draw conclusions at
odds with expert opinion. [Citation.]” (Id. at pp. 549–550.)

General Principles of Constructive Trust

     Arthur contends undisputed evidence in this case
established all of the conditions necessary to impose a
constructive trust. We agree.
     An action to impose a constructive trust is a suit in
equity to compel a person holding property wrongfully to

                              15
transfer the property interest to the person to whom it
rightfully belongs. (Communist Party v. 522 Valencia, Inc.
(1995) 35 Cal. App. 4th 980, 990 (Communist Party); Bogert et
al., The Law of Trusts and Trustees (3d ed. 2009) § 471, p. 2;
5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 840, p.
255.)
      The general principles for imposition of a constructive
trust are set forth in Civil Code sections 2223 and 2224.
(Martin v. Kehl (1983) 145 Cal. App. 3d 228, 237–238
(Martin).) Civil Code section 2223 states, “One who
wrongfully detains a thing is an involuntary trustee thereof,
for the benefit of the owner.” Civil Code section 2224
provides, “One who gains a thing by fraud, accident,
mistake, undue influence, the violation of a trust, or other
wrongful act, is, unless he or she has some other and better
right thereto, an involuntary trustee of the thing gained, for
the benefit of the person who would otherwise have had it.”
      Three conditions must be shown to impose a
constructive trust: (1) a specific, identifiable property
interest, (2) the plaintiff’s right to the property interest, and
(3) the defendant’s acquisition or detention of the property
interest by some wrongful act. (Calistoga Civic Club v. City
of Calistoga (1983) 143 Cal. App. 3d 111, 116 (Calistoga);
Communist Party, supra, 35 Cal.App.4th at p. 990.)
      An action to impose a constructive trust is subject to
the statute of limitations that governs the underlying
substantive right. (Day v. Greene (1963) 59 Cal. 2d 404, 411

                               16
(Greene); Davies v. Krasna (1975) 14 Cal. 3d 502, 515–516.)2
“This section has been applied to diverse factual situations
where fairness and justice dictated recovery but the
actionable facts did not fit into the more readily recognizable
modes.” (Santa Clarita Water Co. v. Lyons (1984) 161
Cal. App. 3d 450, 460.) “Thus, it has been pointed out that ‘a
constructive trust may be imposed in practically any case
where there is a wrongful acquisition or detention of
property to which another is entitled.’ [Citations.]” (Martin,
supra, 145 Cal.App.3d at p. 238.)

     2  To the extent Glue-Fold, Inc. v. Slautterback Corp.
(2000) 82 Cal. App. 4th 1018, 1023, fn.3, suggests no cause of
action for constructive trust exists, the suggestion would be
inconsistent with the weight of authority. (See, e.g., Flores
v. Arroyo (1961) 56 Cal. 2d 492, 494–495 [complaint stated a
cause of action to declare a constructive trust]; Greene,
supra, 59 Cal.2d at p. 411 [statute of limitations applicable
to action to impose a constructive trust is determined by the
nature of the underlying substantive right, not the form of
the action or the remedy sought]; Olson v. Toy (1996) 46
Cal. App. 4th 818, 823 [claim for constructive trust is
effectively an action for possession of property].) The sole
authority cited for the proposition in Glue-Fold is 5 Witkin,
Cal. Procedure (4th ed. 1997) Pleading, § 796, p. 252, which
does not stand for the proposition cited, and in fact,
discusses a cause of action for constructive trust.

                              17
Violation of Promise to Hold Funds in Trust

      A constructive trust may be imposed in this case based
on Lupe’s repudiation of an express voluntary trust in which
she agreed to hold funds in trust for Maria. Clive
transferred funds to trust accounts with Lupe’s agreement
that the funds belonged to Maria and would be held in trust
for Maria. After Clive’s death, Lupe removed Maria’s name
from the accounts and used the funds for her own purposes,
repudiating her promise to hold them in trust on Maria’s
behalf. This evidence was sufficient to impose a constructive
trust on the funds to prevent unjust enrichment.
      Multiple-party bank accounts, including joint accounts
and Totten trusts,3 are governed by the Probate Code. (Prob.
Code, §§ 5100, 5132.) A Totten trust is a “tentative trust,”
created when a depositor opens a bank account “in trust for”
another person, but reserves the power to withdraw funds
during the depositor’s lifetime. (Estate of Allen (1993) 12
Cal. App. 4th 1762, 1766; Estate of Collins (1978) 84
Cal. App. 3d 928, 932 (Collins); Estate of Fisher (1988) 198
Cal. App. 3d 418, 424 (Fisher).) If the trust is not revoked

     3  Probate Code section 80 defines “Totten trust
account” as an account in the name of one or more parties as
trustee for one or more beneficiaries where the relationship
is established by the form of the account and the deposit
agreement with the financial institution and there is no
subject of the trust other than the sums on deposit in the
account.

                             18
before the depositor’s death, any balance in the account is
payable to the beneficiary. (Fisher, supra, at p. 424.) “In a
real sense a tentative or Totten trust is not a trust at all but
is a recognized exception to the law of testamentary
disposition and as such obviates the necessity for compliance
with the requisite statutory elements of executing a will.”
(Collins, supra, at p. 932.)
      While all parties are living, an account belongs to the
parties who have a present right to payment, in proportion
to their contributions, unless there is clear and convincing
evidence of a different intent. (Prob. Code, §§ 5136, subd.
(a), 5301, subd.(a).)4 “In the case of a Totten trust account,

     4 At the time the accounts were opened in this case,
Probate Code section 5301 provided: “(a) An account
belongs, during the lifetime of all parties, to the parties in
proportion to the net contributions by each to the sums on
deposit, unless there is clear and convincing evidence of a
different intent. [¶] (b) In the case of a P.O.D. account, the
P.O.D. payee has no rights to the sums on deposit during the
lifetime of any party, unless there is clear and convincing
evidence of a different intent. [¶] (c) In the case of a Totten
trust account, the beneficiary has no rights to the sums on
deposit during the lifetime of any party, unless there is clear
and convincing evidence of a different intent. If there is an
irrevocable trust, the account belongs beneficially to the
beneficiary.”
      Probate Code section 5301 was amended, effective
January 1, 2013, to add provisions governing excess
withdrawals. Probate Code section 5301 currently provides:

                              19
the beneficiary has no rights to the sums on deposit during
the lifetime of any party, unless there is clear and convincing

“(a) An account belongs, during the lifetime of all parties, to
the parties in proportion to the net contributions by each,
unless there is clear and convincing evidence of a different
intent. [¶] (b) If a party makes an excess withdrawal from
an account, the other parties to the account shall have an
ownership interest in the excess withdrawal in proportion to
the net contributions of each to the amount on deposit in the
account immediately following the excess withdrawal, unless
there is clear and convincing evidence of a contrary
agreement between the parties. [¶] (c) Only a living party,
or a conservator, guardian, or agent acting on behalf of a
living party, shall be permitted to make a claim to recover
the living party’s ownership interest in an excess
withdrawal, pursuant to subdivision (b). A court may, at its
discretion, and in the interest of justice, reduce any recovery
under this section to reflect funds withdrawn and applied for
the benefit of the claiming party. [¶] (d) In the case of a
P.O.D. account, the P.O.D. payee has no rights to the sums
on deposit during the lifetime of any party, unless there is
clear and convincing evidence of a different intent. [¶] (e) In
the case of a Totten trust account, the beneficiary has no
rights to the sums on deposit during the lifetime of any
party, unless there is clear and convincing evidence of a
different intent. If there is an irrevocable trust, the account
belongs beneficially to the beneficiary. [¶] (f) For purposes
of this section, ‘excess withdrawal’ means the amount of a
party’s withdrawal that exceeds that party’s net contribution
on deposit in the account immediately preceding the
withdrawal.”

                              20
evidence of a different intent. If there is an irrevocable
trust, the account belongs beneficially to the beneficiary.”
(Prob. Code, § 5301, subd. (e).) A finding under the clear and
convincing evidence test requires evidence clear enough to
leave no substantial doubt and strong enough that every
reasonable person would agree. (Conservatorship of
Wendland (2001) 26 Cal. 4th 519, 552.)
      In this case, there was clear and convincing evidence
that Clive and Lupe intended to create irrevocable trust
accounts in which Maria had a present beneficial interest in
the funds on deposit, not Totten trust accounts. “A trust is a
fiduciary relationship with respect to property in which the
person holding legal title to the property—the trustee—has
an equitable obligation to manage the property for the
benefit of another—the beneficiary.” (Moeller v. Superior
Court (1997) 16 Cal. 4th 1124, 1133–1134, italics omitted.)
“To be valid, a trust, whether oral or written, must contain
three elements: a trust res, the manifestation of a trust
intent, and a proper trust purpose. ([Prob. Code,] §§ 15201,
15202, 15203.)” (Estate of Gardner (2010) 187 Cal. App. 4th
543, 552.) “It is well settled that no particular language or
terminology is necessary to create a trust; nor need the word
‘trust’ or ‘trustee’ be used; nor need all the conditions of the
trust be expressed in a single paper; nor need a trust in
personal property be in writing.” (Weiner v. Mullaney (1943)
59 Cal. App. 2d 620, 631.) Probate Code section 15200 sets
forth several methods for creating a trust, including “[a]
transfer of property by the owner during the owner’s lifetime

                              21
to another person as trustee.” (Prob. Code, § 15200, subd.
(b); Presta v. Tepper (2009) 179 Cal. App. 4th 909, 914
(Presta).) “‘A trust is any arrangement which exists whereby
property is transferred with an intention that it be held and
administered by the transferee (trustee) for the benefit of
another . . . .’ [Citations.]” (Presta, supra, at p. 913.)
      Clive and Lupe intended the trust in this case to be
irrevocable, unlike a Totten trust that is revocable at will
during the owner’s lifetime. Clive transferred Maria’s
money into the accounts. Maria’s social security income and
other payments owed to Maria continued to be deposited
directly into the accounts. The owner of a Totten trust
generally deposits his or her own money and retains the
right to withdraw funds for any purpose, but Clive and Lupe
did not deposit their own funds into these accounts.
Although Lupe did not have any conversation with Clive
about the reasons for opening the accounts, it is clear from
her actions and testimony that she agreed to hold the funds
in trust for Maria and use them for Maria’s needs. Lupe
signed signature cards that stated the accounts were in trust
for Maria. She testified that the funds in the accounts
belonged to Maria, and she believed everything in the
accounts was for Maria. She referred to the funds several
times during her testimony as Maria’s money. Lupe used
the money in the accounts for Maria’s needs, and after
Maria’s death, for the expenses of Maria’s funeral and
specific bequests set forth in Maria’s estate plan. The
evidence was clear and convincing that Clive and Lupe

                             22
agreed the beneficial ownership of the trust accounts
belonged to Maria, unlike Totten trusts in which the
beneficiary has no present interest during the owner’s
lifetime.
      Clive and Lupe held the legal title to the accounts as
co-trustees, while Maria held the beneficial title. As a co-
trustee, Clive’s death had no effect on Maria’s beneficial
ownership of the accounts. In cases other than joint
accounts, Totten trusts and P.O.D. accounts, “the death of
any party to a multiparty account has no effect on beneficial
ownership of the account other than to transfer the rights of
the decedent as part of the decedent’s estate.” (Prob. Code,
§ 5302, subd. (d).)5 There was clear and convincing evidence

     5    Probate Code section 5302 governs funds in a
multiple-party account on the death of one of the parties,
stating in pertinent part: “(a) Sums remaining on deposit at
the death of a party to a joint account belong to the surviving
party or parties as against the estate of the decedent unless
there is clear and convincing evidence of a different
intent . . . . [¶] (b) If the account is a P.O.D. account: [¶]
(1) On death of one of two or more parties, the rights to any
sums remaining on deposit are governed by subdivision (a).
[¶] . . . [¶] (c) If the account is a Totten trust account: (1)
On death of one of two or more trustees, the rights to any
sums remaining on deposit are governed by subdivision (a).
[¶] . . . [¶] (d) In other cases, the death of any party to a
multiparty account has no effect on beneficial ownership of
the account other than to transfer the rights of the decedent
as part of the decedent’s estate. [¶] (e) A right of

                              23
that Lupe continued to hold the funds in trust for Maria
after Clive’s death, as the parties to the account intended,
and Maria continued to own the beneficial interest in the
accounts after Clive’s death.
      Lupe repudiated the trust by removing Maria’s name
from the accounts after Clive’s death, and she breached her
fiduciary duty by using the funds for her own purposes. “A
cause of action in constructive trust may be based on a
breach of fiduciary duty by a trustee of an express trust.”
(Ehret v. Ichioka (1967) 247 Cal. App. 2d 637, 643.) The
statute of limitations begins to run when the trustee of an
express voluntary trust repudiates the trust. (Chard v.
O’Connell (1941) 48 Cal. App. 2d 475, 480.) If the beneficiary
does not receive written accountings, the action against the
trustee for breach of trust must be filed within three years of
discovery of the claim. (Prob. Code, § 16460, subd. (a)(2);
Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223
Cal. App. 4th 1105, 1123.) Arthur’s complaint against Lupe
was filed on September 23, 2013, well within the three-year
statute of limitations for a constructive trust action based on
breach of trust, whether Lupe’s repudiation of the trust
occurred as early as June 2012 when she removed Maria’s

survivorship arising from the express terms of the account or
under this section, a beneficiary designation in a Totten
trust account, or a P.O.D. payee designation, cannot be
changed by will.” The rights of survivorship set forth in
section 5302 “are determined by the form of the account at
the death of a party.” (Prob. Code, § 5303, subd. (a).)

                              24
name from the accounts, or later when she transferred
money for her own purposes.
      Even if the express trust was found to be
unenforceable, a constructive trust may be imposed on the
funds transferred to Lupe based on her promise to hold them
in trust for Maria in order to prevent unjust enrichment. If
a grantor conveys property to another in reliance on an oral
promise to hold the property in trust for the grantor or a
third person, and the grantee subsequently repudiates the
promise and denies the trust, a constructive trust may be
imposed on the property in order to prevent unjust
enrichment. (Orella v. Johnson (1952) 38 Cal. 2d 693, 696–
698 [oral promise to hold real property in trust may be
unenforceable under the statute of frauds, but a constructive
trust may be imposed on the property to prevent unjust
enrichment].)
      Although Lupe changed the form of the accounts in
June 2012, she did not have any beneficial interest in them.
When Maria died, her beneficial interest in the accounts
passed to her estate. Maria’s will provided for her property,
including savings and checking accounts, to be administered
under the Family Trust. There is no evidence that Clive
intended to give the funds to Lupe or told her that the funds
in the account would belong to her after Maria’s death. Lupe
was not named as a beneficiary of the accounts or Maria’s
estate plan. Lupe testified that she kept the funds because
her name was on the account and it was logical that the
funds belonged to her as the only surviving account owner.

                             25
After Maria’s death, however, she paid funeral expenses
from the accounts and made distributions in accordance with
the provisions of the Family Trust, so there is evidence that
she knew Maria’s ownership interest passed to her estate
after her death. Lupe held the funds in trust for Maria’s
estate after her death, and Arthur, as the executor of the
estate and the trustee of the Family Trust, was entitled to
receive the funds.
      We conclude Lupe held the funds in the accounts in
trust for Maria, and her repudiation of the trust by removing
Maria’s name from the accounts and using the funds for her
own purposes was a wrongful act supporting the imposition
of a constructive trust. We do not need to decide whether
there was evidence of additional wrongful acts that would
support a constructive trust, such as actual fraud in
receiving payments intended for Maria, or a simple mistake
of law in retaining funds after Maria’s death (see generally
Decorative Carpets, Inc. v. State Board of Equalization
(1962) 58 Cal. 2d 252, 254 [constructive trust imposed on
funds collected due to mistake of law]). At this stage of the
proceedings, the evidence shows Arthur is entitled to a
constructive trust as a matter of law. On remand, however,
Lupe will be entitled to present evidence, and the trial court
will make a final determination of the issues.

                             26
                         DISPOSITION

      The judgment is reversed and remanded for further
proceedings. Appellant Arthur C. Higgins, as executor of the
estate of Maria Lopez Higgins and successor trustee of the
Higgins Family Trust dated March 11, 1994, is awarded his
costs on appeal.

             KRIEGLER, Acting P.J.

We concur:

             BAKER, J.

             KIN, 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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