Filed 10/14/16? Lapworth v. Sorenson 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.?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
| ROBERT JAMES LAPWORTH et al.,
Plaintiffs and Appellants, v. MARK SORENSON et al., Defendants and Respondents. |
G052050 (Super. Ct. No. 30-2013-00665083)
O P I N I O N |
Appeal from a judgment of the Superior Court of Orange County, Jamoa A. Moberly, Judge.? Affirmed.
Counsel:
Werner Law Firm and Lee G. Werner for Plaintiffs and Appellants.
Law Offices of Marjorie G. Fuller and Marjorie G. Fuller for Defendants and Respondents.
*????????????????????? *????????????????????? *
??????????????????????? Plaintiffs and appellants Robert James Lapworth, Barbara Burman Rolph, and Susan L. Cohl (plaintiffs), beneficiaries of the Amended Lapworth Living Trust (Trust), sued defendants and respondents Mark Sorenson (Mark)[1] and Thomas Tupman (Thomas; collectively defendants), who were successor trustees (Successor Trustees) of the Trust, challenging an accounting and seeking to have defendants removed as Successor Trustees and surcharged for plaintiffs? attorney fees.? After a bench trial, the court ruled in favor of defendants, approving the accounting, finding defendants acted properly and in good faith, and denying removal and surcharge.
Plaintiffs appeal, arguing the court did not sufficiently review the accounting, erred in finding contested expenses were paid out of a correct subtrust, and should have found defendants were grossly negligent.? They further contend the statement of decision was insufficient.
We conclude the court properly reviewed the accounting, and its statement of decision satisfactorily explained the basis for its findings defendants committed no wrongdoing and the accounting was sufficient.? Although the statement of decision did not specifically rule on the requests for removal and surcharge, based on the remainder of its findings we draw the reasonable inference it found no grounds for removal or surcharge.
FACTS AND PROCEDURAL HISTORY
Margaret W. Lapworth (Margaret) and C. William Lapworth (William) (Trustees) were husband and wife.? It was the second marriage for both and each had children from their first marriages.? Plaintiffs were William?s children; Kim Sorenson (Kim) was Margaret?s daughter and married to Mark.
Margaret and William created the Trust and were the original settlors and Trustees.? After the death of the first settlor, the surviving Trustee was required to divide the Trust into three separate subtrusts:? the Survivor?s Trust, the Bypass Trust, and the Marital Trust.
The Trustee was to distribute to the Survivor?s Trust the surviving spouse?s separate property, share of the community property, share of the deceased trustor?s quasi-community property, any other assets expressly allocated to it, and any assets added to the Trust resulting from the death of the first settlor. ?The Trustee was required to distribute to the Marital Trust the minimum amount necessary to eliminate or reduce to the lowest amount possible any federal estate tax.? The balance of the estate was to be distributed to the Bypass Trust.
The Trust provided that after the death of the first settlor, the Trustee was to pay to the surviving spouse income and principal from the Survivor?s Trust as requested plus any additional amounts the Trustee deemed appropriate for the surviving spouse?s support, health, and education.
In addition, the surviving spouse was the income beneficiary of the Marital Trust and the Bypass subtrust.? The surviving spouse was to be paid all the net income during her life.? If the net income was not sufficient, the surviving spouse was also entitled to any principal the Trustee deemed necessary for her maintenance, support, health, and education.
Upon the death of the second settlor, any remaining assets of the Marital Trust and Survivor?s subtrusts were to be distributed to the trustee of the Bypass Trust. ?After payment of debts, and trust administration expenses, the Trustee was to divide the assets in the Bypass Trust into two equal shares, one-half to Kim and one-half to be divided equally among the three plaintiffs. ?The Trust contained a list of 10 categories of assets, including a residence in San Juan Capistrano (Residence).
The Trust relieved a trustee from liability to a beneficiary for his or her acts or failure to act except for gross negligence or willful misconduct. ?Further, no trustee was liable for another trustee?s act, omission, or default so long as that trustee ?ha[d] no knowledge of facts that might reasonably be expected to put the trustee on notice of it.?
Upon William?s death in 2006, Margaret became the sole Trustee.? She did not immediately establish the Survivor?s, Marital, or Bypass subtrusts. ?By 2007 Margaret quitclaimed ownership of the Residence, 58 percent to Kim as trustee of the Survivor?s Trust, 18 percent and 24 percent to the Martial Trust and the Bypass Trust, respectively, as tenants in common.? Sometime before December 2008 Margaret set up Charles Schwab accounts for the Marital and Bypass subtrusts, which were depleted by the time defendants became the Successor Trustees.[2]
In October 2008 Margaret executed a document entitled Second Amendment to and Complete Restatement of Survivor?s Trust under the Lapworth Living Trust. ?She named Kim as the sole trustee and 100 percent contingent beneficiary.
At the same time Margaret attempted to resign as trustee of the Bypass and Marital subtrusts. ?The Trust allowed a trustee to resign at any time by written notice, with an effective date upon a successor trustee?s acceptance of the position. ?The Trust named defendants as the Trustees? successors.? Margaret did not notify defendants of her resignation nor did they accept their position as Successor Trustee at that time.? Mark did not know Margaret had previously resigned as Trustee until several months after her death.? Margaret died in May 2010.
In August 2010 defendants signed and sent a notice of change of trustee to plaintiffs as beneficiaries of the Trust. ?Thomas did nothing in his capacity as a Successor Trustee except sign verifications of pleadings, help to clean out the Residence, and host a dinner for Margaret and William?s friends. ?Based on his age, 83 at the time of trial, and his health, Thomas did not want to act as a trustee, and he and Mark agreed Mark would act as the sole Successor Trustee. ?Mark accepted Thomas?s resignation.
At the time defendants became Successor Trustees, there were no funds in either the Bypass or Marital subtrust. ?Their only asset was the Residence.? After William died, it was ?in complete shambles.?? Margaret undertook significant repairs. ?After Margaret died, Mark and Kim continued the repairs so the Residence would be fit for selling.? If they had not done so, a short sale would have been likely with the proceeds perhaps half of the ultimate sales price, which was just over $2.819 million.? Mark and Kim loaned money to the Bypass and Marital subtrusts to fund some of the repairs. ?After amounts due were paid off, the net proceeds were paid to Kim as trustee of the Survivor?s Trust.
As sole beneficiary of the Survivor?s Trust and a 50 percent beneficiary of the Marital and Bypass subtrusts, Kim distributed to herself 75 percent of the sales proceeds to herself.? She distributed the remaining 25 percent to Mark as trustee of the Marital and Bypass subtrusts to be divided among the plaintiffs. ?Despite the fact the quitclaim deed had given 18 percent and 24 percent of the interest in the Residence to the Martial Trust and Bypass Trust, respectively, Kim distributed a higher percent because she believed it was the right thing to do.? Mark distributed proceeds to plaintiffs, less amounts withheld for payments to the Bypass and Marital subtrusts? attorneys and accountants, and for Mark?s trustee fees.? Mark provided an accounting with the payment.
Subsequently plaintiffs? lawyer wrote to defendants? counsel asking for an accounting of the Marital and Bypass subtrusts.? Counsel exchanged correspondence and defendants produced documents.? In July plaintiffs filed a petition for an accounting.? In addition to the accounting, plaintiffs sought an order for defendants to be removed as trustees and for attorney fees, for which defendants should be surcharged.
Defendants filed the First and Final Account and Report of Co-Trustees (Account) in November 2013.? It covered the period 2006 through 2012, which covered the time from William?s death until Margaret?s death in 2010. ?It included approximately 130 pages of expense ledgers for the period April 2006 through December 2011.
Shortly thereafter the parties and their counsel met.? Anne Petronave-McGraw (McGraw), the Lapworth family bookkeeper for the period March through October 2005, was present.? She produced at least 10 boxes of documents, which plaintiffs copied.? The documents were the accounting records for the period 2005 through 2012, including bank statements, receipts, check stubs, and bank registers.? When plaintiffs? counsel asked for additional documents regarding improvements to the Residence, McGraw subsequently provided them. ?In May 2014 plaintiffs filed their objections to the Account (Objections).? They contended the Account showed many expenses that should not have been charged to the Marital and Bypass subtrusts.? They also argued defendants had failed to produce additional documents showing expense items plaintiffs had requested. ?The Objections did not itemize the specific charges and expenses to which plaintiffs were objecting.
At trial Mark testified that at the time he became a Successor Trustee, he had no prior knowledge of the status of the Marital and Bypass subtrusts.? The only asset he knew of in those trusts was the Residence.? He testified to the need for rehabilitation and extensive repairs made as detailed above.? Upon completion of the necessary work, the Residence was sold and the proceeds divided as per the beneficiaries? percentage interests.? Mark also testified all contested expenses were paid from the Survivor?s Trust.
Plaintiffs? lawyer testified on their behalf.? He explained his efforts to obtain an accounting.? He also described his personal analysis of the Account.? This included plaintiffs? claims about improper charges against the Marital and Bypass subtrusts.
McGraw testified she prepared the accounting regarding the sale of the Residence. ?She further testified in detail as to the expenses paid to rehabilitate the Residence and how she had created a report based on the documents and receipts she was able to find. ?She also reviewed most of the income and expenses related to the Survivor?s Trust, explaining many of the alleged improper charges.
After trial and taking the matter under submission, the court provided a written tentative decision, finding in favor of defendants.? It ordered them to prepare a statement of decision.? Before it was filed, plaintiffs filed a supplement to their request for statement of decision, asking the court to answer 12 additional questions they claimed were not covered by the tentative. ?These included whether certain expenses were properly charged to the Marital and Bypass subtrusts; whether defendants owed a duty to investigate ?prior charges?; and what assets from the Trust were transferred to the subtrusts and when.? The court denied this supplemental request, characterizing it as interrogatories, which are improper.
The proposed statement of decision mirrored the tentative.? The court found in favor of defendants and approved the Account.? It found the contested expenses were paid from the Survivor?s Trust, not the Bypass Trust or the Marital Trust.? McGraw?s testimony regarding the profit and loss in the Survivor?s Trust account was credible.? According to the Trust, it was not necessary for the Survivor?s Trust to be exhausted before the assets from the Marital Trust or the Bypass Trust were used.? Margaret was entitled to the net income from the Marital and Bypass subtrusts and the principal for health, education, maintenance, and support.
Although plaintiffs? objected to expenditures by Margaret and Kim, they named neither of them as a party.
At the time Margaret died and when defendants later accepted appointment as Successor Trustees, the primary asset of the Marital and Bypass subtrusts was the Residence.? Upon sale of the Residence, the charges against the proceeds were reasonable and the net proceeds were distributed to the proper beneficiaries.
The court found that under the Trust and amendment to the Survivor?s Trust, Kim was entitled to 75 percent of the estate and plaintiffs were entitled to the remaining 25 percent.
No credible evidence was introduced showing defendants acted in bad faith.? Under article No. 15 of the Trust defendants have no liability for the actions of Margaret as predecessor trustee.
Plaintiffs filed an objection to the proposed statement of decision.? They challenged the replication of the tentative decision.? They also argued the statement of decision did not set out a factual or legal basis for the controverted issues at trial, which they claimed were stated in plaintiffs? trial brief and supplement to the request for statement of decision.? This, plaintiffs claimed, made the statement of decision ambiguous.? Plaintiffs argued the statement of decision failed to explain the relevance of the finding that certain expenses were paid from the Survivor?s Trust since they had been charged to the Marital or Bypass subtrusts. ?The court overruled this objection.
DISCUSSION
- Introduction and Standard of Review
Plaintiffs argue the de novo standard of review applies because the appeal presents only questions of law.? We disagree.? The issues they present implicate two other standards of review.
First, although plaintiffs contend they are not disputing any of the facts on which the court relied, that is not the case.? For example, one of their major arguments is the court?s alleged error in finding the contested expenses were paid from the Survivor?s Trust.? This dictates use of the substantial evidence standard.
When a party claims there is insufficient evidence we begin with the presumption the judgment is correct.? (Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956.)? On review of a judgment ???based upon a statement of decision following a bench trial, ?any conflict in the evidence or reasonable inferences to be drawn from the facts will be resolved in support of the determination of the trial court decision.? [Citations.]?? [Citation.]???? (Axis Surplus Ins. Co v. Reinoso (2012) 208 Cal.App.4th 181, 189.)? We may not reweigh or resolve conflicts in the evidence or redetermine the credibility of witnesses.? (Citizens Business Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613.)? We liberally construe the court?s findings of facts, whether express or implied.? (Ibid.)? Even the testimony of a single witness may be sufficient.? (Ibid.)
Because plaintiffs challenge the sufficiency of the evidence, they were required to summarize the evidence in a light most favorable to defendants (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 737) and show why it is insufficient (Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 409).? Plaintiffs failed to do so but instead often reargued facts disputed at trial.[3]
Second, removal of a trustee and surcharge of a trustee, the remedies plaintiffs sought, are within the court?s discretion, which we review for abuse of discretion.? (Estate of Gilmaker (1962) 57 Cal.2d 627, 633 [removal of trustee]; see generally Estate of Gump (1991)1 Cal.App.4th 582, 597-598 [surcharges].)? Whether an accounting is sufficiently detailed is also reviewed for an abuse of discretion.? (Estate of Hershel (1959) 168 Cal.App.2d 658, 660.)
On a different note, plaintiffs refer to some of the court?s questions and comments during closing argument that they contend seemed to have indicated the court might rule in their favor. ?They complain that despite those comments, the court found for defendants.
A court?s preliminary comments are not relevant on appeal.? (Wilshire Ins. Co. v. Tuff Boy Holding, Inc. (2001) 86 Cal.App.4th 627, 638, fn. 9.)? ?This is because a trial court retains inherent authority to change its decision, its findings of fact, or its conclusions of law at any time before entry of judgment and then, the judgment supersedes any memorandum or tentative decision or any oral comments from the bench.? ?(Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 268.)
- Successor Trustees? Liability
??????????????????????? Pursuant to Probate Code section 16403, subdivision (a) (all further statutory references are to this code), generally ?a successor trustee is not liable to the beneficiary for a breach of trust committed by a predecessor trustee.?? Exceptions include where ?the successor trustee knows or has information from which the successor trustee reasonably should have known of a situation constituting a breach of trust committed by the predecessor trustee and?.?.?.?improperly permits it to continue? (id., subd. (b)(1)); or where a successor trustee knows or has information from which he reasonably should know of a predecessor trustee?s breach and fails to take reasonable steps to correct it (id., subd. (b)(3)).
The Trust itself absolves a trustee for liability or responsibility for ?any act, omission, or default of any other trustee? so long as the trustee does not know facts that ?might reasonably be expected to put the trustee on notice of it.?
Defendants did not allow any breach by Margaret to continue after she died and they became Successor Trustees, thus eliminating any potential liability under section 16403, subdivision (b)(1).? Rather, plaintiffs argue defendants knew or had information from which they reasonably should have known Margaret breached the terms of the Trust and then failed to correct it, an alleged breach of section 16403, subdivision (b)(2).
For example, they complain Margaret never divided the Trust assets into the three separate subtrusts after William?s death.? They also claim Margaret and Kim spent hundreds of thousands of dollars and charged the expenses against the Marital and Bypass subtrusts when they should have been charged against the Survivor?s Trust.? They maintain defendants are liable for these actions.? This argument is legally and factually incorrect.
First, it was never defendants? responsibility to divide the Trust into the three subtrusts or allocate the assets of the Trust into those three subtrusts, nor did the Trust give them the authority to do so.? Those were Margaret?s responsibilities.? Therefore, although Margaret may have breached the Trust, this was not something defendants could have corrected.
We also question, without deciding, whether Margaret?s failure to divide the Trust was an actionable breach.? Although the Trust provided for the creation and funding of the subtrusts, in essence all of the money and assets belonged to Margaret until her death.? She had absolute rights to the entirety of the Survivor?s Trust.? She had the right to all of the income from the Bypass and Marital subtrusts.? In addition she had the right to principal from those two trusts the Trustee deemed necessary for her health, education, support, and maintenance.? Since she was the Trustee, she had the discretion to decide that necessity.? And nothing in the Trust states she had to deplete the Survivor?s Trust before she used the principal in the other two subtrusts.
Further, at the time Margaret, and later Kim as the successor trustee of the Survivor?s Trust, paid the challenged expenses, defendants were not the trustees of the Bypass and Marital subtrusts.? Thus, even if the payments were not for Margaret?s health, education, support, or maintenance, as plaintiffs claim, defendants had no control over them.? Plaintiffs specifically concede this when they refer to ?undisputed evidence? that after William died, Margaret and Kim ?were the only individuals who had access to, exercised control over and directed the activities of all the sub-trusts.? ?Thus, for example, Margaret?s expenses of more than $3,000 per month for groceries were sums she expended during her lifetime.? She had the right to spend whatever amount she wanted for groceries without explaining, justifying, or accounting to plaintiffs.
Nor did defendants have any authority or control over Kim?s actions as trustee of the Survivor?s Trust. ?This included payments of $1,000 per month to Kim from the Survivor?s Trust for several months after Margaret died.? Defendants were never trustees of that subtrust, and the court found all the payments came from the Survivor?s Trust, which was Kim?s alone.? The fact Mark may have indirectly benefitted from what Kim received from the Survivor?s Trust did not make him a self-dealing trustee.
Plaintiffs complain Kim controlled all three subtrusts at some point during Margaret?s lifetime and selected the attorney for the Marital and Bypass subtrusts before Mark became a trustee. ?Again, this is nothing over which defendants had control.
We also reject plaintiffs? corollary complaint that during Margaret?s life, statements for accounts set up for the Marital and Bypass subtrusts were sent in Margaret?s name to Kim and Mark?s home.? Mark testified he did not open that mail because it belonged to Kim.? Plaintiffs complain he ?permitted Kim? to ?seize full control of? those accounts and charge improper expenses to them.? But, again, Mark had no right to review those accounts or to take any action regarding the Trust or subtrust assets or expenses.? He was a stranger to the Trust and the subtrusts until after Margaret?s death.
Plaintiffs rely heavily on the fact defendants had access to boxes of documents detailing accounts and expenditures prior to their tenure as Successor Trustees, arguing this gave defendants the responsibility to ensure all expenses had been correctly charged to the right trusts.? Not so.
First, plaintiffs cite no authority to support this theory.? Second, plaintiffs begin with the premise Margaret and Kim breached and proceed with their argument from there.? But, as noted, it is questionable whether there was any actionable original wrongdoing, and thus there was nothing defendants could do or were required to do to correct it.
Finally, section 16403, subdivision (b)(3) makes successor trustees liable for the acts of a predecessor only if the successor knows or has information from which he could reasonably have known about the predecessor?s breach.? It does not require a successor trustee to review documents and investigate to determine if there actually was a breach.? The mere fact defendants had access to documents does not mean they knew or had reason to know of a breach. ?Plaintiffs did not present any facts to prove otherwise.
Plaintiffs also criticize Thomas?s lack of active participation as a trustee, pointing to his testimony that although he had signed the notice of the change in trustees and the pleadings, and also verified the Account, he had nothing to do with the Marital and Bypass subtrusts.? This does not warrant a surcharge be levied against him.
Mark testified Thomas told him he did not want to act as a trustee based on his age.? They agreed Mark would perform the trustee?s job.? And later Thomas resigned as a trustee.
The Trust allows a trustee to resign, which becomes effective on the acceptance by the designated successor.? It requires a notice to the beneficiaries, which Thomas did not send.? Although this was sloppy and not in strict compliance with the Trust requirements, Mark did accept his resignation.
Further, while a cotrustee generally may not ?delegate the entire administration of the trust to a cotrustee? (??16012, subd. (a)), there was no negligence or breach of trust in administration of the Bypass and Marital subtrusts or preparation of the Account.? Thus plaintiffs were not damaged by Thomas?s lack of participation prior to the time he resigned.
In sum, defendants owed no duties to plaintiffs while Margaret was still alive nor were they liable after her death for any possible misconduct she may have committed.? (Estate of Giraldin (2012) 55 Cal.4th 1058, 1066, 1071 [trustee owes no duty to beneficiaries during settlor?s lifetime and ?lack of duty does not retroactively change after the settlor dies?].)
?
?
- Sufficiency of Accounting
As Successor Trustees, defendants only had the duty to account for the period from the time they assumed their offices.? The Trust provides that during the settlors? lifetimes, as long as they remained trustees no accounting was required.? Such was the case here.
Further, section 16062, that sets out when an account is required, refers only to income beneficiaries.? (??16062, subd. (a); Esslinger v. Cummins (2006) 144 Cal.App.4th 517, 528 [trustee has no statutory duty to account to remainder beneficiaries].) ?Plaintiffs were not income beneficiaries until Margaret?s death.? Thus, although the Account covered the period beginning with William?s death, as Mark testified, it was because defendants wanted to give plaintiffs ?as much information as possible? so they could see defendants had done what they were required to do.
Plaintiffs appear to misread the Account, seeming to argue that because defendants were trustees for the Marital and Bypass subtrusts, the Account refers only to those subtrusts.? Thus, they claim the Account reflects defendants charged all of the ?massive improper expenses? to the Marital and Bypass subtrusts instead of to the Survivor?s Trust.? They assert Mark ?falsely contended? he was accounting for expenses after 2010 but accounted for and ?filed detailed expense ledgers? from April 2006, claiming all expenses should be charged against the Marital and Bypass subtrusts.
But that is not the case.? The fact defendants filed the Account covering the period from the date of William?s death does not mean they intended to show all the expenses were paid from the Bypass and Marital subtrusts.? Mark testified that at the time he became a trustee all the money was in the Survivor?s Trust. ?He also testified the Account covered the Survivor?s Trust as well as the Marital and Bypass subtrusts.
In addition, the court found the contested expenses were paid from the Survivor?s Trust. ?From that we can reasonably infer the court read the Account as showing the activity related to the Trust and the Survivor?s, Marital, and Bypass trusts from the time of William?s death.? And it is plain the Account reflects that.? Thus, the Account does not show that all of the challenged expenses were charged to the Marital and Bypass subtrusts.? And, as discussed above, even if they were, Margaret had the right to charge against all of those trusts.
Most of the plaintiffs? criticisms of the Account on appeal concern expenses incurred during Margaret?s life and when she and then Kim were trustees of the Survivor?s Trust.[4]? For example, they complain defendants accounted for only about $400,000 of the approximately $700,000 spent for improvement to, maintenance of, and expenses for the Residence incurred in 2006 and 2007.? But defendants were not yet trustees and had no duty to account for those expenses.? Mark testified he had no access to documents for those years. ?Moreover, when McGraw reviewed the expenses for the Residence and prepared a report, she relied on all the receipts available to her.? Defendants certainly cannot be held responsible for receipts being lost or misplaced before they were trustees.[5]
Moreover, the court found the charges against the gross proceeds were proper.? This was a factual finding supported by evidence.? Defendants provided a closing statement from escrow to show net proceeds.? Plaintiffs have not shown there was insufficient evidence to support the finding.
Plaintiffs contend the court failed to satisfy its duty to examine the Account and determine all the issues raised by the pleadings.? They particularly criticize the court?s finding that expenses were paid from a bank account in the name of the Survivor?s Trust even though they were improperly charged to the Marital and Bypass subtrusts.
But this argument is based on the faulty premise the charges were improper in the first place.? As we have discussed, the challenged expenses were incurred during Margaret?s lifetime, when she had the right to the funds and when defendants had no authority or control over them.
Plaintiffs also claim defendants had the burden to prove every item of the Account, relying on Estate of McCabe (1950) 98 Cal.App.2d 503.? In that case, the court found the account was ?faulty? (id. at p. 505) and stated, ?where there has been a negligent failure to keep true accounts all presumptions are against them upon a settlement? (ibid.).? But this argument again is based on the false premise defendants were negligent in keeping the accounts.
In the reply brief plaintiffs argue for the first time that defendants failed to determine whether William had any separate property.? Yet they do not point to any such separate property except for some tools he had used in his boat building business that Margaret gave to Thomas?s son.? Plaintiffs claim these tools have sentimental value to plaintiff Robert Lapworth.? Without diminishing this value, it is not a sufficient basis to replace Mark as a trustee or surcharge defendants.
Plaintiffs also point to Mark?s testimony that he relied on his lawyer in preparing the Account.? There was nothing improper about this.? A trustee is entitled to retain an attorney to help with administration of the trust, including preparation of the accounting and defending against objections by the beneficiaries.? (Donahue v. Donahue (2010) 182 Cal.App.4th 259, 267-268.)
The court did not abuse its discretion in approving the Account.
- Adequacy of Statement of Decision
Plaintiffs challenge the sufficiency of the statement of decision, claiming it did not address the principle issues in dispute, and specifically failed to discuss the legal duties a trustee owes a beneficiary. ?They argue the statement of decision should have set out a factual and legal analysis of defendants? acts and omissions with reference to those duties.? These arguments have no merit.
A statement of decision must ?explain[] the factual and legal basis for [the court?s] decision as to each of the principal controverted issues at trial?.?.?.?.?? (Code Civ. Proc., ? 632.)? The court is not required to explain how it resolved subsidiary matters even if they are material to the ultimate issues.? (Kuffel v. Seaside Oil Co. (1977) 69 Cal.App.3d 555, 565-566.)
The statement of decision need only ?state the grounds upon which the judgment rests, without necessarily specifying the particular evidence considered by the trial court in reaching its decision. ?[Citations.]?.?.?.?[It] is required to state only ultimate rather than evidentiary facts because findings of ultimate facts necessarily include findings on all intermediate evidentiary facts necessary to sustain them. ?[Citation.]? ?[Citations.]? ?(Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1125.)
Further, the court is not required to ?discuss each question listed in a party?s request; all that is required is an explanation of the factual and legal basis for the court?s decision regarding the principal controverted issues at trial as are listed in the request.? ?(Hellman v. La Cumbre Golf & Country Club (1992) 6 Cal.App.4th 1224, 1230.)? It need not ?make an express finding of fact on every factual matter controverted at trial? so long as it ?addresse[s] the substance of all of the matters raised by [the parties?] request for specific findings.? ?(Bauer v. Bauer (1996) 46 Cal.App.4th 1106, 1118; see In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1530 [statement of decision need not address all 37 questions].)
Plaintiffs complain the court failed to address the two disputed issues the parties set out in their pretrial statement.? First, what was the income from the ?trust? for the period 2006 through 2012; and second, what expenses where properly charged to the Bypass and Marital subtrusts?
As to the first issue, plaintiffs contend the court ?sidestep[ped]? it by finding that Margaret was entitled to all net income from the Bypass and Marital subrusts in addition to all of the principal needed for health, education, maintenance, and support.
But as noted above, although the court needs to decide the controverted issues it is not bound by the form in which the issues are presented.? Here, as plaintiffs contend in their briefs, the principal controverted issue is whether defendants fulfilled their duties as trustees toward plaintiffs. ?More specifically, did defendants properly account for the funds in the Trust and disburse the amounts rightfully due plaintiffs?? The statement of decision sufficiently addressed those issues.
Additionally, we disagree the court sidestepped the issue as to the amount of income.? By finding Margaret was entitled to the income, the court implicitly ruled the exact amount was irrelevant to the decision.? Further, the court?s ruling the contested expenses were paid from the Survivor?s Trust dispensed with the question about what expenses were chargeable to the Bypass and Marital subtrusts.
The statement of decision delineated the legal and factual basis for the principal controverted issues.? It explained Margaret was entitled to all of the money in the Trust until her death and the contested expenses were properly charged against the Survivor?s Trust.? Further, the charges against the Residence were reasonable and Mark properly distributed the net proceeds from the sale.? The court further found defendants acted in good faith and are not liable for any acts before the tenure as Successor Trustees.
One of the purposes of a statement of decision is ??to make the case easily reviewable on appeal by exhibiting the exact grounds upon which judgment rests.??? (Whittington v. McKinney (1991) 234 Cal.App.3d 123, 127, italics omitted.)? The statement of decision satisfactorily explained the basis of the decision, facilitating our review.
DISPOSITION
The judgment is affirmed.? Defendants are entitled to costs on appeal.
THOMPSON, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
ARONSON, J.
??????????? [1]? We use first names for clarity, not out of any disrespect.
??????????? [2]? In closing argument defendants? lawyer stated Margaret ?created accounts, then closed them.?
??????????? [3]? On that basis we could deem plaintiffs? sufficiency of the evidence argument forfeited.? (Schmidlin v. City of Palo Alto, supra, 157 Cal.App.4th at p. 738.)
In addition, plaintiffs seemed to raise arguments in their statement of facts (e.g., disputed proceeds from the sale of the Residence that were not otherwise argued.? Any issues not included in the argument are deemed waived.? (California Rules of Court, rule 8.204(a)(1)(B) [each discrete issue must have a separate heading]; Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289,1294 [?we do not consider all of the loose and disparate arguments that are not clearly set out in a heading and supported by reasoned legal argument?].)
??????????? [4]? Written objections to an accounting are required to be specific and state the items in the account that are deemed objectionable.? (Estate of Kirkpatrick (1952) 109 Cal.App.2d 709, 713; Estate of Wacholder (1946) 76 Cal.App.2d 452, 455.)? Plaintiffs? objections in the trial court did not specify which items they found objectionable.
??????????? [5]? Further, along with the Account, defendants submitted all available receipts related to rehabilitating the Residence.? This was in addition to the over 100 pages of receipts and vouchers from vendors they had previously sent to plaintiffs.