Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. PTR-04-285585
SIMONS, Acting P.J.
Patricia Burns Bailey, as Trustee of the Burns Family Trust - 1992 (appellant), appeals from a February 21, 2006 “Judgment” and from a June 9, 2006 “Final Judgment” both entered by the San Francisco Superior Court in the underlying action. She contends the trial court erred in (1) determining that an amendment to the trust document was void; (2) rescinding a transaction in which she obtained title to real property that was the primary asset of the trust; (3) removing her as trustee of the trust; and (4) determining that the trust’s no contest clause did not prohibit respondents Bernice Burns Jackson (Jackson) and Bravel Burns (hereafter, collectively, respondents) from being named as beneficiaries of the trust. Appellant also claims the trial court erred in issuing the Judgment before issuing a tentative decision and without having provided her the opportunity to request a statement of decision, and that the court’s Final Judgment, issued after she filed a notice of appeal to the Judgment, is invalid. We affirm the Final Judgment as the operative judgment.
As will be discussed later in the opinion, the trial court initially issued a document entitled “Judgment,” from which appellant filed a notice of appeal (Jackson v. Bailey (A114119)). The trial court then issued a document entitled “Final Judgment,” from which appellant filed a second notice of appeal (Jackson v. Bailey (A115000)). Pursuant to stipulation of the parties, the two appeals were consolidated.
FACTUAL AND PROCEDURAL BACKGROUND
On April 22, 1992, after being diagnosed with cancer in late 1991 or early 1992, Geneva Burns, together with her husband, Leon Burns, executed a trust document entitled “Burns Family Trust – 1992” (Burns Family Trust), designating how their property, including their house located on Head Street in San Francisco (Head Street property), would be divided among their children in the event of their deaths. At the time they executed the trust, Geneva and Leon Burns had six living children, Leonard Burns, Rotimi Burns, Bravel Burns, Jackson, appellant and Charlesetta Burns. They also had a predeceased child, Charles Blow, who left three children, Amber Music (Music), Sean Blow and Dianna Blow.
The Burns Family Trust refers to Geneva and Leon Burns as the “settlors” and “trustees” of the trust. Article 6 provides: “The first settlor to die shall be called the ‘deceased settlor’ and the surviving settlor shall be called the ‘surviving settlor.’ Upon the death of the surviving settlor, the trust estate shall be distributed as follows: [¶] a. So long as any of the settlor’s children . . . are alive, they shall have the right to use and occupy the [Head Street property]. Upon the death of the last of the settlor’s children to die, the property shall be distributed by right of representation to the lineal descendants of either settlor. [¶] b. All other principal and accumulated income of the trust shall be distributed outright and free of trust in equal shares to the settlor’s then living children. [¶] c. Except for the eventual distribution of the settlor’s [Head Street property], no gift shall be made to the settlor’s grandchildren or issue of a predeceased child of the settlors.”
Article 7 states in part: “During the joint lifetimes of the settlors, this trust may be revoked in whole or in part by an instrument in writing signed by the settlors and delivered by certified mail to the trustees. After the death of the deceased settlor, this trust may be revoked in whole or in part by an instrument in writing signed by the surviving settlor and delivered by certified mail to the trustee then serving, except that no revocation or amendment of the trust may be made by the surviving settlor alone with respect to the distribution to be made upon the death of the deceased settlor. . . .”
Article 8 states in part: “The settlors acting jointly or the surviving settlor acting alone may at any time during his or her lifetime amend any of the terms of this instrument by an instrument in writing signed by the settlors or the surviving settlor and delivered by certified mail to the trustee. . . . Notwithstanding the foregoing, no revocation or amendment of the trust may be made by the surviving settlor alone with respect to the distribution to be made upon the death of the deceased settlor.”
The Burns Family Trust also contains a no contest clause in Article 15, which provides: “In the event any beneficiary under this trust shall, singly or in conjunction with any other person or persons, contest in any court the validity of this trust or of a deceased settlor’s last Will or shall seek to obtain an adjudication in any proceeding or any court that this trust or any of its provisions or that such Will or any of its provisions is void, or seek otherwise to void, nullify or set aside this trust or any of its provisions, then the right of that person to take any interest given to him or her by this trust shall be determined as it would have been determined had the person predeceased the execution of this Declaration of Trust.”
Geneva Burns died on October 8, 1992. Thereafter, appellant, who was living in the Head Street property, began acting as successor trustee under Article 16, which provides: “If [] either trustee . . . shall for any reason fail to qualify or cease to act as trustee, then [appellant] shall act as successor trustee.” On February 8, 1996, Leon Burns executed a document entitled “First Amendment to Burns Family Trust – 1992” (First Amendment), which was signed by Leon Burns and appellant as trustees, and substantially revised the trust. The First Amendment provides that upon Leon Burns’s death, appellant will have the right to continue living at the Head Street property for five years and, after expiration of the five-year period, half of the principal of the trust will be distributed to appellant, with the other half being divided into six shares, as follows: (1) one share each to Leonard Burns, Rotimi Burns, Bravel Burns and Charlesetta Burns; (2) one share, to be divided equally between Jackson and her daughter, Kidd (Kidd); and (3) one share, to be divided equally between two of the three children of Charles Blow, Music and Sean Blow. The First Amendment provides that within five years of Leon Burns’s death, appellant will have the option of purchasing the Head Street property for its value as of the date of Leon Burns’s death. The First Amendment also provides that in the event either of the trustees fails to qualify or ceases to act as trustee, Charlesetta Burns shall act as successor trustee.
Leon Burns died on November 28, 1996. Appellant continued to live in the Head Street property, and in November 2002, she purchased the property from the trust by signing a grant deed from herself as successor trustee to herself as an unmarried woman. She borrowed $125,000 from Pacific Guarantee Mortgage, securing the loan on the property. She obtained a date of death appraisal on the property, setting its value on the date of Leon Burns’s death as $224,000. Based on the $224,000 appraisal figure, appellant offered $16,666.66 each to Leonard Burns, Rotimi Burns, Bravel Burns and Charlesetta Burns, and $8,333.33 each to Jackson, Kidd, Music and Sean Blow. She asked each of them to sign a “receipt,” which in fact was a release of all claims against the trust. Appellant later sent $2,001 more to each beneficiary, also with a “receipt” for each beneficiary to sign.
On January 7, 2004, respondents filed a petition under Probate Code section 17200, requesting that the court determine the validity of the First Amendment in light of Articles 7 and 8 of the Burns Family Trust. In the event the court determined the amendment was valid, respondents requested that the court find that appellant’s option to purchase the Head Street property lapsed on November 28, 2001, and that her purchase of it in November 2002 was null and void. Respondents asked for an order removing appellant as trustee and requiring her to provide an accounting of all of the trust’s assets. Respondents requested costs, and any “other orders as the court deem proper.”
At trial, Attorney Scott Bassin (Bassin) testified that he drafted the Burns Family Trust. He did not recall any meetings he had with Geneva and Leon Burns regarding the trust, and did not recall explaining any of its terms, including Articles 6 and 7, to either of them. He testified that he also drafted the First Amendment. He did not recall whether he met with Leon Burns and appellant to discuss the First Amendment, but stated he “probably” or “most likely” spoke to appellant on the telephone, and also may have spoken to Leon Burns on the telephone. He did not recall discussions he had with anyone regarding the terms of the First Amendment, and agreed it was “possible” that appellant told him what terms she thought her father wanted, and “also possible” that she told him her father wanted to grant her an option to purchase the house. He did not recall who paid him to draft the First Amendment. He testified that appellant became his client after Leon Burns’s death and he advised her regarding the trust.
Rotimi Burns’s son, Deondray Hall (Hall), testified he had been living in the Head Street property since he was born, and that his grandparents, Geneva and Leon Burns, had essentially raised him. He testified that after Geneva Burns died of cancer in October 1992, appellant, who also lived in the house, became involved in Leon Burns’s financial affairs. He stated he never saw his grandfather write a check because he “didn’t handle any legal matters like that,” and Geneva Burns had taken care of all legal and financial matters while she was alive. His grandfather never discussed the terms of a trust with him because his “grandmother had everything already drawn up before she passed away[, s]o there was no reason for [his grandfather] to even talk about that or bring that up.” He testified that appellant talked to him about his grandparents’ trust document on several occasions. On one occasion, when he met with his mother and appellant, appellant was upset that her siblings were “not going along” with the First Amendment. Appellant said that if there were a court battle, it would cost the siblings more money than what they had received from the trust, and that appellant “could afford to fight it in court better than anyone else that was protesting the amendment could.”
Leonard Burns testified he was the son of Geneva and Leon Burns. He testified that his mother “mostly [took] care of all the paperwork,” and his father was the “breadwinner.” He never talked to his mother about a trust, but she said the house would stay with “all the kids.” After his mother’s death, his father did not talk about the trust because his mother had “set everything up . . . ahead of time.” He testified that appellant never told him about an amendment to the trust, and did not provide him with a copy of either the trust or the amendment. Appellant gave him some money in 2002 and asked him to “sign at the line” of a document, but he has dyslexia, which makes it difficult for him to read, and he did not understand the document. Appellant did not tell him she was a successor trustee of the trust, that she had an option to purchase the Head Street property, or that she was going to take out a loan to purchase it.
Charlesetta Burns testified she is the youngest daughter of Geneva and Leon Burns’s seven children. She grew up in the Head Street property and lived there until she was 21 years old, and returned to the house for a few years in her early to mid-twenties. She had several conversations with her mother in which her mother told her that “when she is no longer with us, she wants her children to never . . . sell the home, that we should get along, and that the house would be for the grandchildren as well.” She testified that her mother wrote all the checks, and that because Leon Burns had “very little education,” her mother read and explained things to him.
In or about 1992, Charlesetta Burns asked appellant if all of the siblings had copies of their parents’ trust, and when they were going to divide their mother’s belongings. Appellant responded, “Oh yeah, we’ll do it. We’ll have to get together and do this.” She continued to ask appellant for a copy of the trust, but “each time I would ask her, there was always some excuse. And then I mentioned to my sisters, my brother, if they had a copy, if they [had] seen [the trust],” and learned that appellant had given them the same type of response. Between 1992 and 1996, she asked appellant for a copy of the trust “at least a dozen times.” When she was finally able to arrange a meeting with appellant, she did not receive anything because shortly after arriving, appellant lit a cigarette, stood up, and said “I don’t have to tell you nothing,” and a “girl fight” ensued. Realizing appellant was not going to provide her or any of her siblings with information, Charlesetta Burns and another sister went to see an attorney.
Charlesetta Burns testified she was unaware of any facts or set of circumstances that may have encouraged her father to change his mind regarding the original distribution plan. She testified that Leon Burns never showed any favoritism among the children, and her parents always told them they would never treat any of their children any differently. She also recalled a discussion in which appellant told her she wanted to purchase the house, but it was too late because too many years had passed.
Rotimi Burns testified she is the oldest daughter of Geneva and Leon Burns. She lived in the Head Street property while growing up and also lived there for a short period of time in 1987. She testified that her parents discussed everything regarding their financial affairs, but her mother was responsible for paying bills and writing checks. She recalled that her mother called her one day to tell her to come to the house to witness the signing of a trust. Her mother told her she wanted the trust in place “because the only thing they had was the property, and she wanted it set up in the family trust so if anyone fell down on their luck, they would always have a place to stay.” Her mother told her that she and Leon Burns had discussed having a trust drafted “so there wouldn’t be any arguments or anything. She wanted everything in place before she passed away.” Rotimi Burns never discussed the trust with her father after her mother’s death because the trust was already in place.
Rotimi Burns further testified that after Geneva Burns’s death, appellant managed Leon Burns’s finances. During the last year of his life, her father “slowed down.” Her parents treated all of their children equally and her father was a “stern believer in all of his kids getting along.” Her mother was generally the disciplinarian, but her father was “very adamant about us bickering and fighting,” and “if . . . his kids got into it, that’s when he would step in.” Appellant was allowed to return to the Head Street property at a time when she was unemployed and had no place to go. Other siblings lived in the house from time to time, as it was their parents’ philosophy to allow all of the children to use the house so they would “always have a roof over their heads.”
Rotimi Burns testified that she asked appellant for a copy of the Burns Family Trust on at least three occasions after her father’s death. Each time, appellant responded that she did not have to show it to her. Rotimi Burns stated she first learned of the First Amendment in 2002, when Jackson told her about it. At some point in 2002, appellant told her she was going to take out a loan, but did not show her any loan papers. Rotimi Burns later received some money from appellant and signed a receipt, but did not read the receipt. At the time she received the money, she was not sure what the money represented. After learning from a niece who works at a title company that appellant had deeded the house from the trust to herself, Rotimi Burns contacted an attorney. The attorney asked appellant for an accounting and a ledger describing all transactions made from the trust, but appellant never provided an accounting or ledger.
Bravel Burns testified that he is the youngest son of Geneva and Leon Burns. His father was the breadwinner, and his mother took care of “the rest.” He did not recall any of his siblings having any major disagreements with their father after their mother passed away. He had regular contact with his father after his mother’s death. He took him to the doctor or to the barbershop, picked up his medication, took his clothes to the cleaner, helped wash him, and cut his toenails. His father did not mention anything to him about a trust, an amendment to a trust, or hiring an attorney. He testified that appellant never told him she was a successor trustee. He recalled seeing the First Amendment at the end of 2002, and received a copy of it in early 2003. When appellant offered to give him some money, he asked appellant whether there was a will. Appellant responded there was none, so he proceeded to accept the money and signed a receipt without reading it. He did not know that by signing the receipt, he would be releasing appellant from any and all claims for distribution. Appellant did not tell him there was an original trust or that the trust had been amended.
Jackson testified she is Geneva and Leon Burns’s daughter. She stated that her mother took care of the financial affairs of the family while her parents were both alive. Her parents showed no favoritism to any of her siblings, and during her parents’ joint lifetimes, it was their policy to allow all of the children to live in the Head Street property at any time. After leaving home, all of the children went back to the house at least once or twice as adults. Jackson testified that in or about September 1992, her mother said she and Leon Burns “wanted that house to be available to all siblings after their passing. And they really wanted the house to stay in the family, to be available to anybody if they needed a place to go.” She testified that after her mother’s death, appellant handled Leon Burns’s financial affairs. Appellant never told her she had become successor trustee. She testified that after her mother’s death, Hall and appellant primarily cared for Leon Burns, but because appellant worked during the day, Hall provided more of the care. She also testified that Rotimi Burns changed her job shift to help out during the day, and other siblings helped as well.
Jackson testified that in or about the spring of 2002, appellant provided her with a copy of the First Amendment, but said the amendment did not “mean anything anymore” because it was too late for appellant to purchase the house. Appellant never told Jackson she owned the house or that she or any of the siblings had an ownership interest in it. Jackson testified she was at a meeting in October 2002 at which Charlesetta Burns asked for the original trust several times, and appellant refused.
Jackson also testified that in December 2002, Kidd told her that appellant had offered Kidd $8,000, and had asked Kidd to sign a receipt. When Kidd, who works for a title company, mentioned to appellant that she would be able to pull the documents on the Head Street property, appellant asked her not to do that, and offered to have Kidd move in with her. Jackson did not know where the money from appellant was coming from, so she went to City Hall to investigate and learned that appellant had sold the house to herself in November 2002. Kidd also discovered that appellant had borrowed $125,000 against the house. When Jackson asked appellant to return the house to the trust, appellant refused, stating it was hers. Jackson saw appellant regularly and talked to her on a daily basis, but appellant never brought to her attention any of the actions she was taking with respect to the trust. Jackson decided to hire an attorney.
Appellant testified she did not participate in the preparation of the Burns Family Trust. She did not recall when she first came across the trust document, and did not recall distributing a copy of it to any of her siblings. She testified she did not have any discussions with her father regarding the First Amendment, and did not discuss the contents of the First Amendment with Bassin. She did not recall reading the First Amendment before the date she signed it. She testified that before her father executed the First Amendment, she took him to Bassin’s office for a meeting. Her participation in the preparation of the First Amendment was limited to providing the spelling of names of siblings and nieces and nephews. She did not recall what else was discussed during the meeting with Bassin, and did not recall whether her father said he wanted to change the trust’s distribution plan.
Appellant testified that her parents loved all of their children equally and did not treat her any better than they treated any of her siblings. After her mother’s death, she did not conduct herself in any way that may have encouraged her father to amend the trust. She testified that at the time her parents executed the trust, the trust represented their joint wishes. She believed the First Amendment also reflected her parents’ wishes because her father asked to see Bassin, and said the First Amendment was what he wanted, and what Geneva Burns also wanted.
Appellant further testified that she first gave a copy of the First Amendment to Jackson and Rotimi Burns in 2001. She did not recall giving a copy of it to anyone else. She testified that she began the process of purchasing the house before the five-year option for her to purchase it expired, but did not complete the process until November 2002. Prior to purchasing the house, she testified she met with Rotimi Burns, Bravel Burns, and Hall because she wanted them to review the loan papers. She did not know whether she told them that she intended to purchase the house.
Appellant testified that after her father’s death, she had Bassin draft a document for her entitled “Affidavit – Death of Trustee,” but did not provide a copy of it to her siblings. She did not provide a copy of the house appraisal to any of the beneficiaries to see if they disagreed with the appraised value. She did not send any purchase documents to any of her siblings. She acknowledged it was her responsibility to let the beneficiaries know what was going on in the trust, and testified she did not inform all of the beneficiaries in 2002 that she was purchasing the house.
Appellant testified that when she took out a loan to pay the beneficiaries, she deposited the funds into a personal account in her own name at Patelco Credit Union. She did not establish the account in the name of the trust, and did not obtain a tax identification number for the purposes of establishing the account. She did not recall sending to any of the beneficiaries a copy of the grant deed showing she transferred the house from the trust to herself. She did not recall sending the closing statement to any of the beneficiaries. She acknowledged that in filling out a form entitled “Certification of Trust,” which she submitted to a title company as proof of the existence of the trust, she identified herself as a settlor of the trust, even though her parents were the settlors. She explained she misunderstood what it meant to be a settlor. In February 2004, appellant refinanced her mortgage and took out an equity line of credit in the amount of $100,000. Of the $100,000, only $30,000 remained after she paid $70,000 to her attorney to defend this action.
After a six-day trial that concluded on January 13, 2006, the trial court issued the February 21, 2006 Judgment, providing that: (1) the First Amendment is invalid to the extent it changed the distribution plan set forth in the Burns Family Trust; (2) appellant shall be removed as successor trustee immediately; (3) the transaction deeding the Head Street property to appellant is rescinded immediately; (4) appellant shall render an accounting in writing of all assets of the Burns Family Trust immediately; and (5) costs of suit pursuant to memorandum of costs are awarded to respondents.
Appellant requested a statement of decision on March 8, 2006. The trial court granted the request and ordered the parties to submit proposed statements of decision. On April 24, 2006, before the trial court issued a statement of decision, appellant filed a notice of appeal from the Judgment. The trial court issued a proposed statement of decision on May 11, 2006. Neither party objected to the proposed statement of decision, which became final and was incorporated into the court’s June 9, 2006 Final Judgment.
In its Final Judgment, the trial court explained that its Judgment was filed as an order rather than a judgment, and was in fact a proposed judgment rather than the trial court’s final judgment in the matter. In its statement of decision, the court set forth its findings and a detailed analysis, and found that in evaluating the testimony it found that Hall, Leonard Burns, Rotimi Burns, Jackson, Bravel Burns and Charlesetta Burns were credible witnesses. The trial court’s Final Judgment added the following orders to the initial Judgment: (1) Charlesetta Burns shall be designated as successor trustee immediately; and (2) damages and attorney’s fees are awarded to respondents. On August 7, 2006, appellant filed a notice of appeal from the Final Judgment. The appeals from the Judgment and Final Judgment were consolidated.
Discussion
I. The First Amendment Was Invalid To The Extent It Changed The Trust’s Distribution Plan.
A. Standard of Review
“The interpretation of a will or trust instrument presents a question of law unless interpretation turns on the credibility of extrinsic evidence or a conflict therein. [Citations.]” (Burch v. George (1994) 7 Cal.4th 246, 254.) “An ambiguity in a written instrument exists when, in light of the circumstances surrounding the execution of the instrument, ‘ “the written language is fairly susceptible to two or more constructions.” [Citations].’ [Citation.] [¶] Where a trust instrument contains some expression of the trustor’s intention, but as a result of a drafting error that expression is made ambiguous, a trial court may admit and consider extrinsic evidence, including the drafter’s testimony, to resolve the ambiguity and give effect to the trustor’s intention as expressed in the trust instrument. [Citation.]” (Ike v. Doolittle (1998) 61 Cal.App.4th 51, 74.) The trial court’s determination of whether an ambiguity exists is a question of law, subject to independent review on appeal. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
When the trial court admits conflicting evidence to resolve an ambiguity or uncertainty as to the meaning of a trust instrument, we apply the substantial evidence rule to its factual findings. (Estate of Dodge (1971) 6 Cal.3d 311, 318-319; Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865; De Anza Enterprises v. Johnson (2002) 104 Cal.App.4th 1307, 1315.) In applying this standard, we do not reweigh the evidence; any credibility issues, conflicts in the testimony or reasonable inferences to be drawn from the evidence are resolved in favor of the trial court’s determination. (Estate of Bristol (1943) 23 Cal.2d 221, 223; TME Enterprises, Inc. v. Norwest Corp. (2004) 124 Cal.App.4th 1021, 1030.)
B. Because Articles 7 and 8 of the Trust Are Ambiguous, the Trial Court Properly Admitted and Considered Extrinsic Evidence
The trial court did not expressly find that the Burns Family Trust is ambiguous. However, in light of the fact that the court admitted and considered extrinsic evidence in interpreting Articles 7 and 8 to mean that the trust’s distribution plan became irrevocable upon Geneva Burns’s death, we conclude there was an implied finding by the court that the trust is ambiguous. (See Rooz v. Kimmel (1997) 55 Cal.App.4th 573, 587, citing In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1132-1134 [when a statement of decision is silent on an issue as to which the appealing party made no request for a finding, the reviewing court will imply findings on the issue to support the judgment].)
Appellant asserts “[t]here is no ambiguity . . . which would allow the [court to] resort to extrinsic evidence to explain any ambiguity appearing on the face of the trust declaration.” We disagree.
Articles 7 and 8 of the Burns Family Trust provide that the surviving settlor may not revoke or amend the trust “with respect to the distribution to be made upon the death of the deceased settlor,” and may be reasonably interpreted in two ways: (1) upon the death of the deceased settlor, the surviving settlor may not revoke or amend the trust with respect to the distribution to be made under the trust, i.e., the trust’s distribution plan became irrevocable upon the death of Geneva Burns; and (2) the surviving settlor may not revoke or amend the distribution that is to be made upon the death of the deceased settlor, i.e., Leon Burns was not allowed to alter the distribution that was to be made upon Geneva Burns’s death, but was otherwise allowed to revoke or amend the trust.
Articles 7 and 8 each empower the surviving settlor to revoke or amend the trust. Relying on Estate of Simoncini (1991) 229 Cal.App.3d 881, appellant argues the first interpretation is unreasonable because, by prohibiting Leon Burns from revoking or amending the trust’s distribution plan, it renders his power to revoke or amend the trust “empty and meaningless.” But this contention ignores the fact that pursuant to the first interpretation Leon Burns retained the power to amend the trust so long as he did not change the trust’s distribution plan. For example, he could have amended the trust to accomplish various administrative purposes, including naming a different trustee or securing a loan with the Head Street property to pay for his care. He in fact did amend the trust to provide that Charlesetta Burns would act as successor trustee in the event appellant failed to qualify or ceased to act as trustee, and the trial court found this amendment to the Burns Family Trust was valid and enforceable.
Appellant also asserts that Probate Code sections 15400, 15401 and 15402 and Family Code section 761 support her position that Leon Burns had the authority to amend the trust’s distribution plan after Geneva Burns’s death. Probate Code section 15400 provides in part that “[u]nless a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the settlor.” (Italics added.) Probate Code section 15401, subdivision (b), provides: “Unless otherwise provided in the instrument, if a trust is created by more than one settlor, each settlor may revoke the trust as to the portion of the trust contributed by that settlor, except as provided in Section 761 of the Family Code.” (Italics added.) Probate Code section 15402 provides: “Unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation.” (Italics added.) Family Code section 761, subdivision (b), provides in part that “[u]nless the trust instrument expressly provides otherwise, a power to revoke as to community property may be exercised by either spouse acting alone.” (Italics added.) As emphasized, each of the four statutes upon which appellant relies gives a settlor the right to revoke or amend a trust instrument, unless the trust instrument provides otherwise, which means a settlor does not have the right to revoke or amend the trust instrument if the trust instrument so provides. Because the very question in this case is whether the Burns Family Trust “provides otherwise,” these statutes do not support appellant’s interpretation.
Appellant asserts that Leon Burns had an unequivocal right to revoke or amend the trust as to his one-half portion of the community assets in the trust. Estate of Powell (2000) 83 Cal.App.4th 1434, however, held that where a trust specifically permits revocation “at any time during the lifetime of either Trustor,” a surviving spouse is authorized to revoke only his or her one-half portion of the community assets in the trust. (Id. at pp. 1438, 1441.) Because the Burns Family Trust, unlike the trust in Estate of Powell, did not contain a provision unambiguously authorizing the surviving settlor to revoke or amend the trust at any time, Estate of Powell is inapposite.
As noted, where a trust instrument contains ambiguous provisions, extrinsic evidence is admissible to interpret the trust instrument. (Estate of Russell (1968) 69 Cal.2d 200, 206-207.) Because Articles 7 and 8 of the Burns Family Trust are ambiguous, the trial court properly admitted and considered extrinsic evidence.
C. Substantial Evidence Supports the Trial Court’s Interpretation of Articles 7 and 8
Substantial evidence supports the trial court’s conclusion that the trust’s distribution plan became irrevocable upon Geneva Burns’s death. The testimony of appellant’s siblings, all of whom the trial court found were credible, showed Geneva and Leon Burns intended the Burns Family Trust to be the final document setting forth the distribution plan upon Geneva Burns’s death. At the time Geneva and Leon Burns executed the trust, Geneva Burns was dying of cancer. All of the siblings testified that Geneva Burns handled all legal and financial matters for herself and for Leon Burns, who had “very little education” and never wrote a check, suggesting that Geneva and Leon Burns intended to execute a legal document setting forth a final distribution of their property while Geneva Burns was still alive. Rotimi Burns, who was present when her parents signed the Burns Family Trust, recalled her parents saying they wanted a trust document drafted before Geneva Burns died, “so [there] wouldn’t be any bickering [among] their children over the house.” Hall testified that his grandfather never spoke to him about a will or trust because his “grandmother had everything already drawn up before she passed away[, s]o there was no reason for [his grandfather] to even talk about that or bring that up.”
Further, there is substantial evidence that Geneva and Leon Burns intended that the Head Street property would always be readily available to all of their children. Rotimi Burns testified that Geneva Burns told her she “wanted [the trust] in place because the only thing they had was the property, and she wanted it set up in the family trust so if anyone fell down on their luck, they would always have a place to stay.” Jackson testified that both Geneva and Leon Burns told her they “wanted that house to be available to all siblings after their passing.” Rotimi Burns and appellant testified that it was their parents’ philosophy to allow all of the children to use the house. All of the children, including appellant, testified that their parents never favored one child over any other. Several witnesses testified that Leon Burns had “slowed down” and was mentally impaired during the last year of his life. Rotimi Burns testified that she believed the language of the First Amendment was “not my father’s doing” because it favored one of the children and would have caused dissension among the children, something to which her father was vehemently opposed.
Appellant asserts that in the event it is necessary to consider extrinsic evidence to determine her parents’ intent in creating the Burns Family Trust, the testimony of Bassin, who drafted the trust, establishes it was revocable and amendable. The argument is without merit because it is the intent of the settlors, not the settlors’ attorney, that is the “focus of the court’s inquiry.” (Wells Fargo Bank v. Marshall (1993) 20 Cal.App.4th 447, 453.) Bassin testified only as to what his intent was in drafting the document, in light of having reviewed it in preparation for trial. He did not testify regarding any knowledge or recollection he had of Geneva and Leon Burns’ intent, and did not remember any meetings or discussions he had with either of them regarding the terms of the trust. In any event, even if Bassin’s testimony provides substantial evidence to support appellant’s position, in our review of the trial court’s ruling we determine only whether substantial evidence supports that ruling, without regard to whether substantial contrary evidence exists. (See Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631 [under the substantial evidence standard, courts “will look only at the evidence and reasonable inferences supporting the successful party, and disregard the contrary showing”].)
Appellant also challenges the trial court’s determination by asserting that Probate Code section 21350 “cannot be applied . . . to invalidate the First Amendment because . . . appellant is the daughter of Leon [Burns].” Section 21350 lists various circumstances under which a document setting forth a “donative transfer” is considered invalid. Further, Probate Code section 21351 provides that section 21350 does not apply if the transferee is related by blood to the transferor. There is nothing in the record indicating the trial court relied on either of these statutes in invaliding the First Amendment, and we do not rely on them.
II. Appellant’s Acquisition of the Head Street Property Was Properly Rescinded.
Appellant contends the trial court erred in rescinding her acquisition of the Head Street property because she exercised her option to purchase the property before the five-year period for her to do so expired. Having concluded the First Amendment was invalid to the extent it changed the distribution plan, appellant had no valid option to purchase the house. Her acquisition of it, regardless of whether it occurred within the five-year period, was void. Thus, the trial court did not err in rescinding her acquisition of the Head Street property.
III. Appellant Was Properly Removed as Trustee of the Burns Family Trust.
Appellant contends the trial court abused its discretion in removing her as trustee of the Burns Family Trust. We reject this contention.
A trustee may be removed when, among other things, it appears that her private interests conflict with her trust duties. (Jones v. Stubbs (1955) 136 Cal.App.2d 490, 502.) In addition, Penal Code section 15642, subdivision (b), provides the following grounds for removal of a trustee by the court: (1) the trustee has committed a breach of the trust; (2) the trustee is insolvent or otherwise unfit to administer the trust; (3) hostility or lack of cooperation among cotrustees impairs the administration of the trust; (4) the trustee fails or declines to act; (5) when the trustee’s compensation is excessive under the circumstances; and (6) for other good cause. (See Stats. 1995, ch. 730, § 9, p. 5478.) Whether a trustee should be removed is a matter within the sound discretion of the court and is dependent upon the circumstances of each particular case. (Jones, at p. 502.) The substitution of a trustee is also largely within the trial court’s discretion. (Estate of Gilmaker (1962) 57 Cal.2d 627, 633.)
All undesignated section references are to the Probate Code.
We find no abuse of discretion in the trial court’s decision to remove appellant as trustee. The trial court found appellant breached her duty: (1) to administer the trust according to the trust instrument and according to the law (§ 16000); (2) by following the directions of an invalid amendment (§ 16001); (3) to act impartially toward beneficiaries (§§ 16002, subd. (a), 16003); (4) by acquiring an interest adverse to the beneficiaries by gaining an advantage over them and by self-dealing (§ 16004); (5) to keep the beneficiaries “reasonably informed of the trust and its administration” (§ 16060); (6) to notify the beneficiaries of a change of trustee of an irrevocable trust, and to give written notice of the trust and its terms of administration when the revocable trust became irrevocable (§ 16061.7, subd. (a)); and (7) by failing to keep her personal property separate from the trust property and not rendering an accounting of the trust dealings on demand (§§ 16060, 16061, 16009).
Section 16000 provides: “On acceptance of the trust, the trustee has a duty to administer the trust according to the trust instrument and, except to the extent the trust instrument provides otherwise, according to this division.”
Section 16001 provides: “(a) Except as provided in subdivision (b), the trustee of a revocable trust shall follow any written direction acceptable to the trustee given from time to time (1) by the person then having the power to revoke the trust or the part thereof with respect to which the direction is given or (2) by the person to whom the settlor delegates the right to direct the trustee. [¶] (b) If a written direction given under subdivision (a) would have the effect of modifying the trust, the trustee has no duty to follow the direction unless it complies with the requirements for modifying the trust.”
Section 16002, subdivision (a), provides: “The trustee has a duty to administer the trust solely in the interest of the beneficiaries.”
Section 16004, subdivision (a), provides: “The trustee has a duty not to use or deal with trust property for the trustee’s own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary.”
Section 16060 provides: “A trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration.”
In pertinent part, section 16061.7, subdivision (a), states that a trustee shall provide notice to the beneficiaries of a trust “in the following events: [¶] (1) When a revocable trust or any portion thereof becomes irrevocable because of the death of one or more of the settlors of the trust. [¶] (2) Whenever there is a change of trustee of an irrevocable trust. The duty to serve the notification by the trustee is the duty of the continuing or successor trustee, and any one cotrustee may serve the notification.”
Section 16061 provides that unless there has been a waiver, or the trust is revocable, or the trustee and the beneficiary are the same person, a trustee must, “on reasonable request by a beneficiary, . . . provide the beneficiary with a report of information about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relevant to the beneficiary’s interest, including the terms of the trust.”
Substantial evidence supports the trial court’s determinations. First, appellant failed to provide the beneficiaries with notice as required by sections 16060 and 16061, which, as noted, requires a trustee to “keep the beneficiaries of the trust reasonably informed of the trust and its administration” (§ 16060); and, to provide, on reasonable request by a beneficiary, “a report of information about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relevant to the beneficiary’s interest, including the terms of the trust” (§ 16061). Charlesetta Burns testified she requested a copy of the trust “at least a dozen times” between 1992 and 1996, but appellant refused to give it to her. Rotimi Burns testified she asked for a copy of the trust on three occasions, and each time, appellant told her she did not have to give it to her. Appellant did not inform her siblings of her intent to purchase the Head Street property, or that she had taken out a loan against the house. Because appellant did not provide a copy of the trust to the beneficiaries upon their request, and did not provide them with any information relating to her purchase of the house, or with an accounting for the distribution of their parents’ assets, she breached her duties under sections 16060 and 16061.
Second, appellant breached her duty under section 16009 to “keep the trust property separate from other property not subject to the trust,” and to “see that the trust property is designated as property of the trust.” In November 2002, appellant purchased the Head Street property, securing her personal mortgage with the house and signing a grant deed from herself as successor trustee to herself as an unmarried woman. Instead of creating a separate trust account, she deposited the funds into her personal account and issued checks to the beneficiaries from that account. She took out a home equity line of credit, securing the loan with the Head Street property and depositing all funds into her personal account. In doing so, appellant breached her duties under section 16009.
Third, by transferring the Head Street property to herself, without notifying the beneficiaries of this transaction, appellant violated section 16002, subdivision (a), which requires a trustee to act “solely in the interest of the beneficiaries,” and section 16004, which imposes on a trustee the duty “not to use or deal with trust property for the trustee’s own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary.” Appellant asserts she acted in good faith, in accordance with the First Amendment, which she believed was valid. She relies on section 16440, which provides that a court, in its discretion, may excuse the trustee in whole or in part from liability for a breach of her duties as trustee if she “acted reasonably and in good faith under the circumstances as known to the trustee.”
However, the trial court’s statement of decision clearly sets forth the court’s reasons for finding there was no such good faith in this case. The trial court stated: “The trustee is a fiduciary, and as such must act in the highest good faith towards the beneficiaries, must make full disclosure of material facts, must not acquire an adverse interest, and must not use the position to gain an advantage over the beneficiaries or to make any special profit. [Citations.] [Appellant], as successor-trustee, withheld the trust and purported amendments to the trust from her fellow beneficiaries. By carrying out the directions for the purported amendment numbered 2 of the ‘First Amendment to the Burns Family Trust – 1992’ purporting to amend . . . Article 6, she clearly had interests adverse to the other five beneficiaries, and she clearly had gained an advantage over the other five beneficiaries because the amendment gave her half the trust assets, (the house), exclusive use of the whole trust asset, and the option to buy the remaining half of the trust asset. [¶] Self dealing is a violation of the fiduciary duty. If a trustee has the power to sell property and purchases it herself, this is a breach of trust regardless of good faith or lack of injury to the beneficiary. [Citation.] [¶] . . . [¶] In November 2002 [appellant] . . . signed a ‘Certification of Trust’ falsely stating and falsely confirming that she was the settlor of the ‘Burns Family Trust – 1992’ . . . in order to secure her personal promissory note with [the Head Street property].” These findings are supported by substantial evidence, and support the trial court’s finding that appellant did not act in good faith in purchasing the Head Street property. The trial court did not abuse its discretion in removing appellant as trustee of the Burns Family Trust.
IV. The Trust’s No Contest Clause Did Not Prohibit Respondents From Being Named as Beneficiaries of the Trust.
Appellant asserts that respondents should be removed as beneficiaries of the Burns Family Trust because they filed a petition contesting the validity of the First Amendment, in violation of the no contest clause contained in the trust. We reject this contention.
“The rules pertaining to construction of no contest clauses are well settled. ‘ “The interpretation of a written instrument, including a . . . declaration of trust, presents a question of law unless interpretation turns on the competence or credibility of extrinsic evidence or a conflict therein. Accordingly, a reviewing court is not bound by the lower court’s interpretation but must independently construe the instrument at issue . . . .” [Citations.]’ ” (Graham v. Lenzi (1995) 37 Cal.App.4th 248, 258.)
A “contest” is defined as a pleading that challenges the validity of an instrument or one or more of its terms. (§§ 21300, subds. (a), (b), (c).) A no contest clause is valid and enforceable, but section 21304 requires that it be “strictly construed.” A no contest clause “ ‘—being by way of forfeiture and condition subsequent—is . . . not [to be] extended beyond what was plainly the testator’s intent.’ [Citation.] ‘The policy against forfeiture is so strong that our courts . . . insist upon a clear and unequivocal attack upon the will before invoking the penalty contained in the . . . clause . . . .’ [Citation.]” (Estate of Black (1984) 160 Cal.App.3d 582, 587.) Thus, a beneficiary will be found to have violated a no contest clause only if it is determined that the beneficiary’s act clearly was intended by the settlor to require the imposition of the penalty. (Ibid.) The fact that a legal action results in changing the distribution under a will is not in itself determinative of whether a prohibited contest has occurred. (See id. at p. 588.)
“ ‘Whether there has been a “contest” within the meaning of a particular no-contest clause depends upon the circumstances of the particular case and the language used.’ [Citations.] ‘[T]he answer cannot be sought in a vacuum, but must be gleaned from a consideration of the purposes that the [testator] sought to attain by the provisions of [his] will.’ [Citation.] . . . [I]t is the testator’s intentions that control . . . . [Citation.]” (Burch v. George, supra, 7 Cal.4th at pp. 254-255.) Determination must be made on a case-by-case basis. (Estate of Black, supra, 160 Cal.App.3d at p. 587.) Where necessary, “resort to extrinsic evidence is appropriate in construing no contest clauses.” (Burch, at p. 258, fn. 8.)
Here, as noted, the Burns Family Trust contained a no contest clause in Article 15, which provides: “In the event any beneficiary under this trust shall, singly or in conjunction with any other person or persons, contest in any court the validity of this trust or of a deceased settlor’s last Will or shall seek to obtain an adjudication in any proceeding in any court that this trust or any of its provisions or that such Will or any of its provisions is void, or seek otherwise to void, nullify or set aside this trust or any of its provisions, then the right of that person to take any interest given to him or her by this trust shall be determined as it would have been determined had the person predeceased the execution of this Declaration of Trust.” (Italics added.) As italicized, the plain language of the no contest clause provides that a beneficiary will be treated as a predeceased child only in the event he or she contests the validity of this trust—the Burns Family Trust. The clause makes no mention of its applicability to amendments, and the First Amendment does not contain its own no contest clause.
Appellant asserts the trust’s no contest clause should nevertheless apply to the First Amendment because the amendment provides: “Except for the amendments outlined above, all other provisions of the Burns Family Trust . . . shall remain in full force and effect.” Estate of Baker (1917) 176 Cal. 430 is instructive. There, a surviving heir successfully challenged a will on the ground the decedent was of “unsound mind” when he executed the will. (Id. at p. 433.) Holding that the invalidated will’s no contest clause did not prohibit the heir from being named as a beneficiary, Baker held: “It would be a strange doctrine which held that one who was of unsound mind could not execute a will, and that at the same time he could by a [no contest] clause in a will otherwise invalid, prevent any persons interested in the estate from maintaining a contest thereof. The invalidity which attaches to a will on the ground of insanity in the testator at the time of its execution attaches to all of its provisions, and is as effective upon a declaration therein forbidding a contest as upon any other part of it. It would be equally strange if a will procured by undue influence of another could be safeguarded by a provision inserted therein that any person who sought to set it aside on the ground of such undue influence should receive no part of the estate, and should therefore be disqualified from maintaining a contest upon that ground.” (Id. at p. 435.)
In the present case, the trial court determined that the First Amendment was invalid to the extent it changed the original distribution plan, because Leon Burns did not have the authority under the original trust to amend the distribution plan in any way after Geneva Burns’s death, i.e., he had no authority to execute the First Amendment. We conclude, as did the court in Estate of Baker, supra, 176 Cal. at page 435, that “[i]t would be a strange doctrine which held that one who [had no authority to execute an amendment to change the original trust’s distribution plan could by a no contest clause in an amendment setting forth a new distribution plan] otherwise invalid, prevent any persons interested in the estate from maintaining a contest thereof.” Thus, we decline to interpret the no contest clause in the original trust broadly to apply to a challenge to a subsequent amendment.
Section 21307 provides in pertinent part: “A no contest clause is not enforceable against a beneficiary to the extent the beneficiary, with probable cause, contests a provision that benefits any of the following persons: [¶] . . . [¶] (b) A person who gave directions to the drafter of the instrument concerning dispositive or other substantive contents of the provision or who directed the drafter to include the no contest clause in the instrument, but this subdivision does not apply if the transferor affirmatively instructed the drafter to include the contents of the provision or the no contest clause. [¶] (c) A person who acted as a witness to the instrument.” “The objective of the section is to protect against improper influences in the preparation of the instrument. Proof that the contestant had probable cause to believe such influences existed suffices to prevent potential abuses and at the same time ensure that the testator’s true wishes are carried out.” (Estate of Peterson (1999) 72 Cal.App.4th 431, 437.) Though this provision appears to insulate respondents from the strictures of the no contest clause, the parties did not raise section 21307 below or on appeal, so we do not rely upon it for our decision.
V. The Trial Court’s Final Statement of Decision and Final Judgment Was Valid
Appellant asserts the judgment must be reversed because the trial court issued the Judgment before issuing a tentative decision, and without having provided her the opportunity to request a statement of decision. She also asserts the Final Judgment is invalid because the trial court had no jurisdiction to issue a second judgment after appellant filed a notice of appeal of the Judgment. We reject these contentions.
Code of Civil Procedure section 632 requires the trial court to issue a statement of decision upon the timely request of any party appearing at trial. California Rules of Court, rule 3.1590 (former rule 232) provides that the trial court shall announce its tentative decision orally or in writing, and that the tentative decision does not constitute a judgment and is not binding on the court. The rule also sets forth the procedures the court is required to follow in the event a party requests a statement of decision. “While a [r]ule of [c]ourt phrased in mandatory language is generally as binding on the courts and parties as a procedural statute, it is seldom jurisdictional and ordinarily departure from it is not reversible error unless prejudice is shown. [Citation.]” (See Estate of Cooper (1970) 11 Cal.App.3d 1114, 1121.)
In National Secretarial Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510, the court held that the defendants in the case were not prejudiced by the trial court’s premature execution of the judgment and statement of decision. There, the defendants contended the trial court failed to follow a court rule and violated due process by signing the judgment and statement of decision without providing them the opportunity to present objections. The record showed the trial court did in fact sign the judgment and statement of decision prematurely, but also that it vacated the prematurely signed judgment, issuing a judgment after considering the defendants’ objections. Thus, any error committed by the trial court in signing the judgment and filing the statement of decision prematurely was considered cured when the court considered the defendants’ objections. The court further held that even if there was error, any error was not prejudicial to the defendants. (Id. at p. 523.)
National Secretarial Service, Inc. v. Froehlich is similar to the present case. Here, the trial court issued the Judgment before issuing a tentative decision, and without allowing the parties an opportunity to request a statement of decision. However, the court later allowed the parties to submit objections to a proposed statement of decision, then issued a Final Judgment and a statement of decision, setting forth its findings and analysis in detail. In it, the court explained that the Judgment it had previously filed was not in fact a judgment, but a proposed judgment, i.e., the trial court’s tentative decision. Thus, even if the trial court erred in prematurely issuing the Judgment, any error was cured when it allowed the parties to request a statement of decision, treated the Judgment as its tentative decision, and issued a Final Judgment and a statement of decision. There was no prejudice to appellant.
We also reject appellant’s contention that the Final Judgment is invalid because her filing of the notice of appeal from the Judgment stayed proceedings in the trial court, and the trial court no longer had jurisdiction to issue the Final Judgment. The filing of a notice of appeal to a judgment does in fact “stay[] proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby.” (Code Civ. Proc., § 916.) However, as explained above, because the Judgment was in effect a proposed judgment, the trial court did not lack jurisdiction to issue a Final Judgment after appellant filed her first notice of appeal.
California Rules of Court, rule 8.104(e)(2) (former rule 2(e)) provides: “The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment.” Because the trial court’s Judgment was in effect a proposed judgment, appellant’s first notice of appeal, filed while the statement of decision was pending before the trial court, was premature. We will therefore treat appellant’s first notice of appeal as having been filed immediately after entry of the Final Judgment.
Disposition
The judgment is affirmed. Respondents shall recover their costs on appeal.
We concur. GEMELLO, J., NEEDHAM, J.
Section 16003 provides: “If a trust has two or more beneficiaries, the trustee has a duty to deal impartially with them and shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries.”
Under section 16009, a trustee has a duty “(a) To keep the trust property separate from other property not subject to the trust. [¶] (b) To see that the trust property is designated as property of the trust.”