Filed 10/29/19 Valdez v. Yamasaki 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FRANK J. VALDEZ,

Petitioner and Appellant,

v.

PETER YAMASAKI, etc., et al.,

Defendants and Respondents.

G056842

(Super. Ct. No. 30-2016-00884814)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, David L. Belz, Judge. Affirmed.

Frank J. Valdez for Petitioner and Appellant.

Duarte & Associates, James M. Duarte, and Julie A. Duncan for Defendants and Respondents.

* * *

Appellant Frank J. Valdez filed a Probate Code section 850 petition to enforce a marital dissolution judgment and other claims against his deceased former spouse’s estate and personal representative. The probate court dismissed his petition for lack of standing. Weeks later, the court denied his motion for reconsideration of the dismissal order and his motion to amend the petition to add a party with standing. Finding no error, we affirm.

I

BACKGROUND

Valdez and Diane Norby divorced in 2012 after approximately 24 years of marriage. They were both practicing attorneys. The stipulated judgment of dissolution contained a negotiated provision disposing of four life insurance policies, two on the life of each spouse. During the marriage, the spouses allegedly used community funds to purchase the insurance policies and each policy designated the policyholder’s spouse as beneficiary. The dissolution judgment awarded the spouses their individual life insurance policies, with each spouse waiving his or her respective community property interests in the other’s insurance policies. Additionally, the judgment provided the spouses would designate their only child, Victoria Valdez (Victoria), as the sole beneficiary of each of the four policies.

Norby died in 2016. After her death, Valdez discovered Norby allegedly violated the dissolution judgment by designating her new husband, Peter Yamasaki, as the beneficiary of one of her life insurance policies. Yamasaki received the $100,000 proceeds of that policy. Victoria received the $50,000 proceeds from Norby’s other life insurance policy.

Valdez demanded Yamasaki give the $100,000 to Victoria, claiming the policy proceeds belonged to her pursuant to the dissolution judgment. Yamasaki refused to turn over the money. Valdez filed a petition under section 850 seeking to enforce the dissolution judgment against Yamasaki as personal representative of Norby’s estate, explicitly seeking to recover the $100,000 insurance policy proceeds on Victoria’s behalf. The petition also stated claims against Yamasaki personally for conversion, unjust enrichment, and a common count for money wrongfully received.

The section 850 petition incorporated by reference an attached exhibit consisting of a single page of the dissolution judgment. The page identified the four insurance policies and contained the following provision: “With reference to the life insurance policies, the parties agree to name their daughter, Victoria [], as the sole primary beneficiary of said policy, however, [they] reserved the right to defer payment of the proceeds to Victoria, by trust, to Victoria’s 30th birthday.”

Yamasaki filed an opposition to the petition denying all allegations. Among the defenses asserted, the opposition argued Valdez lacked standing to bring the action because he had no interest in the subject life insurance policy or the $100,000 proceeds from that policy which Valdez explicitly sought on Victoria’s behalf.

On the day set for trial of the petition, the trial court told the parties it was concerned about standing, a fundamental issue affecting the court’s jurisdiction to hear the case. The court continued the matter for a week to allow the parties to submit supplemental briefing on the issue.

At the continued hearing on standing, the trial court asked the parties to address whether Valdez was an “interested person” within the meaning of section 850 and therefor entitled to prosecute the Probate Court petition to enforce the dissolution judgment. The court alerted Valdez to the uphill battle he was facing on standing: “In this case, the interested party or the party that would benefit directly from that judgment is the daughter. Mr. Valdez is not the interested party, at least from what I can see.”

In response, Valdez stated he brought the petition in probate court “because we are suing a deceased person. I don’t know what other court would have jurisdiction over this issue.” As for Victoria’s absence from the proceeding, Valdez contended “threats” in Yamasaki’s opposition papers and “in letters” that Yamasaki would “invoke a no-contest clause against her and disinherit her” were “a genuine obstacle [to] her being here.” Valdez asserted “Victoria won’t join [this action] on her own because of the threats” of disinheritance. (Ibid.) He suggested the court could facilitate her participation by joining her “as a necessary party to this case[.]”

Yamasaki’s counsel challenged the argument Victoria was avoiding the probate litigation due to fear. He argued: “[T]here is no evidence as to why Victoria is not really here. Maybe Victoria wants to honor her mother’s wishes to give some . . . something to her new husband, who took care of her during all those years that she was sick. Maybe Victoria is very satisfied with the fact that her mother took very good care of her,” referring to the “ton of other money” Victoria received as a trust beneficiary. In any event, defense counsel argued, Victoria “brought in her own attorney and filed a sworn statement with this court, ‘I want nothing to do with this.’ [¶] So she had her chance to come in. She elected not to come in.” Counsel argued joining Victoria “now, after trial has already started” is “a year and a half late into the game[.]”

The trial court agreed, finding “it would be completely unfair” to join Victoria as a party “at this late time.” The court also found Valdez lacked standing to proceed with the probate petition. The court clarified Valdez lacked standing to proceed with “all” the causes of action in the petition: “I am talking about the 850 [i.e., the cause of action to enforce the dissolution judgment]. I am talking about the conversion, the unjust enrichment, the wrongful payment.”

The trial court issued a minute order stating: “The Court finds there is a lack of standing. [¶] Trust Petition filed by Frank Valdez is denied.”

Twelve days later, Valdez filed an ex parte application for an order “adding [Victoria] as petitioner and substituting her in place and instead of [Frank J. Valdez.]” The application acknowledged the trial court’s finding “petitioner Frank Valdez did not suffer any loss or injury by the decedent’s violation of the Family Law Judgment and that the real party who suffered loss is Victoria Valdez.” The application referenced an attached declaration from Victoria in which “[she] consents to the substitution of herself as petitioner in the within action.”

The trial court issued a minute order denying Valdez’s belated request to amend the petition, noting the trust petition already had been denied.

Valdez next filed a Code of Civil Procedure, section 1008 motion for reconsideration of the order denying the section 850 petition based on “new facts”; alternatively, the motion sought discretionary relief (Code Civ. Proc., § 473) from counsel’s “mistake” in “believ[ing] petitioner to be a real party in interest,” and requested Victoria “be joined and/or substituted into the case . . . .” The moving papers asserted the following “new fact or circumstance”: “Victoria Valdez has transferred her chose in action to Petitioner [Frank Valdez], allowing him to proceed with enforcement of the action as the real party in interest.”

The trial court denied Valdez’s motion, rejecting his claim Victoria’s recent assignment to him of her rights as a beneficiary under the dissolution judgment constituted “‘new or different facts, circumstances, or law’” justifying relief under Code of Civil Procedure, section 1008. The court stated in the minute order: “There is no evidence or argument offered suggesting why such an assignment was not accomplished, and could not be reasonably accomplished, before the Court found Mr. Valdez lacked standing to litigate his claims in the Petition filed 10/31/16. [Citation.]” Likewise, the court concluded Valdez did not establish grounds for relief under Code of Civil Procedure, section 473: “Standing was raised in the Objection to the Petition. . . . Valdez essentially urges the Court to allow him a ‘do-over’ based on events that apparently occurred after he suffered an adverse ruling during a bench trial, nearly 18 months after filing his petition. The court concludes such relief is not appropriate.”

On July 16, 2018, the trial court entered a judgment dismissing the section 850 petition.

II

DISCUSSION

On appeal from the judgment of dismissal, Valdez argues the trial court erred in ruling he lacked standing to file the section 850 petition to enforce the marital dissolution judgment against Norby’s estate and her personal representative, Yamasaki. Valdez further contends the court erred in ruling he lacked standing to bring the additional claims (conversion, unjust enrichment, common count for money received) against Yamasaki. Finally, Valdez argues the court abused its discretion in denying his motion for reconsideration or, alternatively, for amendment of the petition to add Victoria, “a party with standing.” None of Valdez’s arguments has merit.

A. Standard of Review

Importantly, the standard of review applicable to all the orders challenged here is the deferential abuse of discretion standard. (See Estate of Maniscalco (1992) 9 Cal.App.4th 520, 525 (Maniscalco) [determination of whether person has standing in probate proceedings as “interested person” under § 48 is reviewed for abuse of discretion]; Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457 [order denying motion for reconsideration is reviewed for abuse of discretion]; Record v. Reason (1999) 73 Cal.App.4th 472, 486 [ruling on motion for leave to amend “‘will be upheld unless a manifest or gross abuse of discretion is shown’”]).

Under the abuse of discretion standard of review, an appellate court will not disturb discretionary trial court rulings “‘unless a clear case of abuse is shown and unless there has been a miscarriage of justice[.]’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) “‘Discretion is abused whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered. The burden is on the party complaining to establish an abuse of discretion[.]’” (Ibid.; Blank v. Kirwan (1985) 39 Cal.3d 311, 331.)

B. The Trial Court Acted Within its Discretion in Ruling Valdez Lacked Standing

Section 48 defines “‘interested person’” for Probate Code proceedings as follows: “(a) Subject to subdivision (b), ‘interested person’ includes any of the following: [¶] (1) An heir, devisee, child, spouse, creditor, beneficiary, and any other person having a property right in or claim against a trust estate or the estate of a decedent which may be affected by the proceeding. [¶] (2) Any person having priority for appointment as personal representative. [¶] (3) A fiduciary representing an interested person. [¶] (b) The meaning of ‘interested person’ as it relates to particular persons may vary from time to time and shall be determined according to the particular purposes of, and matter involved in, any proceeding.” (§ 48.)

Valdez contends he qualifies as an “interested person” under two of the categories listed in subdivision (a)(1) of section 48: “creditor” and “‘person having a property right in or claim against’” Norby’s estate. (Italics added.) Valdez additionally contends he is “an interested person” under subdivision (b) of the statute, which he argues “is broadly interpreted to include a person entitled to enforce an obligation against the trust and estate.” (Italics added.) Essentially, Valdez argues his “claim against” Norby’s estate and his right “to enforce an obligation against” it derive from his status as a party to the marital dissolution judgment. Valdez asserts: “A party to a family law judgment has the right to seek enforcement of his judgment.” Based on that principle, Valdez contends Norby’s violation of the judgment triggered his right, as a party to the judgment, to enforce it against her.

Valdez cites several cases to illustrate his argument section 48, subdivision (b), “is broadly interpreted to include anyone that has an interest in the trust and estate.” All of the cases he cites, however, are distinguishable from the present case for the simple reason the petitioner in each had a pecuniary or other direct interest in the estate. For example, in Estate of Davis (1990) 219 Cal.App.3d 663, the court held a probate administrator’s surety may participate in a probate proceeding as an interested person because the surety would be required to pay on the bond if the administrator were held liable. (Id. at p. 669.) In Maniscalco, supra, 9 Cal.App.4th at p.522, the court found a city that “intended to appear and make an overbid” in a probate sale of real property, but missed its opportunity to bid after being “misled as to the date,” had standing to bring a motion to set aside the probate sale. Likewise, in Estate of Prindle (2009) 173 Cal.App.4th 119, the court found Traveler’s Insurance was an “interested person” in objecting to the assignment of a bad faith claim to the plaintiffs in a tort action against an estate where the insurer had potential liability for that bad faith claim under a homeowner’s insurance policy. (Id. at p. 127.)

In the present case, the trial court found Valdez had no interest in the $100,000 proceeds from Norby’s life insurance policy; only Victoria had an interest in the money, based on her status as a third party beneficiary of the provision in the dissolution judgment directing the spouses to make Victoria the sole beneficiary of all four policies. Because only Victoria potentially could benefit from the provision, only she qualified as an “interested person” under section 48. Valdez was not an “interested person.”

The same analysis pertains to Valdez’s argument he has standing to bring the additional claims (conversion, unjust enrichment, common count for money received) against Yamasaki. Valdez contends he has standing to bring these claims because he “gave up” valuable rights in agreeing to this provision of the judgment: his community property interest in Norby’s insurance policies and the premiums paid for those policies, as well as “his right to name anyone he chooses as beneficiary of his insurance policies in exchange for the agreement that both parties would give the proceeds of their policies to Victoria.” But the fact Valdez “gave up” things in exchange for obtaining this intended benefit for Victoria is irrelevant to the standing analysis. A third party beneficiary is always benefitting from someone else’s performance, payment, or donation. Nevertheless, it is the third party beneficiary who has standing to enforce the resulting right, not the donor who bestowed the right.

C. The Trial Court Acted Within its Discretion in Denying the Motion for Reconsideration or, Alternatively, to Add Victoria as a Party

Valdez argues the trial court abused its discretion in denying his motion for reconsideration of the order dismissing the section 850 petition for lack of standing. He contends Victoria’s assignment to him of her right to recover the insurance policy proceeds was a “new fact” justifying reconsideration under Code of Civil Procedure section 1008, subdivision (a). Valdez argues the court “completely ignored the fact that the assignment did not exist prior to the hearing on standing” and “[u]ntil the court decided that [Valdez] did not have standing, there was no reason to obtain the assignment.”

The argument lacks merit. Valdez had ample notice of his problem of standing, and the need to remedy his lack of standing, long before the trial court decided the standing issue at the start of trial. Yamasaki asserted in his initial opposition to the petition Valdez lacked standing. Yamasaki repeated his standing challenge in his amended opposition and in his verified response. Finally, Yamasaki argued in his trial brief Valdez lacked standing and the court continued the trial for a week to allow the parties to brief that issue in depth.

The court aptly observed, “There is no evidence or argument offered suggesting why such an assignment [of Victoria’s chose in action] was not accomplished, and could not be reasonably accomplished, before the Court found Mr. Valdez lacked standing to litigate his claims in the petition[.]” Consequently, we conclude the court acted within its discretion in concluding no “new facts” within the meaning of section 1008 merited reconsideration of the order denying the petition for lack of standing.

Likewise, Valdez fails to persuade us the trial court abused its discretion in denying his alternative request for an order allowing Victoria to “be joined and/or substituted into the case[.]” Valdez argues such a request to amend the pleadings should be liberally granted. Moreover, he cites Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995 (Cloud) for the rule a trial court must allow a plaintiff who lacks standing to substitute into the action a party with standing. Cloud does not stand for that broad proposition and, in any event, Cloud is distinguishable from the present case.

In Cloud, the plaintiff had personally owned certain causes of action (wrongful termination and sexual harassment), which the plaintiff lost ownership of in a personal bankruptcy: The claims transferred, by operation of federal bankruptcy law, to the bankruptcy trustee. The defendants in Cloud moved for summary judgment, contending the plaintiff lacked standing because the bankruptcy trustee owned the claims. The trial court agreed and granted summary judgment for the defense. The appellate court reversed, holding the trial court erred in refusing plaintiff’s request to substitute in the real party in interest (the bankruptcy trustee) or to obtain the trustee’s abandonment of the claims, reasoning if the trustee abandoned the claims, they would revert to the plaintiff, making her once again the real party in interest with standing to proceed.

There are many factual distinctions between Cloud and the present case. The most significant is the timing of the request to substitute parties: In Cloud, the plaintiff requested the bankruptcy trustee be substituted in as real party in interest before the court ruled on the summary judgment motion. Here, Valdez asked the trial court to substitute Victoria into the case after the court had denied the petition and the case had ended. The court did not abuse its discretion in denying Valdez’s posttrial request to amend the petition to add Victoria as the plaintiff.

DISPOSITION

The judgement is affirmed. Respondent is entitled to costs on appeal.

ARONSON, J.

WE CONCUR:

MOORE, ACTING P. J.

FYBEL, J.