Case Number: SC128516 Hearing Date: January 12, 2018 Dept: O

SC128516

GOLD ET AL v. DANIELS ET AL

Plaintiffs’ Application for Preliminary Injunction is DENIED. Plaintiffs fail to establish the likelihood that they will prevail on their conversion claim against Defendant by a preponderance of the evidence.

ANALYSIS: Plaintiffs seek an injunction enjoining Defendant Natalie Daniels from accessing, removing or transferring any funds held in the name of Steve Gold, the Gold 30025 Trust, and any such funds from any accounts into which such funds have been rolled over or transferred, including any and all agents, heirs and successors of Gold, and any SEP IRA accounts held in the name of Defendant Daniels or aka Natalie Gold. Plaintiffs contend the ownership of Steve Gold’s funds are disputed and Defendant Natalie has already taken over half a million dollars from Steve’s SEP IRA without any prior notice to Plaintiffs, despite all parties being aware of the dispute at the time and all parties being represented by counsel. Plaintiffs argue they will suffer irreparable harm if Steve’s funds are not frozen, because Defendant Natalie Gold will drain any and all accounts held in Steve’s name. Plaintiffs claim the funds rightfully belong to Plaintiff Karen and Plaintiff Natalie Ann Gold, Steve’s legal widow and child. The funds are all earmarked for the benefit of Natalie Ann Gold, Steve’s 12-year old daughter with Plaintiff Karen Gold.

Plaintiffs contend they will likely prevail at trial because Plaintiff Karen was Steve’s legal spouse at the time of his death. As such, Defendant Natalie Daniels has no claim to any of Steve’s property by virtue of her status as a “putative spouse.” Defendant Natalie Daniels was fully aware of Steve’s marriage to Plaintiff Karen and the fact that they were not divorced.

In opposition, Defendant Natalie Daniels objects to Plaintiffs’ submission of evidence bearing confidential Social Security Numbers of Steven, Defendant Natalie Daniels and minor Plaintiff Natalie Gold, as well as bank account numbers. The failure to redact this information violates CRC rule §1.201. Defendant asks that the Court order that all confidential information be redacted in accordance with CRC Rule §1.201.

Defendant Natalie Daniels claims she married Steve Gold on 4/15/15 under the good faith belief that Steve and Plaintiff Karen had legally dissolved their marriage on 1/4/10. Steven stated under penalty of perjury in their marriage license that his marriage to Karen had been legally dissolved on 1/4/10. Defendant Natalie Daniels submits evidence that the Wells Fargo SEP IRA was opened on 12/12/12, nearly three years after entry of the judgment of legal separation between Steve and Karen.

Moreover, the beneficiary form for Steve’s SEP IRA designates Natalie Maria Gold aka Defendant Natalie Maria Daniels as the beneficiary. Account ownership passes directly to the beneficiary of the SEP IRA upon the account holder’s death.

None of Plaintiffs’ evidence establish that the SEP IRA belongs to Plaintiff. Plaintiffs fail to mention the beneficiary designation, which clearly and unambiguously designated Natalie Maria Gold/Daniels as the beneficiary.

In addition, Defendant Natalie Daniels contends she is a putative spouse and therefore entitled to a share of Steve’s separate property. When Defendant and Steve married on 4/15/15, she and Steve were under the good faith, genuine belief that Steve and Karen were legally divorced. As a putative spouse, Defendant Natalie Daniels claims she is entitled to recover from Steve’s estate.

Plaintiffs contend on reply that at trial the evidence will demonstrate that the SEP IRA funds are traceable to community property. Plaintiffs also argue that regardless of who is designated the beneficiary, Plaintiff Karen’s right as a member of the community to community property is unaffected.

Defendant Wells Fargo filed an untimely, limited opposition to the request for injunction. Wells Fargo does not delve into the substantive issues of the action and only opposes on grounds that the requested injunction is too vague to be enforced. There are no specific account numbers provided.

Plaintiffs assert the SEP IRA funds at issue belonged to Plaintiff Karen based on the community nature of the funds therein, Plaintiff Karen’s status as Steve’s surviving spouse and Plaintiff Natalie Ann Gold’s status as Steve’s daughter and beneficiary. However, Plaintiff Karen fails to establish by a preponderance of the evidence that the funds contained in the SEP IRA were community funds and/or that her status as a legal spouse would entitle her to the SEP IRA funds. Herbert Lampert, Steve Gold’s CPA, testifies that Steve’s earnings in 2015 and 2016 would not have contributed to the SEP IRA in any significant way. See Plaintiff’s Motion, Decl. of H. Lampert, ¶5. Lampert also testifies that based on his review of past tax returns and Wells Fargo retirement and other retirement account documents, the funds rolled over from Steve’s SEP IRA into Defendant’s SEP IRA on 8/10/17 were earned over 10 years prior to Steve’s death. Id. at ¶6. However, Lampert’s testimony does not affirmatively state that the funds are traceable to community property. Lampert offers no testimony or opinion as to the source of Steve’s SEP IRA funds.

By virtue of Steve and Karen’s legal separation on 1/4/10, the community ended as of that date. Steve and Karen’s judgment of marital separation specifically provides that any property acquired by either party after the separation date shall be the sole and separate property of the Party acquiring it and that each party waives any property rights in or to any future acquisitions of property by the other.” See Plaintiff’s Motion, Ex. D, ¶¶16.1 and 16.2. Following a judgment of legal separation, the parties acquire no further community property and owe each other no spousal duties of care and support except as ordered by the court pursuant to the judgment. Fam.C. §§ 772, 4300 et seq. Given Karen and Steve’s legal separation as of 1/4/10, Karen fails to establish that the SEP IRA was established or funded with community funds or that the SEP IRA was created prior to 1/4/10, nor is it obvious that the SEP IRA is community property in whole or in part.

Likewise, Plaintiff Karen fails to submit a beneficiary form for the SEP IRA naming herself or Plaintiff Natalie Ann Gold as the beneficiary of the SEP IRA funds in dispute. “Like insurance, proceeds under tax-exempt employee benefit plans and individual retirement arrangements are payable pursuant to the terms of the contract with the plan sponsor. Thus, unless decedent’s estate is the designated beneficiary, the survivors’ benefits are not subject to probate.” See Ross and Cohen, Cal. Prac. Guide: Probate, Prob.C. ¶2:175 (Rutter Group September 2017)(citing Probate C. §5000).

Defendant Natalie Maria Daniels submits as Exhibit G to her opposition a designation of beneficiary for an IRA with Wells Fargo Bank owned by Steve Gold. The designation is dated 5/21/15 and designates Natalie Maria Gold as the beneficiary. See Opposition, Ex. G. However, Exhibit G is not authenticated and there is nothing on the document itself establishing that it is the beneficiary designation for the disputed SEP IRA. Defendant’s only direct evidence to support her claim to the funds is therefore inadmissible.

Defendant also testifies that the SEP IRA was opened at Wells Fargo in December 2012, after Karen and Steven legally separated. See Opposition, Decl. of Defendant N. Gold, ¶8. Although the testimony lacks foundation, if accepted as true, the SEP IRA was created after Karen and Steve’s community was terminated and it is by no means clear that the SEP IRA was funded with or contains community property funds.

In addition, the mere fact that Defendant is the designated the beneficiary of the SEP IRA funds does not preclude Plaintiffs from asserting the SEP IRA was funded with community property. Such as showing would entitle Plaintiff Karen to a portion of those fund as a member of the community, despite the designation of Defendant as beneficiary.

Because Karen fails to establish the nature of the SEP IRA funds, i.e. community or separate, nor does she present a designation of beneficiary expressly naming herself or Plaintiff Natalie Ann Gold as beneficiaries of the SEP IRA, Karen fails to establish a legal right to the funds at issue, an essential element of her conversion claim against Defendant Natalie Maria Daniels. Karen’s ability to establish her right to at least a portion of the SEP IRA funds after discovery and at trial are irrelevant here. As the party seeking the injunction, Karen was required to establish her claim to the funds by a preponderance of the evidence. Karen has simply failed to do so. An injunction cannot issue unless the plaintiff establishes by a preponderance of the evidence the likelihood of prevailing on the merits. See San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442.

The only funds that are properly subject to an injunction in this matter are the $571,538.88 in SEP IRA funds pled in the complaint. Plaintiffs’ complaint only makes specific reference to Defendant Natalie Daniels’s alleged theft of Steve Gold’s SEP IRA. The complaint does not allege conversion of any other specifically identified funds. Money cannot be subject to an action for conversion unless a “specific sum capable of identification is involved.” Fischer v. Machado (1996) 50 Cal.App.4th 1069, 1072 (corporate officers could be liable for conversion, based on obligation to turn over definite sum received as farmers’ agent). The pleading and proof presented in support of the conversion action must identify any specific, identifiable sums allegedly converted. Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235. A generalized claim for money is not actionable as conversion. Id. For this reason, the requested injunction is overbroad and outside the scope of this action to the extent it seeks to enjoin Defendant Natalie Daniels from accessing, removing or transferring any funds apart from the $571,538.88 in SEP IRA funds pled in the complaint.

Apart from being outside the scope of the complaint, any other funds belonging to Steve Gold are potentially subject to probate. Throughout their papers, both Plaintiff and Defendant contend they are entitled to a portion of Steve’s “estate” to the exclusion or together with the other. To the extent Plaintiff and Defendant are seeking disposition of property belonging to Steve’s estate, the matter must be determined by the Probate Court. Therefore, the request for injunction is only properly entertained as to the $571,538.88 in SEP IRA funds pled in the complaint.

In addition to being overbroad and exceeding the scope of this action, the requested injunction also fails for lack of specificity. Wells Fargo’s objection is well taken. Even if enacted, the injunction would not be enforceable as the categories of property affected thereby are not described by account number or unique identifier. “An injunction must be definite enough to provide a standard of conduct for those whose activities are proscribed, as well as a standard for the ascertainment of violations of the injunctive order by the courts called upon to apply it.” Pitchess v. Supr. Ct. (1969) 2 Cal.App.3d 644, 651.