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In re Guardianship of K.S.

September 30, 2009

GUARDIANSHIP OF K.S., A MINOR
HAL S., AS GUARDIAN, ETC., PETITIONER AND RESPONDENT,
v.
JAMES VALENTINE, AS TRUSTEE, ETC., OBJECTOR AND APPELLANT.



(Santa Cruz County Super. Ct. No. PR042036). Trial Judge: The Honorable Samuel S. Stevens.

The opinion of the court was delivered by: Rushing, P.J.

CERTIFIED FOR PUBLICATION

The instant case concerns two appeals. Both in part relating back to Valentine‟s removal as trustee for day trading with trust funds and his payment, to himself, of $250,000 for services. In the first, case No. H032581, Appellant James Valentine*fn1 seeks review of an order of the superior court denying his objections and approving the third guardianship accounting petition filed by Respondent Hal S. In the second appeal, Appellant Valentine seeks review of the superior court‟s order that he pay Hal S. compensatory damages in the amount of $77,573.40, based upon Valentine‟s unreasonable and bad-faith assertion of meritless objections in violation of Probate Code, section 2622.5.

STATEMENT OF THE FACTS AND CASE

Respondent Hal S. is the guardian and father of minor K.S. Hal S. was appointed guardian of K.S. and his brother Derek, who is now an adult, in 2001.

Appellant James Valentine is the suspended trustee of a life insurance trust (hereinafter referred to as the "KMP Trust") established by K.S. and Derek‟s mother, Kelsey P., to provide for the "health, maintenance, education, travel, and welfare, and general welfare," of the boys at the time of her death. Kelsey P. died in a plane crash on October 2, 2000.

Upon Kelsey P.‟s death in 2000, Hal S. became the single guardian of the boys. Valentine served as trustee of the KMP Trust, and provided support for the boys pursuant to the provisions of the trust. In May 2001, the trust was funded with $20,524,234 from the proceeds of Kelsey P.‟s life insurance policy. Valentine initially transferred $54,000 to K.S.‟s guardianship account on May 31, 2001, and continued to disperse $6,000 per month to the account until the time he was suspended as trustee in March 2007.

In January 2007, Hal S. filed his third account and report of guardian and petition for attorney fees that included the period from October 2004 to October 2006. Valentine filed objections to the third account in March 2007, and filed amended objections in April 2007. Hal S. filed a reply to the objections in June 2007, asserting that the objections were without merit and that pursuant to Probate Code, section 2622,*fn2 Valentine had no standing to assert his objections.

In August 2007, the court ruled that Valentine was an "interested" party under Probate Code, section 2622, and permitted Valentine to proceed to trial on the objections. The court also appointed an attorney to represent the interests of K.S. Prior to trial in December 2007, Valentine filed supplemental objections.

During trial, attorney for K.S., Deborah Malkin, represented to the court that she was satisfied with Hal S.‟s expenditures as stated in the third account. After Valentine‟s case in chief, the court granted Hal S.‟s motion for judgment under Code of Civil Procedure section 631.8. Hal S. then moved for attorney fees and costs under Probate Code section 2622.5, which provides compensation if the court determines objections are brought in bad faith.

An evidentiary hearing was held in July 2008, on the issue of attorney fees. The court found that Valentine‟s objections were unreasonable and were filed in bad faith. The court ordered Valentine to pay attorney fees and costs to Hal S. in the amount of $77,573.40.

Valentine filed two notices of appeal in the case. The first is case No. H032581, and concerns the trial court‟s denial of his objections and approval of Hal S.‟s Third Account. The second appeal is case No. H033376, and concerns the court‟s award of attorney fees and costs to Hal S. pursuant to Probate Code section 2622.5.

DISCUSSION

Appeal in Case No. H032581-Objections and Approval of Third Account

Valentine asserts the trial court erred in granting Hal S.‟s motion for judgment pursuant to Code of Civil Procedure section 631.8. Valentine also asserts the court erred in ...


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