APPEAL from a judgment of the Superior Court of Fresno County. Debra J. Kazanjian, Judge. (Super. Ct. No. 06CEPR01097)
The opinion of the court was delivered by: Wiseman, Acting P.J.
CERTIFIED FOR PUBLICATION
This case involves the disposition of approximately $2 million from the estate of James Donald Gardner, Jr. ("decedent"). Appellant contends that the money should go to her and to her daughter, decedent's mother and sister, respectively, because that was decedent's intent, although he failed to complete the necessary paperwork before he died. Respondents, decedent's ex-wives and children, contend that the money should go to decedent's children. On appeal, appellant contends that the probate court erred in sustaining respondents' demurrer without leave to amend. For the following reasons, we reverse.
FACTUAL AND PROCEDURAL HISTORIES
On January 23, 2009, appellant Adria Underwood filed a first-amended petition for an order determining ownership of property under Probate Code section 850*fn1 or alternatively for an order to determine the existence of an oral trust under section 5302. In the petition, she alleged that she is the mother of the decedent, who died intestate on October 11, 2006. She listed those persons with possible interests in decedent's estate as herself, Valda Pollard (decedent's sister), Carmia Eldridge (decedent's sister), Danielle Ricchiuti (decedent's minor daughter), Mari Ann Ricchiuti (decedent's ex-spouse and legal guardian of his daughter), James D. Gardner, III (decedent's minor son), and Valerie Pearce (decedent's ex-spouse and legal guardian of his son).
Appellant alleged that decedent received approximately $2.5 million as a settlement for a personal injury lawsuit. He deposited about 80 percent of these settlement proceeds in two brokerage accounts. On June 14, 2006, he opened an account with Atlas Funds and deposited the sum of $1,008,661.80 into the Atlas account. On June 19, 2006, he opened an account at Wells Fargo Investments, LLC, and deposited the sum of $1,008,661.88 into the Wells Fargo account.
Appellant further alleged that decedent completed and executed the necessary documentation for the Atlas account to be registered as a "Payable on Death" (POD) account, with appellant and decedent's sister, Carmia Eldridge, as equal beneficiaries of the account in the event of his death. Decedent told his Wells Fargo advisor, Richard Roush, that he wished to set up the same type of account for the Wells Fargo account. However, decedent subsequently was informed that one of his former spouses was a Wells Fargo employee. Appellant alleged that decedent became concerned when he found this out and "elected to withdraw the entirety of the funds on July 21, 2006, and transfer them to Wachovia Securities." In September 2006, decedent signed paperwork to electronically transfer funds in the Atlas account to Wachovia. Appellant alleged that she "is informed, believes and thereon alleges the P.O.D. terms (or, alternatively, the Totten trust terms) were maintained as part of the transfer to Wachovia."
Appellant alleged that decedent expressed an intent that the funds be held for the benefit of his mother and sister, and that, in response to decedent's directions, Wachovia staff subsequently prepared an "'Application for Registration of Account in Beneficiary Form Transfer on Death Direction,'" which confirmed that appellant and Eldridge were equal beneficiaries of the Wachovia funds. Appellant, however, died before he could sign the application. Nevertheless, appellant contended that she and Eldridge were the rightful owners of the funds deposited by decedent with Wachovia, either because decedent "maintained and/or created a Totten trust or POD account upon depositing the settlement proceeds at Wachovia Securities," or because decedent "created an express oral trust upon depositing the settlement proceeds at Wachovia Securities ...."
On February 23, 2009, Mari Ann Ricchiuti, on behalf of Danielle Ricchiuti, filed an opposition to appellant's petition. In her opposition, she contended that, because decedent never "completed and/or executed" the Wachovia paperwork, any intent to create POD accounts for the Wachovia accounts was never realized and the POD terms were not maintained as part of the transfer of the funds from the Atlas account. Moreover, decedent never established POD terms for the Wells Fargo account initially, so there was nothing to maintain or transfer when the monies in that account were transferred to Wachovia. She also contends that there was no clear and convincing evidence that decedent intended to create an express oral trust.
On February 25, 2009, Valerie Pearce, on behalf of James Gardner, III, filed a demurrer to appellant's petition. In the demurrer, Pearce contended that appellant failed to plead with certainty whether appellant's claim of the existence of a Totten trust or POD account is based upon "the terms of a written contract carried over from Decedent's Atlas account, an oral contract based upon Decedent's conversations with Wachovia Employees, or a contract implied by conduct when Wachovia drafted an 'Application for Registration of Account in Beneficiary Form Transfer on Death Direction' that was never executed by Decedent." Pearce also asserted that appellant failed to state facts sufficient to establish that decedent intended to create an express oral trust.
On March 23, 2009, appellant filed her opposition to the demurrer. She contended that she had sufficiently pleaded the existence of a Totten trust or POD account and the creation of an oral trust. She asserted that any factual disputes should be resolved by trial or summary judgment.
On April 9, 2009, the probate court issued an order sustaining Ricchiuti's opposition to and sustaining Pearce's demurrer to appellant's first-amended petition without leave to amend. The trial court first observed that, because the Wachovia account is a security account, the proper analysis should probably be under the "'Uniform T.O.D. ... Security Registration Act,'" section 5500 et seq., although the result would be the same as its analysis of the case under the California Multi-Party Accounts Law ("CAMPAL"), section 5100 et seq. The court rejected the argument that the Wachovia account should be deemed a POD account because decedent intended to complete the POD paperwork for the Wachovia account but failed to do so before he died. According to the court, as a matter of law, the failure to sign the form resulted in the failure to create a POD account.
The probate court also rejected the alternate theory that the money in the Atlas account kept the POD terms when the money was electronically transferred to the Wachovia accounts. The court concluded that the assertion the POD designation of the Atlas account "'governed' the terms" of the Wachovia account was a legal assertion and not a factual assertion. The probate court found that section 5303, subdivision (c), precluded this legal assertion because that subdivision ...