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Citizens Business Bank v. Carrano

November 5, 2010


APPEAL from an order of the Superior Court of Los Angeles County. Mitchell L. Beckloff, Judge. Reversed and remanded. (Los Angeles County Super. Ct. No. BP108535).

The opinion of the court was delivered by: O'connell, J.*fn5


This matter stems from a dispute over whether a child born out of wedlock is a beneficiary to his biological grandparents' trust. The trial court found the trust instrument ambiguous and that his grandparents did not intend for him to be a beneficiary under their trust. We reverse because we find the terms of the trust are unambiguous and remand with instructions.


The facts in this matter are generally undisputed and taken from a joint trial statement submitted to the trial court below. Charles and Serena Papaz created the Papaz Family Trust on August 2, 1966. Charles and Serena have one child, Christopher.*fn1 Christopher fathered three children out of wedlock: Jonathan Carrano, Christopher Brewington and Robert Goerss. Only Jonathan's status is the subject of this appeal.

1. Christopher Fathers a Child Out of Wedlock

Christopher met Jonathan's mother, Kathy Carrano, when he was shot in the leg in 1984. She was Christopher's physical therapist while he was in the hospital and she continued to care for him during his recovery at his parents' home. One night, Christopher gave Kathy a drug and had sex with her without her knowledge. Jonathan was conceived that night. Kathy was married to another man at the time. Jonathan was born in August 1985. Kathy and her husband raised Jonathan as their child. A few years after he was born, Kathy learned that Jonathan was Christopher's son and not her husband's. Jonathan was never formally adopted by Kathy's husband.

Christopher, however, appeared to be aware that Jonathan was his son from the beginning. He bragged to his friend, Vahe Tatoian, when Kathy was pregnant that, "I know this is my kid." He again acknowledged Jonathan as his son to Vahe in 2004, but refused to tell his father, Charles. Serena also appeared to know that Christopher had fathered a child. At or around the time of Jonathan's birth, she mentioned to her sister that Christopher may have had a child with a nurse. Serena's sister understood that the nurse she referred to was the one who cared for Christopher while he was recovering from his gunshot wound. In any event, it is undisputed that Jonathan is Christopher's biological son.

Charles and Serena did not approve of Christopher's behavior, particularly his relationships with women and fathering children out of wedlock. They also did not trust Christopher with money and did not want to leave their entire fortune to him outright, believing he would squander it.

2. The Trust Instrument is Amended to Redefine "Issue"

As a result, they amended their trust in 1988 (the Eighth Amendment) to, among other things, enable him to receive income from the trust but not the assets themselves. An attorney revised the trust each time. Under the Eighth Amendment to the trust, Christopher's "issue" would receive the trust assets in the event Christopher did not survive his parents. "Issue" was defined in the Eighth Amendment as follows:

"As used in this trust, the term 'issue' shall refer to lineal descendants of all degrees and the terms 'child,' 'children' and 'issue' shall include persons adopted into the Trustors' bloodline and shall exclude persons adopted out of the Trustors' bloodline. As used in this trust, the term 'then-living issue' shall include any issue that has been conceived prior to and is born after the time such issue acquires an interest in this trust." In 1991, Charles and Serena amended the trust a ninth time to redefine the term "issue" to expressly exclude "persons adopted into the Trustors' bloodline" and "persons adopted out of the Trustors' bloodline." If Christopher had no issue, then one half of the trust assets would go to Charles's heirs - his sister's children - and one half to Serena's heirs - her sister.*fn2 Charles and Serena subsequently amended the trust two additional times with the last revision occurring in 2004; they did not change the definition of "issue" again.

In December 2006, Christopher became paralyzed from his neck down and could no longer speak. In January 2007, Kathy told both Jonathan and Charles that Christopher was Jonathan's biological father. Jonathan introduced himself to Charles, saying, "I am Jonathan, your grandson, Christopher's son." Charles "reached over and grabbed [Jonathan's] hand and said, 'I know.' " Though Jonathan visited both Christopher and Charles regularly thereafter, Charles never acknowledged him as his grandson, and in fact referred to him as "Leroy." However, there was evidence Charles acknowledged to his attorney and banker that Jonathan was his grandson during financial discussions where Jonathan was present. There is no contention that Charles was not lucid during this time, ...

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