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East Bay Regional Park District v. Griffin

California Court of Appeals, First District, First Division

August 18, 2016

EAST BAY REGIONAL PARK DISTRICT, Plaintiff and Respondent,
GEOFFREY M. GRIFFIN, as Trustee, etc., Defendant SIDNEY CORRIE, JR., et al., Objectors and Appellants. SIDNEY CORRIE, JR., et al., Plaintiffs and Appellants, GEOFFREY M. GRIFFIN, as Trustee, etc., Defendant; EAST BAY REGIONAL PARK DISTRICT, Objector and Respondent.


         Contra Costa County Superior Court No. P09-01129 Hon. John Hideki Sugiyama

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[Copyrighted Material Omitted]

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         Gagen, McCoy, McMahon, Koss, Markowitz & Raines, Gregory L. McCoy and Lauren E. Dodge for Plaintiffs and Appellants.

         Wendel, Rosen, Black & Dean, David Goldman and Thiele R. Dunaway for Defendant and Respondent.


         MARGULIES, J.

         These consolidated appeals arise out of a dispute concerning the trust of Armand Borel. The trust states that, upon Borel’s death, a parcel of the trust’s real property is to be distributed to the East Bay Regional Park District (the District) for the purposes of establishing an agricultural park. A portion of that same property is also the subject of an option agreement between Borel and Sidney Corrie, Jr.

         After Borel’s death, Corrie filed a petition for an order instructing the trustee to convey a portion of the property to him pursuant to the option agreement. The District opposed that petition, and also filed a competing petition pursuant to Probate Code[1] section 17200. The District’s section 17200 petition sought an order authorizing the trustee to distribute the property to the District and to receive an $800, 000 loan on behalf of the trust. The probate court granted the District’s petition, and Corrie appealed.[2] The District subsequently petitioned the probate court pursuant to section 1310, subdivision (b) to authorize the immediate distribution of the land and acceptance of the loan notwithstanding the pending appeal. The order granting that motion is also on appeal. While the first two appeals were pending,

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the probate court held a trial on the validity of Corrie’s option rights and issued a statement of decision finding Corrie’s option was unenforceable. Judgment was entered in favor of the District, and a third and final appeal followed.

         We find appellants are not entitled to relief in connection with their first two appeals, because under section 1310, subdivision (b), the actions taken by the trustee are valid, regardless of the outcome on appeal. Accordingly, those appeals are dismissed. As to the third appeal, we affirm, as we agree with the probate court that the option agreement is void and unenforceable.

         I. BACKGROUND

         A. The Trust

         Armand Borel was the settlor and trustee of the Armand Borel Trust dated June 20, 1994. The trust’s estate consists of various real and personal property, including a 16.65-acre parcel of real property located in Danville (the Danville property).

         Borel executed a revised trust instrument on July 14, 2008 (the Trust). During his lifetime, Borel was to act as the trustee and could distribute proceeds from the Trust to himself. On Borel’s death, the Trust was to become irrevocable, Noelle Flanagan was to be appointed as the successor trustee, and various distributions were to be made. Specifically, the successor trustee was to distribute $300, 000 to Dana Vasquez, give all of Borel’s firearms and ammunition to Carl J. Mast, and pay the estate’s death taxes, debts, and expenses.

         As to the remaining trust estate, the successor trustee was to distribute the Danville property to the District “for so long as it [is] used as and for an agricultural park.” The distribution of the Danville property was further conditioned on the District doing or performing all of the following: “all structures of whatever kind or nature are to remain on the property, and be maintained, and if necessary, restored”; various equipment, including several vintage automobiles, shall be “held, maintained, and exhibited as the beneficiary may desire”; Borel’s residence shall be restored and “used as a museum and meeting facility”; and various personal property within the residence shall be restored, including various antique furniture, four deer heads, two ducks, an albino blackbird, and a restored gas pump.

         The Trust also states: “If in the trustee[’]s sole opinion, which shall be final and incontestable, the [District] cannot meet each and every of the above-described conditions then” the Danville property shall instead be distributed

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to the City of San Ramon, first, or to the Town of Danville, second, subject to the same terms and conditions. If none of these beneficiaries take the Danville property, the trustee may lease any or all of the property to them under such terms and conditions the trustee deems appropriate. If the remaining trust property is not completely disposed of by the preceding provisions, it shall be distributed to Borel’s heirs.

         The Trust also includes a no contest clause, which provides in relevant part: “If any beneficiary under this instrument... directly or indirectly contests this instrument, any amendment to this instrument, ... or the validity of any contract, agreement..., declaration of trust, beneficiary designation, or other document executed by the settlor or executed by another for the benefit of the settlor that is part of the settlor’s integrated estate plan... then the right of that person to take any interest given to him or her by this instrument... shall be void, and any gift or other interest in the trust property to which the beneficiary would otherwise have been entitled shall pass as if he or she had predeceased the settlor without issue.”

         B. The Option Agreement

         On June 14, 2004, Borel and Corrie entered into a “Real Property Option and Purchase Agreement” (the Option Agreement) pertaining to the Danville property. The Option Agreement granted Corrie a five-year exclusive and irrevocable option to purchase up to seven acres of the Danville property at a price of $500, 000 per acre. In return for the purchase option, Corrie was required to pay Borel a nonrefundable option fee of $100, 000 up front, plus another $5, 000 per month during the option period. The Option Agreement also gave Corrie a right of first refusal to purchase “the balance of the [Danville property] that is not part of this Option Agreement.”

         On March 25, 2009, Borel and Corrie amended the Option Agreement to (1) extend the option period by one year to June 14, 2010; (2) increase the option fees from $5, 000 per month to $10, 000 per month; and (3) give Corrie the option to extend the option period to June 14, 2011, by payment of an additional $100, 000 to Borel, which would count toward the purchase price of the property if Corrie exercised the option (Amendment No. 1). Corrie timely made the $100, 000 payment required for extension of the option period until June 14, 2011.

         Borel died on April 19, 2009. and Flanagan became the successor trustee of the Trust. On November 16, 2010, Flanagan and Corrie executed a document captioned “Amendment #2 to Real Property Option and Purchase Agreement” (Amendment No. 2). Amendment No. 2 extended the option ...

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