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Placencia v. Strazicich

California Court of Appeals, Fourth District, Third Division

November 26, 2019

STEPHANIE A. PLACENCIA, as Cotrustee, etc., Plaintiff, Defendant and Respondent,
v.
LISA M. STRAZICICH, as Cotrustee, etc., Plaintiff, Defendant and Appellant.

          Opinion Filed Date 12/23/19

          Appeal from a judgment of the Superior Court of Orange County No. 30-2010-00356226, David L. Belz, Judge. Affirmed in part, reversed in part and remanded with directions.

          Bradley R. Kirk & Associates and Bradley R. Kirk for Plaintiff, Defendant and Appellant.

          Bidna & Keys, Richard D. Keys and Howard M. Bidna for Plaintiff, Defendant and Respondent.

         ORDER MODYIFING OPINION AND DENYING PETITION FOR REHEARING; NO CHANGE IN JUDGMENT

         It is hereby ordered that the opinion filed on November 26, 2019, be modified as follows:

         On page 3, second full paragraph, delete the last three words at the end of the last sentence, “is Ralph's estate” and insert the following in their place, “was Ralph at the time of his death, and thus the funds became part of his estate.”

         On page 3, last paragraph, the second sentence beginning with “First, the funds in the bank” is modified to read as follows:

         “First, the funds in the bank account were part of Ralph's estate, to be distributed pursuant to his will, which has not been subject to a probate proceeding.”

         On page 10, first full paragraph, second sentence beginning with “The financial institution may pay the” is modified to read as follows:

         “The financial institution may pay the surviving party according to the terms of the account, but the funds are part of the decedent's estate, and thus the surviving party holds the funds in constructive trust in favor of decedent's heirs and must account for the funds to the administrator of decedent's estate.”

         On page 10, at the end of the last sentence of the first full paragraph delete the phrase after the word “survivorship, ” beginning with the words “but Ralph's estate” and replace it with the following:

         “but Lisa held the funds in constructive trust in favor of Ralph's heirs.”

         On page 12, remove the italics from the subheading “A Will May Furnish Evidence of Intent.”

         In the disposition on page 19, the first sentence beginning with “The judgment is reversed” is modified as follows:

         “The judgment is reversed as to the ownership of the Franklin Fund account (item 1 of the Final Judgment and Order on Petitions), and the court is instructed to enter a new order declaring that the account became part of Ralph's personal estate at the time of his death, and thus Lisa holds the funds in constructive trust in favor of Ralph's heirs, which are to be determined in a probate proceeding.”

         There is no change in the judgment.

         The petition for rehearing is DENIED.

          OPINION

          IKOLA, J.

         Ralph Placencia died, leaving behind, among other things, a will, a trust, and a joint bank account with an express right of survivorship in favor of one of his daughters, appellant Lisa Strazicich. Prior to his death in 2009, Ralph left clear statements in his will that he did not want Lisa to have the right of survivorship; he wanted the proceeds of the account to go to his trust so it could benefit all three of his daughters.[1] After his death, Lisa refused to relinquish the funds, and both she and respondent Stephanie Placencia, another of Ralph's daughters, both of whom were cotrustees of Ralph's trust, filed petitions in the probate court in their capacity as trustees to determine the parties' respective rights. The court determined that Ralph's intent should prevail and ordered Lisa to account for the funds to the trust. Lisa appealed.

         This appeal turns on a close reading of Probate Code sections 5302 and 5303, part of the California Multiple-Party Accounts Law (Prob. Code, § 5100 et seq.; CAMPAL), which governs rights of survivorship in joint accounts.[2] Section 5302, subdivision (a), provides that a joint account entails a right of survivorship “unless there is clear and convincing evidence of a different intent.” The commentary to that section makes clear that “the intention to negate survivorship may be shown to have existed after the time of creation of the account.” (Cal. Law Revision Com. com., 53 West's Ann. Prob. Code (2009 ed.) foll. § 5302, p. 61, italics added.) On the other hand, section 5303 provides that “rights of survivorship are determined by the form of the account at the death of a party.” (Id., subd. (a), italics added.) “Once established, the terms of a multi-party account” including joint tenancies, “can be changed only by one of the following methods” (id., subd. (b), italics added), which generally require a party to file paperwork with the financial institution. (id., subd. (b)(2).) This case presents a difficult question: Ralph clearly expressed the intent to negate survivorship, but the form of the account included a right of survivorship, and Ralph did not employ one of the methods listed in section 5303 to change the terms of the account.

         We harmonize the two statutes by recognizing the explicit distinction drawn in CAMPAL between the actual ownership of the beneficial interests in the account, and the express terms of the account. The distinction allows the court to honor the clear intent of the person who established the account while at the same time offering protection to the financial institution which holds the depository account.

         The express terms of the account bear particular importance for the financial institution that holds the account: CAMPAL contains a safe harbor that immunizes a financial institution for payments it makes in compliance with the express terms of the account. Nonetheless, CAMPAL recognizes that the beneficial interests in the funds may differ from its express terms. Section 5302 concerns the rules to determine the beneficial interests in the account; section 5303 concerns the express terms of the account. Thus, we hold that the financial institution was correct to pay the funds to Lisa pursuant to the express terms of the account, but the beneficial owner of those funds is Ralph's estate.

         We also conclude the court properly relied on Ralph's will as evidence of his intent, notwithstanding section 5302, subdivision (e), which provides that a right of survivorship “cannot be changed by will.” That provision merely preserves the nonprobate quality of survivorship rights. The court may still look to the will as an expression of intent to negate survivorship.

         However, we reverse on two issues. First, the funds in the bank account belong to Ralph's estate, which has not been subject to a probate proceeding. It was error for the court to award those funds directly to the trust in the absence of a probate proceeding. Second, in light of that reversal, we remand for the trial court to reassess Stephanie's attorney fees.

         FACTS

         In 1985, Ralph opened what the parties refer to as the Franklin Fund account with an initial deposit of $140, 000. Lisa was listed as a co-owner. Lisa's counsel states the paperwork submitted to open the account specifies that it is a joint account with right of survivorship, though the copy in the record is almost entirely illegible. Regardless, Stephanie stipulated that the account was opened as a joint tenancy with right of survivorship. Moreover, an account statement from 2009 ...


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