Danielle Waller v. Pamela Rogers

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 26, 2024
• Docket: 23-16152
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 26 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

DANIELLE WALLER; SUSAN SPENCER; No. 23-16152 MARGARET HARVEY, D.C. No. 3:23-cv-00808-VC Plaintiffs-Appellants,

v. MEMORANDUM*

PAMELA ROGERS; SMILE TRAIN FOUNDATION; STANFORD HOSPITAL; JOHN MUIR HOSPITAL; CONTRA COSTA MEALS-ON-WHEELS; CHILDREN'S HOSPITAL OF OAKLAND,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Vince Chhabria, District Judge, Presiding

Argued and Submitted June 14, 2024 San Francisco, California

Before: GOULD, TALLMAN, and R. NELSON, Circuit Judges.

Plaintiff-Appellants Danielle Waller, Susan Spencer, and Margaret Harvey

(“Appellants”) appeal the district court’s order dismissing their complaint against

Defendant-Appellees, Pamela Rogers and charity beneficiaries Smile Train,

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Stanford Hospital, Children’s Hospital of Oakland, John Muir Hospital, and Contra

Costa Meals-on-Wheels (“Appellees”). Appellants, beneficiaries of a family trust

(“family trust”), filed a complaint in the Northern District of California seeking

declaratory relief arising out of the administration of three related inter vivos trusts

by the Contra Costa County Probate Court (“probate court”). We review de novo

the district court’s finding that it lacked subject matter jurisdiction, and that

Appellants’ complaint was barred by collateral estoppel and the Rooker-Feldman

doctrine. Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 963 (9th Cir. 2018)

(citing Novak v. United States, 795 F.3d 1012, 1017 (9th Cir. 2015)). As the parties

are familiar with the facts, we do not recount them here. We have jurisdiction under

28 U.S.C. § 1291, and we affirm.

1. The district court did not err in determining that the California probate

court had jurisdiction to determine the existence or ownership of property within a

trust through a petition for instruction. Cal. Prob. Code § 17000(b)(6) explicitly

vests California probate courts with the power to fully investigate matters brought

to it through a trustee petition for instruction. Appellees’ petition for instruction

from the California Superior Court was entirely permitted by the California Probate

Code, as was the probate court’s response. See Estate of Baglione, 65 Cal. 2d 192,

196–97 (1966) (“[A] superior court sitting in probate that has jurisdiction over one

aspect of a claim to certain property can determine all aspects of the claim.”); Estate

2 23-16152 of Mullins, 206 Cal. App. 3d 924 (1988). Once a petition for instruction is submitted,

California courts have found that a probate court is “empowered to resolve

competing claims over the title to and distribution of the decedent’s property.”

Estate of Heggstad, 20 Cal. Rptr. 2d 433, 442 (1993) (“It is of no legal significance

that respondent/trustee chose to seek relief through a petition for instruction . . . .”).

The fact that Appellants could not independently file a complaint in the probate court

against Appellees regarding the administration of the individual trust does not negate

this statutory procedure.

2. The district court did not err in holding that collateral estoppel prohibits

successive review of Appellants’ complaint. Collateral estoppel prevents parties

from relitigating issues actually litigated and necessarily decided in a prior action.

United States v. Real Prop. Located at Section 18, 976 F.2d 515, 518 (9th Cir. 1992);

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979); Levi Strauss & Co. v. Blue

Bell, Inc., 778 F.2d 1352, 1357 (9th Cir. 1985). The California factors for collateral

estoppel are: (1) the issue sought to be precluded from relitigation must be identical

to that decided in the former proceeding; (2) the issue must have been actually

litigated in the former proceeding; (3) the issue must have been necessarily decided

in the former proceeding; (4) the decision in the former proceeding must be final and

on the merits; and (5) the party against whom preclusion is sought must be the same

3 23-16152 as, or in privity with, the party to the former proceeding. See Lucido v. Superior Ct.,

51 Cal. 3d 335, 341 (1990).

Here, Appellants assert the district erred in applying collateral estoppel,

arguing: (1) the issues in their complaint were never “actually litigated”; (2) there

was no privity between Appellant Harvey and Appellants Waller and Spencer; and

(3) even if the “actually litigated” and privity prongs are established, Appellees did

not meet the burden of proof required. We do not find these arguments persuasive.

First, Appellants were given fair opportunity to litigate. Janjua v. Neufeld,

933 F.3d 1061, 1065 (9th Cir. 2019). As the probate court stated: “at trial,

[Appellant] Waller had the opportunity, and failed, to present any evidence in

support of her claim that the [individual] trust held family trust funds. She was given

‘a fair adversary proceeding in which to fully present [her] case’” and “Ms. Waller

[did] not present evidence to support her allegation that there [were] still assets

[remaining].” The additional Appellants were given notice of the proceedings, and

“had the opportunity to appear, object, and present evidence in support of [their]

claims that the trust held family trust funds.” No party appealed the decision of the

probate court or filed a motion for reconsideration.

In Lucido, the California Supreme Court stated that an issue is “actually

litigated” when both parties “presented evidence and witnesses in support of their

positions, and . . . had the opportunity to present full cases.” 51 Cal. 3d at 354

4 23-16152 (emphasis added). There, the Court emphasized that “[a]lthough the People claim

they did not present their entire case and, thus, collateral estoppel should not apply,

it is enough that the People had ‘notice of the hearing as well as the opportunity and

incentive to present [their] case . . . . The People cannot now take advantage of the

fact that [they] avoided [their] litigation responsibilities and chose not to present

evidence at the prior proceeding.’” Id. The same applies here.

Second, Appellants Waller, Spencer, and Harvey stood in privity with one

another as the beneficiaries of the family trust. It is well-established that “a non-

party may be bound by a judgment if one of the parties to the earlier suit is so closely

aligned with the non-party’s interests as to be its virtual representative.” Mother’s

Rest., Inc. v. Mama’s Pizza, Inc., 723 F.2d 1566, 1572 (Fed. Cir. 1983) (collecting

cases); see also Milton H. Greene Archives, Inc. v. Marilyn Monroe Ltd. Liab. Co.,

692 F.3d 983, 996 (9th Cir. 2012) (citing to Wash. Mut. Inc. v. United States, 636

F.3d 1207, 1216 (9th Cir. 2011)). Under California law, all beneficiaries of an estate

are bound by the settling decision of the probate court, and inherently share privity

as “the parties interested in the estate” if the privity scheme is consistent with due

process. Carr v. Bank of America Nat’l Trust & Sav. Ass’n, 11 Cal. 2d 366, 369

(Cal. 1938) (including minors who were not represented at the probate hearing by a

guardian); see also Cal. Prob. Code § 11605 (order of probate court, including decree

5 23-16152 of distribution, “binds and is conclusive as to the rights of all interested persons”);

Richards v. Jefferson Cnty., 517 U.S. 793, 798 (1996) (due process).

Each Appellant here had a clear shared interest in the estate. Each held a

designated percentage distribution in the family trust, which could, and did, change

based on the death of another named beneficiary. Under California law, any of them

could object to the probate court proceedings, all were given notice, and all would

be bound by the probate court’s decision. See Carr, 11 Cal. 2d at 366–68. Appellant

Harvey’s failure to appear does not entitle Appellants to repetitive litigation already

decided by the state court for similar parties and a mutual estate.

Finally, we reject Appellants’ argument that Appellees failed to “meet their

burden of showing a sufficient record of the prior proceedings for [the district court]

to determine that the exact issues [Appellants] allege were previously litigated in

Probate court.” In Clark v. Bear Stearns & Co., Inc., we emphasized that the party

moving for collateral estoppel must “introduce a sufficient record of the [prior

proceeding] to enable the trial court to pinpoint the exact issues previously

determined.” 966 F.2d 1318, 1322–23 (9th Cir. 1992); see also United States v.

Lasky, 600 F.2d 765, 769 (9th Cir. 1979) (stating the party that asserts preclusion

bears the burden of proof). Here, Appellees’ original motion to dismiss included not

only the previous court order, and the minute order, but also a declaration in support

of the motion, and it included the full Second Petition and Third Petition containing

6 23-16152 all objections and exhibits. This comprises a large amount of information previously

presented to the probate court, which Appellees employed to “pinpoint” similarities

in issues as required by Clark. 966 F.2d at 1321. Appellees met their burden of

proof. Accordingly, the district court did not err in applying collateral estoppel to

dismiss Appellants’ complaint.

3. Nor did the district court err in holding that Appellants’ complaint is also

prohibited by the Rooker-Feldman doctrine. The Rooker-Feldman doctrine, as

established in Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and D.C. Court of

Appeals v. Feldman, 460 U.S. 462 (1983), precludes federal district courts from

exercising jurisdiction over cases that are de facto appeals from state court

judgments. This doctrine has been consistently applied to a wide range of state court

decisions, including probate proceedings. See Noel v. Hall, 341 F.3d 1148 (9th Cir.

2003). To constitute a de facto appeal, a district court looks to see if the complaint

alleges a legal wrong committed by the state court and seeks relief from the judgment

of that court. Id. at 1163. The doctrine also extends to claims that are “inextricably

intertwined with a forbidden appeal.” Cooper v. Ramos, 704 F.3d 772, 778–79 (9th

Cir. 2012) (noting federal courts must “pay close attention to the relief sought” on

appeal). However, the Supreme Court has emphasized that Rooker-Feldman is

narrowly confined to cases where “state-court losers” seek federal court review, and

does not apply to constitutional challenges or federal suits brought by non-parties to

7 23-16152 the state court action. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280,

284 (2005).

Here, Appellants attempt to relitigate issues that they litigated and lost in front

of the California probate court. The probate court had already litigated and decided

the two key issues Appellants raised in their district court complaint, holding that

Appellee Rogers successfully fulfilled her duty as Trustee, and that no comingled

funds existed between the trusts. Appellants implicitly and explicitly challenge the

correctness of that state-court judgment. See Exxon Mobil Corp., 544 U.S. at 284;

Tellez v. Proiettii, No. 1:24-cv-00408-KES-SKO, 2024 WL 1742028, at *4 (E.D.

Cal. Apr. 22, 2024) (dismissing complaint where “Plaintiff essentially seeks an order

overturning the adverse decisions of [a probate judge] establishing an estate’s claim

of ownership to property and directing its transfer to the estate”). Appellants assert

the probate court erred legally by failing to recognize comingled funds and by

finding that the Trustee successfully discharged her duties—and ask for relief from

that judgment as a remedy. Kougasian v. TMSL, Inc., 359 F.3d 1136, 1140 (9th Cir.

2004) (citing Noel, 341 F.3d at 1163).

We have previously emphasized that the Rooker-Feldman doctrine extends to

claims that are “inextricably intertwined with a forbidden appeal,” meaning that “the

relief requested” in those claims “would effectively reverse the state court decision

or void its ruling.” Cooper, 704 F.3d at 778–79. This is the case here. The

8 23-16152 introduction of a breach of fiduciary duty claim relies entirely on revisiting the very

issues raised in front of the probate court—and asks the district court to find that

Rogers knew or should have known that comingled funds existed between the trusts.

To rule in Appellants’ favor on a breach of fiduciary duty claim, the district court

would necessarily have to find that the probate court erred in determining no

comingled funds existed, and therefore also erred in determining Rogers had

properly fulfilled her role as trustee. This is clearly barred by Rooker-Feldman.

As we lack jurisdiction, we decline to address whether the probate exception

applies to inter vivos trusts.

AFFIRMED.

9 23-16152