Healy v. Donnelly CA4/3

CourtCalifornia Court of Appeal
DecidedJanuary 17, 2023
DocketG060968
StatusUnpublished

This text of Healy v. Donnelly CA4/3 (Healy v. Donnelly CA4/3) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Healy v. Donnelly CA4/3, (Cal. Ct. App. 2023).

Opinion

Filed 1/17/23 Healy v. Donnelly CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

KEVIN HEALY, as Co-trustee, etc.,

Plaintiff and Appellant, G060968, G060971 & G061052

v. (Super. Ct. No. 30-2018-01022563)

MAUREEN A. DONNELLY, as Co- OPI NION trustee, etc.,

Respondent and Appellant.

Appeal from orders of the Superior Court of Orange County, Kim R. Hubbard, Judge. Affirmed. Ross Law Group and Mark A. Ross for Plaintiff and Appellant. Muscarella & Assoc., Fred G. Muscarella and Barron E. Ramos for Respondent and Appellant. * * * After years of litigation, the parties settled this contentious probate matter, reserving, as relevant here, the issue of attorney fees and costs for the court. After another year of litigation, the court ultimately issued orders. Cotrustee Kevin P. Healy sought $116,097.90 in attorney fees and $6,697.89 in costs, and he was awarded $49,492.50 in attorney fees. Cotrustee Maureen A. Donnelly sought $211,471.25 in attorney fees and $9,256.90 in costs, and the court awarded the requested amounts. Each party appeals. Healy appeals the amount awarded to him and the fact that Donnelly received any award at all, as well as the amount of her award. Donnelly appeals Healy’s award. After careful review of the parties’ arguments and the voluminous record, we conclude that given the court’s broad equitable powers, the reduction from the amount Healy sought to the amount actually awarded was supported by substantial evidence. Further, we find that as a matter of law, Donnelly was entitled to fees and costs, and the court did not abuse its discretion in awarding the amount she sought. Accordingly, we affirm both orders.

I FACTS In order to prevent this opinion from becoming as sprawling as the underlying litigation, we endeavor to keep the facts to the bare minimum necessary.

Background 1 In December 2000, Robert N. Williams and Betty Jean Williams (collectively the settlors) created the Williams Family Trust (the Family Trust), naming themselves as cotrustees and lifetime beneficiaries. The settlors executed several

1 For the ease of the reader, we refer to Robert and Betty by their first names. (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 475-476, fn. 1.)

2 amendments to the Family Trust during their lifetimes. Donnelly was Betty’s child by a prior marriage; Healy was Robert’s stepson by a previous marriage. Betty died in December 2012. The Family Trust was divided between a Survivor’s Trust (Trust A) and a Decedent’s Trust (Trust B). In August 2013, Robert allocated assets from the Family Trust to Trusts A and B. He also designated himself and Healy as cotrustees of Trust B, and in the event that either of them could not serve, designated Donnelly as cotrustee. Robert died in March 2018, leaving Healy as sole trustee of Trust A, and Healy and Donnelly as cotrustees of Trust B. Donnelly was also the primary beneficiary of Trust B, and Healy and his sister, Ann Marie Garisek, were the beneficiaries of Trust A after a number of charitable bequests were distributed . It did not take long for disputes to arise between Healy and Donnelly, and from 2018 until March 2021, the parties engaged in contested litigation. According to Healy, Donnelly was hostile toward him and his deceased stepfather Robert. According to Donnelly, her hostility arose from Healy’s refusal of an accounting and his request that she sign a full release of claims against him in exchange for resigning as cotrustee. Donnelly argued that as of March 2018, Trust B was valued at approximately $340,000, while in 2015 its value had been estimated as $627,893.40. Trust A grew in value from roughly $600,000 to over $1 million. Later, Donnelly stated in a declaration that she had learned that Trust B’s assets were being kept in an account at Northwestern Mutual, where Healy was employed as a financial advisor. She believed this was a conflict of interest. In September, Healy filed a petition to remove Donnelly as cotrustee and approve his accounting, and sought trustee fees as to Trust B. Donnelly objected to and opposed the petition. In June 2019, she filed a cross-petition alleging breach of trust, breach of fiduciary duty, removal, review of asset allocation and surcharge, which was

3 followed by a first amended petition, adding a request to compel a full accounting from the date of the trust’s funding to the date of the petition. Healy opposed. Numerous motions to the court followed. Among other things, Healy filed a demurrer, motion to strike, two summary judgment motions, and a motion to quash, all of which were denied. Donnelly’s motion to compel an accounting prior to trial was also denied.

Settlement In March 2021, four days before the matter was scheduled for trial, the parties settled the case. Within 10 days of the settlement, the parties agreed to execute instructions to distribute the remaining $239,759.66, less a $1,000 reserve, to Donnelly. Further, Healy agreed to pay Donnelly $259,240.34 to equalize Donnelly’s payment to $500,000. As to attorney fees, costs, and trustee fees, the parties agree to reserve their rights to claim such fees in appropriate motions to the court, with neither party’s trustee fees to exceed $16,000. In other respects, the parties’ respective petitions were to be dismissed. The settlement included a general release and a waiver of Civil Code section 1542.

Attorney Fee Motions and Award Donnelly sought $211,471.25 in attorney fees and $9,256.90 in costs plus $16,000 in trustee fees. Healy’s motion requested $116,097.90 in attorney fees, $6,697.89 in costs, and $16,000 in trustee fees. Each opposed the other party’s requests. Some issues followed that led to motions for reconsideration by both parties, which were granted. Ultimately, the court granted $49,492.50 in attorney fees to Healy, plus $16,000 in trustee fees, jointly and severally against Donnelly and Trust B.

4 Donnelly requested a statement of decision as to the fee order regarding Healy. The court 2 denied the request. As to Donnelly, the court granted $211,471.25 in attorney fees and $9,256.90 in costs against Healy both individually and as trustee. Both parties appeal.

II DISCUSSION We have before us both an appeal by Healy and a cross-appeal by Donnelly. Healy appeals the attorney fee award granted to him, the lack of a costs award in his favor, and the award granted to Donnelly. Donnelly appeals the award granted to Healy, arguing that he should not have recovered any fees at all.

Standard of Review The parties agree that the amount of any attorney fee award is a matter left to the trial court’s discretion, and should not be disturbed unless it results from an abuse of that discretion. We agree. (See PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) If there is a question regarding the legal basis for an attorney fee award, our review is de novo. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.) Under the de novo standard, we exercise our independent judgment and give no deference to the trial court’s ruling. (Ziesmer v. Superior Court (2003) 107 Cal.App.4th 360, 363.) We review any questions of fact for substantial evidence. “In applying this standard of review, we ‘view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its

2 Neither party appeals this order.

5 favor . . . .’” (Zagami, Inc. v. James A. Crone, Inc.

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