Ster v. Ster CA3

CourtCalifornia Court of Appeal
DecidedSeptember 16, 2021
DocketC087729
StatusUnpublished

This text of Ster v. Ster CA3 (Ster v. Ster CA3) 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
Ster v. Ster CA3, (Cal. Ct. App. 2021).

Opinion

Filed 9/16/21 Ster v. Ster CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 THIRD APPELLATE DISTRICT (Sacramento) ----

JAMES FRANK STER III, C087729

Plaintiff and Respondent, (Super. Ct. No. 34-2017- 00215909-PR-TR-FRC) v.

JOHN STER, as Successor Trustee, etc.,

Defendant and Appellant;

KAREN REEVES,

Appellant.

Defendant John Ster (“John”) and plaintiff James Frank Ster III (“James”), along with their adult siblings Judy Bauer (“Judy”) and Janice Glaser (“Janice”), are beneficiaries of their deceased father’s trust, the James Frank Ster, Jr. Revocable Living Trust (the “Trust”). On appeal, John and his wife Karen Reeves (“Karen”) contend the trial court erred in removing John as the acting trustee, freezing the assets of the Trust,

1 and compelling the sale of a piece of real property that had been transferred to them from the Trust. John and Karen ask us to vacate the trial court’s orders and remand the matter for trial. Karen acknowledges that she is not a beneficiary of the Trust but argues she has standing as an aggrieved co-owner of the property ordered to be sold. She contends the trial court’s orders are void because she never received notice of the hearing or related petitions. John additionally contends the trial court erred in failing to hold an evidentiary hearing. James contests Karen’s standing and argues, among other things, that the challenged order freezing the trust assets was not appealable as it was tantamount to a preliminary injunction. We will reverse the trial court’s orders and remand the matter for further proceedings. FACTUAL AND PROCEDURAL BACKGROUND James Frank Ster, Jr., was the settlor (the “settlor”) of the Trust. He died in November 2016, and the Trust became irrevocable. The Trust included the settlor’s personal property (of an undetermined value), a certificate of deposit worth approximately $50,000 (CD), and three residential properties, referred to by the parties as the “Poplar,” “Sandburg,” and “Cobalt” properties. A. Relevant term of the Trust Under the terms of the Trust, each of the beneficiaries was to receive an equal pro rata share of the entire trust estate. The Trust specifies that John was to receive a special gift of the Cobalt property, subject to any liens and encumbrances. The fair market value of the Cobalt property was fixed at $300,000, regardless of when the settlor died, so that “no appraisal shall be necessary.” The Trust contemplated that John would likely be required to provide an equalizing payment to the other beneficiaries in order to achieve the result that each beneficiary receives an equal share of the entire estate. The Trust also

2 contemplated that John may need to obtain a loan to ensure that the estate had enough liquid assets so that each beneficiary receives an equal share. The Trust grants the trustee the discretion to “defer actual division or distribution for such reasonable period of time as is needed to effectively identify, take possession of, value, divide, and distribute the assets of the trust.” The Trust granted additional powers to the trustee, including the power to “[m]anage, control, improve, and maintain all real and personal trust property,” including the authority, “[w]ith or without court authorization, [to] sell [ ], convey, exchange, partition, and divide trust property.” In addition, the trustee has the power to (1) “[m]ake ordinary or extraordinary repairs or alterations in buildings or other trust property,” (2) “[e]mploy and discharge agents and employees,” and (3) “[b]orrow money for any trust purpose” or “encumber any trust property.” The trustee is also granted the power to self-deal in defined circumstances. The trustee was required to render an account only at the termination of the Trust, on change of the trustee, or as required by law. The trustee is not liable for acts or omissions, except those resulting from the trustee’s “willful misconduct or gross negligence.” The trustee has the power to make discretionary distributions to a beneficiary, including for “health, education, maintenance, and support,” “based on the beneficiary’s standard of living at the date of distribution.” Under such circumstances, no equalizing distribution is required, and these distributions are final and incontestable. John was designated as successor trustee, with Janice designated as the alternate. If neither John nor Janice were able or willing to serve, a new trustee would be appointed by majority vote of the remaining adult beneficiaries. B. First petition by James In July 2017, James petitioned to compel the trustee to make distributions. James stated he had been negotiating with John since November 2016 regarding his share of the Trust and hoped to receive one of the residential properties. James alleged John had been

3 living in the Cobalt property without paying rent or transferring title to himself, and he had used trust funds to repair the property. James further alleged John had taken no steps to liquidate the residential properties, and had failed to make any distributions. James requested the court order the trustee to distribute the Poplar property to James, with an assigned distribution value of $174,500. John responded that he offered to transfer to James as his full and final distribution the Poplar house, along with certain other personal property and forgiveness of a $7,000 loan. James rejected the offer. James also rejected John’s subsequent attempt to distribute James’s share in March 2017, based on disagreements about how the $50,000 CD funds should be distributed. In the meantime, John distributed the trust personal property to the beneficiaries, with James receiving a car, a mobility scooter, and miscellaneous household items. John stated that he met with James, Janice, and Judy in May 2017, and James said he wanted to purchase the Poplar property. Judy said she wanted to acquire the Sandburg property, and all four agreed that John could initiate the transfer of the Cobalt property to himself. James had previously asked that Cobalt not be transferred until all other assets had been distributed, but he agreed to talk with his counsel about withdrawing his objection. In June 2017, John again offered to transfer the Poplar property and other property to James as his full and final distribution. James sent a letter saying he accepted the offer, but he actually only accepted the offer’s $174,500.00 valuation of the property. James also demanded an accounting. In his petition to compel distributions, James argued he refused to agree to the offers to settle because he did not want to waive his right to an accounting and full distribution. John stated he and James continued to negotiate the terms of James’s distribution in September and October 2017. In October 2017, John obtained new counsel.

4 C. Second petition by James In September 2017, James petitioned the court to remove John as trustee and appoint Janice as successor trustee, and for John to provide an accounting. James alleged John continued to disregard his fiduciary duties, including using trust funds to maintain and improve the residence that would eventually be transferred to him (i.e., Cobalt). James further alleged John still had not taken any steps to distribute the other real properties, and had failed to provide an accounting. James again demanded an accounting and attorney fees. In his reply, John stated that he had lived in Kansas the entire time he served as trustee of the Trust.

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Ster v. Ster CA3, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ster-v-ster-ca3-calctapp-2021.