McKINSTER, Acting P.J.
Mark A. Roesler, temporary conservator for Bettie Mae Page, now deceased, appeals orders of the probate court in connection with the court's disapproval of his "Amended First and Final Account." The probate court ordered Roesler to restore funds to the conservatorship estate which were transferred to the conservatee's revocable trust pursuant to a court order which, the court determined, had been obtained by Roesler's misrepresentation of material facts; ordered payment of a claim by the California Department of Developmental Services from the conservatorship estate; and set a hearing on an order to show cause why the conservator should not be surcharged in the amount of the funds which were transferred to the trust. We will reverse the order with respect to payment to the Department of Developmental Services, but will otherwise affirm the order.
Bettie Mae Page was confined to Patton State Hospital in July 2007, apparently after she was found not guilty of attempted murder and assault, by reason of insanity. At some point after her admission to Patton State Hospital, she suffered a stroke which left her paralyzed from the neck down. She was transferred to Crestview Convalescent Hospital in Rialto, a facility "under the purview of Patton State Hospital" which could provide more appropriate care.
On June 27, 2008, Mark Roesler, who was Ms. Page's long-time business manager, petitioned the court to be appointed temporary conservator. His attorney (Roesler, who lives in Indiana, was not present) explained Ms. Page's medical condition and asserted that Ms. Page had "some money in a bank account that was held with her neighbor" so that the neighbor could pay some of her bills. He expressed concern that the neighbor would take money from the account.
On July 21, 2008, after receiving a report from the probate court investigator which confirmed that Ms. Page required a conservator of her estate and her person, the court issued letters of temporary conservatorship specifically authorizing Roesler to transfer the funds from Ms. Page's personal accounts to an account held by the Bettie Mae Page Trust. Roesler transferred the funds, in the amount of $145,126.20, on July 22, 2008.
On July 31, 2008, the Department of Developmental Services (DDS) filed a creditor's claim for reimbursement of expenses incurred on Ms. Page's behalf during her hospitalization at Patton State Hospital and Crestview Convalescent Hospital, pursuant to Welfare and Institutions Code section 7275.
On August 11, 2008, Ms. Page was transferred to Metropolitan State Hospital in Los Angeles County. On October 10, 2008, DDS filed a petition for instructions to order payment of its creditor's claim, seeking $254,843.78. The court set a hearing for November 25, 2008. The hearing was continued to December 30, 2008.
On December 11, 2008, before the scheduled hearing on DDS's claim, Ms. Page died. On December 26, 2008, Roesler, who became the trustee of Ms. Page's trust upon her death, distributed all of the trust's assets, according to the trust's provisions.
On February 17, 2009, Roesler filed a "First and Final Account . . . and Petition for Settlement of Account." The document stated that the conservatorship estate had no assets at the time of Ms. Page's death. It stated that Ms. Page's sole assets were the funds in her personal bank accounts at the time the temporary conservatorship was established and that those funds had been transferred to the Bettie Mae Page Trust, pursuant to the court's authorization. DDS objected to the accounting on the ground that it had a lien on the conservatorship estate in the amount of $272,047.42, pursuant to Welfare and Institutions Code sections 7275 and 7279.
At a hearing on the petition to settle the account, held on May 19, 2009, the probate court expressed concern that Roesler had made material misrepresentations when applying for the temporary conservatorship. The court asserted that Roesler had represented to the court that a neighbor had access to Ms. Page's bank account and was depleting it. However, the court noted, the bank statements attached to the accounting showed that there had been no withdrawals for the month of June 2007 and the statement showed that the account was solely in the name of Bettie Page. The court was also concerned because, upon Ms. Page's death, the court learned through media reports that Ms. Page had "quite an estate."
After a hearing on the amended first and final accounting, to which DDS filed objections, the court issued a written ruling on December 31, 2009. The court disapproved the amended first and final accounting; affirmed its previous order that Roesler return all funds previously transferred to the trust to the conservatorship estate; ordered Roesler to file a second amended accounting; set an order to show cause (OSC) hearing regarding a possible surcharge in the amount of $145,126.20; and awarded DDS $145,126.20 in payment of its claim.
Roesler filed a timely notice of appeal.
Roesler argues that the court lacked jurisdiction to order him to transfer funds in the trust to the conservatorship.
First, he contends that a conservatorship court retains jurisdiction after the death of the conservatee "solely in order to settle accounts and make other appropriate orders relating to such accounts or the termination of the conservator/conservatee relationship." He cites Probate Code section 2630
Section 2630 provides, "The termination of the relationship of guardian and ward or conservator and conservatee by the death of either . . . does not cause the court to lose jurisdiction of the proceeding for the purpose of settling the accounts of the guardian or conservator or for any other purpose incident to the enforcement of the judgments and orders of the court upon such accounts or upon the termination of the relationship." In Conservatorship of Starr, supra, 215 Cal.App.3d 1390, the court addressed the contention that the probate court lacked jurisdiction to set aside a grant deed which the conservator had executed before the conservatee's death without prior authorization from the court. (Id. at pp. 1392, 1394.) The appellate court held that in reviewing the final accounting of a conservatorship, the court "undertakes to allow or disallow claims for expenses and to approve an inventory of the conservatorship estate." (Id. at p. 1394.) It held that the probate court could not approve or disapprove the final account without determining whether the conservator had acted properly in executing the deed, which severed a joint tenancy and removed real property from the conservatorship estate. The court held, "The [probate] court's power to enforce orders upon the conservatorship accounts implies power to adjudicate the authority of the conservator to take specific actions pursuant to all orders relating to the conservatorship, including the original order of appointment, that affect the account. Any action that may result in property being included or excluded from the estate inventory clearly affect[s] the conservatorship accounts. Without ruling on the conservator's authority to take such an action, the court could make no definitive inventory of estate property." (Id. at p. 1395.) Similarly, here, the probate court retained jurisdiction to adjudicate the propriety of Roesler's transfer of the entire conservatorship estate to Ms. Page's trust. As we will discuss, the fact that the court had previously authorized the transfer did not deprive it of authority to review the transfer in connection with the final accounting.
Next, Roesler contends that the probate court had no jurisdiction to make an order concerning the internal affairs of the trust. He contends that only the Los Angeles County Superior Court, which had jurisdiction over the trust, had the authority to make orders concerning the internal affairs of the trust or to pass upon the acts of the trustee.
Finally, Roesler contends that the court had no authority to vacate its prior order authorizing the transfer of funds to the trust. He contends that the order was final and could not be set aside. We disagree.
Section 2103, subdivision (a) provides: "When a judgment or order made pursuant to this division becomes final, it releases the guardian or conservator and the sureties from all claims of the ward or conservatee and of any persons affected thereby based upon any act or omission directly authorized, approved, or confirmed in the judgment or order. For the purposes of this section, `order' includes an order settling an account of the guardian or conservator, whether an intermediate or final account."
Roesler cites several cases which, he asserts, hold that only extrinsic fraud avoids the res judicata bar created by section 2103, subdivision (a). None of those cases relies on section 2103 or its predecessor, former section 2103. Former section 2103, which was substantially similar to the current section 2103, was enacted in 1957. (Stats. 1957, ch. 1902, § 1, p. 3318; see Bank of America v. Superior Court (1986) 181 Cal.App.3d 705, 714, fn. 7.) All of the cases Roesler cites predate the enactment of former section 2103.
DDS contends that the record does support a finding of extrinsic fraud, in any event. It points out that in his petition for temporary conservatorship, Roesler declared that Ms. Page was "not a patient in or on leave of absence from a state institution under the jurisdiction of the California Department of Mental Health or the California Department of Developmental Services." It asserts that Roesler was "well aware" when he filed the petition on June 27, 2008, that Ms. Page had "entered the state hospital system in 2007" and was also aware when he filed the petition that Crestview Convalescent Hospital, where Ms. Page was residing, is "under the purview of Patton State Hospital." The probate court did find that Roesler failed to disclose that information. However, although DDS did not receive timely notice of the filing of the petition, as it should have (§ 1461, subds. (a)(2), (b)), it was nevertheless not prevented from presenting its claim. Consequently, by definition, no extrinsic fraud occurred. (Bank of America v. Superior Court, supra, 181 Cal.App.3d at p. 715 [judgment not obtained by extrinsic fraud where it has no effect on party's ability to litigate its claim].)
We question the efficacy of the court's order to restore the funds to the conservatorship estate because, as we will discuss in section 2 below, upon Ms. Page's death the conservator's only duty was to conserve the funds until they could be transferred to Ms. Page's trust, and, even if the funds were restored to the conservatorship estate, the court lacked authority to order Roesler to do anything with the funds except to transfer them to Ms. Page's trust; it had no authority at that juncture to order him to pay DDS. Nevertheless, for the reasons stated above, the court had the authority to make the order. And, for the same reasons, the court had the authority to disapprove the amended first accounting and order a second amended accounting.
Roesler contends that the probate court had no jurisdiction to order payment of DDS's creditor's claim after Ms. Page died. Rather, he contends, once Ms. Page died, DDS's recourse was against her revocable trust. We agree.
Welfare and Institutions Code section 7275 establishes that the estate of a person committed to a state hospital, other than a mentally retarded person, is liable for the cost of the patient's "care, support, and maintenance" in the state hospital.
Moreover, section 2467 provides that upon the death of a conservatee, the conservator's duty is "conservation of the estate . . . pending the delivery thereof to the personal representative of the . . . conservatee's estate or other disposition according to law." (§ 2467.) The conservator may, but is not required to, pay the unpaid expenses of the conservatorship accruing before or after the death of the conservatee, from any personal property of the deceased conservatee which is under the control of the conservator. (§ 2631, subd. (a).) Any creditor of the estate which has not been paid may file a claim against the conservatee's probate estate or against any revocable trust the conservatee had. (§§ 9000 et seq., 19000 et seq.) Taken all together, these provisions reflect a legislative intent that a creditor whose claim against a conservatee's estate has not been adjudicated by the time of the conservatee's death must make a claim against any trust or the decedent's estate rather than against the conservatorship estate.
Because the probate court lacked authority to make the order, we will reverse the order for payment to DDS in the amount of $145,126.20.
Roesler states that the court's ruling is ambiguous "as to whether Appellant was in fact surcharged" for breach of his fiduciary duty or "whether the trial court simply set an OSC" regarding a possible surcharge. He contends that issue of a surcharge was not properly before the court and that a surcharge was improper.
The ruling is not ambiguous; it clearly does not impose a surcharge but instead sets a hearing on an OSC on the question of imposing a surcharge. An appeal may be taken only from a final order or judgment which resolves all of the issues between the parties. (Code Civ. Proc., § 904.1, subd. (a); Olson v. Cory (1983) 35 Cal.3d 390, 399.) Consequently, an appeal on the merits of the purported surcharge is premature.
Roesler's contention that the court lacked authority to consider whether to impose a surcharge is meritless, however. The court's authority to impose a surcharge arises under sections 2401.3 and 2625. Section 2401.3 provides that a conservator is chargeable for any breach of fiduciary duty which results in loss to the conservatorship estate. Section 2625 provides that the court may "hold . . . the conservator liable for any violation of duties" in connection with any transaction "not previously authorized, approved, or confirmed by the court." Such transactions are subject to review by the court "upon the next succeeding account" which occurs after the transaction. (§ 2625.) Roesler contends that because DDS did not seek a surcharge in its objections to the first accounting, the court lacked authority to address the issue, "absent an independent inquiry pursuant to Probate Code section 2625." To conduct an independent inquiry on the potential surcharge is, of course, precisely why the probate court set a hearing on the OSC. Setting the OSC hearing was unquestionably within the court's authority.
Whether the evidence adduced at the hearing on the OSC supports a surcharge is a question which may be addressed only after the probate court has made its ruling.
As we have mentioned above, a surcharge is generally authorized only where the conservator has breached his or her fiduciary duty, to the detriment of the conservatee's estate. (§ 2401.3.) Here, there is no evidence that transferring the funds to the trust caused any loss or detriment to the estate. On the contrary, the record shows that the funds were distributed to the beneficiaries of the trust in accordance with Ms. Page's desires. As far as the record shows, the only arguable detriment caused by Roesler's actions is to DDS.
We are aware of only one situation in which a conservator may be surcharged for damage to someone other than the estate itself: where the conservator breaches his or her duty to exercise ordinary care in the management of the estate and causes detriment to a beneficiary of certain types of insurance policies, annuities, investment instruments or retirement, profit-sharing or employee welfare plans or benefits.
Section 2459, subdivision (b) provides that a "conservator may continue in force any of the following in which the conservatee, or a person legally entitled to support, maintenance, or education from the conservatee, has or will have an interest:
Section 2459, subdivision (c) provides, "The right to elect benefit or payment options, to terminate, to change beneficiaries or ownership, to assign rights, to borrow, or to receive cash value in return for a surrender of rights, or to take similar actions under any of the policies, plans, or benefits described in subdivision (b) may be exercised by the conservator only after authorization or direction by order of the court, except as permitted in Section 2544.5." In Conservatorship of Coffey, supra, 186 Cal.App.3d 1431, the appellate court held that by enacting section 2459, the Legislature intended to afford protection to beneficiaries of life insurance policies, annuities, retirement plans "and the like." It held that section 2625 authorizes the probate court to impose a surcharge on a conservator who has permitted such a policy or plan to lapse or has otherwise caused detriment to a beneficiary of the plan or policy, without having first obtained court authorization, if the conservator's action was a breach of his or her duty to exercise ordinary care in the management of the estate. (Id. at pp. 1438-1441.) In that case, the conservatee had maintained life insurance policies for the benefit of his son. The conservator failed to pay the premiums and allowed the policies to lapse, without authorization of the probate court. (Conservatorship of Coffey, supra, at pp. 1435-1436.)
The rule enunciated in Conservatorship of Coffey, supra, 186 Cal.App.3d 1431 does not apply to DDS. The funds in Ms. Page's personal checking account do not constitute an insurance policy or any of the other policies or plans listed in section 2459, subdivision (b), and DDS is not a person legally entitled to support from Ms. Page. Accordingly, unless there is evidence that Roesler breached his fiduciary duty to Ms. Page, to the detriment of her estate, there is no basis for imposing a surcharge.
Roesler contends that the court committed judicial misconduct by investigating facts outside the record and that its comments concerning what the court deemed to be his misrepresentations of material fact displayed bias against him. He contends that as a result of this bias, the court denied him a fair hearing throughout the proceedings and in particular denied him a fair hearing on DDS's claim because it did not allow him the opportunity to present evidence as to the amount owed to DDS. Because we have determined that the court lacked the authority to make any award to DDS, we need not address that aspect of Roesler's contention. However, his contention that the court committed misconduct and displayed bias toward him must be addressed.
Roesler believes that many of the court's adverse orders can be traced to the court's erroneous belief that Roesler's attorney misled the court in the initial hearing on the petition for temporary conservatorship. As the court understood it, Roesler's attorney asserted that Ms. Page's checking account was jointly held with her former neighbor and that the neighbor was depleting the account. The court expressed its outrage at these supposed misrepresentations when, some months later, documentation filed with the court showed that the account was solely in Ms. Page's name and that no withdrawals had been made for several months prior to the court's order authorizing the transfer of funds to Ms. Page's trust. The court stated, among other things, that Roesler, via his attorney, had represented to the court "that there was somebody making withdrawals and accessing that account without authority" and that "we had somebody on a daily basis going to the ATM and the bank and pulling money out from this poor woman." In fact, Roesler's attorney made only the following statements at the initial hearing:
Although the attorney was incorrect in stating that the neighbor's name was on the account, he certainly did not tell the court that the neighbor was actually taking money out of the account. (Roesler himself later explained to the court that he understood that the neighbor wrote and signed checks for Ms. Page after she became physically unable to do so.) On the contrary, he stated that removing the money from the account was a precautionary measure. The subsequent disclosure that there had been no activity on the account for several months preceding the initial hearing and that the account was in fact solely in Ms. Page's name certainly raised legitimate concerns about the veracity of the attorney's statements. However, the court's recollection of what was said was obviously greatly exaggerated, and the court maintained its belief despite later having reviewed a transcript of the initial hearing. Roesler contends that because the court remained convinced that his attorney made these assertions, despite his repeated attempts to demonstrate otherwise, the court was clearly biased against him, and he was deprived of his right to a fair hearing.
Roesler also contends that the court violated the canons of judicial ethics by conducting an investigation of facts outside the record.
Even if we were to conclude that the court's reading of general news publications concerning the death of a minor celebrity constitutes "investigating" facts outside the record and/or that the court displayed bias against Roesler, however, the record does not support the conclusion that Roesler did not ultimately get a fair hearing. First, by the time the court issued its ruling, it appears to have recognized that it was mistaken in believing that Ms. Page had an existing estate which was larger than the $145,000 bank account. In the introductory paragraph of its ruling, the court described litigation filed in Los Angeles County by Ms. Page's heirs, challenging the trust which made Roesler both the trustee and chief beneficiary under the trust. In that context, the court stated that the estate "has the potential to be large given that Ms. Page was a model in the late 1950s and early 1960s who has developed somewhat of a cult following." Both the fact of the litigation and the terms of the trust are part of the record. Also part of the record before the court was Ms. Page's assignment to the trust of her right of publicity and all rights to the use of her likeness, name, life story, photographs, images and the like. Taken in context, we understand the court's comment about the potential of Ms. Page's estate to become "large" to reflect the renewed interest in Ms. Page brought about by her death. Consequently, we are not persuaded by Roesler's argument that the court's perception of the estate as including more than Roesler had revealed to the court amounted to bias or prejudice against him.
Second, even though the court tenaciously held to its belief that Roesler had misled the court in order to obtain authorization to transfer the funds out of the conservatorship estate, as the court saw it, and into the trust, we cannot say that the court's conclusion was unfounded. Even though the words the attorney used seem innocuous, his manner may have conveyed such a sense of urgency that the court perceived the situation to be more dire than it actually was.
In any event, because the orders we have affirmed are essentially meaningless and because we have reversed the order for payment to DDS and have explained the necessary factual basis for any surcharge imposed on Roesler, it is unnecessary to rely on any taint of bias toward Roesler as an independent ground for reversal.
The order for payment to the Department of Developmental Services in the amount of $145,126.20 is reversed. The order is otherwise affirmed.
The parties are to bear their own costs on appeal.
We concur:
King, J.
Codrington, J.
Extrinsic fraud also exists where "fiduciaries have concealed information they have a duty to disclose." (Lazzarone v. Bank of America, supra, 181 Cal.App.3d at p. 596.)
