STEVEN COOPER v. PHYLLIS SHAW (2010)

The issue in this probate appeal is whether an order permanently suspending the powers of Phyllis Shaw as administrator of a probate estate and appointing a successor administrator must be reversed because the petitioner was the former attorney who represented Shaw. We conclude reversal is not required and affirm.

FACTUAL AND PROCEDURAL SUMMARY

Phyllis Shaw was appointed conservator for James J. Nelson in 1986.   The same year, Nelson executed a holographic will naming Shaw as primary beneficiary.   Nelson's son and brother, the only other beneficiaries under the will, were each to receive $1. It is undisputed that the only assets of the estate were four lots of improved real property in Redondo Beach.   Nelson died in 1989.   In 1990, the will was admitted to probate and Shaw was appointed administrator with will annexed.   In October 1990, respondent Steven J. Cooper substituted in as Shaw's attorney in the probate proceeding.

After an unsuccessful contest by Nelson's son, the probate proceeding languished for the next 17 years.   In 2001, Karen McDaniel petitioned the court to remove Shaw as administrator, claiming that she had stored personal property in a building belonging to the estate and that Shaw refused to return it.   That petition was denied.   Cooper represented Shaw until February 8, 2005, when Michael Smith substituted in as her counsel.

In late 2007, McDaniel again petitioned for the removal of Shaw. She claimed that the estate's property was subject to an imminent tax lien sale because Shaw had not paid the property taxes, which then totaled $169,000.   Cooper objected to McDaniel's petition on the ground that she lacked standing and argued he had a higher priority to nominate a successor administrator because of his status as a creditor of the estate under his lien for unpaid attorney fees.   He advised the court that he was in the process of preparing a petition for removal of Shaw as administrator and for appointment of Alex R. Borden as successor administrator.   Cooper stated that the estate was no longer bonded because the surety which underwrote the bond had gone out of business in 2001.

On December 12, 2007, the probate court denied McDaniel's petition, suspended Shaw's powers, appointed Borden as special administrator, and ordered a new bond.   Apparently the court considered these to be temporary orders because the matter was continued for a hearing on Cooper's petition for removal of Shaw and appointment of a successor administrator.   Letters of special administration were filed for Borden that month with an expiration date in January 2008.

Cooper's petition for removal of Shaw and for appointment of successor administrator was filed in January 2008.   He argued Shaw had mismanaged the estate and was unable to fulfill her duties as administrator.   Cooper contended Shaw's removal for mismanagement was proper under Probate Code section 8502, subdivision (a) ¹ because the estate had been issued multiple municipal code citations and orders to abate for storing inoperable vehicles and allowing persons to reside on the commercially zoned property.   He also pointed out that Shaw had avoided a public auction by obtaining court approval to obtain a loan, but then failed to cooperate in the loan application.   Instead, she executed a purported quitclaim deed to obtain money to pay the property taxes.   Copies of the cited documents were attached.   Cooper claimed that a second public auction had been scheduled for February 2008.

Cooper also claimed Shaw was unable to execute her duties within the meaning of section 8502, subdivision (b), citing his unsuccessful efforts to get Shaw to close the estate when he represented her.   He attached copies of citations issued by the probate court in 1999 and 2000.   In addition, under section 8502, subdivision (c), Cooper cited Shaw's rejection of legitimate claims by creditors and alleged that Shaw refused to close the estate because she did not want to pay the creditors.   He attached copies of two letters he sent Shaw as her attorney in 1995 urging the importance of closing the estate.   Finally, he argued Shaw's removal was necessary for the protection of interested persons under section 8502, subdivision (d) since the estate is not bonded.

The probate court granted Cooper's petition in April 2008, permanently suspending Shaw's powers as administrator CTA and removing her and ordering her to turn over all estate property to the successor administrator CTA, Alex R. Borden.   Cooper was allowed extraordinary fees of $2,550 as former attorney for Shaw and $5,102.25 in fees and costs.   This appeal followed.

DISCUSSION

Shaw argues that Cooper violated his duty of loyalty to her as a former client by petitioning to remove her as administrator.   She asserts that Cooper should have been disqualified from advocating a position adverse to her interests.   According to Shaw, Cooper could have avoided this conflict by petitioning the probate court to issue a citation to the administrator to show cause why the estate could not be closed.   She cites case law declaring that an attorney may not do anything which will “injuriously affect his former client in any manner in which he formerly represented” that client “nor may he at anytime use against his former client knowledge or information acquired by virtue of the previous relationship.”  (People ex rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 155-156.)

Shaw argues that an attorney's disqualification is mandatory if there is a substantial relationship between the subjects of the former and present representations.   She contends:  “Cooper should have been disqualified from bringing his petition and the probate court should not have considered that petition or relied on it as a basis for Shaw's removal.”   Shaw asserts that prejudice is presumed where an attorney takes a position adverse to a former client in the same proceeding in which he once represented her.   She contends that Cooper's violation of his duty of loyalty tainted the proceedings and violated her valuable right to act as administrator.

“ ‘To the probate court is given, in the first instance, the supervision and protection of estates of deceased persons, with power, in the exercise of that supervision, to remove an executor when, in its discretion, such step is necessary for the protection of the estate;  and that power is not to be interfered with by the appellate court, unless there has been a clear abuse of that discretion.’ ”  (Luckey v. Superior Court (1930) 209 Cal. 360, 370.)   “ ‘The test is not whether we would have made a different decision had the matter been submitted to us in the first instance.   Rather, the discretion is that of the trial court, and we will only interfere with its ruling if we find that under all the evidence, viewed most favorably in support of the trial court's action, no judge reasonably could have reached the challenged result.’  [Citation.]”  (Estate of Hammer (1993) 19 Cal.App.4th 1621, 1633-1634.)   The Hammer court emphasized that an “ ‘administrator should not be removed except for good and sufficient cause [citation].’ ”  (Id. at p. 1634.)

Section 8502 provides that a personal representative of an estate, including an administrator, may be removed where:  “(a) The personal representative has wasted, embezzled, mismanaged, or committed a fraud on the estate, or is about to do so. [¶] (b) The personal representative is incapable of properly executing the duties of the office or is otherwise not qualified for appointment as personal representative. [¶] (c) The personal representative has wrongfully neglected the estate, or has long neglected to perform any act as personal representative. [¶] (d) Removal is otherwise necessary for protection of the estate or interested persons.”

In the unusual circumstances presented in this case, the record establishes that Shaw had done nothing to close the probate of the estate for 17 years.   Shaw's powers were originally suspended in response to McDaniel's unsuccessful 2007 petition for her removal and Cooper's opposition to McDaniel's petition.   The evidence presented at that point established that a public auction of the estate's only assets was pending because of nonpayment of property taxes.   The extreme delay in closing the estate and the property tax lien were sufficient to support the probate court's removal of Shaw as administrator under section 8502.

Under these circumstances, Cooper's possible violation of his ethical duty to Shaw by seeking her removal does not warrant reversal of the court's necessary remedial action.   In the face of the evidence regarding waste and mismanagement of the estate during Shaw's tenure as administrator, the probate court was hardly in a position to do nothing;  it could not stand by and allow further waste.  “[A] court sitting in probate has continuing jurisdiction to determine any questions arising from controversies over the administration of estate property, in order to prevent fraud and waste.  [Citations.]”  (Estate of Beard (1999) 71 Cal.App.4th 753, 772-773.)   We find no abuse of the trial court's discretion in removing Shaw as administrator.²

DISPOSITION

The order suspending Shaw's duties as administrator and permanently replacing her is affirmed.   Each side is to bear its own costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

We concur:

FOOTNOTES

FN1. Statutory references are to the Probate Code..  FN1. Statutory references are to the Probate Code.

FN2. At oral argument, counsel suggested that the issue before us is moot in light of subsequent developments regarding estate assets.   No documentation of these developments is in the record on appeal and we therefore base our opinion on the record that was before the probate court when it made its order..  FN2. At oral argument, counsel suggested that the issue before us is moot in light of subsequent developments regarding estate assets.   No documentation of these developments is in the record on appeal and we therefore base our opinion on the record that was before the probate court when it made its order.

EPSTEIN, P.J.

WILLHITE, J. SUZUKAWA, J.