Estate of Citragno

Filed 11/30/05 Estate of Citragno CA1/3

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

Estate of GUIDO D. CITRAGNO, Deceased.
ROBERT G. CITRAGNO, Petitioner and Appellant, v. ALLEN M. CITRAGNO, Objector and Respondent.	A107866 (Alameda County Super. Ct. No. RP03112829)

In this case, the probate court entered an order directing Allen M. Citragno, the trustee of a family trust, to reissue a grant deed in order to indicate the grantor’s status as trustee. After Allen failed to comply, his brother Robert—who stood to receive the property in question—filed a petition seeking to have himself declared the sole owner of the property.[1] After a hearing at which both parties appeared and gave evidence, the court determined its prior order was contrary to the terms of the trust and issued an order “rescind[ing]” its prior order. Robert appeals from this second order, arguing, among other things, that the court lacked jurisdiction to rescind its prior order. We agree and reverse.

BACKGROUND

On August 13, 1997, Guido D. Citragno transferred his ownership interest in a Berkeley, California property to the “Guido D. Citragno Trust” and named his son Allen as the trustee. The trust contained no other assets beyond this single piece of real property. An exhibit to the trust instrument provided that, upon Guido’s death, this “Trust estate” would be distributed in shares of equal value to his two sons, Allen and Robert Citragno. Exactly one year later, on August 13, 1998, Guido died.

On August 20, 2003, Robert filed a verified petition in probate court for an order compelling the trustee to act. According to the petition, Allen had executed and delivered a grant deed on June 7, 2001, transferring title to the Berkeley property to Robert. This deed was recorded on November 26, 2002. However, in March 2003 the Alameda County assessor advised Robert the office was unable to process the deed because Allen held ownership of the property as a trustee, not as an individual; consequently, a grant deed for the property would have to reflect the grantor’s (i.e., Allen’s) status as a trustee for the Guido D. Citragno Trust. Robert’s petition advised the court that Allen had failed to correct or reissue the deed in this manner, and it requested an order compelling him to do so. Allen did not appear at the hearing on the petition, and on October 28, 2003, the court issued an order directing Allen to reissue the grant deed as the trustee of the Guido D. Citragno Trust.

Apparently unbeknownst to Robert or the probate court, Allen did execute a new grant deed on September 3, 2003, shortly after Robert’s petition was filed. In this deed, which Allen signed in his capacity as trustee, Allen granted ownership of the Berkeley property in equal one-half shares to Robert and himself. This deed was recorded on October 15, 2003.

Robert filed a new petition on December 15, 2003, asking the probate court to transfer full title in the property to him. The petition alleged that Allen had failed to comply with the court’s October 28, 2003 order, and it described the separate deed Allen had recently issued granting title 50 percent to each brother. Robert asked the court to issue orders transferring all interest in the property to himself and declaring null and void any deeds recorded by Allen after August 20, 2003. He also sought an award of costs and attorney fees.

Both parties appeared at the July 12, 2004 hearing on this petition. Allen testified that he did not reissue the deed in accordance with the court’s prior order because Robert still owed him money for the property. He explained that the trust gave each of the brothers one-half shares of ownership interest in the property, which had an estimated value of $425,000, and Robert had agreed to purchase his share in return for keeping the house. But, while Robert had signed over checks to Allen for more than $100,000, Allen contended he was still owed over $100,000 for his half of the property. Robert did not dispute the existence of this agreement, but he stated that Allen was supposed to have put the property in his name so that he could take out a loan to pay “the remainder of the money” he owed to Allen. Robert did not know how much money he still owed Allen, but he admitted he had not paid the entire amount agreed upon.

After the matter was submitted, the court observed that the status of the parties’ agreement to transfer the property was unclear. It was clear to the court, however, that the trust directed the property to be distributed in equal one-half shares to each brother, which was exactly how the most recent grant deed (recorded in October 2003) described the state of ownership. Thus, the court concluded its prior order directing that the property be conveyed entirely to Robert “seems to be contrary to . . . the provisions of the trust [and] the settlor’s wishes” unless there had been an exchange of sufficient consideration. Over an objection from Robert’s counsel that the order was final and no motion for reconsideration had been filed, the court indicated it did not need a pleading and was reconsidering the matter “now.” The court explained: “You got the facts just like I do, and based on the facts that I see, I don’t see that your client ought to receive a windfall by getting half of the property. And [it] seems to me that that’s what I would be doing if I would enforce my order, and I’m not going to do that.” The court observed the prior order was contradicted by the evidence, to wit, Robert’s admission that he still owed money for the property, and the court repeated, “I’m not going to enforce an order where your very client says that he hasn’t paid the full amount.” After hearing additional testimony from Robert about the brothers’ agreement, the court ordered its prior order “withdrawn and rescinded.” While noting there should be “some correction of the flow of consideration for this property” (so that either Robert finished paying and received a 100 percent interest, or Allen returned Robert’s money and they each continued to hold a 50 percent share), the court concluded it was appropriate to leave the property in both names, as reflected in the most recent deed.

Robert’s appeal followed from the minute order of this hearing.[2]

DISCUSSION

Robert contends the probate court lacked jurisdiction in July 2004 to “rescind” its October 28, 2003 order because this order became final 60 days after it was entered, at which point the time for an appeal had expired. In a related argument, he maintains the court erred in reconsidering the order sua sponte, without requiring a pleading and discovery on the issue.

This second contention is easily dispensed with. While Robert cites no authority for his contention that a “pleading [must] be filed setting out the basis for reconsideration,” we presume he is referring to Code of Civil Procedure section 1008, which places strict limits on a party’s ability to seek reconsideration of a prior court order.[3] However, it is now settled that this statute does not limit the court’s ability to reconsider prior orders on its own motion, so “so it may correct its own errors.” (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1107.) This power derives from the court’s “inherent authority to change its decision at any time prior to the entry of judgment.” (Darling, Hall & Rae v. Kritt (1999) 75 Cal.App.4th 1148, 1156-1157; see also Le Francois v. Goel, supra, 35 Cal.4th at pp. 1103-1105 [Legislature may not limit court’s inherent power to correct its error]; Case v. Lazben Financial Co. (2002) 99 Cal.App.4th 172, 183-185.) Although the Supreme Court recently observed that a trial court should inform the parties of its concerns and allow briefing and a hearing before reconsidering a prior order (Le Francois v. Goel, supra, 35 Cal.4th at p. 1108), we conclude the court in this case substantially complied with these fairness guidelines. The validity of the October 2003 order was clearly placed in issue by Robert’s petition seeking, essentially, enforcement of that order, and both parties participated in a lengthy hearing addressed to the court’s concerns.

Robert’s jurisdictional argument is more troubling, however, and it requires us to decide whether the October 2003 order should be construed as an interim order or a final judgment. The characterization is important, because a court has power to reconsider only interim orders, not final judgments. An interim order may be corrected at any time before final judgment, while the case is still pending in the trial court. (Betz v. Pankow (1993) 16 Cal.App.4th 931, 937; Robbins v. Los Angeles Unified School Dist. (1992) 3 Cal.App.4th 313, 317.) Once a final judgment has been entered, however, the trial court loses its previously unrestricted power to change that judgment. (Craven v. Crout (1985) 163 Cal.App.3d 779, 782; cf. Le Francois v. Goel, supra, 35 Cal.4th at pp. 1097, 1101, 1107-1108 [holding only that trial court has inherent ability to reconsider its prior “interim” orders].)

“Normally, the rule for distinguishing between an interim and a final order is whether such order is appealable. (Dick v. Superior Court (1986) 185 Cal.App.3d 1159, 1163, fn. 5.)” (Robbins v. Los Angeles Unified School Dist., supra, 3 Cal.App.4th at p. 317.) Robert asserts the order on his first petition “bears the same finality as judgments in other proceedings” because this order was appealable—either as an order instructing a fiduciary (Prob. Code, § 1300, subd. (c)), or as an order instructing the trustee of a trust (Prob. Code, §§ 1304, subd. (a), 17200, subd. (b)(6)). The October 2003 order did direct Allen to take specific action with respect to trust property, and it left no further matters to be litigated with respect to the petition; therefore, the order does appear to be an appealable order directing action by a trustee, even though the act in question is somewhat ministerial in nature. If Allen disagreed with the order because of a separate agreement he had with Robert, it was incumbent upon him to file a timely motion for reconsideration or a notice of appeal from the order. After the time for appeal expired, however, this order had the force and effect of a final judgment, which Allen could attack only by establishing that the judgment was void. (See Estate of Keet (1940) 15 Cal.2d 328, 333-334 [order directing trustee to sell stock had the effect of a final judgment after time for appeal expired, and court lacked authority to enter a contrary order later].)

Because the October 2003 order had become final in the months after it was issued, the probate court lacked jurisdiction to reconsider it. Accordingly, the court’s order purporting to “rescind” this prior order must be reversed. (See Estate of Keet, supra, 15 Cal.2d at pp. 333-334.) However, it should be noted that our decision does not preclude application by any party for such further relief as may be appropriate to determine the contractual rights of the parties and, if necessary, to quiet title in the property.[4]

DISPOSITION

The order of the probate court is reversed. The parties shall bear their own costs on appeal.

_________________________

McGuiness, P.J.

We concur:

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Corrigan, J.

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Pollak, J.

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[1] Because the parties share the same surname, we refer to them by their first names to avoid confusion.

[2] Robert filed a motion to strike the respondent’s brief and exhibits in the respondent’s appendix that were not admitted in evidence below. Having deferred ruling until the merits, we now deny the motion to strike the brief, but we grant the motion and strike exhibits B and F in the respondent’s appendix. These exhibits have not been considered as part of the record on appeal.

[3] For example, such motions must be supported by affidavit and based on new or different facts, circumstances or law. (Code Civ. Proc., § 1008, subds. (a), (b).)

[4] At oral argument, Robert’s counsel agreed the trial court still has jurisdiction to determine factual issues pertaining to the division of trust assets.