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827799
KEKER & VAN NEST LLP
JOHN W. KEKER - # 49092
jkeker@kvn.com
WARREN A. BRAUNIG - # 243884
whraunig@kvn.com
BENJAMIN BERKOWITZ - # 244441
bberkowitz@kvn.com
ABHISHEK BAJORIA - #255294
abajoria@kyn.com
633 Battery Street
San Francisco, CA 94111-1809
Telephone: 415 391 5400
Facsimile: 415 397 7188
MYERS URBATSCH P.C.
PETER S. MYERS - # 115113
psmyers@myersurbatsch.com
MATTHEW R. MRAULE - # 263433
mmraule@myersurbatsch.com
625 Market Street, 4th Floor
San Francisco, California 94105
Phone: (415) 896-1500
Fax: (415) 979-0761
Attorneys for Petitioner and Respondent
BRUCE H. QVALE, FAMILY TRUSTEE and
Respondent LAURA HIURA
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
MAY 29 2014
Clerk of the Court
BY: NOELIA RIVERA
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO
In the Matter of the
Kathryn C. Qvale Exempt Marital Trust,
dated January 31, 2006
Miles Jeffrey Qvale, individually and as
trustee,
VWs.
Bruce H. Qvale, Laura Hiura, and Does 1-10
Case No. PTR-13-297016
PETITIONER’S AND RESPONDENTS’
REPLY MEMORANDUM IN SUPPORT
OF DEMURRER
Date: June 5, 2014
Time: 2:00 p.m.
Dept.: Probate, Room 204
Judge: Hon. Andrew Cheng
PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
L INTRODUCTION
Miles Jeffrey Qvale’s Opposition to Demurrer (“Opp.”) fails to address three flaws in the
Petition, which require that Respondents Bruce H. Qvale and Laura Hiura’s demurrer be
sustained as to three of his four causes of action. First, Miles Jeffrey Qvale (“Jeff”) is barred as a
matter of law from proceeding on an intentional interference with expectation of inheritance
(JED claim because that tort is “only available when the aggrieved party has essentially been
deprived of access to the probate system” due to some tortious conduct against the testator. Jeffs
vigorous participation in this probate proceeding demonstrates that he is far from shut out of the
probate system. And Jeff's argument that he can challenge the 2013 Exercises of Power of
Appointment (“2013 Changes”) to the various trusts in probate, while simultaneously challenging
the failure to undo those changes in tort, has no basis in the law and is contrary to the guidance of
the Court of Appeal decision that authorized the HEI tort under California law. Second, Jeff's
hand-waving about various misapprehensions he alleges Kjell Qvale had about the state of the
Qvale Automotive Group cannot remedy his failure to plead a mistake that was the but-for cause
of the 2013 Changes. Third, Jeff does not have an independent claim for financial elder abuse
because the 2013 Changes did not deprive Kjell of any property or property right. A shifting of
assets among beneficiaries is not a deprivation of property. Bruce and Laura’s demurrer to Jeff's
Second, Third, and Fourth Claims for Relief must be sustained.
Tf. ARGUMENT
A. Jeffs Potential Relief in Probate Precludes any Claim for Intentional
Interference with Expectation of Inheritance.
Jeff's opposition to the demurrer fundamentally misapprehends the tort of intentional
interference with expectation of inheritance (ILED, a limited and “inherently speculative” tort
remedy enshrined in California law two years ago. See Beckwith v. Dahl, 205 Cal App. 4th 1039,
1056 (2012). As the Court of Appeal explained in Beckwith: “[T]he tort of IIE] is only available
when the aggrieved party has essentially been deprived of access to the probate system.” Id. at
1053 (emphasis added). Thus, “[t]he proper focus of the tort is on the just distribution of estate
assets; when that can be achieved in probate, the need for the tort disappears.” Munn v. Briggs,
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PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
185 Cal. App. 4th 578, 590 (2010) (quoting Wilson v. Fritschy, 55 P.3d 997, 1005 (N.M. App.
2002)). Indeed, the Court of Appeal has declared ITE] a tort of “last resort,” to be used only by
“those who lack an adequate probate remedy because of the interference of another.” Beckwith,
205 Cal. App. 4th at 1052 (emphasis in original).
The plaintiff's situation in Beckwith exemplifies the circumstances in which an ITE] claim
can proceed. Beckwith was in a same-sex relationship with Marc MacGinnis; at the time, their
same-sex partnership did not entitle Beckwith to any intestate rights. MacGinnis was facing
complicated surgery and indicated his desire to sign a will that, consistent with the terms of a
previous but misplaced codicil, divided his estate evenly between Beckwith and MacGinnis’s
estranged sister, Dahl. /d. at 1046-47. Dahi allegedly convinced Beckwith not to present a will to
MacGinnis, telling him that they should set up a trust fer MacGinnis instead. Beckwith further
alleged that Dahl concealed from him the riskiness of the surgery and the likelihood that
MacGinnis would not survive. /d. When MacGinnis died intestate a few days later, the entire
estate went to Dahl, his sister and only heir. /d. at 1048. Beckwith was excluded from the
probate process for lack of standing. Id. Therefore, in the absence of a tort claim for HEI, and
because of Dahl’s allegedly tortious conduct, Beckwith would have no remedy at all, and no way
to achieve the financial relief to which he believed he was entitled.
There are no such concerns here. Jeff’s HEI claim is premised on the allegation that, after
Kjell Qvale signed the 2013 Changes, Bruce and Laura supposedly “dissuaded Kjell from
undoing the 2013 Changes.” Pet, 477. Yet “undoing the 2013 Changes” is precisely what Jeff is
seeking to accomplish through his non-tort probate challenges. Pet. { 69; Prayer for Relief. To
the extent Jeff claims that he was unable to accomplish a recission or reformation of the 2013
Changes during Kjell’s lifetime, due to Bruce and Laura’s alleged conduct, he may now attempt
to achieve that same result in the probate courts.
Jeff rightly admits that he has a probate remedy to redress the supposedly wrongful efforts
to procure the 2013 Changes—but argues that his ITEI claim applies only to Bruce and Laura’s
purported efforts to keep Kjell from reversing those changes. Opp. at 7. The temporal distinction
makes no difference. As noted above, ILE is available on when the “aggrieved party has
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PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
essentially been deprived of access to the probate system.” Beckwith, 205 Cal. App. 4th at 1053.
Here, Jeff is a full participant in the probate process; he has filed seven separate petitions against
his co-trustees and beneficiaries. A concurrent IIEI claim, in this case, is far from “necessary to
afford an injured plaintiff a remedy.” /d. at 1056. Indeed, allowing Jeff to challenge the adoption
of the 2013 Changes in probate, and the failure to reverse them in tort, would generate precisely
the “dual litigation tracks for disgruntled heirs” that the Court of Appeal believed would threaten
the “integrity of the probate system.” /d. at 1052; Munn, 185 Cal. App. 4th at 590.' Jeff's
interpretation would transform I[E] from a tort of “last resort” to a universally applicable remedy.
Finally, even if Jeff were correct that an I[EI claim is appropriate here, he has not
adequately pleaded it. An HEI claim requires interference with an expectancy of an inheritance.
Beckwith, 205 Cal, App. 4th at 1057, As pleaded by Jeff, when Bruce and Laura supposedly
dissuaded Kjell from undoing the 2013 Changes, those changes had already taken effect and Jeff
no longer had a legitimate expectation of receiving a precise 50% share of the estate. Pet. {] 48-
51, 76, 80. Jeffs claim is really that Bruce and Laura inhibited him from gaining more than he
expected to receive under the existing trust instrument. That is the opposite of an IIEI claim.
Given the complete relief to which Jeff would be entitled if he prevailed in probate (which he
should not, as his claims are baseless), the Court should not stretch the bounds of the ITEI claim to
allow a supplemental civil claim in this situation.
B. Jeff Fails to Allege any Mistake Regarding the 2013 Changes Under his Own
Three-Part Pleading Standard.
Jeffs Opposition quibbles with the required degree of heightened pleading when a
challenger to a trust seeks recission or reformation based on “mistake,” Opp. at 3-4, but Jeff
admits that he was required to plead, with specificity, the following: 1) the “true” facts; 2) the
' Brazil v. Silva, 181 Cal. 490 (1919), on which Jeff also relies, actually supports Bruce and
Laura’s position. In Brazil, the plaintiffs alleged fraud by a defendant who procured a will in her
favor and then, when asked by the decedent to destroy it, burned an envelope that she said
contained the will but actually did not. /d. at 492. The Court allowed the claim to proceed
because the probate court had already held that plaintiffs’ claim could net be resolved in probate
proceedings, such that “if the present plaintiffs were entitled to any relief it would have to be
sought outside of the probate proceedings.” Jd. at 493. Thus, to the extent this hundred-year-old
decision has any bearing on the present case, it certainly does not authorize concurrent
probate/tort actions that would achieve the same ultimate relief.
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Case No. PTR-13-297016827799
settlor’s misapprehension of those facts; and 3) that “but for the settlor’s mistaken belief, he or
she would not have executed the instrument.” Opp. at 3 (citing Hartog & Kovar, California Trust
Litigation (2014), 5.50[1], p. 5-126). Jeffs Petition does not meet even his own standards, and
therefore the demurrer should be sustained.
Jeff's Petition, and his Opposition, focus upon Kjell’s purported mistake regarding “the
financial health of QAG”; however, his Opposition only points to one “true” fact set forth in the
Petition—that “one dealership enjoy[ed] record profits” in December 2012. See Opp. at 4.
Nowhere does Jeff allege that Kjell had any misapprehension as to this fact; consequently, Jeff
fails to state a claim for mistake based on the sole dealership’s profits. In other words, Jeff does
not allege either that Kjell misapprehended this purported “true” fact, or that “but for the settlor’s
mistaken belief, he or she would not have executed the instrument.”
Jeff next claims that Kjell was under the impression that his two “assistants were let go
because the business suffered from difficulties.” Opp. at 4. Jeff again fails to adhere to the
pleading standard by failing to allege the purported “true” facts. Nowhere does Jeff's Petition
allege that the “true” facts, e.g., that the assistants were not in fact let go, or that the assistants
were let go for a different reason. Jeff also fails to allege, because he cannot truthfully do so, that
Kjell executed the 2013 Changes because of his mistaken belief as to the reason the assistants
were let go. Thus, Jeff's has failed to plead a claim for mistake on this basis.
Unable to plead facts, Jeff resorts to opinion. He alleges that the December 2012 results
for the Qvale Automotive Group (“QAG”) were “extremely good,” and that Kjell believed
otherwise. But this difference in opinion is not a mistake of fact. See Walton v. Bank of Cal.,
218 Cal. App. 2d 527, 543 (“[T]here is a mistake of fact when a person understands the facts to
be other than they are.”). Jeff's Opposition does not argue otherwise.
But, even if “extremely good” 2012 results were somehow a statement of fact, and further
assuming that Kjell believed otherwise, Jeff does not plead—as he admits he must—that Kjell
implemented the 2013 Changes because he was mistaken about QAG’s results in 2012. A claim
for mistake must allege that the purported mistake “animated and controlled” the party’s conduct,
going to “the essence of the object in view,” and that it was not merely incidental. Walton, 218
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PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
Cal. App. 2d at 545-46 (citation omitted). Thus, Jeff must allege that but-for the mistake, the
trust document in dispute would not have been executed. See Reid v. Landon, 166 Cal. App. 2d
476, 483 (1958); see also Earl v. Saks & Co., 36 Cal. 2d 602, 609 (1951) (the mistake must entail
the “substantial frustration of the donor’s purpose”). Jeff does not (and cannot truthfully) do so.
Jeff argues that Kjell must have concluded that QAG “was a risky asset” because Kjell
thought the business was not doing well. Opp. at 4. But Jeff’s logically flawed conclusion does
not allege but-for causation. Even if Kjell had not believed that “QAG was not doing well” and
instead believed that “December 2012 results were extremely good,” QAG would still be “a risky
asset.” QAG, like any business subject to the vicissitudes of the economy, inherently carries
substantial financial and business risks independent of profits in a particular month. See
Demurrer at 7, Indeed, Kjell’s Exercise of Power of Appointment made clear that the 2013
Changes were not premised on a mistake about the company’s short-term profitability. See
Petitioner’s Request for Judicial Notice, | 5. The lack of any pleaded link between an actual
mistake of fact and Kjell’s decision to give the business assets to Bruce, and all other assets to
Jeff, is fatal to the “mistake” claim.
Finally, Jeffs Opposition points to four other purported “mistakes,” with no further
discussion: 1) “the relative risks attendant to the instrument’s allocation of estate taxes”;
2) “impact on his grandchildren of various changes wrought by instruments executed by him”;
3) “the mistaken belief that his attorneys were independent”; and 4) that Laura “was acting on
Kjell’s behalf.” Opp. at 3. These are not “mistakes” on which a trust instrument may be
invalidated, certainly as pleaded. For each of these conclusory statements, the Petition fails to
allege a “true” fact about which Kjell was mistaken, or that the 2013 Changes were executed
because of those mistakes, and that “but for the Kjell’s “mistaken belief.” he or should would not
have executed the instrument. Because Jeff has failed to meet the pleading standard for mistake,
the demurrer to Jeffs Second Claim for mistake must be sustained.
Cc. Jeff’s Claim for Financial Elder Abuse Fails Because Jeff Cannot Allege that
Kjell was Deprived of a Property Right.
Respondents’ demurrer pointed out that Kjell was never “deprived of [a] property right”
because Kjell always retained the right to change his testamentary disposition. Demurrer at 9.
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PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
According to the elder abuse statute, “a person or entity takes, secretes, appropriates, obtains, or
retains real or personal property when an elder or dependent adult is deprived of any property
right, including by means of an agreement, donative transfer, or testamentary bequest, regardless
of whether the property is held directly or by a representative of an elder or dependent adult.”
Welf. & Inst. Code § 15610.30(c) (emphasis added). Despite repeating the language of the statute
in his Opposition, Jeff fails to identify any property right (or actual property) of which Kjell was
deprived.” Without any such lawful deprivation, his claim for financial elder abuse must fail.
In his Opposition, Jeff quotes a Practice Guide regarding deprivation of property rights;
however, Jeff selectively eliminates language underscoring the incurable infirmity in his Petition.
See Opp. at 9-10 (quoting Prac. Guide Elder Abuse Litigation Ch. 8:4(c)). The Elder Abuse
Practice Guide, when quoted in its entirety, states:
Of course, where the testamentary plan has the effect of depriving
the elder of the further right to make an alternative disposition,
either because of the form of the testamentary plan such as an
irrevocable bequest, or because the elder subsequently becomes
incapacitated from making an alternative disposition, he has lost
the right to dispose of property.
Prac. Guide Elder Abuse Litigation Ch. 8:4(c) (second and third emphases added). But despite
this clear admonition, Jeff nowhere alleges that Kjell’s testamentary plan deprived Kjell of the
right to dispose of property through, e.g., alternative dispositions. On the contrary, the
allegations in Jeff’s Petition undercut his argument—Jeff’s Petition alleges that Kjell could have
revoked the 2013 Changes, and specifically does not allege that Kjell lacked authority or capacity
todo so. Pet. 81. This claim is therefore doomed because Jeff's allegations, at bottom, pertain
to undue influence over Kjell’s continuing right to dispose of his property, not a deprivation of
the right itself.
* Undue influence over the testamentary bequest has already been pled in Jeffs First Claim for
Relief pursuant to the Probate Code. See Cal. Prob. Code § 86 (‘Undue influence’ has the same
meaning as defined in Section 15610.70 of the Welfare and Institutions Code.”). Contrary to
Jeff's claim that the Legislature created a duplicative claim for such dispositions “by statutory
definition,” Opp. at 9, his own Petition demonstrates otherwise: “[i]t is the intent of the
Legislature that this section supplement the common law meaning of undue influence without
superseding or interfering with that law.” Pet. 68; see also 2013 Cal. Legis. Serv. Ch. 668 (A.B.
140) (“This bill would define undue influence for those purposes without superseding or
interfering with the common law of undue influence.”).
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PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827799
Not only does Jeff's Opposition improperly quote the Practice Guide, it also fails to
address the actual argument in Respondents’ Demurrer: Kjell was not deprived of a property
right because he “merely shifted assets among beneficiaries in the trusts (which he could alter at
any time prior to his death).” Dervurrer at 9 (emphasis added). Unsurprisingly, then, Jeff also
wholly fails to mention, let alone address, the “injuries to decedent” that give right to his claim,
thus providing a separate and independent basis on which Bruce and Laura’s demurrer must be
sustained. See Demurret at 8 (citing Quiroz v. Seventh Ave. Center, 140 Cal. App. 4th 1256, 1278
(2006)). Jeffs Fourth Claim for Relief for Financial Elder Abuse thus fails as a matter of law.
IIE CONCLUSION
For the foregoing reasons, the Court should sustain Respondents’ demurrer in its entirety.
Dated: May 29, 2014 KEKER & VAN NEST LLP
By: _/s/ Warren Braunig
WARREN BRAUNIG
Attorneys for Petitioner and Respondent
BRUCE H. QVALE, FAMILY TRUSTEE
and Respondent LAURA HIURA
7
PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER.
Case No. PTR-13-297016827733.01
PROOF OF SERVICE BY ELECTRONIC TRANSMISSION,
EMAIL VIA PDF FILE AND UNITED STATES MAIL
1am employed in the City and County of San Francisco, State of California in the office of a
member of the bar of this court at whose direction the following service was made. I am over the
age of eighteen years and not a party to the within action. My business address is Keker & Van
Nest LLP, 633 Battery Street, San Francisco, CA 94111-1809,
On May 29, 2014, I served the following documents described as:
PETITIONER’S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF
_ DEMURRER
by serving a true copy of the above-described documents in the following manner: ~
BY LEXIS NEXIS® FILE & SERVE
On the date executed below, I electronically served the documents described above via
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located on the via Lexis Nexis® File & Serve website.
BY E-MAIL VIA PDF FILE
errr eeeeeeeeeaeenaeeeaeeeeeenaeeeaeeeeeaceeaceeaeaaeeaeerenaeeaerce ee Ty
by E-MAIL VIA PDE FILE, by transmitting on this date via e-mail a true and correct copy
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Case No. PTR-13-297016827733.01
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Evans, Latham & Campisi
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Burnham Brown
A Professional Corporation
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| AZabronsky@ele-law.com _
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and correct.
chore Lita
Joanne Winars v
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827799 KEKER & VAN NEST LLP JOHN W. KEKER - # 49092 jkeker@kvn.com WARREN A. BRAUNIG - # 243884 whraunig@kvn.com BENJAMIN BERKOWITZ - # 244441 bberkowitz@kvn.com ABHISHEK BAJORIA - #255294 abajoria@kyn.com 633 Battery Street San Francisco, CA 94111-1809 Telephone: 415 391 5400 Facsimile: 415 397 7188 MYERS URBATSCH P.C. PETER S. MYERS - # 115113 psmyers@myersurbatsch.com MATTHEW R. MRAULE - # 263433 mmraule@myersurbatsch.com 625 Market Street, 4th Floor San Francisco, California 94105 Phone: (415) 896-1500 Fax: (415) 979-0761 Attorneys for Petitioner and Respondent BRUCE H. QVALE, FAMILY TRUSTEE and Respondent LAURA HIURA ELECTRONICALLY FILED Superior Court of California, County of San Francisco MAY 29 2014 Clerk of the Court BY: NOELIA RIVERA Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN FRANCISCO In the Matter of the Kathryn C. Qvale Exempt Marital Trust, dated January 31, 2006 Miles Jeffrey Qvale, individually and as trustee, VWs. Bruce H. Qvale, Laura Hiura, and Does 1-10 Case No. PTR-13-297016 PETITIONER’S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER Date: June 5, 2014 Time: 2:00 p.m. Dept.: Probate, Room 204 Judge: Hon. Andrew Cheng PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 L INTRODUCTION Miles Jeffrey Qvale’s Opposition to Demurrer (“Opp.”) fails to address three flaws in the Petition, which require that Respondents Bruce H. Qvale and Laura Hiura’s demurrer be sustained as to three of his four causes of action. First, Miles Jeffrey Qvale (“Jeff”) is barred as a matter of law from proceeding on an intentional interference with expectation of inheritance (JED claim because that tort is “only available when the aggrieved party has essentially been deprived of access to the probate system” due to some tortious conduct against the testator. Jeffs vigorous participation in this probate proceeding demonstrates that he is far from shut out of the probate system. And Jeff's argument that he can challenge the 2013 Exercises of Power of Appointment (“2013 Changes”) to the various trusts in probate, while simultaneously challenging the failure to undo those changes in tort, has no basis in the law and is contrary to the guidance of the Court of Appeal decision that authorized the HEI tort under California law. Second, Jeff's hand-waving about various misapprehensions he alleges Kjell Qvale had about the state of the Qvale Automotive Group cannot remedy his failure to plead a mistake that was the but-for cause of the 2013 Changes. Third, Jeff does not have an independent claim for financial elder abuse because the 2013 Changes did not deprive Kjell of any property or property right. A shifting of assets among beneficiaries is not a deprivation of property. Bruce and Laura’s demurrer to Jeff's Second, Third, and Fourth Claims for Relief must be sustained. Tf. ARGUMENT A. Jeffs Potential Relief in Probate Precludes any Claim for Intentional Interference with Expectation of Inheritance. Jeff's opposition to the demurrer fundamentally misapprehends the tort of intentional interference with expectation of inheritance (ILED, a limited and “inherently speculative” tort remedy enshrined in California law two years ago. See Beckwith v. Dahl, 205 Cal App. 4th 1039, 1056 (2012). As the Court of Appeal explained in Beckwith: “[T]he tort of IIE] is only available when the aggrieved party has essentially been deprived of access to the probate system.” Id. at 1053 (emphasis added). Thus, “[t]he proper focus of the tort is on the just distribution of estate assets; when that can be achieved in probate, the need for the tort disappears.” Munn v. Briggs, 1 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 185 Cal. App. 4th 578, 590 (2010) (quoting Wilson v. Fritschy, 55 P.3d 997, 1005 (N.M. App. 2002)). Indeed, the Court of Appeal has declared ITE] a tort of “last resort,” to be used only by “those who lack an adequate probate remedy because of the interference of another.” Beckwith, 205 Cal. App. 4th at 1052 (emphasis in original). The plaintiff's situation in Beckwith exemplifies the circumstances in which an ITE] claim can proceed. Beckwith was in a same-sex relationship with Marc MacGinnis; at the time, their same-sex partnership did not entitle Beckwith to any intestate rights. MacGinnis was facing complicated surgery and indicated his desire to sign a will that, consistent with the terms of a previous but misplaced codicil, divided his estate evenly between Beckwith and MacGinnis’s estranged sister, Dahl. /d. at 1046-47. Dahi allegedly convinced Beckwith not to present a will to MacGinnis, telling him that they should set up a trust fer MacGinnis instead. Beckwith further alleged that Dahl concealed from him the riskiness of the surgery and the likelihood that MacGinnis would not survive. /d. When MacGinnis died intestate a few days later, the entire estate went to Dahl, his sister and only heir. /d. at 1048. Beckwith was excluded from the probate process for lack of standing. Id. Therefore, in the absence of a tort claim for HEI, and because of Dahl’s allegedly tortious conduct, Beckwith would have no remedy at all, and no way to achieve the financial relief to which he believed he was entitled. There are no such concerns here. Jeff’s HEI claim is premised on the allegation that, after Kjell Qvale signed the 2013 Changes, Bruce and Laura supposedly “dissuaded Kjell from undoing the 2013 Changes.” Pet, 477. Yet “undoing the 2013 Changes” is precisely what Jeff is seeking to accomplish through his non-tort probate challenges. Pet. { 69; Prayer for Relief. To the extent Jeff claims that he was unable to accomplish a recission or reformation of the 2013 Changes during Kjell’s lifetime, due to Bruce and Laura’s alleged conduct, he may now attempt to achieve that same result in the probate courts. Jeff rightly admits that he has a probate remedy to redress the supposedly wrongful efforts to procure the 2013 Changes—but argues that his ITEI claim applies only to Bruce and Laura’s purported efforts to keep Kjell from reversing those changes. Opp. at 7. The temporal distinction makes no difference. As noted above, ILE is available on when the “aggrieved party has 2 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 essentially been deprived of access to the probate system.” Beckwith, 205 Cal. App. 4th at 1053. Here, Jeff is a full participant in the probate process; he has filed seven separate petitions against his co-trustees and beneficiaries. A concurrent IIEI claim, in this case, is far from “necessary to afford an injured plaintiff a remedy.” /d. at 1056. Indeed, allowing Jeff to challenge the adoption of the 2013 Changes in probate, and the failure to reverse them in tort, would generate precisely the “dual litigation tracks for disgruntled heirs” that the Court of Appeal believed would threaten the “integrity of the probate system.” /d. at 1052; Munn, 185 Cal. App. 4th at 590.' Jeff's interpretation would transform I[E] from a tort of “last resort” to a universally applicable remedy. Finally, even if Jeff were correct that an I[EI claim is appropriate here, he has not adequately pleaded it. An HEI claim requires interference with an expectancy of an inheritance. Beckwith, 205 Cal, App. 4th at 1057, As pleaded by Jeff, when Bruce and Laura supposedly dissuaded Kjell from undoing the 2013 Changes, those changes had already taken effect and Jeff no longer had a legitimate expectation of receiving a precise 50% share of the estate. Pet. {] 48- 51, 76, 80. Jeffs claim is really that Bruce and Laura inhibited him from gaining more than he expected to receive under the existing trust instrument. That is the opposite of an IIEI claim. Given the complete relief to which Jeff would be entitled if he prevailed in probate (which he should not, as his claims are baseless), the Court should not stretch the bounds of the ITEI claim to allow a supplemental civil claim in this situation. B. Jeff Fails to Allege any Mistake Regarding the 2013 Changes Under his Own Three-Part Pleading Standard. Jeffs Opposition quibbles with the required degree of heightened pleading when a challenger to a trust seeks recission or reformation based on “mistake,” Opp. at 3-4, but Jeff admits that he was required to plead, with specificity, the following: 1) the “true” facts; 2) the ' Brazil v. Silva, 181 Cal. 490 (1919), on which Jeff also relies, actually supports Bruce and Laura’s position. In Brazil, the plaintiffs alleged fraud by a defendant who procured a will in her favor and then, when asked by the decedent to destroy it, burned an envelope that she said contained the will but actually did not. /d. at 492. The Court allowed the claim to proceed because the probate court had already held that plaintiffs’ claim could net be resolved in probate proceedings, such that “if the present plaintiffs were entitled to any relief it would have to be sought outside of the probate proceedings.” Jd. at 493. Thus, to the extent this hundred-year-old decision has any bearing on the present case, it certainly does not authorize concurrent probate/tort actions that would achieve the same ultimate relief. 3 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 settlor’s misapprehension of those facts; and 3) that “but for the settlor’s mistaken belief, he or she would not have executed the instrument.” Opp. at 3 (citing Hartog & Kovar, California Trust Litigation (2014), 5.50[1], p. 5-126). Jeffs Petition does not meet even his own standards, and therefore the demurrer should be sustained. Jeff's Petition, and his Opposition, focus upon Kjell’s purported mistake regarding “the financial health of QAG”; however, his Opposition only points to one “true” fact set forth in the Petition—that “one dealership enjoy[ed] record profits” in December 2012. See Opp. at 4. Nowhere does Jeff allege that Kjell had any misapprehension as to this fact; consequently, Jeff fails to state a claim for mistake based on the sole dealership’s profits. In other words, Jeff does not allege either that Kjell misapprehended this purported “true” fact, or that “but for the settlor’s mistaken belief, he or she would not have executed the instrument.” Jeff next claims that Kjell was under the impression that his two “assistants were let go because the business suffered from difficulties.” Opp. at 4. Jeff again fails to adhere to the pleading standard by failing to allege the purported “true” facts. Nowhere does Jeff's Petition allege that the “true” facts, e.g., that the assistants were not in fact let go, or that the assistants were let go for a different reason. Jeff also fails to allege, because he cannot truthfully do so, that Kjell executed the 2013 Changes because of his mistaken belief as to the reason the assistants were let go. Thus, Jeff's has failed to plead a claim for mistake on this basis. Unable to plead facts, Jeff resorts to opinion. He alleges that the December 2012 results for the Qvale Automotive Group (“QAG”) were “extremely good,” and that Kjell believed otherwise. But this difference in opinion is not a mistake of fact. See Walton v. Bank of Cal., 218 Cal. App. 2d 527, 543 (“[T]here is a mistake of fact when a person understands the facts to be other than they are.”). Jeff's Opposition does not argue otherwise. But, even if “extremely good” 2012 results were somehow a statement of fact, and further assuming that Kjell believed otherwise, Jeff does not plead—as he admits he must—that Kjell implemented the 2013 Changes because he was mistaken about QAG’s results in 2012. A claim for mistake must allege that the purported mistake “animated and controlled” the party’s conduct, going to “the essence of the object in view,” and that it was not merely incidental. Walton, 218 4 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 Cal. App. 2d at 545-46 (citation omitted). Thus, Jeff must allege that but-for the mistake, the trust document in dispute would not have been executed. See Reid v. Landon, 166 Cal. App. 2d 476, 483 (1958); see also Earl v. Saks & Co., 36 Cal. 2d 602, 609 (1951) (the mistake must entail the “substantial frustration of the donor’s purpose”). Jeff does not (and cannot truthfully) do so. Jeff argues that Kjell must have concluded that QAG “was a risky asset” because Kjell thought the business was not doing well. Opp. at 4. But Jeff’s logically flawed conclusion does not allege but-for causation. Even if Kjell had not believed that “QAG was not doing well” and instead believed that “December 2012 results were extremely good,” QAG would still be “a risky asset.” QAG, like any business subject to the vicissitudes of the economy, inherently carries substantial financial and business risks independent of profits in a particular month. See Demurrer at 7, Indeed, Kjell’s Exercise of Power of Appointment made clear that the 2013 Changes were not premised on a mistake about the company’s short-term profitability. See Petitioner’s Request for Judicial Notice, | 5. The lack of any pleaded link between an actual mistake of fact and Kjell’s decision to give the business assets to Bruce, and all other assets to Jeff, is fatal to the “mistake” claim. Finally, Jeffs Opposition points to four other purported “mistakes,” with no further discussion: 1) “the relative risks attendant to the instrument’s allocation of estate taxes”; 2) “impact on his grandchildren of various changes wrought by instruments executed by him”; 3) “the mistaken belief that his attorneys were independent”; and 4) that Laura “was acting on Kjell’s behalf.” Opp. at 3. These are not “mistakes” on which a trust instrument may be invalidated, certainly as pleaded. For each of these conclusory statements, the Petition fails to allege a “true” fact about which Kjell was mistaken, or that the 2013 Changes were executed because of those mistakes, and that “but for the Kjell’s “mistaken belief.” he or should would not have executed the instrument. Because Jeff has failed to meet the pleading standard for mistake, the demurrer to Jeffs Second Claim for mistake must be sustained. Cc. Jeff’s Claim for Financial Elder Abuse Fails Because Jeff Cannot Allege that Kjell was Deprived of a Property Right. Respondents’ demurrer pointed out that Kjell was never “deprived of [a] property right” because Kjell always retained the right to change his testamentary disposition. Demurrer at 9. 3 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 According to the elder abuse statute, “a person or entity takes, secretes, appropriates, obtains, or retains real or personal property when an elder or dependent adult is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult.” Welf. & Inst. Code § 15610.30(c) (emphasis added). Despite repeating the language of the statute in his Opposition, Jeff fails to identify any property right (or actual property) of which Kjell was deprived.” Without any such lawful deprivation, his claim for financial elder abuse must fail. In his Opposition, Jeff quotes a Practice Guide regarding deprivation of property rights; however, Jeff selectively eliminates language underscoring the incurable infirmity in his Petition. See Opp. at 9-10 (quoting Prac. Guide Elder Abuse Litigation Ch. 8:4(c)). The Elder Abuse Practice Guide, when quoted in its entirety, states: Of course, where the testamentary plan has the effect of depriving the elder of the further right to make an alternative disposition, either because of the form of the testamentary plan such as an irrevocable bequest, or because the elder subsequently becomes incapacitated from making an alternative disposition, he has lost the right to dispose of property. Prac. Guide Elder Abuse Litigation Ch. 8:4(c) (second and third emphases added). But despite this clear admonition, Jeff nowhere alleges that Kjell’s testamentary plan deprived Kjell of the right to dispose of property through, e.g., alternative dispositions. On the contrary, the allegations in Jeff’s Petition undercut his argument—Jeff’s Petition alleges that Kjell could have revoked the 2013 Changes, and specifically does not allege that Kjell lacked authority or capacity todo so. Pet. 81. This claim is therefore doomed because Jeff's allegations, at bottom, pertain to undue influence over Kjell’s continuing right to dispose of his property, not a deprivation of the right itself. * Undue influence over the testamentary bequest has already been pled in Jeffs First Claim for Relief pursuant to the Probate Code. See Cal. Prob. Code § 86 (‘Undue influence’ has the same meaning as defined in Section 15610.70 of the Welfare and Institutions Code.”). Contrary to Jeff's claim that the Legislature created a duplicative claim for such dispositions “by statutory definition,” Opp. at 9, his own Petition demonstrates otherwise: “[i]t is the intent of the Legislature that this section supplement the common law meaning of undue influence without superseding or interfering with that law.” Pet. 68; see also 2013 Cal. Legis. Serv. Ch. 668 (A.B. 140) (“This bill would define undue influence for those purposes without superseding or interfering with the common law of undue influence.”). 6 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827799 Not only does Jeff's Opposition improperly quote the Practice Guide, it also fails to address the actual argument in Respondents’ Demurrer: Kjell was not deprived of a property right because he “merely shifted assets among beneficiaries in the trusts (which he could alter at any time prior to his death).” Dervurrer at 9 (emphasis added). Unsurprisingly, then, Jeff also wholly fails to mention, let alone address, the “injuries to decedent” that give right to his claim, thus providing a separate and independent basis on which Bruce and Laura’s demurrer must be sustained. See Demurret at 8 (citing Quiroz v. Seventh Ave. Center, 140 Cal. App. 4th 1256, 1278 (2006)). Jeffs Fourth Claim for Relief for Financial Elder Abuse thus fails as a matter of law. IIE CONCLUSION For the foregoing reasons, the Court should sustain Respondents’ demurrer in its entirety. Dated: May 29, 2014 KEKER & VAN NEST LLP By: _/s/ Warren Braunig WARREN BRAUNIG Attorneys for Petitioner and Respondent BRUCE H. QVALE, FAMILY TRUSTEE and Respondent LAURA HIURA 7 PETITIONER'S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF DEMURRER. Case No. PTR-13-297016827733.01 PROOF OF SERVICE BY ELECTRONIC TRANSMISSION, EMAIL VIA PDF FILE AND UNITED STATES MAIL 1am employed in the City and County of San Francisco, State of California in the office of a member of the bar of this court at whose direction the following service was made. I am over the age of eighteen years and not a party to the within action. My business address is Keker & Van Nest LLP, 633 Battery Street, San Francisco, CA 94111-1809, On May 29, 2014, I served the following documents described as: PETITIONER’S AND RESPONDENTS’ REPLY MEMORANDUM IN SUPPORT OF _ DEMURRER by serving a true copy of the above-described documents in the following manner: ~ BY LEXIS NEXIS® FILE & SERVE On the date executed below, I electronically served the documents described above via Lexis Nexis® File & Serve on the recipients designated on the Transaction Receipt located on the via Lexis Nexis® File & Serve website. BY E-MAIL VIA PDF FILE errr eeeeeeeeeaeenaeeeaeeeeeenaeeeaeeeeeaceeaceeaeaaeeaeerenaeeaerce ee Ty by E-MAIL VIA PDE FILE, by transmitting on this date via e-mail a true and correct copy scanned into an electronic file in Adobe “pdf” format. The transmission was reported as complete and without error, Edward Koplowitz MacInnis, Donner & Koplowitz 465 California Street, Suite 222 San Francisco, CA 94104 eakatt@aol.com Ronald Hayes Malone 9098 Mustang Court Petaluma, CA 94954 ron@circleoakequine.com George Montgomery Friedman, McCubbin, Spalding, Bilter Roosevelt & Montgomery 425 California Street, 25th Floor San Francisco, CA 94104 george@fomlaw.com Peter L. Muhs Richard J. 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According to that practice, items are deposited with the United States Postal Service at San Francisco, California on that same day with postage thereon fully prepaid. | am aware that, on motion of the party served, service is.presumed invalid if the postal cancellation date or the postage meter date is more than one day after the date of deposit for mailing stated in this affidavit. Norma Hepworth P.O. Box 871 Hailey, ID 83333 Nancy Bong 23 Kingston Place Walnut Creek, CA 94596 Karen Duarteau 2600 Nicasio Valley Road Nicasio, CA 94946 ° Rita Jelincic 25385 Palomares Road Castro Valley, CA 94552 Hubert Gely 3532 Sacramento St., #2 San Francisco, CA 94118 Blake Henry Qvale 336 E. 18th St., Apt. E-2 New York, NY 10003 Lillian Fredriksson 1318 Hale Drive Concord, CA 94518 Roger Hansen 868 East 2830 South Hagerman, ID 83332 Don Endo 21000 Glenwood Drive Castro Vailey, CA 94552 Raymonde Gely 3532 Sacramento St., #2 San Francisco, CA 94118 Kendel Hailey Qvale 3500 Scott St. San Francisco, CA 94123 Connor Hammond Qvale 98 Via Poinciana Lane Boca Raton, FL 33487 PROOF OF SERVICE, Case No. PTR-13-297016827733.01 Caroline Paige Qvale 461 ~ 2" Street, C227 San Francisco, CA 94107 Executed on May 29, 2014, at San Francisco, California. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. chore Lita Joanne Winars v PROOF OF SERVICE Case No. PTR-13-297016