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UMMA
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Feb-01-2012 3:32 pm
Case Number: PES-10-293505
Filing Date: Feb-01-2012 3:31
Juke Box: 001 Image: 03477138
GENERIC PROBATE PLEADING
IN RE: STAN KWONG IRREVOCABLE TRUST II
001P03477138
Instructions:
Please piace this sheet on top of the document to be scanned.Christine Tour-Sarkissian (SBN 118794)
Paul Tour-Sarkissian (SBN 123467)
Phil Foster (SBN 262120)
TOUR-SARKISSIAN LAW OFFICES
211 Gough Street, Third Floor
San Francisco, CA 94102
Telephone (415) 626-7744
Facsimile (415) 626-8189
Attorneys for Respondent
D
SUPEBIOR C
COUNTY OF SAN FRANCISCO
22 FEB =1 PM 12: 36
GLERSA GF TRE COURT
rile, :
DrPuT © cLeRe
JEANNE KWONG as Trustee of the Stan Kwong Trust
IN THE TRIAL COURTS FOR THE STATE OF CALIFORNIA
IN AND FOR THE CITY AND COUNTY OF SAN FRANCISCO
IN RE: STANLEY CHONG KWONG,
Case No.:
Related Cases:
ESTATE OF STANLEY CHONG KWONG,
Deceased,
JENNIFER SHUK-HAN KWOK
Petitioner,
v.
JEANNE KWONG, individually and as a
former trustee of the Stan Kwong Irrevocable
Trust II,
Respondent.
LAU KWONG, e7 al,
Plaintiffs,
Vv.
JENNIFER SHUK-HAN KWOK, er al,
Defendants.
PES-09-293019
PES-09-292733
@ES-10.29350)
CGC-10-499028
RESPONDENT JEANNE KWONG’S REPLY
BRIEF IN SUPPORT OF MOTION FOR
RECONSIDERATION OF ORDER
REMOVING JEANNE KWONG AS
TRUSTEE OF THE STAN KWONG TRUST
Date: February 8, 2012
Wednesday
Time: 3:00 PM
Dept.: 613
Location: 400 McAllister Street
San Francisco, CA 94102
Judge: Hon. Ernest Goldsmith
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTRespondent JEANNE KWONG (“Respondent”) submits this Reply Brief in support of her
Motion for Reconsideration of Order Removing Jeanne Kwong as Trustee of the Stan Kwong Trust.
I.
Respondent’s reconsideration motion should be granted.
Petitioner Jennifer Kwok’s (“Kwok”) opposition papers failed to address the merits of
Respondent’s Motion for Reconsideration in the following 8 ways:
1.
Kwok did not cite a single authority permitting Kwok to file a Motion to Remove Trustee as a
16-day motion rather than a Section 17200 petition under the Probate Code. Kwok did not cite
any such authority because none cxists. The Motion to Remove Trustee was improperly
brought, and Kwok has not disputed this.
Kwok did not cite a single authority supporting Kwok’s contention that Respondent could be
denied a 30-day response time under Prob. Code § 17203 to defend against the Motion to
Remove Trustee. Kwok was unable to cite any such authority because none exists.
Respondent was wrongfully denied an opportunity to defend against the Motion to Remove
Trustee, and Kwok does not dispute this.
Kwok did not make a single argument excusing Kwok’s failure to follow the procedural
requirements of Prob. Code § 15642(a), Prob. Code § 17201, and Prob. Code § 17203. Kwok
was unable to make such an argument because the requirements of these Probate Code sections
are jurisdictional. The Court was without jurisdiction to make its December 23, 2011 order
removing Respondent as trustee, and Kwok does not dispute this.
Kwok did not deny failing to serve notice of the Motion to Remove Trustee on the
beneficiaries as required by Prob. Code § 17203. Kwok could not deny it because Kwok’s
own proof of service of the Motion to Remove Trustee establishes that Kwok did not serve
notice on all beneficiaries.
Kwok did not cite a single authority excusing Kwok’s failure to serve notice on the
beneficiaries. Kwok was unable to cite any such authority because none exists.
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUST6. Kwok did not make any argument or cite any authority as to why Kwok’s failure to properly
notice the beneficiaries did not render the Court’s December 23, 2011 order a nullity according
to the rule set forth in Texas Co. v. Bank of America Nat. Trust & Savings Ass’n, 5 Cal.2d
35, 41 (1935). Kwok did not even address this in the Opposition.
7. Kwok’s opposition papers were devoid of any argument or legal authority justifying how the
Court could make the December 23, 2011 order in the absence of competent evidence and in
contravention of the rule that “when challenged in a lower court, affidavits and verified
petitions may not be considered as evidence at a contested probate hearing.” Evangelho v.
Presoto, 67 Cal.App.4th 615, 620 (1998). Kwok did not even address this in the Opposition.
8. Kwok’s opposition papers were devoid of any argument or legal authority justifying the denial
of Respondent’s right to an evidentiary hearing. To the contrary, Kwok’s own declaration set
forth that Kwok herself expects an evidentiary hearing on the Motion to Remove Trustee.
Kwok’s failure to dispute any of the above facts is telling. Kwok did not dispute the above
points because Kwok is simply unable to. For these reasons, it is respectfully requested that the Court
grant Respondent’s motion for reconsideration.
IL. Respondent’s reconsideration motion set forth new or different facts and circumstances.
In the Opposition, Ms. Kwok contended “The former trustee’s motion is elaborate in its
presentation of ‘evidence,’ but it is completely devoid of any ‘new or different facts or circumstances.
Each argument could have been in response to the original motion brought last September.”
Opposition p.1:21-24. The contention misstates California law.
The phrase “new facts” includes both (1) facts that were not previously known and (2) new
testimony bearing on the meaning of previously known facts. See Garcia v, Hejmadi, 58
Cal.App.4th 674, 689-690 (1997) (“Garcia”): “(While new facts, in the sense of substantive
occurrences which were not previously known, were not shown, new evidence of the meaning of those
facts was produced, stemming from depositions of the operative players. Those depositions were
2
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTtaken after the previous attachment hearings. The trial court found that the depositions shed new light
on the case. Contrasted with the naked facts which showed up in previous declarations by the
subsequent deponents, the depositions provided ‘many subtle nuances and subjective impressions’
none of which could be drawn from the declarations. Thus, new information was made available.”
“New circumstances” is defined to include instances where a trial court failed to correctly
consider previously set forth points and authorities. See Johnston v. Corrigan, 127 Cal. App. 4th
553, 556 (2005) (“Johnston”): “Cross-defendants presented evidence the trial court failed to consider
the timely filed memorandum of points and authorities in support of the special motion to strike. This
was a sufficient showing of new circumstances authorizing the trial court to grant reconsideration
under section 1008, subdivision (a).”
Here, Respondent brought the instant reconsideration motion based on new facts and new
circumstances as permitted by Garcia and Johnston. Respondent’s new facts are comprised of the
following:
1. Beneficiary Kimberly Gon expressed an interest in the December 23, 2011 order being
vacated [a “new” fact that was not known until after the hearing on the Motion to
Remove Trustee];
2. Respondent was erroneously denied an evidentiary hearing [a new fact under the
Garcia standard and a new circumstance under the Johnston standard];
3. Respondent was unable to obtain declarations from third-party witness Falcon Gee,
third-party witness Kay Lee, and Beneficiary Kimberly Gon in the less-than-ten days in
which Respondent had to prepare a defense of the Motion to Remove Trustee [a new
circumstance under the Johnston standard);
4. The declarations of third-party witnesses Falcon Gee and Kay Lee establish that the
trustor-decedent foresaw, and even feared, that Kwok would try to scize the assets of
the Stan Kwong Trust from the trustor-decedent’s family [facts that shed new meaning
3
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTand new light on the case under the Garcia standard];
5. The procedural irregularities (lack of notice, lack of 30-day response time, efc.) in
Kwok’s Motion to Remove Trustee necessitated the Motion to Remove Trustee being
denied [new circumstances in accordance with the Johnston standard];
6. The testimony of witnesses that the trustor-decedent intended the Stan Kwong Trust to
remain in the control of, and serve a benefit to, Jeanne Kwong and Jeanne Kwong’s two
daughters [facts that shed new meaning and new light on the case under the Garcia
standard);
7. The testimony of witnesses that the trustor-decedent has always, since at least July
1998, wanted Jeanne Kwong and Jeanne Kwong’s daughter Kimberly Gon to serve as
trustee of the Stan Kwong Trust, and for Kwok to never serve as trustee [facts that shed
new meaning and new light on the case under the Garcia standard],
8. Evidence that Jeanne Kwong and her two daughters are the only measuring lives of the
Stan Kwong Trust and that the trustor-decedent wanted the Stan Kwong Trust to benefit
Jeanne Kwong and her two daughters for Jeanne Kwong and her daughters’ entire
lifetimes [facts that shed new meaning and new light on the case under the Garcia
standard].
Ill. Feng Ouyang has committed a breach of trust in the past 6 days.
If the reconsideration motion was filed today, Respondent would have based the motion on an
additional “new” fact — the new trustee Feng Ouyang has (again) breached the trust of the Stan Kwong
Trust’s beneficiaries.
As set forth in the Second Supplemental Declaration of Phil Foster filed herewith, on January
25, 2012 -- in accordance with the Court’s December 23, 2011 order — Respondent hand-delivered to
Ms. Quyang’s attorneys a flashdrive containing records, pleadings, defenses, document productions,
and administration materials of the Stan Kwong Trust. Within 5 days of receiving the trust’s
4
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTmaterials, Ms. Ouyang apparently transferred all of the materials to Kwok such that Kwok’s counsel
had the opportunity to review the materials in detail. There can be no doubt that Kwok’s counsel
reviewed the matters in detail because, on January 30, 2012, Kwok’s counsel sent Respondent a
detailed letter evidencing Kwok’s knowledge and review of the materials transferred to Feng Ouyang
and demanding immediate production of those materials.
Kwok is the sole adversary of Stan Kwong Trust. Kwok seeks to distribute all of the Stan
Kwong Trust’s assets to herself and completely divest all of the trust beneficiaries. Because of Ms.
Ouyang, Kwok is now in receipt of the Stan Kwong Trust’s defenses, records, documents, and exhibits
for trial. The Stan Kwong Trust has been irreparably prejudiced in its defense to an extent that is
currently unascertainable.
Ms. Ouyang’s breach of trust now subjects Ms. Ouyang to a petition for Ms. Ouyang’s removal
and an indemnity claim for any loss or injury suffered by the Stan Kwong Trust at trial on Kwok’s
multiple claims against the Stan Kwong Trust. Ms. Ouyang is unfit to serve as trustee of the Stan
Kwong Trust.
IV. | The Court cannot remove a trustee on its own motion without notice to the beneficiaries.
In the Opposition, Kwok contended that the Court may remove Respondent on the Court’s own
motion. See Opposition p.2:11-14. While it is true that the Court may remove a trustee on the
Court’s own motion, in this context the contention is spurious for two reasons. First, the Court never
made such a motion. Second, there is no authority allowing the Court to grant its own motion without
notice to all affected parties, including the beneficiaries of the Stan Kwong Trust. Kwok cited no
contrary authority because none exists.
Vv. “Constructive notice” of the Motion to Remove Trustee was insufficient te confer
personal jurisdiction over Beneficiary Kimberly Gon.
In the Opposition, Kwok contended (without a shred of evidence) that Beneficiary Kimberly
Gon had “constructive notice” of the Motion to Remove Trustee. See Opposition p.4:24. The
5
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTon a
contention fails for three reasons. First, Kwok adduced zero evidence that Ms. Gon did in fact have
“constructive notice.” Kwok was just speculating. Second, Prob. Code § 17203 does not provide for
“constructive notice.” Prob. Code § 17203 requires actual notice to be sent by mail: “At least 30 days
before the time set for the hearing on the petition, the petitioner shall cause notice of hearing to be
mailed to all of the following persons: (1) All trustees. (2) All beneficiaries, subject to Chapter 2
(commencing with Section 15800) of Part 3.” Prob. Code § 17203(a). Third, there is no evidence on
the Court’s docket — and Kwok does not appear to contend — that Kwok ever served notice of the
Motion to Remove Trustee by publication.
VI. The beneficiaries were entitled to notice of the Motion to Remove Trustee.
In the Opposition, Kwok contended that Respondent and Beneficiary Kimberly Gon both failed
to cite authority for the proposition that Beneficiary Kimberly Gon was entitled to notice of the
Motion to Remove Trustee. See Opposition p.4:17-19. The contention is incorrect. Both
Respondent and Ms. Gon repeatedly cited Prob. Code § 17203 as legal authority for the proposition
that beneficiaries were entitled to notice of the Motion to Remove Trustee.
VII. A trial court may not shorten time on a hearing to remove a trustee.
In the Opposition, Kwok contended that “the Court can shorten the hearing time, and that is
what the Court in fact did effectively.” Opposition p.5:7-8. Kwok’s use of the term “effectively” at
the end of the sentence is noteworthy, given that the Court did not shorten time on the hearing.
As the online docket shows, Kwok filed the Motion to Remove in Case No. PES-09-293019
with the hearing date of October 12, 2011. This hearing date never changed. Respondent’s 7 days to
respond to the motion never changed. Respondent’s time to respond was never shortened.
As the online docket also shows, four days after Respondent filed her opposition papers — five
days before the hearing date of October 12, 2011 - Kwok sought an order shortening time to file the
identical motion to remove trustee under three different case numbers. According to the proposed
order drafted by Kwok’s counsel, Respondent’s opposition papers were to be deemed filed in each of
6
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTthe separate case numbers. Kwok’s contention in the instant Opposition that “This was, clearly, the
perfect opportunity for counsel to complain about notice, inadequate time and the scheduling and
timing issue...” (Opposition p.5:18-19) was simply false. The statement lacked candor.
The order shortening time sought by Kwok was for the sole purpose of correcting a clerk’s
filing error. The clerical filing error was the sole grounds stated by Kwok in her ex parte application.
XxX. The trustor’s intent is relevant to a motion to remove trustee.
In the Opposition, Kwok contended that the trustor-decedent’s intent was irrelevant to the
Motion to Remove Trustee. See Opposition p.7:7-18. The contention is without merit. Evidence
that the trustor-decedent foresaw any part of the conflict currently alleged by Kwok is relevant to the
issue of Respondent’s removal. In the moving papers to the reconsideration motion, Respondent
adduced evidence that the trustor-decedent foresaw all of the so-called conflicts currently claimed by
Kwok. The conflict over Kwok’s ambition to seize the assets of the Stan Kwong Trust is no different
today than it was during trustor-decedent’s lifetime.
1X. | Kwok’s disclaimer petition seeks the total annihilation of the Stan Kwong Trust.
In the Opposition, Kwok contended that Kwok’s so-called “disclaimer petition” was simply a
request for the Stan Kwong Trust’s assets in excess of $3.5 million to be distributed to Kwok. See
Opposition 6:24-7:4. This statement directly contradicts Kwok’s verified allegations in the
disclaimer petition.
Jeanne Kwong has filed herewith a Request for Judicial Notice of Kwok’s Petition for Order
Directing Respondent Trustce to Distribute Separate Trust Assets to Trustee of the Marital
Trust (which the parties herein refer to as the “disclaimer petition”). Under penalty of perjury, Kwok
stated in the disclaimer petition that the Stan Kwong Trust should “terminate” and distribute “all” of
the Stan Kwong Trust’s assets to Kwok: “Pursuant to Probate Code section 17200, Petitioner requests
that this Court direct Respondent, as the trustee of the Separate Trust, to distribute immediately all
assets of the Separate Trust to Petitioner, as trustee of the Marital Trust. [{]} Upon distribution of all
7
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTassets in the Separate Trust, that trust will terminate and the trustee of the Separate Trust must account
pursuant to Probate Code section 16062.” See {18 and § 19 of the Disclaimer Petition. Kwok’s
instant Opposition is disingenuous about Kwok’s own verified pleadings.
VIII. Kwok advanced the incorrect legal standard for determining “conflict of interest.”
According to Kwok, a conflict of interest purportedly arose in Respondent because Respondent
was defending against Kwok’s lawsuits despite Kwok telling Respondent to not defend against
Kwok’s lawsuits. See Opposition p.4:7-8.
Kwok cited no legal support for Kwok’s position that the trustee of the Stan Kwong Trust must
follow the instructions of a beneficiary to the detriment of the trust. Kwok was unable to cite such
authority because none exists. To the contrary, the Stan Kwong Trust does not instruct the trustee to
follow the instructions of its beneficiaries.
Kwok also cited no legal authority for Kwok’s position that a “conflict of interest” arises where
a beneficiaries’ instructions to a trustee conflict with the instructions to the trustee in the trust
agreement. Kwok was again unable to cite any authority because none exists.
The standard for determining a trustee’s conflict of interest is set forth in Moore v. Bowes (a
case cited by Kwok in the Opposition): “Trustees are subject to removal whenever it appears that their
private interests conflict with their trust duties...” Moore v. Bowes, 8 Cal.2d 162 (1937). Nowhere in
this case — or in any of the cases cited by Kwok — does any court hold that a trustee has a conflict of
interest if beneficiaries give the trustee instructions that contradict with the instructions to the trustee
in the trust agreement.
Here, the only “conflict” that exists is that Kwok has instructed Respondent to distribute “all”
of the Stan Kwong Trust’s assets to Kwok while, at the same time, the Stan Kwong Trust document
itself instructs Respondent to “defend, at the expense of the Trust Estate and including reasonable
attorneys’ and professional fees and costs, any contest or other attack of any nature on this Trust or the
Trustor’s Will or any of their provisions.” Stan Kwong Trust pp.17-18. The conflict is not a conflict
8
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTof interest in Respondent. The conflict is a conflict between Kwok’s desire and express terms of the
Stan Kwong Trust.
Kwok has never adduced any evidence of Respondent’s private interests conflicting with the
instructions given to Respondent by the Stan Kwong Trust. If such evidence existed, Kwok would
have brought it forward by now. Kwok has not done so because no such evidence exists.
XI. Kwok’s opposition papers establish that an evidentiary hearing is required.
In the Opposition, Kwok contended the motion for reconsideration contained “fabrications”
about Kwok and that Respondent’s third party witnesses had perjured themselves in their declarations.
See Opposition pp.7:21-8:1. Kwok also accused Respondent of having “cajoled and manipulated
Stan for many months trying to secure for herself and her daughters several pieces of real property...”
See Declaration of Jennifer Kwok p.2:23-24.
Kwok’s statements create triable issues of fact regarding, at a minimum, the trustor’s intent and
the credibility of witnesses. Kwok’s contentions in themselves demonstrate that the Motion to
Remove can only properly be decided after an evidentiary hearing.
XII. The Court may re-evaluate its own order in the absence of a reconsideration motion.
Code Civ. Proc. § 1008 does not govern the court’s ability, on its own motion, to reevaluate its
own interim rulings: “We hold that sections 437c and 1008 limit the parties’ ability to file repetitive
motions but do not limit the court’s ability, on its own motion, to reconsider its prior interim orders so
it may correct its own errors. [{]J [I]t should not matter whether the ‘judge has an unprovoked flash of
understanding in the middle of the night’ or acts in response to a party’s suggestion. If a court
believes one of its prior interim orders was erroneous, it should be able to correct that error no matter
how it came to acquire that belief.” Le Francois v. Goel, 35 Cal.4th 1094, 1107 (2005).
Based on the foregoing, Respondent respectfully requests that, after reviewing the papers filed
in support of the reconsideration motion, that the Court, on its motion, vacate the December 23, 2011
order removing Respondent as trustee of the Stan Kwong Trust.
9
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTXIII. CONCLUSION.
Based on the foregoing, Respondent Jeanne Kwong requests an order granting the instant
reconsideration motion, reopening the record and hearing on the Motion to Remove Trustee and For
Instructions to allow the evidence filed in support of the instant motion and at the time of any
evidentiary hearing to be part of the record, for the Court to vacate its December 23, 2011 order
removing Jeanne Kwong as trustee, and for the Court to issue an order denying the Motion to Remove
Trustee and For Instructions.
February 1, 2012 TOUR-S. SSIAN LAW OFFICES
By: Le ‘ 77
PHIL FOSTER.
Attorneys for Respondent
JEANNE KWONG as Trustee of the
Stan Kwong Trust
10
RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION
OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUST
Preview
UMMA SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Feb-01-2012 3:32 pm Case Number: PES-10-293505 Filing Date: Feb-01-2012 3:31 Juke Box: 001 Image: 03477138 GENERIC PROBATE PLEADING IN RE: STAN KWONG IRREVOCABLE TRUST II 001P03477138 Instructions: Please piace this sheet on top of the document to be scanned.Christine Tour-Sarkissian (SBN 118794) Paul Tour-Sarkissian (SBN 123467) Phil Foster (SBN 262120) TOUR-SARKISSIAN LAW OFFICES 211 Gough Street, Third Floor San Francisco, CA 94102 Telephone (415) 626-7744 Facsimile (415) 626-8189 Attorneys for Respondent D SUPEBIOR C COUNTY OF SAN FRANCISCO 22 FEB =1 PM 12: 36 GLERSA GF TRE COURT rile, : DrPuT © cLeRe JEANNE KWONG as Trustee of the Stan Kwong Trust IN THE TRIAL COURTS FOR THE STATE OF CALIFORNIA IN AND FOR THE CITY AND COUNTY OF SAN FRANCISCO IN RE: STANLEY CHONG KWONG, Case No.: Related Cases: ESTATE OF STANLEY CHONG KWONG, Deceased, JENNIFER SHUK-HAN KWOK Petitioner, v. JEANNE KWONG, individually and as a former trustee of the Stan Kwong Irrevocable Trust II, Respondent. LAU KWONG, e7 al, Plaintiffs, Vv. JENNIFER SHUK-HAN KWOK, er al, Defendants. PES-09-293019 PES-09-292733 @ES-10.29350) CGC-10-499028 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUST Date: February 8, 2012 Wednesday Time: 3:00 PM Dept.: 613 Location: 400 McAllister Street San Francisco, CA 94102 Judge: Hon. Ernest Goldsmith RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTRespondent JEANNE KWONG (“Respondent”) submits this Reply Brief in support of her Motion for Reconsideration of Order Removing Jeanne Kwong as Trustee of the Stan Kwong Trust. I. Respondent’s reconsideration motion should be granted. Petitioner Jennifer Kwok’s (“Kwok”) opposition papers failed to address the merits of Respondent’s Motion for Reconsideration in the following 8 ways: 1. Kwok did not cite a single authority permitting Kwok to file a Motion to Remove Trustee as a 16-day motion rather than a Section 17200 petition under the Probate Code. Kwok did not cite any such authority because none cxists. The Motion to Remove Trustee was improperly brought, and Kwok has not disputed this. Kwok did not cite a single authority supporting Kwok’s contention that Respondent could be denied a 30-day response time under Prob. Code § 17203 to defend against the Motion to Remove Trustee. Kwok was unable to cite any such authority because none exists. Respondent was wrongfully denied an opportunity to defend against the Motion to Remove Trustee, and Kwok does not dispute this. Kwok did not make a single argument excusing Kwok’s failure to follow the procedural requirements of Prob. Code § 15642(a), Prob. Code § 17201, and Prob. Code § 17203. Kwok was unable to make such an argument because the requirements of these Probate Code sections are jurisdictional. The Court was without jurisdiction to make its December 23, 2011 order removing Respondent as trustee, and Kwok does not dispute this. Kwok did not deny failing to serve notice of the Motion to Remove Trustee on the beneficiaries as required by Prob. Code § 17203. Kwok could not deny it because Kwok’s own proof of service of the Motion to Remove Trustee establishes that Kwok did not serve notice on all beneficiaries. Kwok did not cite a single authority excusing Kwok’s failure to serve notice on the beneficiaries. Kwok was unable to cite any such authority because none exists. RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUST6. Kwok did not make any argument or cite any authority as to why Kwok’s failure to properly notice the beneficiaries did not render the Court’s December 23, 2011 order a nullity according to the rule set forth in Texas Co. v. Bank of America Nat. Trust & Savings Ass’n, 5 Cal.2d 35, 41 (1935). Kwok did not even address this in the Opposition. 7. Kwok’s opposition papers were devoid of any argument or legal authority justifying how the Court could make the December 23, 2011 order in the absence of competent evidence and in contravention of the rule that “when challenged in a lower court, affidavits and verified petitions may not be considered as evidence at a contested probate hearing.” Evangelho v. Presoto, 67 Cal.App.4th 615, 620 (1998). Kwok did not even address this in the Opposition. 8. Kwok’s opposition papers were devoid of any argument or legal authority justifying the denial of Respondent’s right to an evidentiary hearing. To the contrary, Kwok’s own declaration set forth that Kwok herself expects an evidentiary hearing on the Motion to Remove Trustee. Kwok’s failure to dispute any of the above facts is telling. Kwok did not dispute the above points because Kwok is simply unable to. For these reasons, it is respectfully requested that the Court grant Respondent’s motion for reconsideration. IL. Respondent’s reconsideration motion set forth new or different facts and circumstances. In the Opposition, Ms. Kwok contended “The former trustee’s motion is elaborate in its presentation of ‘evidence,’ but it is completely devoid of any ‘new or different facts or circumstances. Each argument could have been in response to the original motion brought last September.” Opposition p.1:21-24. The contention misstates California law. The phrase “new facts” includes both (1) facts that were not previously known and (2) new testimony bearing on the meaning of previously known facts. See Garcia v, Hejmadi, 58 Cal.App.4th 674, 689-690 (1997) (“Garcia”): “(While new facts, in the sense of substantive occurrences which were not previously known, were not shown, new evidence of the meaning of those facts was produced, stemming from depositions of the operative players. Those depositions were 2 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTtaken after the previous attachment hearings. The trial court found that the depositions shed new light on the case. Contrasted with the naked facts which showed up in previous declarations by the subsequent deponents, the depositions provided ‘many subtle nuances and subjective impressions’ none of which could be drawn from the declarations. Thus, new information was made available.” “New circumstances” is defined to include instances where a trial court failed to correctly consider previously set forth points and authorities. See Johnston v. Corrigan, 127 Cal. App. 4th 553, 556 (2005) (“Johnston”): “Cross-defendants presented evidence the trial court failed to consider the timely filed memorandum of points and authorities in support of the special motion to strike. This was a sufficient showing of new circumstances authorizing the trial court to grant reconsideration under section 1008, subdivision (a).” Here, Respondent brought the instant reconsideration motion based on new facts and new circumstances as permitted by Garcia and Johnston. Respondent’s new facts are comprised of the following: 1. Beneficiary Kimberly Gon expressed an interest in the December 23, 2011 order being vacated [a “new” fact that was not known until after the hearing on the Motion to Remove Trustee]; 2. Respondent was erroneously denied an evidentiary hearing [a new fact under the Garcia standard and a new circumstance under the Johnston standard]; 3. Respondent was unable to obtain declarations from third-party witness Falcon Gee, third-party witness Kay Lee, and Beneficiary Kimberly Gon in the less-than-ten days in which Respondent had to prepare a defense of the Motion to Remove Trustee [a new circumstance under the Johnston standard); 4. The declarations of third-party witnesses Falcon Gee and Kay Lee establish that the trustor-decedent foresaw, and even feared, that Kwok would try to scize the assets of the Stan Kwong Trust from the trustor-decedent’s family [facts that shed new meaning 3 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTand new light on the case under the Garcia standard]; 5. The procedural irregularities (lack of notice, lack of 30-day response time, efc.) in Kwok’s Motion to Remove Trustee necessitated the Motion to Remove Trustee being denied [new circumstances in accordance with the Johnston standard]; 6. The testimony of witnesses that the trustor-decedent intended the Stan Kwong Trust to remain in the control of, and serve a benefit to, Jeanne Kwong and Jeanne Kwong’s two daughters [facts that shed new meaning and new light on the case under the Garcia standard); 7. The testimony of witnesses that the trustor-decedent has always, since at least July 1998, wanted Jeanne Kwong and Jeanne Kwong’s daughter Kimberly Gon to serve as trustee of the Stan Kwong Trust, and for Kwok to never serve as trustee [facts that shed new meaning and new light on the case under the Garcia standard], 8. Evidence that Jeanne Kwong and her two daughters are the only measuring lives of the Stan Kwong Trust and that the trustor-decedent wanted the Stan Kwong Trust to benefit Jeanne Kwong and her two daughters for Jeanne Kwong and her daughters’ entire lifetimes [facts that shed new meaning and new light on the case under the Garcia standard]. Ill. Feng Ouyang has committed a breach of trust in the past 6 days. If the reconsideration motion was filed today, Respondent would have based the motion on an additional “new” fact — the new trustee Feng Ouyang has (again) breached the trust of the Stan Kwong Trust’s beneficiaries. As set forth in the Second Supplemental Declaration of Phil Foster filed herewith, on January 25, 2012 -- in accordance with the Court’s December 23, 2011 order — Respondent hand-delivered to Ms. Quyang’s attorneys a flashdrive containing records, pleadings, defenses, document productions, and administration materials of the Stan Kwong Trust. Within 5 days of receiving the trust’s 4 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTmaterials, Ms. Ouyang apparently transferred all of the materials to Kwok such that Kwok’s counsel had the opportunity to review the materials in detail. There can be no doubt that Kwok’s counsel reviewed the matters in detail because, on January 30, 2012, Kwok’s counsel sent Respondent a detailed letter evidencing Kwok’s knowledge and review of the materials transferred to Feng Ouyang and demanding immediate production of those materials. Kwok is the sole adversary of Stan Kwong Trust. Kwok seeks to distribute all of the Stan Kwong Trust’s assets to herself and completely divest all of the trust beneficiaries. Because of Ms. Ouyang, Kwok is now in receipt of the Stan Kwong Trust’s defenses, records, documents, and exhibits for trial. The Stan Kwong Trust has been irreparably prejudiced in its defense to an extent that is currently unascertainable. Ms. Ouyang’s breach of trust now subjects Ms. Ouyang to a petition for Ms. Ouyang’s removal and an indemnity claim for any loss or injury suffered by the Stan Kwong Trust at trial on Kwok’s multiple claims against the Stan Kwong Trust. Ms. Ouyang is unfit to serve as trustee of the Stan Kwong Trust. IV. | The Court cannot remove a trustee on its own motion without notice to the beneficiaries. In the Opposition, Kwok contended that the Court may remove Respondent on the Court’s own motion. See Opposition p.2:11-14. While it is true that the Court may remove a trustee on the Court’s own motion, in this context the contention is spurious for two reasons. First, the Court never made such a motion. Second, there is no authority allowing the Court to grant its own motion without notice to all affected parties, including the beneficiaries of the Stan Kwong Trust. Kwok cited no contrary authority because none exists. Vv. “Constructive notice” of the Motion to Remove Trustee was insufficient te confer personal jurisdiction over Beneficiary Kimberly Gon. In the Opposition, Kwok contended (without a shred of evidence) that Beneficiary Kimberly Gon had “constructive notice” of the Motion to Remove Trustee. See Opposition p.4:24. The 5 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTon a contention fails for three reasons. First, Kwok adduced zero evidence that Ms. Gon did in fact have “constructive notice.” Kwok was just speculating. Second, Prob. Code § 17203 does not provide for “constructive notice.” Prob. Code § 17203 requires actual notice to be sent by mail: “At least 30 days before the time set for the hearing on the petition, the petitioner shall cause notice of hearing to be mailed to all of the following persons: (1) All trustees. (2) All beneficiaries, subject to Chapter 2 (commencing with Section 15800) of Part 3.” Prob. Code § 17203(a). Third, there is no evidence on the Court’s docket — and Kwok does not appear to contend — that Kwok ever served notice of the Motion to Remove Trustee by publication. VI. The beneficiaries were entitled to notice of the Motion to Remove Trustee. In the Opposition, Kwok contended that Respondent and Beneficiary Kimberly Gon both failed to cite authority for the proposition that Beneficiary Kimberly Gon was entitled to notice of the Motion to Remove Trustee. See Opposition p.4:17-19. The contention is incorrect. Both Respondent and Ms. Gon repeatedly cited Prob. Code § 17203 as legal authority for the proposition that beneficiaries were entitled to notice of the Motion to Remove Trustee. VII. A trial court may not shorten time on a hearing to remove a trustee. In the Opposition, Kwok contended that “the Court can shorten the hearing time, and that is what the Court in fact did effectively.” Opposition p.5:7-8. Kwok’s use of the term “effectively” at the end of the sentence is noteworthy, given that the Court did not shorten time on the hearing. As the online docket shows, Kwok filed the Motion to Remove in Case No. PES-09-293019 with the hearing date of October 12, 2011. This hearing date never changed. Respondent’s 7 days to respond to the motion never changed. Respondent’s time to respond was never shortened. As the online docket also shows, four days after Respondent filed her opposition papers — five days before the hearing date of October 12, 2011 - Kwok sought an order shortening time to file the identical motion to remove trustee under three different case numbers. According to the proposed order drafted by Kwok’s counsel, Respondent’s opposition papers were to be deemed filed in each of 6 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTthe separate case numbers. Kwok’s contention in the instant Opposition that “This was, clearly, the perfect opportunity for counsel to complain about notice, inadequate time and the scheduling and timing issue...” (Opposition p.5:18-19) was simply false. The statement lacked candor. The order shortening time sought by Kwok was for the sole purpose of correcting a clerk’s filing error. The clerical filing error was the sole grounds stated by Kwok in her ex parte application. XxX. The trustor’s intent is relevant to a motion to remove trustee. In the Opposition, Kwok contended that the trustor-decedent’s intent was irrelevant to the Motion to Remove Trustee. See Opposition p.7:7-18. The contention is without merit. Evidence that the trustor-decedent foresaw any part of the conflict currently alleged by Kwok is relevant to the issue of Respondent’s removal. In the moving papers to the reconsideration motion, Respondent adduced evidence that the trustor-decedent foresaw all of the so-called conflicts currently claimed by Kwok. The conflict over Kwok’s ambition to seize the assets of the Stan Kwong Trust is no different today than it was during trustor-decedent’s lifetime. 1X. | Kwok’s disclaimer petition seeks the total annihilation of the Stan Kwong Trust. In the Opposition, Kwok contended that Kwok’s so-called “disclaimer petition” was simply a request for the Stan Kwong Trust’s assets in excess of $3.5 million to be distributed to Kwok. See Opposition 6:24-7:4. This statement directly contradicts Kwok’s verified allegations in the disclaimer petition. Jeanne Kwong has filed herewith a Request for Judicial Notice of Kwok’s Petition for Order Directing Respondent Trustce to Distribute Separate Trust Assets to Trustee of the Marital Trust (which the parties herein refer to as the “disclaimer petition”). Under penalty of perjury, Kwok stated in the disclaimer petition that the Stan Kwong Trust should “terminate” and distribute “all” of the Stan Kwong Trust’s assets to Kwok: “Pursuant to Probate Code section 17200, Petitioner requests that this Court direct Respondent, as the trustee of the Separate Trust, to distribute immediately all assets of the Separate Trust to Petitioner, as trustee of the Marital Trust. [{]} Upon distribution of all 7 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTassets in the Separate Trust, that trust will terminate and the trustee of the Separate Trust must account pursuant to Probate Code section 16062.” See {18 and § 19 of the Disclaimer Petition. Kwok’s instant Opposition is disingenuous about Kwok’s own verified pleadings. VIII. Kwok advanced the incorrect legal standard for determining “conflict of interest.” According to Kwok, a conflict of interest purportedly arose in Respondent because Respondent was defending against Kwok’s lawsuits despite Kwok telling Respondent to not defend against Kwok’s lawsuits. See Opposition p.4:7-8. Kwok cited no legal support for Kwok’s position that the trustee of the Stan Kwong Trust must follow the instructions of a beneficiary to the detriment of the trust. Kwok was unable to cite such authority because none exists. To the contrary, the Stan Kwong Trust does not instruct the trustee to follow the instructions of its beneficiaries. Kwok also cited no legal authority for Kwok’s position that a “conflict of interest” arises where a beneficiaries’ instructions to a trustee conflict with the instructions to the trustee in the trust agreement. Kwok was again unable to cite any authority because none exists. The standard for determining a trustee’s conflict of interest is set forth in Moore v. Bowes (a case cited by Kwok in the Opposition): “Trustees are subject to removal whenever it appears that their private interests conflict with their trust duties...” Moore v. Bowes, 8 Cal.2d 162 (1937). Nowhere in this case — or in any of the cases cited by Kwok — does any court hold that a trustee has a conflict of interest if beneficiaries give the trustee instructions that contradict with the instructions to the trustee in the trust agreement. Here, the only “conflict” that exists is that Kwok has instructed Respondent to distribute “all” of the Stan Kwong Trust’s assets to Kwok while, at the same time, the Stan Kwong Trust document itself instructs Respondent to “defend, at the expense of the Trust Estate and including reasonable attorneys’ and professional fees and costs, any contest or other attack of any nature on this Trust or the Trustor’s Will or any of their provisions.” Stan Kwong Trust pp.17-18. The conflict is not a conflict 8 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTof interest in Respondent. The conflict is a conflict between Kwok’s desire and express terms of the Stan Kwong Trust. Kwok has never adduced any evidence of Respondent’s private interests conflicting with the instructions given to Respondent by the Stan Kwong Trust. If such evidence existed, Kwok would have brought it forward by now. Kwok has not done so because no such evidence exists. XI. Kwok’s opposition papers establish that an evidentiary hearing is required. In the Opposition, Kwok contended the motion for reconsideration contained “fabrications” about Kwok and that Respondent’s third party witnesses had perjured themselves in their declarations. See Opposition pp.7:21-8:1. Kwok also accused Respondent of having “cajoled and manipulated Stan for many months trying to secure for herself and her daughters several pieces of real property...” See Declaration of Jennifer Kwok p.2:23-24. Kwok’s statements create triable issues of fact regarding, at a minimum, the trustor’s intent and the credibility of witnesses. Kwok’s contentions in themselves demonstrate that the Motion to Remove can only properly be decided after an evidentiary hearing. XII. The Court may re-evaluate its own order in the absence of a reconsideration motion. Code Civ. Proc. § 1008 does not govern the court’s ability, on its own motion, to reevaluate its own interim rulings: “We hold that sections 437c and 1008 limit the parties’ ability to file repetitive motions but do not limit the court’s ability, on its own motion, to reconsider its prior interim orders so it may correct its own errors. [{]J [I]t should not matter whether the ‘judge has an unprovoked flash of understanding in the middle of the night’ or acts in response to a party’s suggestion. If a court believes one of its prior interim orders was erroneous, it should be able to correct that error no matter how it came to acquire that belief.” Le Francois v. Goel, 35 Cal.4th 1094, 1107 (2005). Based on the foregoing, Respondent respectfully requests that, after reviewing the papers filed in support of the reconsideration motion, that the Court, on its motion, vacate the December 23, 2011 order removing Respondent as trustee of the Stan Kwong Trust. 9 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUSTXIII. CONCLUSION. Based on the foregoing, Respondent Jeanne Kwong requests an order granting the instant reconsideration motion, reopening the record and hearing on the Motion to Remove Trustee and For Instructions to allow the evidence filed in support of the instant motion and at the time of any evidentiary hearing to be part of the record, for the Court to vacate its December 23, 2011 order removing Jeanne Kwong as trustee, and for the Court to issue an order denying the Motion to Remove Trustee and For Instructions. February 1, 2012 TOUR-S. SSIAN LAW OFFICES By: Le ‘ 77 PHIL FOSTER. Attorneys for Respondent JEANNE KWONG as Trustee of the Stan Kwong Trust 10 RESPONDENT JEANNE KWONG’S REPLY BRIEF IN SUPPORT OF MOTION FOR RECONSIDERATION OF ORDER REMOVING JEANNE KWONG AS TRUSTEE OF THE STAN KWONG TRUST