Preview
1 MICHAEL S. PECHERER, (SBN 47053)
24 Rio Vista
2
Orinda, CA 94563 ELECTRONICALLY
3 Office: 925-386-0943, Cell: 925-518-7076 F I L E D
Email: michael@pecherer.com Superior Court of California,
County of San Francisco
4
Referee in Partition 06/17/2020
5 Clerk of the Court
BY: ERNALYN BURA
6 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA Deputy Clerk
7 IN AND FOR THE COUNTY OF SAN FRANCISCO
8 UNLIMITED JURISDICTION
9
ANTHONY CHIAPELONE, Case No.: CGC-17-562017
10
Plaintiff,
11
vs. DECLARATION OF MICHAEL S.
12 PECHERER, REFEREE IN SUPPORT OF
STEVEN CHIAPELONE, and DOES 1 PETITION FOR VARIOUS ORDERS
13
THROUGH 50,
14
INCLUSIVE,
15
Defendants
16 DATE: July 15, 2020
17 TIME: 9:30
DEPT. 501
18
BACKGROUND
19
1. I am an attorney duly admitted to practice before this Honorable Court. I make
20
this Declaration of my own personal knowledge and if called as a witness, I could competently
21 testify as to the contents hereof.
22 2. This is a partition action involving a single family residence located at 1650 32nd
23 Avenue in San Francisco (the “Property”). The parties are siblings. With respect to the
24 residence, the plaintiff owned approximately 95% and the defendant owned approximately 5%.
25 The defendant had been living in the residence for many years and refused to acknowledge his
brother’s ownership. (The Defendant also owns 95% of another San Francisco residence located
26
on Yerba Buena and receives substantial rents from that property.)
27
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 1
1 3. The parties also have interests in several commercial properties which produce
2 substantial rental income. I will address the related issues later in this Declaration.
3 4. The Property was partitioned by sale on February 28, 2020 as per this Court’s
4
Interlocutory Judgment.
5. On February 7, 2020, this Court entered an “Order Approving Interim Report of
5
Referee and Distribution Order” upon the motion of the Referee. Since then, the sale of the
6
Property closed, and the Referee has attempted to complete the instructions contained in that
7
Order. Unfortunately, because of the lack of cooperation and irrational behavior by the
8
Defendant, further Court proceeding in the form of this Motion have become necessary.
9
10 DEFENDANT’S HISTORY OF UNCOOPERATION AND IRRATIONAL BEHAVIOR
11
12 6. This case was filed in October of 2017. The Defendant was served, and Proof of
13
Service was filed in March of 2018 and Defendant’s default was taken at the same time. The
Interlocutory Judgment was entered in June 2018. That Judgment required the Defendant to
14
vacate the Property so that it could be partitioned by sale and I was appointed as Referee. I then
15
wrote numerous letters to Defendant requesting his cooperation. He did not respond in any
16
fashion. This case could have been resolved at that time had the Defendant cooperated and acted
17
rationally.
18 7. After numerous unsuccessful attempts to gain Defendant’s cooperation in
19 vacating the Property, in December 2018 I obtained a Writ of Possession and the Defendant was
20 evicted shortly thereafter. In that context, the Referee learned that the Defendant, although
21 highly intelligent, did not have a computer, did not use email, and did not use a cell phone. The
22
Referee insisted that the Defendant obtain a cell phone, which he did. The Defendant is highly
eccentric but obviously intelligent.
23
8. Once the property was vacant, the Referee undertook to prepare the Property for
24
sale. The Referee was in repeated contact by telephone with the Defendant who had moved to a
25
motel room at Lake Tahoe. As detailed in the Declaration of Michael S. Pecherer, Referee, in
26
Support of Report of Referee and Request for Instructions” filed on July 25, 2019, the Defendant
27 is a hoarder and the Property was filled with all manner of possessions, collections and debris.
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 2
1 Most of these items did not have objective value, but the Referee believed that they might have
2 particular value to the Defendant and wanted to give the Defendant every opportunity to retrieve
3 his possessions.
4
9. Accordingly, the Referee undertook to organize the huge volume of items in the
Property and at the same time, repeatedly reached out to the Defendant by telephone seeking his
5
cooperation in dealing with his personal property. (The July 25, 2019 Declaration referred to
6
previously provides considerable detail as to the scope and quantity of this personal property and
7
the condition of the Property.)
8
10. Notwithstanding multiple communications by telephone and in writing, and
9 repeated requests that the Defendant return to San Francisco and assist in sorting through the
10 massive amount of personal property, the Defendant refused to cooperate and repeatedly stated
11 that he had no intention of cooperating, nor would he sign any papers, and that he would do
12 nothing to help.
13
11. The Referee then proposed to the Court that the personal property be liquidated,
and the proceeds held by the Referee for the Defendant in the Referee’s trust account. In order
14
to be sure that the Defendant had notice of what the Referee proposed and in a last ditch effort to
15
gain Defendant’s cooperation, the Referee proposed to the Court that an Order to Show Cause be
16
issued to and served on the Defendant, giving him the opportunity to participate. This Court
17
issued the requested Order to Show Cause in July 2019 which was served on the Defendant
18 shortly thereafter. The Defendant did not respond, nor did he respond constructively to a
19 subsequent telephone call by the Referee.
20 12. Subsequently, this Court entered its Order authorizing the Referee to liquidate the
21 personal property remaining at the Property and to retain the proceeds in the Referee’s trust
22
account. The Referee implemented the Order.
13. The Property was listed, an acceptable offer was received which was confirmed
23
by the Court in January 2020. The sale closed at the end of February 2020.
24
14. As a result of the sale, the Defendant was entitled to receive $42,679.84 from the
25
sales proceeds. The title company issued a check in that amount payable to Defendant which
26
check is currently in the possession of the Referee. In addition, there were some items of
27 personal property belonging to the Defendant which the Referee had stored and, there was the
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 3
1 sum of $17,279.83 which included some cash that was found by the Referee in the Property as
2 well as the proceeds from the sale of personal property belonging to the Defendant.
3 15. Previously, on motion by the Referee, this Court entered its “Order Approving
4
Interim Report of Referee and Distribution Order”. That Order in Paragraph E., Page 3 affirmed
the Referee’s proposal to distribute the Defendant’s property and money as follows:
5
6 “The Referee has proposed that he will arrange for the Defendant to
receive the personal property that is presently in storage as well as the sum
7 of $17,279.83 being the proceeds of the sale of some of Defendant’s
property as was previously Ordered. The Referee will also undertake to
8
deliver the Defendant’s allocation of the proceeds of the sale of the
9 Property to the Defendant. That Proposal is reasonable under the
circumstances.”
10
16. Once the sale had closed, I repeatedly telephoned the Defendant, who, as noted, is
11
residing in a motel room at Lake Tahoe, and requested that he meet me either in Placerville or at
12
Lake Tahoe so that I could hand him the title company check, a trust account check, and his
13
remaining personal property. He refused and repeatedly stated that he would not cooperate in
14
any fashion. Although I tried to convince him otherwise by telephone on several occasions, he
15
will not cooperate. He is irrational and argumentative in these telephone conversations.
16 17. In the course of carrying out my responsibilities as Referee and in particular, in
17 the course of organizing the Defendant’s personal property and emptying the Property, I noted
18 the following additional items pertinent to this motion:
19 a. The Defendant was entitled to receive monthly distributions from the manager
responsible for the parties’ commercial properties. These are substantial properties
20
that had been distributed in part to Defendant and in part to Plaintiff from the Family
21
Trust. The Plaintiff is the Successor Trustee of that Trust. For years, the property
22
manager would issue a monthly check to Defendant for his share of the monthly
23
rental receipts. In the course of organizing the contents of the Property, I found
24
several years’ worth of those checks uncashed and undeposited, some in unopened
25 envelopes, some in drawers, and some scattered elsewhere about the Property. I
26 subsequently spoke with the property manager who stated that the Defendant hadn’t
27 cashed or deposited any of these checks for years. The checks that I found were
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 4
1 stale and the underlying amounts have been deposited into an account within the
2 Family Trust, which account is maintained by the Trustee exclusively for the
3 Defendant. The amount in that account has accumulated into the low six figures.
4
b. Steven was entitled to a distribution from the Family Trust as part of his inheritance.
He has refused receipt of those funds which are being held in a separate account
5
within the trust. Again, the amount is in six figures.
6
c. At the Property I found repetitive correspondence from American General Life
7
Insurance Co. showing that Steven is entitled to a payment of approximately $30,000
8
as the liquidation of an annuity as part of his parents’ estate. All he had to do to
9 receive those funds was to sign and return a document. I mentioned this to Steven in
10 several of our conversations and he said he didn’t want to sign the document and
11 didn’t trust the company. If he does not sign the document by the end of August, or
12 some other arrangement is not made, the funds will escheat.
13
d. Documentation at the Property showed that Steven receives substantial monthly rent
from the second property located on Yerba Buena in San Francisco. Steven was
14
deeded 95% of this property by their parents and Anthony was deeded 5%. This rent
15
is paid in cash or money orders and not by check. Although we found years’ worth
16
of open envelopes that were used to transmit that rent, we found no organized
17
records, no records of any bank deposits or even of bank accounts, and most
18 importantly, no records showing that Steven files income tax returns. What we did
19 find were substantial evidence that Steven frequents casinos, in the form of match
20 book covers, advertising materials, decks of playing cards from casinos, and
21 advertising specialties such as glasses, ashtrays, note pads, pens, dice sets, gambling
22
chips, etc. all from casinos. On several occasions when I have called Steven, when
he answered he stated he was at a casino. Anthony informs that Seven has long had
23
a gambling problem.
24
e. Although Steven had lived in the Property for many years, he only sporadically paid
25
any of the taxes, utilities, trash collection bills, water bills, etc. These have mainly
26
been paid by Anthony from funds held in the Family Trust for Steven’s benefit.
27
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 5
1 f. There was no indication at the Property that Steven has filed income tax returns and
2 there were opened letters from the IRS indicating that he had not. I raised this issue
3 in conversations with him and he was evasive and ultimately acknowledged that he
4
had not filed returns in years.
g. I have mentioned the Yerba Buena house which is rented to a third party and of
5
which Steven owns 95%. Steven collects all of the rents but does nothing to manage
6
that property such that the responsibility has fallen on Anthony. Indeed, Anthony
7
has paid the real property taxes and insurance from Steven’s funds for at least five
8
years since their father died. I believe these rents are Steven’s primary source of
9 spendable money. There was no indication at the Property that Steven had any bank
10 accounts or any other account where he might deposit this rent. I believe that he
11 carries around the cash or otherwise secrets it in some way.
12 h. I have spoken with Steven on numerous occasions by phone and I have met him
13
once at the time he was evicted from the Property. In my opinion, Steven has some
psychological issues. He is completely disorganized in his dealings with money. He
14
expresses irrational distrust for banks, for the annuity company, and for any sort of
15
institution. Judging from the contents of the Property, he was definitely a hoarder.
16
While he is quite intelligent, these eccentricities render him very difficult. While I
17
do not believe that he would qualify for a conservatorship, in my opinion, he is
18 fortunate that his brother takes care of his financial interests. Otherwise, hundreds of
19 thousands of dollars belonging to Defendant would have escheated.
20
21 PROPOSED SOLUTION
22
18. I am requesting that the Court issue somewhat creative Orders in order to bring
this matter to a proper conclusion. The Court sits in equity and has broad statutory power to
23
issue any orders or decrees necessary to carry out the purposes of the partition statutes. CCP
24
§872.120.
25
19. The accompanying Declaration of Anthony Chiapelone (“Anthony”), shows that
26
the Family Trust that was established by the parties’ deceased parents, is being maintained by the
27 Plaintiff in part for the benefit of Steven. It also shows that notwithstanding their opposition as
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 6
1 parties in this matter, Anthony demonstrates a deep concern for his brother Steven and has been
2 responsibly handling Steven’s financial affairs for many years. The Family Trust provides a
3 vehicle for the resolution of the matters raised by this Motion. It may be necessary to establish a
4
more comprehensive trust for Steven’s benefit in the future. Anthony was named as the sole
trustee by the parties’ parents who had established the trust as an estate planning matter and
5
reflects their decision that Anthony was best able to manage the family’s finances after the
6
parents were gone.
7
20. Anthony’s Declaration shows that within the Family Trust, he maintains two
8
separate accounts for Steven. The first contains Steven’s inheritance which is maintained
9 separately because there are no related income tax issues. That money has been available to
10 Steven for more than five years and he has not taken it. The second account holds Steven’s
11 share of the monthly rentals from the trust properties as well as any other funds from other
12 sources that have been accumulated for Steven’s benefit.
13
21. In order to bring this matter to a conclusion, I am proposing two Orders:
a. An order authorizing me as Referee, and authorizing Fidelity Title, which
14
handled the partition escrow, to pay the funds belonging to Steven to the Family Trust for
15
deposit by Anthony in the account maintained for Steven which I have described.
16
b. An order authorizing Anthony as Steven’s Attorney in Fact, to sign the
17
annuity document on Steven’s behalf with the proviso that the resulting funds shall also
18 be deposited into Steven’s account as maintained by the Trust.
19 22. In my dealings with Steven, which, with the exception of the date when he was
20 evicted from the Property have been by phone, I have found him very intelligent, but highly
21 eccentric and for reasons that are not clear, entirely uncooperative. He seems oblivious about
22
financial matters. I have attempted through many phone calls to gain his cooperation so that this
case can be brought to a normal conclusion. Since he was evicted from the Property, he has
23
lived in a motel room at Lake Tahoe. I have discussed with him that he has considerable
24
resources available and that he could move to a more conventional living circumstance. He
25
responds without any direction or indication that he has any plans. While I do not believe that he
26
is inclined to or even possibly capable of handling his financial affairs, I do not believe that he
27 meets the criteria for a conservatorship. Yet, in order to conclude this matter, I require the
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 7
1 assistance from the Court in dealing with the monies described and with the annuity application
2 which I have treated as an asset that was located at the Property. CCP §873.810 recognizes that
3 the proceeds of a partition sale may appropriately be paid into an existing trust or into a trust
4
created for that purpose. As the Family Trust already exists, I believe it appropriate to direct the
funds belonging to Steven into the Family Trust, to be held until a more permanent arrangement
5
can be made. Anthony’s Declaration states his intention to establish a separate trust for Steven
6
in connection with the final distributions from the Family Trust.
7
23. Without initiating a complex proceeding in which one can be assured that no
8
cooperation will be forthcoming from Steven, I know of no other approach to resolve these
9 lingering problems that have arisen within the partition action and are preventing this action from
10 being concluded in the ordinary course.
11 24. I have spent twelve hours doing the research, investigating the trust situation and
12 preparing these papers. I expect that an additional two hours will be required in connection with
13
the appearance and the final close out of this case. My ordinary billing rate is $500 per hour and
I would ordinarily bill $7,000 for these services. Given the circumstances, however, I am
14
requesting a reduced fee of $4,500 to be paid from the funds presently being held in my trust
15
account.
16
17
I declare under penalty of perjury under the laws of the State of California that
18 the forgoing is true and correct.
19
20 Executed at Orinda, CA on June 17, 2020
21
22
23
24
25 ________________________________
Michael S. Pecherer
26
27
28 DECLARATION OF MICHAEL S. PECHERER, REFEREE IN SUPPORT OF PETITION FOR VARIOUS
ORDERS - 8