Preview
Phil Foster (SBN 262120) DEPARTMENT: 204
Hearing: 05/07/2024 9:00 am|
TOUR-SARKISSIAN LAW OFFICES, LLP
211 Gough Street, 3rd Floor
ELECTRONICALLY
San Francisco, CA 94102
(415) 626-7744 FILED
Superior Court of California,
(415) 626-8189 facsimile County of San Francisco
phil@tslo.com 03/21/2024
Clerk of the Court
BY: LESLIE GOMEZ
Attorneys for Petitioner Beneficiary Deputy Clerk
ROSARIO LEGASTO
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
PROBATE DIVISION
10
PTR-24-307146
ll
Case No.:
12 In The Matter Of
PETITION FOR ORDER TO REDRESS
13 THE SMITH ADRON KETCHUM III TRUST BREACH OF TRUST, SUSPEND AND
UTD January 5, 2007 REMOVE SUCCESSOR TRUSTEE, AND
14 APPOINT REPLACEMENT TRUSTEE
15 [Prob. Code § 17200(b)(10), (12)]
[Prob. Code § 15642(b)(1), (2), (9)]
16
17
18
19
20
Petitioner ROSARIO LEGASTO (“Petitioner”) submits the following Petition for Order to
21
Redress Breach of Trust, Suspend and Remove Successor Trustee, and Appoint Replacement Trustee.
22
22
I INTRODUCTION.
23
1 Petitioner is the surviving spouse of Decedent SMITH ADRON KETCHUM III
24
(“Decedent”) and the sole beneficiary of the Marital Trust created by The Smith Adron Ketchum III
25
PETITION FOR ORDER TO REDRESS BREACH or TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
Trust (“Trust”).
2 Petitioner’s step-son ERIC SMITH KETCHUM is the trustee of Petitioner’s Marital
Trust (“Respondent Trustee”) whose accountings for the years 2021 and 2022 appear to show that
Respondent Trustee has misappropriated in excess of $2 million from the Marital Trust and used the
funds to enrich himself personally.
3 For nearly a year now, Petitioner has requested that Respondent Trustee fully account
for and explain his misappropriations from the Marital Trust, and that Respondent Trustee repay to the
Marital all of the sums taken by him, but to date Respondent Trustee has failed and refused to do so,
and has declined Petitioner’s multiple requests to submit this matter to mediation.
10 4 Respondent Trustee’s continuing misappropriation of Marital Trust assets now imperils
1 the ongoing ability of the Marital Trust to provide for Petitioner's health, education, maintenance,
12 support, and general welfare needs and necessitates the filing of the instant petition to recover from
Respondent Trustee all of the amounts he has taken from the Marital Trust and to remove Respondent
14 Trustee as trustee of the Marital Trust to avoid further losses.
15 IL THE TRUST.
16 5 Petitioner is the surviving spouse of Decedent SMITH ADRON KETCHUM III
17 (“Decedent”), the settlor and initial trustee of the Smith Adron Ketchum III Trust established by
18 written declaration of trust dated January 5, 2007 (“Trust”), a true and correct copy of which is
19 attached hereto as Exhibit A.
20 6 Decedent acted as initial trustee of the Trust from the Trust’s creation until Decedent’s
21 death on May 28, 2017.
22
22 7 At Decedent’s death, Section 1.1 of the Trust appointed Decedent’s adult son ERIC
23 SMITH KETCHUM as successor trustee of the Trust (“Respondent Trustee”). Respondent Trustee is
24 Petitioner’s step-son.
25 8 At all times relevant herein, Respondent Trustee accepted his appointment as successor
2
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
trustee and has acted continuously as the sole successor trustee of the Trust since Decedent’s death.
9 Also at Decedent’s death, the Trust became irrevocable pursuant to the preamble to
Article 4, which provides: “Following my death this trust shall become an irrevocable administrative
trust and shall be administered as follows...”
10. Article 4 of the Trust requires the following distributions of Trust assets:
a. Section 4.1 confirms to Petitioner her interest in any community property in the
Trust estate, and Section 4.2(a) distributes to Petitioner all of the Decedent’s
personal property and belongings, excluding motor vehicles (neither of these
sections is the subject of the instant petition);
10 Section 4.2(b) distributes to Respondent Trustee (in his individual capacity) free
11 and clear of trust the real property commonly known as 49 Drumm Street, San
12 Francisco, CA (“Drumm Street Property”) and the real property commonly
13 known as 348 Beach Road, Belvedere, CA in addition to Decedent’s ownership
14 interests in several businesses, including Decedent’s medical practice;
15 Section 4.3 distributes all of the Trust’s remaining assets to a “Marital Trust” for
16 the life-time benefit of Decedent’s surviving spouse Petitioner.
17 11. As the life-time beneficiary of the Marital Trust, Petitioner is entitled to receive “the
18 entire net income of the trust(s) and as much of the principal of the trust(s) as the trustee in its
19 discretion deems appropriate for [Petitioner] ROSARIO’s Health, Education, Support, Maintenance,
20 and General Welfare” under Section 4.3(a) of the Trust.
21 12. The assets in Petitioner’s Marital Trust are substantial and included the following as of
Road,
22 the date of Decedent’s death: (a) Decedent’s and Petitioner’s marital home located at 344 Beach
and
Belvedere, California (“Marital Home”); (b) eleven (11) rental properties located in Marin County
24 Humboldt County; and (c) eight (8) bank accounts. Petitioner is informed and believes and thereon
25 alleges that the aggregate value of the assets in the Marital Trust was an approximate $30 million as of
PETITION FOR ORDER TO REDRESS BREACH oe TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
Decedent’s death.
13. Under Section 4.3 of the Trust, the Marital Trust is to remain in existence and continue
providing for Petitioner’s health, education, maintenance, support, and general welfare needs until
Petitioner’s death.
14. At Petitioner’s death, Section 4.3(b) of the Trust passes the assets of the Marital Trust to
a so-called “Family Pot Trust” for the benefit of Decedent’s “issue” who survive Petitioner.
15. At all times relevant herein, Decedent’s only issue are his adult sons Eric Smith
Ketchum (Respondent Trustee herein) and JASON SEMIN KETCHUM (“Jason”), both of whom are
alive today.
10 16. Since no assets pass to the “Family Pot Trust” until Petitioner’s death, Respondent
11 Trustee and his adult brother Jason are contingent remainder beneficiaries of the Trust who have no
12 present right to receive benefits from the Trust, but instead must survive Petitioner before the so-called
“Family Pot Trust” for their benefit is funded with Marital Trust assets.
14 17. There are no amendments to the Trust.
15 Il. PRIOR LITIGATION.
16 18. On August 6, 2018, Petitioner filed a Petition for Instructions to Trustee to Utilize
17 Marital Deduction from Federal Estate Tax and Pay Trust Income to Beneficiary in the proceeding
18 known as The Matter of The Smith Adron Ketchum II Trust U.T.D. January 5, 2007, Superior Court of
19 Marin County, Case No. PR1702557 (“Prior Action”).
20 19. Respondent Trustee’s misconduct necessitating the filing of the Prior Action was
21 egregious. For the first fourteen (14) months after Decedent’s death, Respondent Trustee intentionally
22
22 withheld the Marital Trust’s net income from Petitioner in an overt attempt to coerce Petitioner to agree
to an early termination of the Marital Trust and a three-way split of its assets among Petitioner,
24 Respondent Trustee, and Jason.
25 20. In addition to withholding the Marital Trust’s net income from Petitioner, Respondent
4
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
Trustee also embarked on a campaign to harass or oust Petitioner from the Marital Home in which
Petitioner continued to reside after Decedent’s death. Respondent Trustee claimed to have the same
“rights” in the Marital Home as Decedent had had and purported to impose “rules” on Petitioner for
what she could or could not do in her own home, including that Petitioner was not allowed to lock her
bedroom door to exclude Respondent Trustee from her bedroom and that Petitioner was not permitted
to host family or friends overnight, especially if any of the guests were men. The Prior Action was
filed shortly after Respondent Trustee forced Petitioner’s locked bedroom door open to gain entry to
Petitioner’s bedroom in her absence.
21. On December 11, 2018, the Prior Action was settled at a mediation conducted by the
10 private mediator Bette Epstein, Esq., at ADR Services, Inc. Attached hereto as Exhibit B is a true and
ll correct copy of the Settlement Agreement executed at mediation.
12 Iv. MISMANAGEMENT OF MARITAL TRUST ASSETS.
13 22. The instant petition is based on the following facts:
14 23. On or about March 14, 2023, Respondent Trustee provided Petitioner with a Trust
15 accounting for the period of time beginning 1/1/2021 and ending 12/31/2021 (“2021 Accounting”), a
16 true and correct copy of which is attached hereto as Exhibit C.
17 24. Petitioner is informed and believes and thereon alleges that the 2021 Accounting
18 disclosed Respondent Trustee’s misappropriation of more than $973,000 of Marital Trust assets during
19 the year 2021. Among other things, the 2021 Accounting shows:
20 a. that Respondent Trustee has yet again withheld (or diverted) a portion of the
21 Marital Trust’s net income from Petitioner, contrary to Section 4.3(a) of the
22 Trust that requires Respondent Trustee to “pay to [Petitioner] ROSARIO the
23 entire net income of the trust(s)....”5
24 that Respondent Trustee took an approximate $410,140.53 from the Marital
25 Trust to pay for Respondent Trustee’s personal attorneys in the civil action
5
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
known as Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San Francisco
County, Case No. CGC-20-584246, which was a litigation matter that involved
Respondent Trustee’s personal asset (the Drumm Street Property) and had no
connection to the Marital Trust or any asset of the Marital Trust;
that Respondent Trustee took an approximate $563,724.75 from the Marital
Trust to upgrade and improve the Drumm Street Property;
that Respondent Trustee has been unlawfully “matching” principal distributions
paid to Petitioner with distributions in equal amounts that Respondent Trustee
distributes, or intends to distribute, to himself out of the Marital Trust.
10 25. Upon receiving the 2021 Accounting, Petitioner requested a meeting with Respondent
ll Trustee and his counsel to discuss the substantial sums taken by Respondent Trustee from the Marital
12 Trust.
13 26. On March 28, 2023, Petitioner and Respondent Trustee, with their respective legal
14 counsel, met via Zoom for over an hour to discuss the apparent misappropriations from the Marital
15 Trust. The substance of the discussion was summarized by Petitioner’s letter sent to Respondent
16 Trustee on March 30, 2023, a true and correct copy of which is attached hereto as Exhibit D.
17 27. While Respondent Trustee did not deny using Marital Trust assets to benefit himself and
18 his Drumm Street Property, Responent Trustee was unwilling to commit to a plan to repay the funds
19 and requested that Petitioner afford him more time to develop a repayment plan.
20 28. On or about July 11, 2023, Respondent Trustee provided Petitioner with a Trust
g”), a
21 accounting for the period of time beginning 1/1/2022 and ending 12/31/2022 (“2022 Accountin
22 true and correct copy of which is attached hereto as Exhibit E.
29. Petitioner is informed and believes and thereon alleges that the 2022 Accounting
24 disclosed Respondent Trustee’s misappropriations of Marital Trust assets in excess of $1.2 million in
25 the year 2022, including without limitation:
6
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
an approximate $460,000 paid to Respondent Trustee’s attorneys in the civil
action entitled Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San
Francisco County, Case No. CGC-20-584246;
an approximate $390,000 paid to upgrade and improve the Drumm Street
Property.
30. In addition to disclosing the amounts taken by Respondent Trustee from the Marital
Trust, the 2022 Accounting also showed a purported “matching” distribution in the amount of
Trust
$860,000 to be paid to the so-called Family Pot Trust (the subtrust created by Section 4.5 of the
that does not come into existence until after Petitioner’s death).
10 31. On July 14, 2023, Petitioner sent a letter to Respondent Trustee requesting all of
records, including contracts, invoices, receipts, statements, and
11 Respondent Trustee’s books and
12 evidences of payment, such as canceled checks, credit card statements, electronic payment receipts,
13 and the like, that relate to the amounts taken from the Marital Trust and spent on Respondent Trustee’s
2023
14 personal assets and personal interests. A true and correct copy of Petitioner’s letter dated July 14,
15 is attached hereto as Exhibit F.
16 32. To date, Respondent Trustee has failed and refused to provide Petitioner with any of the
17 requested books and records or otherwise account for or explain his apparent misappropriations.
18 33. On or about August 14, 2023, Petitioner and Respondent Trustee executed a written
g
19 Tolling Agreement extending Petitioner’s time to challenge the 2021 Accounting and 2022 Accountin
20 until March 29, 2024. A true and correct copy of the Tolling Agreement is attached hereto as Exhibit
21 G
22 34. On September 21, 2023, Petitioner followed up with Respondent Trustee by email to
again request the books and records that Petitioner had requested in her letter dated July 14, 2023. A
23
H.
24 true and correct copy of Petitioner’s email dated September 21, 2023 is attached hereto as Exhibit
25 35. Notwithstanding Petitioner’s email, Respondent Trustee continued to fail and refuse to
R
PETITION FOR ORDER TO REDRESS BREACH or TRUST, SUSPEND AND REMOVE SUCCESSO
TRUSTEE, AND APPOINT REPLACEMENT TRUSTE E
provide Petitioner with any of the requested books and records.
36. On September 27, 2023, Petitioner proposed the parties mediate the issue of Respondent
Trustee’s misappropriations from the Marital Trust with either Hon. Ernest H. Goldsmith (Ret.) or
Hon. Kevin J. Murphy (Ret.), both of whom work at ADR Services, Inc.
37. Receiving no response to Petitioner's request for mediation, Petitioner emailed
Respondent Trustee on February 5, 2024 to again request mediation. A true and correct copy of
Petitioner’s email dated February 5, 2024 is attached hereto as Exhibit I.
38. To date, Respondent Trustee has neither agreed to mediate this matter nor produced any
of the Marital Trust books and records requested by Petitioner. Worse, Respondent Trustee has yet to
10 repay the Marital Trust even a penny of what Respondent Trustee has taken.
11 Vv. VENUE, JURISDICTION, NOTICE.
12 39. Petitioner has standing under Prob. Code § 17200(a) to bring this petition.
13 40. Pursuant to Prob. Code §§ 17002(b)(1) and 17005(c) and Code Civ. Proc. § 395(a), San
14 Francisco County is the proper venue for this petition since Petitioner is informed and believes and
of this
15 thereon alleges that Respondent Trustee resides in San Francisco County at the commencement
16 action.
17 41. Pursuant to Prob. Code § 17203, the names and addresses of the persons entitled to
18 notice or who may be entitled to notice of this petition are as follows:
19 Beneficiaries Relationship to Decedent
20 Rosario Legasto Surviving spouse and Beneficiary
301 Executive Park Blvd. #719
21 San Francisco, CA 94134
22 Adult son, Respondent Trustee, and
Eric Smith Ketchum
301 Main Street #19F Contingent Remainder Beneficiary
23
San Francisco, CA 94105
24
25
8
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
Jason Semin Ketchum Adult son and Contingent Remainder
3033 Wilshire Blvd. #1108 Beneficiary
Los Angeles, CA 90010
FIRST CAUSE OF ACTION
(Breach of Trust)
42. Petitioner re-alleges Paragraphs 1 through 41 of this petition as though fully set forth
herein.
43. Respondent Trustee is, and at all relevant times herein was, the duly acting trustee of the
Marital Trust and has served continuously as trustee since Decedent’s death on May 28, 2017.
10 44 As the trustee of the Marital Trust, Respondent Trustee owed Petitioner the duties
11 imposed on trustees by the California Probate Code, including but not limited to the following:
12 45. Prob. Code § 16000 provides: “On acceptance of the trust, the trustee has a duty to
13 administer the trust according to the trust instrument and, except to the extent the trust instrument
14 provides otherwise, according to this division.”
1S 46. Prob. Code § 16002(a) provides: “The trustee has a duty to administer the trust solely in
16 the interest of the beneficiaries.”
17 47. Prob. Code § 16004(a) provides: “The trustee has a duty not to use or deal with trust
18 property for the trustee’s own profit or for any other purpose unconnected with the trust, nor
to take
19 part in any transaction in which the trustee has an interest adverse to the beneficiary.”
20 48. Prob. Code § 16009 provides: “The trustee has a duty to do the following: (a) To keep
21 the trust property separate from other property not subject to the trust. (b) To see that the trust property
2B
is designated as property of the trust.”
23 49. Prob. Code § 16061 provides: “Except as provided in Section 16069, on reasonable
24 information
request by a beneficiary, the trustee shall report to the beneficiary by providing requested
25
9
SUCCESSOR
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE
TRUSTEE, AND APPOINT REPLACE MENT TRUSTEE
to the beneficiary relating to the administration of the trust relevant to the beneficiary’s interest.”
50. Here, as disclosed by the 2021 Accounting and the 2022 Accounting, Petitioner is
informed and believes and thereon alleges that Respondent Trustee breached his fiduciary duties owed
to Petitioner by, among other things:
a. withholding from Petitioner the entirety of the net income of the Marital Trust in
2021 and 2022;
misappropriating an approximate $410,000 from the Marital Trust in 2021 and
an approximate $460,000 in 2022 to pay for Respondent Trustee’s defense of the
civil action known as Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San
10 Francisco County, Case No. CGC-20-584246;
ll misappropriating an approximate $560,000 from the Marital Trust in 2021 and
12 an approximate $390,000 in 2022 to upgrade and improve the Drumm Street
13 Property, which is not an asset of the Marital Trust but instead belongs to
14 Respondent Trustee personally in his individual capacity; and
15 paying principal distributions, or threatening to pay such distributions, out of the
16 Marital Trust as “matching” distributions to either Respondent Trustee himself
17 and/or to the so-called “Family Pot Trust,” including but not limited to the
18 “matching” distribution of $860,000 disclosed on Schedule H to the 2022
19 Accounting.
20 Sl. As the proximate result of Respondent Trustee’s breaches of fiduciary duty, Petitioner is
21 informed and believes and thereon alleges that Petitioner’s assets in the Marital Trust have been
22 wrongfully depleted by more than $2 million, and Respondent Trustee has been wrongfully enriched in
23 the same amount.
24 WHEREFORE, Petitioner prays judgment against Respondent Trustee as hereinafter set forth
25 below.
10
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
SECOND CAUSE OF ACTION
(Suspension and Removal of Trustee)
52. Petitioner re-alleges Paragraphs 1 through 51 of this petition as though fully set forth
herein.
53. Respondent Trustee is, and at all relevant times herein was, the duly acting trustee of the
Marital Trust and has served continuously as trustee since Decedent’s death on May 28, 2017.
54. Prob. Code § 15642(b) provides: “(b) The grounds for removal of a trustee by the court
include the following: (1) Where the trustee has committed a breach of the trust. (2) Where the trustee
is insolvent or otherwise unfit to administer the trust. ... (9) For other good cause.”
10 55. Here, Respondent Trustee has perpetrated multiple breaches of trust that have now
1 depleted Marital Trust assets by, on information and belief, in excess of $2 million. Respondent
12 Trustee is not fit to serve as trustee and can no longer be trusted with the assets of the Marital Trust.
56. Petitioner respectfully requests an order removing Respondent Trustee as trustee of the
14 Trust and Marital Trust and appointing a professional or corporate fiduciary in his place.
15 57. Section 7.7 of the Trust waives bond unless requested in writing by any of the Primary
16 Beneficiaries of the Trust or by a majority of the other Beneficiaries of the Trust.
17 WHEREFORE, Petitioner prays judgment against Respondent Trustee as set forth below:
18 On the First Cause of Action for Breach of Trust:
19 1 For an order enjoining Respondent Trustee from misappropriating any further assets of the
20 Marital Trust, enjoining Respondent Trustee from funding the so-called “Family Pot Trust”
21 with any asset of the Marital Trust during Petitioner’s lifetime, and enjoining Respondent
22 Trustee from distributing any asset of the Marital Trust to Respondent Trustee himself and/or
23 his brother Jason;
24 For an order compelling Respondent Trustee to redress his breaches of trust by payment of
25 money damages to the Marital Trust in an amount according to proof at trial together with
1
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
interest at the legal rate thereon;
For an award of compensatory damages in favor of the Marital Trust, in an amount according to
proof at trial;
For an order pendente lite suspending Respondent Trustee as trustee of the Marital Trust and
appointing a temporary trustee or trustee ad litem to take possession of the assets of the Marital
Trust and to administer the Marital Trust during the pendency of this proceeding;
For an order removing Respondent Trustee as trustee of the Marital Trust;
For an order appointing a professional fiduciary or corporate trustee as successor trustee of the
Marital Trust;
10 For an order authorizing and directing Petitioner’s attorney’s fees incurred in this proceeding to
11 be paid from the Trust, and directing that this amount be charged to Trust principal and not to
12 income;
13 For costs of suit;
14 For any other relief that the Court considers just and proper.
15 On the Second Cause of Action for Breach of Trust:
16 For an order pendente lite suspending Respondent Trustee as trustee of the Marital Trust and
17 appointing a temporary trustee or trustee ad litem to take possession of and manage the assets of
18 the Marital Trust;
19 For an order removing Respondent Trustee as trustee of the Marital Trust and appointing a
20 successor trustee to serve without bond;
21 For an order directing Respondent Trustee to file an accounting with the Court detailing his acts
22 as trustee since December 31, 2022;
For an order authorizing and directing Petitioner’s attorney’s fees incurred in this proceeding to
24 be paid from the Trust, and directing that this amount be charged to Trust principal and not to
25 income;
12
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
5 For costs of suit;
6. For any other relief that the Court considers just and proper.
March 20, 2024. . rea so LLP
PHIL FOSTER
Attorneys for Petitioner
ROSARIO LEGASTO
10
ll
12
13
14
15
16
17
18
19
20
21
22
23
24
25
13
R
PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSO
TRUSTEE, AND APPOINT REPLACE MENT TRUSTEE
VERIFICATION
am the petitioner in this proceeding. 1 have read the foregoing
I, ROSARIO LEGASTO,
as to those
petition and know the contents thereof. The same is true of my own knowledge, except
| believe them to be true. I declare
matters stated on infor rmation and belief, and as to those matters,
ni ia that the foregoing is true and correct.
under penalty of perjury under the laws of the State of Califor
California.
Executed on March 20, 2024 at San Francisco,
ROSARIO LEGASTO
10
il
12
13
14
15
16
17
18
19
20
21
22
23
24
25
4
VE SUCCESSOR
PETITION FOR ORDER TO RED! RESS BREACH OF TRUST, SUSPEND AND REMO
TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE
Exhibit A
SMITH ADRON KETCHUM UL TRUST
January 5 _, 2007
sf-2249215
TABLE OF CONTENTS
Page
ESTABLISHMENT OF TRUST, APPOINTMENT OF TRUSTEES, AND
POWERS OF REVOCATION AND AMENDMENT......cssecsesrererees .
Ll Establishment of Trust and Appointment of Trustees
12 Powers of Revocation and Amendment,
DECLARATIONS REGARDING FAMILY, NOMINATION OF GUARDIAN
OF MINOR CHILD, AND DISINHERITANCE AND NO-CONTEST
CLAUSES
21 Marital Status......... sesssesaneseanansearens deseuanyreesseeenaesenereneenpenetesaaypnsarenaneeeeey
2.2 Children.............
2.3 Nomination of Guardian of Minor Child
24 Disinheritance Clause
25 No-Contest Clause...
DISPOSITION OF TRUST ESTATE DURING SETTLOR’S LIFETIME
4 DISPOSITION OF TRUST ESTATE FOLLOWING SETTLOR’S DEATH
4d Confirmation to Surviving Spouse of Her Interest in Any Community
Property; Payment of Debts
42 Special Distributions (Free of Death Taxes).............
(@) My Interest in All Tangible Articles of a Personal Nature,
ROSARIO’s Insurance and Annuity Policies and Employee
Benefit Plans, and Club Memberships
() Distribution to My Son Eric
43 Marital Trust(s)
(a) During Rosario’s Lifetime...
(b) Following Rosario’s Death .
(c) Speciaf Marital Trust Provisions.
@) Disclaimer of Interest in Marital Trust(s) . .
44 Disposition of Residue (“Family Pot” Tzust(s))
(a) While My Son Jason Is Living and Under Age 25 ...........
(b) When My Son Jason Is Not Living and Under Age 25
45 Separate Trusts for My Issue
(a) During the Child’s Lifetime
sf-2249215
age
(b) Following the Child’s Death.
4.6 Ultimate Disposition if No Issue........... 10
AT Overriding Provisions....... 10
(a) Beneficiary Self-Dealing ...... 10
li
(b) Insurance on Life of Trustee-Beneficiary
Income and Principal Allocations... i
(c)
(dy Division of Trust into Exempt and Non-exempt Generation-
skipping Subtrusts 1
(©) Combination of Substantially Identical Trusts 12
13
O Equitable Adjustments...
(8) Anti-Retaliation Provision 13
13
h) Real Property
GENERAL TRUST PROVISIONS. . 14
Sal Mandatory and Discretionary Distributions of Income and Principal + 14
5.2 Discretionary Distributions to More Than One Beneficiary. 14
5.3 Use of Trust Property by Beneficiaries............ 14
5.4 Purchase of Property from and Loans to Probate Estate and Beneficiaries 15
5.5 Spendthrift Provision... 15
5.6 Perpetuities Savings.Provision: . 1S
57 Multiple Trusts— No Physical Division Required..... 15
5.8 Transfers of Property to Trust........... 15
TRUSTEE’S ADMINISTRATIVE POWERS 5
6.1 Trustee Self-dealin, 16
6.2 Retention, Disposition, or Liquidation of Interest in a Closely Held Entity;
Power to Guarantee Loans to the Entity ...... 16
6.3 Closely Held Entity Regarded as Separate frorn the Trust .. 16
6.4 Management of Closely Held Entity... 16
6.5 Specific Authority Regarding Certain Transactions. 16
6.6 Beneficiary with Power of Revocation or Withdrawal os 17
6.7 Authority To File Tax Returns and Make Tax Decisions........ . 17
6.8 Authority To Nominate Personal Representatives and/or Appoint
Attomey(s)-in-fact 17
PROVISIONS RELATING TO THE TRUSTEE 17
i
sf-22492 15
Page
7A Resignation, Declination, and Removal of Trustee and Appointment of
Successor Trustee. 7
72 Disclaimed and Precluded Trustee Powers... 18
73 Actions by Multiple Trustees... 18
74 Trustee’s Duty to Report Information and Account to Beneficiaries..... 18
TS Limits on Liability of Trustee tee 19
71.6 Indemnification of Trustee for Environmental Problems........... 19
VT Bonding of Individual Trustee; Custody of Assets 19
DEFINITIONS AND MISCELLANEOUS PROVISIONS 20
8.1 Definition of Adjusted Gross Estate... 20
8.2 Definition of Beneficiary and Primary Beneficiary. 20
8.3 Definition of Death Taxe: 20
8.4 Definition of Education... a 20
8.5 Definition of Employee Benefit Plans 20
8.6 Definition of General Welfare 21
.
8.7 Definition of GST Tax Inclusion Ratio 21
8.8 Definition of Health 21
8.9 Definition of Incompetent 21
.
8.10 Definition of Issue and Spouse; Distribution to Issue 21
8.11 Definition of Marital Deduction Amount...
8.12 Definition of Net Fair Market Value ......
8.13 Definition of Qualified Relatives and Qual ‘ed Charities . 22
8.14 Definition of Support and Maintenance 22
Distributions to or for Benefit of Individual Beneficiary .......... 22
8.15
8.16 Governing Law 23
8.17 Ninety-Day Survival Requirement ...... 23
8.18 Powers to Withdraw Principal; $5,000 or 5% Annual Power of
Withdrawal... o 23
8.19 Representation of Incompetent Beneficiary.
8.20 Testamentary Powers of Appoiniment.
iti
sf-2249215
SMITH ADRON KETCHUM I TRUST
1 ESTABLISHMENT OF TRUST, APPOINTMENT OF TRUSTEES, AND
POWERS OF REVOCATION AND AMENDMENT
Lt Establishnent of Trust and Appointment of Trustees.
J, SMITH ADRON KETCHUM II, a resident of Marin County, California
(sometimes referred to as the “Settlor”), hereby transfer and deliver to myself, as trustee, all.
separate property now owned by me, and I declare that all separate property hereafter acquired
by me shall be deemed to be owned by this trust; provided, however, that no such properly shall
be deemed transferred to or owned by this trust if, such transfer or ownership is prohibited by law
or by any agreement to which I am subject, or if such transfer or ownership would adversely
affect me or any interest I have in such property.
If fail to qualify or cease to act as the trustee of any trust established under this
instrument, I appoint my son ERIC SMITH KETCHUM as the trustee; if ERIC fails to qualify or
ceases to act as the trustee of any trust established hereunder, I appoint my nepbew LESTER
THOMAS WALLACE as the trustee; if LESTER fails to qualify or ceases to act as the trustee of
any such trust, I appoint my nephew DARIEN KENNETH WALLACE as the trustee; if
DARIEN fails to qualify or ceases to act as the trustee of any such trust, I appoint my nephew
LYLE ADRON WALLACE as the trustee; if LYLE fails to qualify or ceases to act as the trustee
of any such trust, { appoint my son JASON as the trustee (but only after he has attained age 30);
of
and if (or during such period of time that) JASON fails to qualify or ceases to act. as the trustee
any such trust, I appoint THEODORE SPEIKER, of Moraga, California, as the trustee.
Noiwithstanding the foregoing, after attaining age 35 each Primary Beneficiary of a separate
trust established under Section 4.5, below, shall have the right to act as the sole trustee of that
trust, by delivering an instrument in writing exercising this right to the existing trustee and copies
1
sf-2249215
of such instrument to the other Beneficiaries of the trust; and if the Primary Beneficiary later
ceases to.act as the trustee, the persons specified above or appointed pursuant to Section 7.1,
below, shall act as successor trustees in the order named; provided, however, that this right to act
as the sole trustee may not be exercised if the Trustee in its discretion determines that the
Primary Beneficiary is substantially unable to manage his or her financial resources or resist
fraud or undue influence.
This trust may be referred to as the “Smith Adron Ketchum II] Trust.” The term
“Trustee” refers to any person or persons acting as trustee. All property subject to this trust (the
“Trust Estate”) shal] be administered as provided below.
12 Powers of Revocation and Amendment.
During my lifetime i reserve the powers to revoke and amend this trust by a
written instrument delivered to the Trustee. These powers are personal to me and may not be
exercised on my behalf by any attorney-in-fact, conservator, or other person; provided, however,
that if I become Incompetent, revocation or amendment by any such person may be authorized
by the court-afier notice to the Trustee and to those persons who would be Beneficiaries of the
trust if ] were to die immediately prior to the filing of the petition seeking such court
authorization. Any amendment changing the duties, powers, or responsibilities of the Trustee
shall require its consent. Except as specifically provided in this Section 1,2 or elsewhere in this
instrument, all trusts established under this instrument are irrevocable and unamendable.
sf-2249215
2. DECLARATIONS REGARDING FAMILY,
NOMINATION OF GUARDIAN OF MINOR CHILD,
AND DISINHERITANCE AND NO-CONTEST CLAUSES
21 Marital Status.
Tam married to ROSARIO LEGASTO, and all references to “ROSARIO” or “My
Spouse” are. to her.
2.2 Children.
Thave two children now living, whose names and birthdates are:
ERIC SMITH KETCHUM, March 11, 1980, and
JASON SEMIN KETCHUM, May 4, 1995;
and all references to “My Son” and “My Sons” are to them.
23 Nomination of Guardian of Minor Child.
If I die or become Incompetent and My Son JASON is then a minor, I nominate
My Son ERIC as guardian of JASON’s person and estate. If ERIC fails to so qualify or ceases to
so act, | nominate my nephews, LESTER WALLACE, then DARIEN WALLACE, and then
LYLE WALLACE, as such guardian. I request that no bond be required of any guardian.
nominated in this section.
2.4 Disinheritance Clause.
Except as otherwise specified, I have intentionally failed to provide for my heirs
in this instrument.
25 No-Contest Clause.
If any beneficiary under this instrument in any manner, directly or indirectly,
contests or attacks this instrument or any of its provisions in any legal or equitable proceeding
that is designed to thwart my wishes as expressed herein, any share or interest in the Trust Estate
given to such beneficiary under this instrument is revoked and shall be disposed of as if he or she
sf-2249215
had predeceased me without Issue; provided, however, that if My Son JASON’s mother, INO
JANG, contests or attacks this instrument on JASON’s behalf, the share to which JASON or his
Issue are otherwise entitled shall be reduced by forty percent (40%).
3. DISPOSITION OF TRUST ESTATE
DURING SETTLOR’S LIFETIME
During my lifetime the Trustee shall distribute the net income and principal of the
trust as | direct, and J am the Primary Beneficiary of the trust.
Subject to the preceding paragraph, the Trustee shall pay to (a) ROSARIO and_me
as much of the net income and principal of the trust as (1) is necessary for our proper Health,
Education, Support, and Maintenance and (2) the Trustee in its discretion deems appropriate for
our General Welfare; and (b) My Issue, the Spouses of My Issue, and Qualified Charities as
much of the remaining net income and principal of the trust as the Trustee in its discretion deems
appropriate; provided, however, that (1) all such payments constituting gifts to individuals that
would not qualify for the gift tax annual exclusion or the educational or medical exclusion under
Sections 2503(b) and 2503(e), respectively, of the Internal Revenue Code, and (2) all charitable
contributions in excess of the amount allowable to me as an income tax deduction for the current
year under Section 170 of the Internal Revenue Code, may be made only with the approval of the
court or all of those persons who would be residuary Beneficiaries of the trust if 1 were to die.
The Trustee shall consult with my agents authorized to make decisions regarding my health care,
personal care, and property matters and pay them reasonable fees for their services.
s€-2249215
4. DISPOSITION OF TRUST ESTATE FOLLOWING
SETTLOR’S DEATH
Following my death this trust shall become an irrevocable administrative trust and
shall be administered as follows:
41 Confirmation to Surviving Spouse of Her Interest in Any Community
Property; Payment of Debts.
I confirm to ROSARIO her interest in any community property that
Preview
Phil Foster (SBN 262120) DEPARTMENT: 204 Hearing: 05/07/2024 9:00 am| TOUR-SARKISSIAN LAW OFFICES, LLP 211 Gough Street, 3rd Floor ELECTRONICALLY San Francisco, CA 94102 (415) 626-7744 FILED Superior Court of California, (415) 626-8189 facsimile County of San Francisco phil@tslo.com 03/21/2024 Clerk of the Court BY: LESLIE GOMEZ Attorneys for Petitioner Beneficiary Deputy Clerk ROSARIO LEGASTO SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO PROBATE DIVISION 10 PTR-24-307146 ll Case No.: 12 In The Matter Of PETITION FOR ORDER TO REDRESS 13 THE SMITH ADRON KETCHUM III TRUST BREACH OF TRUST, SUSPEND AND UTD January 5, 2007 REMOVE SUCCESSOR TRUSTEE, AND 14 APPOINT REPLACEMENT TRUSTEE 15 [Prob. Code § 17200(b)(10), (12)] [Prob. Code § 15642(b)(1), (2), (9)] 16 17 18 19 20 Petitioner ROSARIO LEGASTO (“Petitioner”) submits the following Petition for Order to 21 Redress Breach of Trust, Suspend and Remove Successor Trustee, and Appoint Replacement Trustee. 22 22 I INTRODUCTION. 23 1 Petitioner is the surviving spouse of Decedent SMITH ADRON KETCHUM III 24 (“Decedent”) and the sole beneficiary of the Marital Trust created by The Smith Adron Ketchum III 25 PETITION FOR ORDER TO REDRESS BREACH or TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE Trust (“Trust”). 2 Petitioner’s step-son ERIC SMITH KETCHUM is the trustee of Petitioner’s Marital Trust (“Respondent Trustee”) whose accountings for the years 2021 and 2022 appear to show that Respondent Trustee has misappropriated in excess of $2 million from the Marital Trust and used the funds to enrich himself personally. 3 For nearly a year now, Petitioner has requested that Respondent Trustee fully account for and explain his misappropriations from the Marital Trust, and that Respondent Trustee repay to the Marital all of the sums taken by him, but to date Respondent Trustee has failed and refused to do so, and has declined Petitioner’s multiple requests to submit this matter to mediation. 10 4 Respondent Trustee’s continuing misappropriation of Marital Trust assets now imperils 1 the ongoing ability of the Marital Trust to provide for Petitioner's health, education, maintenance, 12 support, and general welfare needs and necessitates the filing of the instant petition to recover from Respondent Trustee all of the amounts he has taken from the Marital Trust and to remove Respondent 14 Trustee as trustee of the Marital Trust to avoid further losses. 15 IL THE TRUST. 16 5 Petitioner is the surviving spouse of Decedent SMITH ADRON KETCHUM III 17 (“Decedent”), the settlor and initial trustee of the Smith Adron Ketchum III Trust established by 18 written declaration of trust dated January 5, 2007 (“Trust”), a true and correct copy of which is 19 attached hereto as Exhibit A. 20 6 Decedent acted as initial trustee of the Trust from the Trust’s creation until Decedent’s 21 death on May 28, 2017. 22 22 7 At Decedent’s death, Section 1.1 of the Trust appointed Decedent’s adult son ERIC 23 SMITH KETCHUM as successor trustee of the Trust (“Respondent Trustee”). Respondent Trustee is 24 Petitioner’s step-son. 25 8 At all times relevant herein, Respondent Trustee accepted his appointment as successor 2 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE trustee and has acted continuously as the sole successor trustee of the Trust since Decedent’s death. 9 Also at Decedent’s death, the Trust became irrevocable pursuant to the preamble to Article 4, which provides: “Following my death this trust shall become an irrevocable administrative trust and shall be administered as follows...” 10. Article 4 of the Trust requires the following distributions of Trust assets: a. Section 4.1 confirms to Petitioner her interest in any community property in the Trust estate, and Section 4.2(a) distributes to Petitioner all of the Decedent’s personal property and belongings, excluding motor vehicles (neither of these sections is the subject of the instant petition); 10 Section 4.2(b) distributes to Respondent Trustee (in his individual capacity) free 11 and clear of trust the real property commonly known as 49 Drumm Street, San 12 Francisco, CA (“Drumm Street Property”) and the real property commonly 13 known as 348 Beach Road, Belvedere, CA in addition to Decedent’s ownership 14 interests in several businesses, including Decedent’s medical practice; 15 Section 4.3 distributes all of the Trust’s remaining assets to a “Marital Trust” for 16 the life-time benefit of Decedent’s surviving spouse Petitioner. 17 11. As the life-time beneficiary of the Marital Trust, Petitioner is entitled to receive “the 18 entire net income of the trust(s) and as much of the principal of the trust(s) as the trustee in its 19 discretion deems appropriate for [Petitioner] ROSARIO’s Health, Education, Support, Maintenance, 20 and General Welfare” under Section 4.3(a) of the Trust. 21 12. The assets in Petitioner’s Marital Trust are substantial and included the following as of Road, 22 the date of Decedent’s death: (a) Decedent’s and Petitioner’s marital home located at 344 Beach and Belvedere, California (“Marital Home”); (b) eleven (11) rental properties located in Marin County 24 Humboldt County; and (c) eight (8) bank accounts. Petitioner is informed and believes and thereon 25 alleges that the aggregate value of the assets in the Marital Trust was an approximate $30 million as of PETITION FOR ORDER TO REDRESS BREACH oe TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE Decedent’s death. 13. Under Section 4.3 of the Trust, the Marital Trust is to remain in existence and continue providing for Petitioner’s health, education, maintenance, support, and general welfare needs until Petitioner’s death. 14. At Petitioner’s death, Section 4.3(b) of the Trust passes the assets of the Marital Trust to a so-called “Family Pot Trust” for the benefit of Decedent’s “issue” who survive Petitioner. 15. At all times relevant herein, Decedent’s only issue are his adult sons Eric Smith Ketchum (Respondent Trustee herein) and JASON SEMIN KETCHUM (“Jason”), both of whom are alive today. 10 16. Since no assets pass to the “Family Pot Trust” until Petitioner’s death, Respondent 11 Trustee and his adult brother Jason are contingent remainder beneficiaries of the Trust who have no 12 present right to receive benefits from the Trust, but instead must survive Petitioner before the so-called “Family Pot Trust” for their benefit is funded with Marital Trust assets. 14 17. There are no amendments to the Trust. 15 Il. PRIOR LITIGATION. 16 18. On August 6, 2018, Petitioner filed a Petition for Instructions to Trustee to Utilize 17 Marital Deduction from Federal Estate Tax and Pay Trust Income to Beneficiary in the proceeding 18 known as The Matter of The Smith Adron Ketchum II Trust U.T.D. January 5, 2007, Superior Court of 19 Marin County, Case No. PR1702557 (“Prior Action”). 20 19. Respondent Trustee’s misconduct necessitating the filing of the Prior Action was 21 egregious. For the first fourteen (14) months after Decedent’s death, Respondent Trustee intentionally 22 22 withheld the Marital Trust’s net income from Petitioner in an overt attempt to coerce Petitioner to agree to an early termination of the Marital Trust and a three-way split of its assets among Petitioner, 24 Respondent Trustee, and Jason. 25 20. In addition to withholding the Marital Trust’s net income from Petitioner, Respondent 4 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE Trustee also embarked on a campaign to harass or oust Petitioner from the Marital Home in which Petitioner continued to reside after Decedent’s death. Respondent Trustee claimed to have the same “rights” in the Marital Home as Decedent had had and purported to impose “rules” on Petitioner for what she could or could not do in her own home, including that Petitioner was not allowed to lock her bedroom door to exclude Respondent Trustee from her bedroom and that Petitioner was not permitted to host family or friends overnight, especially if any of the guests were men. The Prior Action was filed shortly after Respondent Trustee forced Petitioner’s locked bedroom door open to gain entry to Petitioner’s bedroom in her absence. 21. On December 11, 2018, the Prior Action was settled at a mediation conducted by the 10 private mediator Bette Epstein, Esq., at ADR Services, Inc. Attached hereto as Exhibit B is a true and ll correct copy of the Settlement Agreement executed at mediation. 12 Iv. MISMANAGEMENT OF MARITAL TRUST ASSETS. 13 22. The instant petition is based on the following facts: 14 23. On or about March 14, 2023, Respondent Trustee provided Petitioner with a Trust 15 accounting for the period of time beginning 1/1/2021 and ending 12/31/2021 (“2021 Accounting”), a 16 true and correct copy of which is attached hereto as Exhibit C. 17 24. Petitioner is informed and believes and thereon alleges that the 2021 Accounting 18 disclosed Respondent Trustee’s misappropriation of more than $973,000 of Marital Trust assets during 19 the year 2021. Among other things, the 2021 Accounting shows: 20 a. that Respondent Trustee has yet again withheld (or diverted) a portion of the 21 Marital Trust’s net income from Petitioner, contrary to Section 4.3(a) of the 22 Trust that requires Respondent Trustee to “pay to [Petitioner] ROSARIO the 23 entire net income of the trust(s)....”5 24 that Respondent Trustee took an approximate $410,140.53 from the Marital 25 Trust to pay for Respondent Trustee’s personal attorneys in the civil action 5 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE known as Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San Francisco County, Case No. CGC-20-584246, which was a litigation matter that involved Respondent Trustee’s personal asset (the Drumm Street Property) and had no connection to the Marital Trust or any asset of the Marital Trust; that Respondent Trustee took an approximate $563,724.75 from the Marital Trust to upgrade and improve the Drumm Street Property; that Respondent Trustee has been unlawfully “matching” principal distributions paid to Petitioner with distributions in equal amounts that Respondent Trustee distributes, or intends to distribute, to himself out of the Marital Trust. 10 25. Upon receiving the 2021 Accounting, Petitioner requested a meeting with Respondent ll Trustee and his counsel to discuss the substantial sums taken by Respondent Trustee from the Marital 12 Trust. 13 26. On March 28, 2023, Petitioner and Respondent Trustee, with their respective legal 14 counsel, met via Zoom for over an hour to discuss the apparent misappropriations from the Marital 15 Trust. The substance of the discussion was summarized by Petitioner’s letter sent to Respondent 16 Trustee on March 30, 2023, a true and correct copy of which is attached hereto as Exhibit D. 17 27. While Respondent Trustee did not deny using Marital Trust assets to benefit himself and 18 his Drumm Street Property, Responent Trustee was unwilling to commit to a plan to repay the funds 19 and requested that Petitioner afford him more time to develop a repayment plan. 20 28. On or about July 11, 2023, Respondent Trustee provided Petitioner with a Trust g”), a 21 accounting for the period of time beginning 1/1/2022 and ending 12/31/2022 (“2022 Accountin 22 true and correct copy of which is attached hereto as Exhibit E. 29. Petitioner is informed and believes and thereon alleges that the 2022 Accounting 24 disclosed Respondent Trustee’s misappropriations of Marital Trust assets in excess of $1.2 million in 25 the year 2022, including without limitation: 6 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE an approximate $460,000 paid to Respondent Trustee’s attorneys in the civil action entitled Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San Francisco County, Case No. CGC-20-584246; an approximate $390,000 paid to upgrade and improve the Drumm Street Property. 30. In addition to disclosing the amounts taken by Respondent Trustee from the Marital Trust, the 2022 Accounting also showed a purported “matching” distribution in the amount of Trust $860,000 to be paid to the so-called Family Pot Trust (the subtrust created by Section 4.5 of the that does not come into existence until after Petitioner’s death). 10 31. On July 14, 2023, Petitioner sent a letter to Respondent Trustee requesting all of records, including contracts, invoices, receipts, statements, and 11 Respondent Trustee’s books and 12 evidences of payment, such as canceled checks, credit card statements, electronic payment receipts, 13 and the like, that relate to the amounts taken from the Marital Trust and spent on Respondent Trustee’s 2023 14 personal assets and personal interests. A true and correct copy of Petitioner’s letter dated July 14, 15 is attached hereto as Exhibit F. 16 32. To date, Respondent Trustee has failed and refused to provide Petitioner with any of the 17 requested books and records or otherwise account for or explain his apparent misappropriations. 18 33. On or about August 14, 2023, Petitioner and Respondent Trustee executed a written g 19 Tolling Agreement extending Petitioner’s time to challenge the 2021 Accounting and 2022 Accountin 20 until March 29, 2024. A true and correct copy of the Tolling Agreement is attached hereto as Exhibit 21 G 22 34. On September 21, 2023, Petitioner followed up with Respondent Trustee by email to again request the books and records that Petitioner had requested in her letter dated July 14, 2023. A 23 H. 24 true and correct copy of Petitioner’s email dated September 21, 2023 is attached hereto as Exhibit 25 35. Notwithstanding Petitioner’s email, Respondent Trustee continued to fail and refuse to R PETITION FOR ORDER TO REDRESS BREACH or TRUST, SUSPEND AND REMOVE SUCCESSO TRUSTEE, AND APPOINT REPLACEMENT TRUSTE E provide Petitioner with any of the requested books and records. 36. On September 27, 2023, Petitioner proposed the parties mediate the issue of Respondent Trustee’s misappropriations from the Marital Trust with either Hon. Ernest H. Goldsmith (Ret.) or Hon. Kevin J. Murphy (Ret.), both of whom work at ADR Services, Inc. 37. Receiving no response to Petitioner's request for mediation, Petitioner emailed Respondent Trustee on February 5, 2024 to again request mediation. A true and correct copy of Petitioner’s email dated February 5, 2024 is attached hereto as Exhibit I. 38. To date, Respondent Trustee has neither agreed to mediate this matter nor produced any of the Marital Trust books and records requested by Petitioner. Worse, Respondent Trustee has yet to 10 repay the Marital Trust even a penny of what Respondent Trustee has taken. 11 Vv. VENUE, JURISDICTION, NOTICE. 12 39. Petitioner has standing under Prob. Code § 17200(a) to bring this petition. 13 40. Pursuant to Prob. Code §§ 17002(b)(1) and 17005(c) and Code Civ. Proc. § 395(a), San 14 Francisco County is the proper venue for this petition since Petitioner is informed and believes and of this 15 thereon alleges that Respondent Trustee resides in San Francisco County at the commencement 16 action. 17 41. Pursuant to Prob. Code § 17203, the names and addresses of the persons entitled to 18 notice or who may be entitled to notice of this petition are as follows: 19 Beneficiaries Relationship to Decedent 20 Rosario Legasto Surviving spouse and Beneficiary 301 Executive Park Blvd. #719 21 San Francisco, CA 94134 22 Adult son, Respondent Trustee, and Eric Smith Ketchum 301 Main Street #19F Contingent Remainder Beneficiary 23 San Francisco, CA 94105 24 25 8 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE Jason Semin Ketchum Adult son and Contingent Remainder 3033 Wilshire Blvd. #1108 Beneficiary Los Angeles, CA 90010 FIRST CAUSE OF ACTION (Breach of Trust) 42. Petitioner re-alleges Paragraphs 1 through 41 of this petition as though fully set forth herein. 43. Respondent Trustee is, and at all relevant times herein was, the duly acting trustee of the Marital Trust and has served continuously as trustee since Decedent’s death on May 28, 2017. 10 44 As the trustee of the Marital Trust, Respondent Trustee owed Petitioner the duties 11 imposed on trustees by the California Probate Code, including but not limited to the following: 12 45. Prob. Code § 16000 provides: “On acceptance of the trust, the trustee has a duty to 13 administer the trust according to the trust instrument and, except to the extent the trust instrument 14 provides otherwise, according to this division.” 1S 46. Prob. Code § 16002(a) provides: “The trustee has a duty to administer the trust solely in 16 the interest of the beneficiaries.” 17 47. Prob. Code § 16004(a) provides: “The trustee has a duty not to use or deal with trust 18 property for the trustee’s own profit or for any other purpose unconnected with the trust, nor to take 19 part in any transaction in which the trustee has an interest adverse to the beneficiary.” 20 48. Prob. Code § 16009 provides: “The trustee has a duty to do the following: (a) To keep 21 the trust property separate from other property not subject to the trust. (b) To see that the trust property 2B is designated as property of the trust.” 23 49. Prob. Code § 16061 provides: “Except as provided in Section 16069, on reasonable 24 information request by a beneficiary, the trustee shall report to the beneficiary by providing requested 25 9 SUCCESSOR PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE TRUSTEE, AND APPOINT REPLACE MENT TRUSTEE to the beneficiary relating to the administration of the trust relevant to the beneficiary’s interest.” 50. Here, as disclosed by the 2021 Accounting and the 2022 Accounting, Petitioner is informed and believes and thereon alleges that Respondent Trustee breached his fiduciary duties owed to Petitioner by, among other things: a. withholding from Petitioner the entirety of the net income of the Marital Trust in 2021 and 2022; misappropriating an approximate $410,000 from the Marital Trust in 2021 and an approximate $460,000 in 2022 to pay for Respondent Trustee’s defense of the civil action known as Oasis Grill, LLC, et al. v. Ketchum, Superior Court of San 10 Francisco County, Case No. CGC-20-584246; ll misappropriating an approximate $560,000 from the Marital Trust in 2021 and 12 an approximate $390,000 in 2022 to upgrade and improve the Drumm Street 13 Property, which is not an asset of the Marital Trust but instead belongs to 14 Respondent Trustee personally in his individual capacity; and 15 paying principal distributions, or threatening to pay such distributions, out of the 16 Marital Trust as “matching” distributions to either Respondent Trustee himself 17 and/or to the so-called “Family Pot Trust,” including but not limited to the 18 “matching” distribution of $860,000 disclosed on Schedule H to the 2022 19 Accounting. 20 Sl. As the proximate result of Respondent Trustee’s breaches of fiduciary duty, Petitioner is 21 informed and believes and thereon alleges that Petitioner’s assets in the Marital Trust have been 22 wrongfully depleted by more than $2 million, and Respondent Trustee has been wrongfully enriched in 23 the same amount. 24 WHEREFORE, Petitioner prays judgment against Respondent Trustee as hereinafter set forth 25 below. 10 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE SECOND CAUSE OF ACTION (Suspension and Removal of Trustee) 52. Petitioner re-alleges Paragraphs 1 through 51 of this petition as though fully set forth herein. 53. Respondent Trustee is, and at all relevant times herein was, the duly acting trustee of the Marital Trust and has served continuously as trustee since Decedent’s death on May 28, 2017. 54. Prob. Code § 15642(b) provides: “(b) The grounds for removal of a trustee by the court include the following: (1) Where the trustee has committed a breach of the trust. (2) Where the trustee is insolvent or otherwise unfit to administer the trust. ... (9) For other good cause.” 10 55. Here, Respondent Trustee has perpetrated multiple breaches of trust that have now 1 depleted Marital Trust assets by, on information and belief, in excess of $2 million. Respondent 12 Trustee is not fit to serve as trustee and can no longer be trusted with the assets of the Marital Trust. 56. Petitioner respectfully requests an order removing Respondent Trustee as trustee of the 14 Trust and Marital Trust and appointing a professional or corporate fiduciary in his place. 15 57. Section 7.7 of the Trust waives bond unless requested in writing by any of the Primary 16 Beneficiaries of the Trust or by a majority of the other Beneficiaries of the Trust. 17 WHEREFORE, Petitioner prays judgment against Respondent Trustee as set forth below: 18 On the First Cause of Action for Breach of Trust: 19 1 For an order enjoining Respondent Trustee from misappropriating any further assets of the 20 Marital Trust, enjoining Respondent Trustee from funding the so-called “Family Pot Trust” 21 with any asset of the Marital Trust during Petitioner’s lifetime, and enjoining Respondent 22 Trustee from distributing any asset of the Marital Trust to Respondent Trustee himself and/or 23 his brother Jason; 24 For an order compelling Respondent Trustee to redress his breaches of trust by payment of 25 money damages to the Marital Trust in an amount according to proof at trial together with 1 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE interest at the legal rate thereon; For an award of compensatory damages in favor of the Marital Trust, in an amount according to proof at trial; For an order pendente lite suspending Respondent Trustee as trustee of the Marital Trust and appointing a temporary trustee or trustee ad litem to take possession of the assets of the Marital Trust and to administer the Marital Trust during the pendency of this proceeding; For an order removing Respondent Trustee as trustee of the Marital Trust; For an order appointing a professional fiduciary or corporate trustee as successor trustee of the Marital Trust; 10 For an order authorizing and directing Petitioner’s attorney’s fees incurred in this proceeding to 11 be paid from the Trust, and directing that this amount be charged to Trust principal and not to 12 income; 13 For costs of suit; 14 For any other relief that the Court considers just and proper. 15 On the Second Cause of Action for Breach of Trust: 16 For an order pendente lite suspending Respondent Trustee as trustee of the Marital Trust and 17 appointing a temporary trustee or trustee ad litem to take possession of and manage the assets of 18 the Marital Trust; 19 For an order removing Respondent Trustee as trustee of the Marital Trust and appointing a 20 successor trustee to serve without bond; 21 For an order directing Respondent Trustee to file an accounting with the Court detailing his acts 22 as trustee since December 31, 2022; For an order authorizing and directing Petitioner’s attorney’s fees incurred in this proceeding to 24 be paid from the Trust, and directing that this amount be charged to Trust principal and not to 25 income; 12 PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSOR TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE 5 For costs of suit; 6. For any other relief that the Court considers just and proper. March 20, 2024. . rea so LLP PHIL FOSTER Attorneys for Petitioner ROSARIO LEGASTO 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 13 R PETITION FOR ORDER TO REDRESS BREACH OF TRUST, SUSPEND AND REMOVE SUCCESSO TRUSTEE, AND APPOINT REPLACE MENT TRUSTEE VERIFICATION am the petitioner in this proceeding. 1 have read the foregoing I, ROSARIO LEGASTO, as to those petition and know the contents thereof. The same is true of my own knowledge, except | believe them to be true. I declare matters stated on infor rmation and belief, and as to those matters, ni ia that the foregoing is true and correct. under penalty of perjury under the laws of the State of Califor California. Executed on March 20, 2024 at San Francisco, ROSARIO LEGASTO 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 VE SUCCESSOR PETITION FOR ORDER TO RED! RESS BREACH OF TRUST, SUSPEND AND REMO TRUSTEE, AND APPOINT REPLACEMENT TRUSTEE Exhibit A SMITH ADRON KETCHUM UL TRUST January 5 _, 2007 sf-2249215 TABLE OF CONTENTS Page ESTABLISHMENT OF TRUST, APPOINTMENT OF TRUSTEES, AND POWERS OF REVOCATION AND AMENDMENT......cssecsesrererees . Ll Establishment of Trust and Appointment of Trustees 12 Powers of Revocation and Amendment, DECLARATIONS REGARDING FAMILY, NOMINATION OF GUARDIAN OF MINOR CHILD, AND DISINHERITANCE AND NO-CONTEST CLAUSES 21 Marital Status......... sesssesaneseanansearens deseuanyreesseeenaesenereneenpenetesaaypnsarenaneeeeey 2.2 Children............. 2.3 Nomination of Guardian of Minor Child 24 Disinheritance Clause 25 No-Contest Clause... DISPOSITION OF TRUST ESTATE DURING SETTLOR’S LIFETIME 4 DISPOSITION OF TRUST ESTATE FOLLOWING SETTLOR’S DEATH 4d Confirmation to Surviving Spouse of Her Interest in Any Community Property; Payment of Debts 42 Special Distributions (Free of Death Taxes)............. (@) My Interest in All Tangible Articles of a Personal Nature, ROSARIO’s Insurance and Annuity Policies and Employee Benefit Plans, and Club Memberships () Distribution to My Son Eric 43 Marital Trust(s) (a) During Rosario’s Lifetime... (b) Following Rosario’s Death . (c) Speciaf Marital Trust Provisions. @) Disclaimer of Interest in Marital Trust(s) . . 44 Disposition of Residue (“Family Pot” Tzust(s)) (a) While My Son Jason Is Living and Under Age 25 ........... (b) When My Son Jason Is Not Living and Under Age 25 45 Separate Trusts for My Issue (a) During the Child’s Lifetime sf-2249215 age (b) Following the Child’s Death. 4.6 Ultimate Disposition if No Issue........... 10 AT Overriding Provisions....... 10 (a) Beneficiary Self-Dealing ...... 10 li (b) Insurance on Life of Trustee-Beneficiary Income and Principal Allocations... i (c) (dy Division of Trust into Exempt and Non-exempt Generation- skipping Subtrusts 1 (©) Combination of Substantially Identical Trusts 12 13 O Equitable Adjustments... (8) Anti-Retaliation Provision 13 13 h) Real Property GENERAL TRUST PROVISIONS. . 14 Sal Mandatory and Discretionary Distributions of Income and Principal + 14 5.2 Discretionary Distributions to More Than One Beneficiary. 14 5.3 Use of Trust Property by Beneficiaries............ 14 5.4 Purchase of Property from and Loans to Probate Estate and Beneficiaries 15 5.5 Spendthrift Provision... 15 5.6 Perpetuities Savings.Provision: . 1S 57 Multiple Trusts— No Physical Division Required..... 15 5.8 Transfers of Property to Trust........... 15 TRUSTEE’S ADMINISTRATIVE POWERS 5 6.1 Trustee Self-dealin, 16 6.2 Retention, Disposition, or Liquidation of Interest in a Closely Held Entity; Power to Guarantee Loans to the Entity ...... 16 6.3 Closely Held Entity Regarded as Separate frorn the Trust .. 16 6.4 Management of Closely Held Entity... 16 6.5 Specific Authority Regarding Certain Transactions. 16 6.6 Beneficiary with Power of Revocation or Withdrawal os 17 6.7 Authority To File Tax Returns and Make Tax Decisions........ . 17 6.8 Authority To Nominate Personal Representatives and/or Appoint Attomey(s)-in-fact 17 PROVISIONS RELATING TO THE TRUSTEE 17 i sf-22492 15 Page 7A Resignation, Declination, and Removal of Trustee and Appointment of Successor Trustee. 7 72 Disclaimed and Precluded Trustee Powers... 18 73 Actions by Multiple Trustees... 18 74 Trustee’s Duty to Report Information and Account to Beneficiaries..... 18 TS Limits on Liability of Trustee tee 19 71.6 Indemnification of Trustee for Environmental Problems........... 19 VT Bonding of Individual Trustee; Custody of Assets 19 DEFINITIONS AND MISCELLANEOUS PROVISIONS 20 8.1 Definition of Adjusted Gross Estate... 20 8.2 Definition of Beneficiary and Primary Beneficiary. 20 8.3 Definition of Death Taxe: 20 8.4 Definition of Education... a 20 8.5 Definition of Employee Benefit Plans 20 8.6 Definition of General Welfare 21 . 8.7 Definition of GST Tax Inclusion Ratio 21 8.8 Definition of Health 21 8.9 Definition of Incompetent 21 . 8.10 Definition of Issue and Spouse; Distribution to Issue 21 8.11 Definition of Marital Deduction Amount... 8.12 Definition of Net Fair Market Value ...... 8.13 Definition of Qualified Relatives and Qual ‘ed Charities . 22 8.14 Definition of Support and Maintenance 22 Distributions to or for Benefit of Individual Beneficiary .......... 22 8.15 8.16 Governing Law 23 8.17 Ninety-Day Survival Requirement ...... 23 8.18 Powers to Withdraw Principal; $5,000 or 5% Annual Power of Withdrawal... o 23 8.19 Representation of Incompetent Beneficiary. 8.20 Testamentary Powers of Appoiniment. iti sf-2249215 SMITH ADRON KETCHUM I TRUST 1 ESTABLISHMENT OF TRUST, APPOINTMENT OF TRUSTEES, AND POWERS OF REVOCATION AND AMENDMENT Lt Establishnent of Trust and Appointment of Trustees. J, SMITH ADRON KETCHUM II, a resident of Marin County, California (sometimes referred to as the “Settlor”), hereby transfer and deliver to myself, as trustee, all. separate property now owned by me, and I declare that all separate property hereafter acquired by me shall be deemed to be owned by this trust; provided, however, that no such properly shall be deemed transferred to or owned by this trust if, such transfer or ownership is prohibited by law or by any agreement to which I am subject, or if such transfer or ownership would adversely affect me or any interest I have in such property. If fail to qualify or cease to act as the trustee of any trust established under this instrument, I appoint my son ERIC SMITH KETCHUM as the trustee; if ERIC fails to qualify or ceases to act as the trustee of any trust established hereunder, I appoint my nepbew LESTER THOMAS WALLACE as the trustee; if LESTER fails to qualify or ceases to act as the trustee of any such trust, I appoint my nephew DARIEN KENNETH WALLACE as the trustee; if DARIEN fails to qualify or ceases to act as the trustee of any such trust, I appoint my nephew LYLE ADRON WALLACE as the trustee; if LYLE fails to qualify or ceases to act as the trustee of any such trust, { appoint my son JASON as the trustee (but only after he has attained age 30); of and if (or during such period of time that) JASON fails to qualify or ceases to act. as the trustee any such trust, I appoint THEODORE SPEIKER, of Moraga, California, as the trustee. Noiwithstanding the foregoing, after attaining age 35 each Primary Beneficiary of a separate trust established under Section 4.5, below, shall have the right to act as the sole trustee of that trust, by delivering an instrument in writing exercising this right to the existing trustee and copies 1 sf-2249215 of such instrument to the other Beneficiaries of the trust; and if the Primary Beneficiary later ceases to.act as the trustee, the persons specified above or appointed pursuant to Section 7.1, below, shall act as successor trustees in the order named; provided, however, that this right to act as the sole trustee may not be exercised if the Trustee in its discretion determines that the Primary Beneficiary is substantially unable to manage his or her financial resources or resist fraud or undue influence. This trust may be referred to as the “Smith Adron Ketchum II] Trust.” The term “Trustee” refers to any person or persons acting as trustee. All property subject to this trust (the “Trust Estate”) shal] be administered as provided below. 12 Powers of Revocation and Amendment. During my lifetime i reserve the powers to revoke and amend this trust by a written instrument delivered to the Trustee. These powers are personal to me and may not be exercised on my behalf by any attorney-in-fact, conservator, or other person; provided, however, that if I become Incompetent, revocation or amendment by any such person may be authorized by the court-afier notice to the Trustee and to those persons who would be Beneficiaries of the trust if ] were to die immediately prior to the filing of the petition seeking such court authorization. Any amendment changing the duties, powers, or responsibilities of the Trustee shall require its consent. Except as specifically provided in this Section 1,2 or elsewhere in this instrument, all trusts established under this instrument are irrevocable and unamendable. sf-2249215 2. DECLARATIONS REGARDING FAMILY, NOMINATION OF GUARDIAN OF MINOR CHILD, AND DISINHERITANCE AND NO-CONTEST CLAUSES 21 Marital Status. Tam married to ROSARIO LEGASTO, and all references to “ROSARIO” or “My Spouse” are. to her. 2.2 Children. Thave two children now living, whose names and birthdates are: ERIC SMITH KETCHUM, March 11, 1980, and JASON SEMIN KETCHUM, May 4, 1995; and all references to “My Son” and “My Sons” are to them. 23 Nomination of Guardian of Minor Child. If I die or become Incompetent and My Son JASON is then a minor, I nominate My Son ERIC as guardian of JASON’s person and estate. If ERIC fails to so qualify or ceases to so act, | nominate my nephews, LESTER WALLACE, then DARIEN WALLACE, and then LYLE WALLACE, as such guardian. I request that no bond be required of any guardian. nominated in this section. 2.4 Disinheritance Clause. Except as otherwise specified, I have intentionally failed to provide for my heirs in this instrument. 25 No-Contest Clause. If any beneficiary under this instrument in any manner, directly or indirectly, contests or attacks this instrument or any of its provisions in any legal or equitable proceeding that is designed to thwart my wishes as expressed herein, any share or interest in the Trust Estate given to such beneficiary under this instrument is revoked and shall be disposed of as if he or she sf-2249215 had predeceased me without Issue; provided, however, that if My Son JASON’s mother, INO JANG, contests or attacks this instrument on JASON’s behalf, the share to which JASON or his Issue are otherwise entitled shall be reduced by forty percent (40%). 3. DISPOSITION OF TRUST ESTATE DURING SETTLOR’S LIFETIME During my lifetime the Trustee shall distribute the net income and principal of the trust as | direct, and J am the Primary Beneficiary of the trust. Subject to the preceding paragraph, the Trustee shall pay to (a) ROSARIO and_me as much of the net income and principal of the trust as (1) is necessary for our proper Health, Education, Support, and Maintenance and (2) the Trustee in its discretion deems appropriate for our General Welfare; and (b) My Issue, the Spouses of My Issue, and Qualified Charities as much of the remaining net income and principal of the trust as the Trustee in its discretion deems appropriate; provided, however, that (1) all such payments constituting gifts to individuals that would not qualify for the gift tax annual exclusion or the educational or medical exclusion under Sections 2503(b) and 2503(e), respectively, of the Internal Revenue Code, and (2) all charitable contributions in excess of the amount allowable to me as an income tax deduction for the current year under Section 170 of the Internal Revenue Code, may be made only with the approval of the court or all of those persons who would be residuary Beneficiaries of the trust if 1 were to die. The Trustee shall consult with my agents authorized to make decisions regarding my health care, personal care, and property matters and pay them reasonable fees for their services. s€-2249215 4. DISPOSITION OF TRUST ESTATE FOLLOWING SETTLOR’S DEATH Following my death this trust shall become an irrevocable administrative trust and shall be administered as follows: 41 Confirmation to Surviving Spouse of Her Interest in Any Community Property; Payment of Debts. I confirm to ROSARIO her interest in any community property that