Preview
'Yg
2
Mary E.
Jamay
Jennifer
Pryce,
Lee, Esq.
M. Stier,
Barulich Dugoni
Esq. (SBN
(SBN 238042)
Esq.
188443)
(SBN 286556)
Law Group, Inc.
IIP fLI5
saNMATImQ QOUN~
3 400 El Camino Real, Suite 1000
San Mateo, CA 94402 Ogc', - 8 515
4 Tel: 650-292-2900
Fax: 650-292-2901 e l~ tth g yA 0 U~
Email: mary@bdlawinc.corn
j amay@bdlawinc.corn ~yiivuiveiic
Attorneys for Rebecca A. Litke, Trustee
7
SUPERIOR COURT OF THK STATE OF CALIFORNIA
COUNTY OF SAN MATEO
10
In the Matter of Case No, 16PRO00221
THK JUDITH STOCKTON 2000 REPLY TO OBJECTION TO FIRST
TRUST DATED APRIL 11, 2000 ACCOUNTANDRKPORT
13
Date: December 6, 2016
Time: 9:00 a.m.
Dept.: 28
16
20 Rebecca A. Litke, Trustee of the Judith Stockton 2000 Trust, dated April 11, 2000
21 ("Petitioner" ) presents her Reply to the Objection to First Account and Report by Jesse Litke (the
22 "Objection") as follows:
23 Introduction and Relevant Background
24 As discussed in more detail in the Trustee's Response to Jesse Edward Litke's Amended
25 Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Beneficiary; (2) to
26 Remove Trustee; and (3) Modify Trust Effectuate Decedent's Intent (the "Response to Removal
27 Petition" ), since the inception of Petitioner's administration of the Judith Stockton 2000 Trust
c
18- PRO —00221
REP
Reply Filed
278888
I
REPLY TO OBSECTION TO FIRST ACCOUNT AND REPORT
dated April 11, 2000 (the Trust" ), Jesse Litke ("Jesse" ), or rather, Petitioner and Jesse's adoptive
2 father, Jeffrey Litke, has relentlessly sought Petitioner's removal.
3 Jesse has serious learning and emotional disabilities and was always in special education
4 classes in school. Jesse has never held a job in his 37 years of life. According to a previously
filed petition (by Jesse), Jesse "lacks the sophistication to manage any significant financial
6 assets". (See Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Trustee;
7 (2) Remove Trustee; and (3) Modify Trust to Effectuate Decedent's Intent filed herein on August
8 23, 2016, p. 2, lines 12-13.)
9 The Objection follows a pending petition for removal filed by (or through) Jesse Litke set
10 to be heard on the same day as Petitioner's First Account and Report of Trustee and Petition for
Its Settlement (the "First Account and Report" ). As evidence of Jeffrey Litke's (former spouse of
12 Judith) involvement in both proceedings, the removal petition seeks an order from the Court
modifying clear provisions in the Trust to funnel Jesse's distribution to an irrevocable trust
14 proposed to be controlled by Jeffrey Litke's biological daughter and employee, Stephanie
Maldanado. The proposed irrevocable trust identifies the beneficiaries as Jesse's heirs at law (i.e.,
16 Jeffrey Litke and/or Stephanie Maldanado.) The trustor, Judith Stockton ("Judith" ), had no
17 relationship with Ms. Maldanado (believed to be the love child of Jeffrey Litke) and is not named
18 in any of Judith's estate planning documents. The Trust gives one-half of the estate to Jesse, to be
19 held in trust for his lifetime, the remainder to Petitioner or her issue (i.e., not Jeffrey Litke or
20 Stephanie Maldanado.) Jeffrey Litke's attorney, Christina Nelson, Esq., represents Jesse in this
21 proceeding.
22 The Objection, like the removal petition, was filed without reasonable cause and in bad
faith for the sole purpose of harassing Petitioner, so that Petitioner would step down as trustee.
24 Jesse (or rather, Jeffrey Litke) devotes a significant amount of discussion on Petitioner's
25 purported "hostility" towards Jesse. Any "hostility" is pure fabrication and unsupported by the
26 record. Petitioner has bent over backwards to ensure her brother's best interests are served at all
27 times. Though not obligated, Petitioner loaned the Trust monies to get the administration up and
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
running. To date, Petitioner has not paid herself back for this loan. As detailed in the objection to
2 the removal petition and the pending petition, Petitioner elected to take less than one-third of the
total trustee fees she could have taken. Petitioner devoted substantial amounts of personal labor
4 traveling between San Francisco and Humboldt County to clean up, repair and maintain the
Trust's several real properties. Petitioner has distributed more money to Jesse than herself,
6 though both are equal, one-half beneficiaries of the Trust (and Petitioner's distribution isoutright,
while Jesse's is held in Trust). The foregoing is intended to be a demonstrative list of sacrifices
8 Petitioner has made for this Trust administration and Jesse and is not an exhaustive list by any
9 means.
10 There are assertions in the removal petition and Objection that Petitioner has not contacted
Jesse throughout this administration. These assertions are deliberately misleading. From the
12 inception of this administration, as Ms. Nelson well knows, Ms. Nelson expressly instructed
13 Petitioner to have zero contact or communication with Jesse.
14 The specific allegations in the Objection fall into one or more the following six (6)
15 categories:
16 1) Objections to expenditures specifically allocated to trustee compensation in the First
17 Account and Report of Trustee and Petition for Its Settlement (the "First Accounr and
Report" ) —the Trustee's total compensation during the 15-month accounting period was
19 $ 39,100 for the administration of a Trust with a fair market value of approximately $ 11
20 million;
21 2) Objections to expenditures specifically identified as distributions to beneficiary (i.e.,
22 Petitioner) —Jesse actually received more in distributions than Petitioner though both are
23 entitled to an equal one-half share in the Trust estate;
24 3) Objections to reasonable Trust-related expenditures for which Petitioner derived no
25 personal benefit;
26 4) Objections that, even iftrue, do not amount to a breach of Trust;
27 5) Objections to how various deposits/disbursements were reported, of which the
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
characterization makes absolutely no difference in this case (i.e.,results in zero damage to
the Trust or Jesse); and
6) Objections that are based on allegations which are patently false or pure speculation.
The allegations are more particularly addressed below.
Res0onse to Allegations
I. PURSUANT TO PROBATE CODE g 16243, PETITIONER IS AUTHORIZED
TO PAY HERSELF REASONABLE COMPENSATION FOR HER SERVICES
AS TRUSTEE.
9 If the trust instrument does not specify the trustee's compensation, the trustee is
10 entitled to reasonable compensation under the circumstances. (Probate Code $ 15681.) The
trustee has the power to pay reasonable compensation of the trustee. (Probate Code $ 16243.)
12 Trustee fees in the amount of 1% of fair market value is customary in this geographic
13 area and has been approved by this Court for non-professional trustees in other matters. Here,
14 1% of the gross value of the Trust estate at the beginning of the accounting period ($ 11,072,968)
15 amounts to a trustee fee of $ 110,000 for one year or $ 132.000 for the 15-month accounting
period. Nevertheless, Petitioner took only $ 39.100 for trustee compensation during the 15-
17 month accounting period, less than one-third of the fees Petitioner could have taken. The assets
18 in the Trust estate consist almost entirely of real properties spread out over three different
19 counties (and two states). The dire condition of the Trust estate at the time of death of the
20 trustor, Judith Stockton ("Judith" ), and Petitioner's noteworthy success in putting Judith's affairs
in order with the assistance of counsel are detailed in the First and Final Account. This was no
simple Trust administration by any stretch of the imagination.
23 Jesse objects to various disbursements as "an unnecessary and improper Trust expense
24 for the Trustee's personal benefit which did not provide a benefit to the Trust estate." (See
Objection, p. 6, lines 4-8; p. 7, lines 4-8.)'he expenditures Jesse complains about are clearlv
26 1
Jesse alsocomplains about a payinent to PG&E in the amount of $ 21.15.That payment was inadvertently reported
as trusteecompensation, but was a beneficiarydistribution. As discussed in more Petitioner
detail herein, is entitled
27 to an outright,one-half distribution of the Trust estate.
Again, once Petitionerwas advised that sheneeded to
distributefunds to herself first and
then pay for expenses &om the distributed funds, Petitionerimmediately began
28 doing so. There was no harm to the Trust estateor Jessewhatsoever.
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
identified as "trustee compensation" in Schedule D, pp. 55-58 of Exhibit B-2 of the First
2 Account and Report (as Jesse expressly acknowledges) —and are included in the $ 39,100 rotal
trustee compensation for the accounting period. Jesse's deliberate mischaracterization of these
4 expenditures in light of the documentary evidence to the contrary is evidence of his bad faith in
filing the Objection, warranting attorneys'ees.
6 Petitioner, who is not a professional trustee, had been taking compensation &om the
Trust by using trust funds to pay for certain personal expenditures. Once counsel discovered
8 Petitioner was compensating herself in this manner, counsel immediately advised Petitioner she
9 needed to pay herself first and then pay for expenses after the funds were distributed to her,
10 which Petitioner did and has been doing. In any event, the total compensation, which includes
the specific items complained about in the Objection, total $ 39,100, a mere fraction (less than
12 1/3' of the total amount Petitioner could have taken as trustee. Neither the Trust estate nor
Jesse suffered any damages whatsoever, as Jesse (or his counsel) well knows.
14
II. AS A BENEFICIARY, PETITIONER IS ENTITLED TO DISTRIBUTIONS
15 FROM THE TRUST PURSUANT TO THE TRUST PROVISIONS.
16
Pursuant to the Trust provisions, Petitioner is entitled to a one-half, outright
17
distribution of the entire Trust estate. (Exhibit A to Petition: Trust, Article Two, Section 2.2,
18
subparagraph 3.)
19
Jesse complains about a disbursement in Palm Springs and for Virgin America. (See
20 Objection, p. 6, lines 9-14.) As clearlv noted in Schedule E, Distribution to Beneficiary, p. 6,
Items 113, 114, 115, of Exhibit B-2 of the Petition, those disbursements were allocated to
Petitioner as a distribution to beneficiary. The distributions to Petitioner as a one-half
23
beneficiary of the Trust total $ 6 1 2,506.1 1,which is less than the distributions to Jesse totaling
24 $ 616,606.11.
25
The foregoing is merely additional evidence the Objection was filed in bad faith arid is
a good example of the situation with Jesse's counsel that Petitioner and her counsel have had to
27
contend with throughout this Trust administration, largely contributing to the attorney fees'hat
Jesse now complains about.
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
III. AS TRUSTEE, PETITIONER IS ENTITLED TO USE TRUST FUNDS FOR
PAYMENT OF TRUST-RELATED EXPENSES PURSUANT TO THE
PROVISIONS OF THE TRUST AND PROBATE CODE g 16243 and 16247.
4
Pursuant to Probate Code $ 16247, a trustee is authorized to hire persons, including
5
attorneys and accountants to advise or assist the trustee in the performance of her duties.
6
Pursuant to Probate Code $ 16243, a trustee has the power to pay reasonable compensation of
7
expenses incurred in the collection, care and administration and protection of the trust.
a) Fees Paid to Barulich Dugoni Law Group, Inc. and Engebnan Accountancv
Jesse complains about fees paid to Petitioners'ounsel, Barulich Dugoni Law Group,
10
Inc., and Engelman Accountancy. (Objection, p. 21, lines 12-25 —p.22, lines 1-17.) The
11
condition of the Trust estate at the time Petitioner took over as trustee is discussed in detail in
12
the Petition. To wit, the Trust administration consisted of seven (7) real properties, of which
13
three (3) were rental properties, significant debt, including without limitation: delinquent
14
mortgages, liens, delinquent state and federal income taxes, delinquent property taxes, medical
15
bills, an outstanding loan and delinquent credit card bills, line of credit, delinquent utility bills,
16
and water and sewage liens. The total amount of cash in the estate was $ 6,516.83. To make
17
matters worse, Judith did not keep tenant deposit accounts, required by law. (The foregoing list
18
is intended to be demonstrative and is not, by any means, an exhaustive list of the daunting
19
issues Petitioner faced when she took over as trustee. The foregoing was in addition to dealing
20
with Jesse (or Jeffrey Litke's) relentless allegations of malfeasance throughout the trust
21
administration.)
22
As a result of the efforts of Petitioner's counsel and accountant, Petitioner succeeded in
23
bringing all mortgages current, paid the delinquent property taxes and liens, made arrangements
24
for tax installment payments with the IRS and California Franchise Tax Board to pay Judith's
25
delinquent back income taxes, paid in full Judith's credit card balances and medical bills, and
26
eventually paid all past and current income taxes. Invoices listing the services provided by
27
Engelman Accountancy will be provided to Jesse's counsel before the hearing on the Petition.
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
1 In recognition of the amount of effort by Petitioner's counsel and accountant in putting
2 Judith's affairs in order, Petitioner took only a fraction of the total trustee fees she could have
3 taken under the circumstances.
4 b) Pavments to Laborers Hired bv Petitioner.
5 Jesse also objects to payments to laborers who were hired by Petitioner and provided
6 various services to the Trust. (Objection, p. 7, lines 17-24.) Petitioner derived no personal
7 benefit from the services provided by these individuals, all of whom have no relationship to
8 Petitioner requiring disclosure pursuant to Probate Code $ 16063. The laborers have performed
9 various jobs for Judith for over a decade. Petitioner hired these same laborers to perform work
10 on Trust properties.
11 As previously discussed, the Trust estate consisted of seven real properties (one in
12 Oklahoma, three in San Francisco and four in Humboldt County). Many of these properties or
units on these properties required extensive work. Services included without limitation:
14 painting, weeding, landscaping, cutting trees, general repair and maintenance, and other hard
physical labor, much of which Petitioner also personally performed.
16 The total amount paid to Joseph Hicks ($ 5,460), Jamie Oiler ($ 5,657.50), Evan Steed
17 ($ 3,690), Danny Johnson ($ 1,355), Jerrad Johnson ($ 1,500), and Jerry Conner ($ 720), at
18 approximately $ 15-$ 20 per hour during the accounting period are at or below market value for
19 the services performed, which was consistent with what Judith paid. It should also be noted that
20 Petitioner devoted significant personal labor towards repair, maintenance and upkeep of the
21 Trust's several real properties to limit as much as possible the need to hire outside labor.
22 c) Pavment of Trust-related Expenses.
23 1) Vendor/Contractor Meeting Expenses ($ 1,114.40 / purported harm to Jesse as
24 one-half beneficiarv: $ 557).
25 Jesse objects to payments for vendor/contractor meeting expenses. Jesse asserts'that
26 "these entries reflect [Petitioner] using Trust monies to pay for her personal meals and drinking
2/ expenses and demonstrate her misuse of Trust funds." (See Objection, p. 6, lines 15-21.) The
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
payments were for breakfast or lunch meetings with vendors and contractors to discuss work to
be performed on the Trusts'everal real properties. The total amount objected to is $ 1,114.40.
Because Petitioner is a one-half beneficiary, the purported damage complained of amounts to
$ 557.
Any personal benefit Petitioner may have derived from this expense is miniscule.
Significantly, as discussed herein and in the Petition, Petitioner paid herself only a small fraction
of the trustee fees she could have taken. If Petitioner were truly interested in using Trust funds
for her own personal benefit to the detriment of the Trust estate or Jesse, Petitioner could have
very easily taken more in trustee fees. She did not, as Jesse well knows. The objection to this
10 expense is frivolous, but a valid indication of the merits of the Objection overall.
2) Meals!Lodmng in Oklahoma ($ 2,542.05 / purported harm to Jesse as one-half
beneficiarv: $ 1,262)
Jesse objects to payments for expenses Petitioner incurred during her visit to
Oklahoma. The trustee has a duty to marshal and maintain Trust assets. The Trust estate
15 includes one property in Oklahoma with a residence on 160 acres.
While in Oklahoma, Petitioner personally inspected the residence and the surrounding
17 property. There had been apparent squatters in the residence at one point. The residence was
18 also in significant disrepair and required substantial clean up —there were cattle excrements,
rodents, and other debris in the residence. Petitioner cleaned out the residence, made some
20 necessary repairs, boarded the residence, and put up a security gate. While in Oklahoma,
21 Petitioner also met with the attorney and farm tenant. Judith's family resides in Oklahoma. It
22 was Judith's birthday and a small reception paid for with Trust funds (another item of objection)
23 was held to honor Judith with family members who were unable to attend her funeral in
24 Cali fornia.
25 3) Transportation Costs
26 Jesse objects to various transportation costs Petitioner incurred in performing her
27 duties as trustee. (Objection, p. 16, lines 20-26 — p.17, lines 1-19.) In so doing, Jesse
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
conveniently forgets that the Trust estate consists of real properties located in San Francisco,
2 Humboldt County and Oklahoma. Judith had two residences, one in San Francisco and another
3 in Humboldt County, which held large amounts of tangible personal property and Judith's
4 records. In order to perform the duties required of her as trustee, extensive travel between both
residences was necessary. As Jesse well knows, the real properties in California required much
6 attention.
7 Petitioner derived no personal benefit related to the transportation costs. As previously
8 discussed, Petitioner took only less than a third of the trustee fees she could have taken as
9 trustee. If Petitioner were truly interested in milking the Trust for her own personal gain,
10 Petitioner needed only to take more trustee fees. Petitioner did not.
IV. PETITIONER ACTED REASONABLY IN (I) LISTING TRUST PROPERTY
FOR SALK ON MULTIPLE LISTING SERVICES TO SECURE THK
HIGHEST BIDDER„AND(2) ELECTING TO PAY THK ESTATE TAX DUE IN
INSTALLMENTS AT THK 2% I.R.S. RATE TO PRESERVE INCOMK-
PRODUCING TRUST PROPERTY.
Absent an abuse of power by Petitioner as trustee, the law provides that a court may not
16 disturb a trustee's acts. In Hearst v. Ganzi, the Court of Appeal held:
Ifdiscretion is conferred upon the trustee in the exercise of a power, "the
court will not interfere unless the trustee in exercising or fazlz'ng to exerczse
the power acts dishonestly, or with an improper even though not a dishonest
19 motive, or fails to use lzisjudgment, or acts beyond the bounds ofa
reasonablejudgment." The mere fact that if the discretion had been
20 conferred upon the court, the court would have exercised the power
differently, is not a sufficient reason for interfering with the exercise of the
21 power of trustee. (Hearst v. Ganzi, (2006) 145 Cal.App.4'195, 1209,
22
citing Restatement 2d Trusts, ( 187, corn. E, p. 403.)
23
a) Sale ofAshburv Propertv with Notice ofProposed Action
24
Jesse complains about actions Petitioner took to list the Ashbury Property for sale on
25
the Multiple Listing Services. (Objection, p. 7, line 25 —p. 8, line 3.) First and foremost, as
26
acknowledged in the Objection, Jesse consented to Petitioner's Notice of Proposed Action
27
regarding the sale of the Ashbury property. Petitioner attached a copy of the Listing Agreement
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
with the Notice of Proposed Action. Jesse expressly consented to the terms of the listing
2 agreement. Further, the sale provided funds necessary for Petitioner to pay massive debts, past
3 taxes, liens, and administration costs. (A true and correct copy of Jesse's consent to the Notice
4 of Proposed Action is attached hereto as Exhibit A, and incorporated herein by reference.)
5 Second, the biggest complaint regarding the sale of the Ashbury appears motivated by
6 the fact that Petitioner rejected the purchase offer by an unknown client of Jesse's attorney,
Christina Nelson, Esq. (Ms. Nelson proposed that Petitioner sell the Ashbury property in a
8 private sale to her client; based on information and belief, this undisclosed client was Jeffrey
9 Litke, who has continuously held the belief that the property awarded to Judith in their divorce
10 belonged solely to him.) It is noteworthy that Ms. Nelson's client did not submit a bid for the
11 Ashbury property —compelling evidence Ms. Nelson's client had no intention of purchasing the
Ashbury property for fair market value.
13 Petitioner negotiated the broker commission from the standard rate of 6% down to 5%,
14 saving the Trust almost $ 25,000 in commissions. Jesse's objections to the reasonable costs of a
necessary sale of Trust property —especially given the fact that Jesse expressly consented to
16 Petitioner's Notice of Proposed Action attaching the listing agreement —constitutes a bad faith
objection to an accounting warranting attorney fees and costs pursuant to statutory authority.
18 b) Installment Plan Re: Estate Taxes
19 Jesse complains about Petitioner's election to pay the estate's tax liability in
20 installments. (Objection, p. 8, lines 4 —15.) Based upon the advice of counsel and Petitioner's
21 accountant, Petitioner elected to pay the substantial estate tax due in installments at the
22 extremely low Internal Revenue Service rate of 2% to preserve the Trust's income producing
23 real properties and securing the benefit of lower property taxes due to the Parent-Child
24 Reassessment Exclusion.
25 The objection to the installment plan stems from Petitioner's refusal to sell the Trust
26 real properties in a private sale to Ms. Nelson's client (not Jesse). Aside from conflict of interest
2'7 issues raised by such a proposal —especially in light of Ms. Nelson's representations in Court
28
10
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
pleadings that Jesse "has serious learning and emotional disabilities and was always in special
2 education classes in school...has not been able to work a job in his entire 37 years of
life...unable to get a driver's license...lacks the sophistication to manage any financial assets..."
4 (See Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Trustee; (2)
Remove Trustee; and (3) Modify Trust to Effectuate Decedent's Intent filed herein on August
23, 2016, p. 2, lines 6-12.) —Ms. Nelson's client was apparently unwilling to pay fair market
7 value for the Ashbury property. To summarize, Ms. Nelson's client never submitted a bid after
8 the Ashbury property was listed for sale on MLS.
V. THE OBJECTION WAS FILED WITHOUT REASONABLE CAUSE AND IN
10 BAD FAITH; ATTORNEYS'EES AND COSTS ARE WARRANTED UNDER
PROBATE CODE g 11003(a), 17211(a).
Pursuant to Probate Code $$ 11003 and 17211, if a beneficiary contests the trustee's
12
account and the Court determines that the contest was without reasonable cause and in bad faith,
13
the Court may award against the contest the compensation and costs of the trustee and other
14
expenses and costs of litigation, including attorney's fees incurred to defend the account. The
15
amount awarded shall be a charge against any interest of the beneficiary in the trust.
16
The Objection is replete with (1) objections that are based on allegations which are
17
patently false or pure speculation; and/or (2) objections that, even if true, do not amount ro a
18
breach of trust. The objections and Petitioner's responses are as follows:
19
~ Objection: The trustee "further encumbered the Stewart Property with a line of credit,
20
the balance of which was $ 82,638.51..." [followed by lengthy discussion criticizing
21
Petitioner]. (See Objection, p. 8, line 17 —p. 9,line 10.)
22
~ Response: The line of credit was opened and the funds expended by Judith before her
23
death. This pre-existing debt was reported in the Estate Tax Return, a copy of which was
24 —well before
sent to Jesse in July 2016 the Objection was filed.
25
~ Objection: "The Accounting discloses that in several instances monthly payments were
on insurance policies covering the real property were not paid regularly and that
27
intermittent payments were made with entries indicating 'multiple payment'..."
28
REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT
[followed by lengthy discussion criticizing Petitioner].
~ Response: As detailed in the First Account and Report, Petitioner inherited an estate in
disarray. Judith failed to make mortgage and insurance payments during her illness.
Many of the mortgages fell behind. In some instances, Petitioner made multiple
payments to catch up on prior-missed payments. In other instances, Petitioner was
forced to juggle payments for several other liabilities until Petitioner was able to stabilize
the Trust's financial situation. Petitioner acted reasonably and in good faith at all times.
None of the properties were jeopardized by the payment schedule. Ifanything, Petitioner
managed to save all properties by the payment schedule Jesse complains about.
10 ~ Objection: "The accounting discloses that $ 1,052.35 in Bank Service Charges were
incurred during the period of the Accounting." (Objection, p. 10, lines 15-26.)
12 ~ Response: The majority of the charges were for wire transfers. As soon as Petitioner
13 received an infusion of funds, Petitioner paid past due mortgages to preserve the Trust
14 real properties. There were about $ 200 in ATM fees during the 15-month accounting
15 period —all were at the beginning of the Trust administration only. Petitioner notes that
16 she loaned the Trust more than $ 18,000 for zero interest. The $ 200 in ATM fees Jesse
17 complains about is a mere 1% of the $ 18,000 Petitioner loaned and significantly less than
18 any interest Petitioner could have charged the Trust (she is not).
19 ~ Objection: "...the Trustee has made repeated demands for [Jesse] to vacate 2247A [the
20 Rohnerville property], so she can sell both properties but allthe while failing to address
21 any alternative living situation for Jesse..." (Objection, p. 16, lines 1-8.)
22 ~ Response: Jesse expressly informed Petitioner he did not wish to receive the
23 Rohnerville property and further, that he wanted Petitioner to sell the Rohnerville
24 property and all Trust property as soon as possible. Petitioner made repeated requests to
25 Jesse about his needs and preferences for alternative housing arrangements, so the
26 Rohnerville property could be sold. (See Exhibits B, C, F, I, J, K, L to Trustee's
27 Response to Jesse Edward Litke's Amended Petition for Orders, et. al., filed November
28
12
REPLY TO OB JECTION TO FIRST ACCOUNT AND REPORT
30, 2016; Petitioner's counsel, Mary Pryce also discussed this issue with Jesse's counsel
on November 13, 2016.) To date, all requests for information have been ignored.
~ Objection: [Regarding the Stewart property], "the property remains on the market
without any serious buyers. What the Trustee does not disclose are (1) the length of the
broker's listing, (2) the broker's commission rate, and (3) whether any attempts have
been made to lease the property...not to mention the additional secured line of credit"
(Objection, p. 15, lines 22-27.)
~ Response: As disclosed in the Notice of Proposed Action transmitted to Jesse's counsel
on January 8, 2016, the listing agreement was for a period of three (3) months, and the
10 broker's commission is to be 5%. A copy of the Notice of Proposed Action transmitted
to Jesse's counsel is attached hereto as Exhibit B. Attempts have not been made to lease
12 the property, as it was not anticipated that the sale would take very long, and a single
13 family home with a tenant isless attractive for potential buyers. There has been a lack of
14 interest, due to significant deferred maintenance before Judith's death. Petitioner
15 repaired and cleaned up the property, and has contractors scheduled to replace the roof,
16 which has been the primary complaint of all potentially interested buyers. The line of
17 credit against the Stewart property was taken by Judith during her lifetime (not
18 Petitioner) and disclosed as pre-existing debt in the Estate Tax Return transmitted to
19 Jesse's counsel on July 7. 2016.
20
~ Objection. "[Petitioner] has demanded that Jesse sign [a quitclaim deed to the
21
Oklahoma property] and only then will she distribute an equal amount of cash into the
Preview
'Yg 2 Mary E. Jamay Jennifer Pryce, Lee, Esq. M. Stier, Barulich Dugoni Esq. (SBN (SBN 238042) Esq. 188443) (SBN 286556) Law Group, Inc. IIP fLI5 saNMATImQ QOUN~ 3 400 El Camino Real, Suite 1000 San Mateo, CA 94402 Ogc', - 8 515 4 Tel: 650-292-2900 Fax: 650-292-2901 e l~ tth g yA 0 U~ Email: mary@bdlawinc.corn j amay@bdlawinc.corn ~yiivuiveiic Attorneys for Rebecca A. Litke, Trustee 7 SUPERIOR COURT OF THK STATE OF CALIFORNIA COUNTY OF SAN MATEO 10 In the Matter of Case No, 16PRO00221 THK JUDITH STOCKTON 2000 REPLY TO OBJECTION TO FIRST TRUST DATED APRIL 11, 2000 ACCOUNTANDRKPORT 13 Date: December 6, 2016 Time: 9:00 a.m. Dept.: 28 16 20 Rebecca A. Litke, Trustee of the Judith Stockton 2000 Trust, dated April 11, 2000 21 ("Petitioner" ) presents her Reply to the Objection to First Account and Report by Jesse Litke (the 22 "Objection") as follows: 23 Introduction and Relevant Background 24 As discussed in more detail in the Trustee's Response to Jesse Edward Litke's Amended 25 Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Beneficiary; (2) to 26 Remove Trustee; and (3) Modify Trust Effectuate Decedent's Intent (the "Response to Removal 27 Petition" ), since the inception of Petitioner's administration of the Judith Stockton 2000 Trust c 18- PRO —00221 REP Reply Filed 278888 I REPLY TO OBSECTION TO FIRST ACCOUNT AND REPORT dated April 11, 2000 (the Trust" ), Jesse Litke ("Jesse" ), or rather, Petitioner and Jesse's adoptive 2 father, Jeffrey Litke, has relentlessly sought Petitioner's removal. 3 Jesse has serious learning and emotional disabilities and was always in special education 4 classes in school. Jesse has never held a job in his 37 years of life. According to a previously filed petition (by Jesse), Jesse "lacks the sophistication to manage any significant financial 6 assets". (See Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Trustee; 7 (2) Remove Trustee; and (3) Modify Trust to Effectuate Decedent's Intent filed herein on August 8 23, 2016, p. 2, lines 12-13.) 9 The Objection follows a pending petition for removal filed by (or through) Jesse Litke set 10 to be heard on the same day as Petitioner's First Account and Report of Trustee and Petition for Its Settlement (the "First Account and Report" ). As evidence of Jeffrey Litke's (former spouse of 12 Judith) involvement in both proceedings, the removal petition seeks an order from the Court modifying clear provisions in the Trust to funnel Jesse's distribution to an irrevocable trust 14 proposed to be controlled by Jeffrey Litke's biological daughter and employee, Stephanie Maldanado. The proposed irrevocable trust identifies the beneficiaries as Jesse's heirs at law (i.e., 16 Jeffrey Litke and/or Stephanie Maldanado.) The trustor, Judith Stockton ("Judith" ), had no 17 relationship with Ms. Maldanado (believed to be the love child of Jeffrey Litke) and is not named 18 in any of Judith's estate planning documents. The Trust gives one-half of the estate to Jesse, to be 19 held in trust for his lifetime, the remainder to Petitioner or her issue (i.e., not Jeffrey Litke or 20 Stephanie Maldanado.) Jeffrey Litke's attorney, Christina Nelson, Esq., represents Jesse in this 21 proceeding. 22 The Objection, like the removal petition, was filed without reasonable cause and in bad faith for the sole purpose of harassing Petitioner, so that Petitioner would step down as trustee. 24 Jesse (or rather, Jeffrey Litke) devotes a significant amount of discussion on Petitioner's 25 purported "hostility" towards Jesse. Any "hostility" is pure fabrication and unsupported by the 26 record. Petitioner has bent over backwards to ensure her brother's best interests are served at all 27 times. Though not obligated, Petitioner loaned the Trust monies to get the administration up and 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT running. To date, Petitioner has not paid herself back for this loan. As detailed in the objection to 2 the removal petition and the pending petition, Petitioner elected to take less than one-third of the total trustee fees she could have taken. Petitioner devoted substantial amounts of personal labor 4 traveling between San Francisco and Humboldt County to clean up, repair and maintain the Trust's several real properties. Petitioner has distributed more money to Jesse than herself, 6 though both are equal, one-half beneficiaries of the Trust (and Petitioner's distribution isoutright, while Jesse's is held in Trust). The foregoing is intended to be a demonstrative list of sacrifices 8 Petitioner has made for this Trust administration and Jesse and is not an exhaustive list by any 9 means. 10 There are assertions in the removal petition and Objection that Petitioner has not contacted Jesse throughout this administration. These assertions are deliberately misleading. From the 12 inception of this administration, as Ms. Nelson well knows, Ms. Nelson expressly instructed 13 Petitioner to have zero contact or communication with Jesse. 14 The specific allegations in the Objection fall into one or more the following six (6) 15 categories: 16 1) Objections to expenditures specifically allocated to trustee compensation in the First 17 Account and Report of Trustee and Petition for Its Settlement (the "First Accounr and Report" ) —the Trustee's total compensation during the 15-month accounting period was 19 $ 39,100 for the administration of a Trust with a fair market value of approximately $ 11 20 million; 21 2) Objections to expenditures specifically identified as distributions to beneficiary (i.e., 22 Petitioner) —Jesse actually received more in distributions than Petitioner though both are 23 entitled to an equal one-half share in the Trust estate; 24 3) Objections to reasonable Trust-related expenditures for which Petitioner derived no 25 personal benefit; 26 4) Objections that, even iftrue, do not amount to a breach of Trust; 27 5) Objections to how various deposits/disbursements were reported, of which the 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT characterization makes absolutely no difference in this case (i.e.,results in zero damage to the Trust or Jesse); and 6) Objections that are based on allegations which are patently false or pure speculation. The allegations are more particularly addressed below. Res0onse to Allegations I. PURSUANT TO PROBATE CODE g 16243, PETITIONER IS AUTHORIZED TO PAY HERSELF REASONABLE COMPENSATION FOR HER SERVICES AS TRUSTEE. 9 If the trust instrument does not specify the trustee's compensation, the trustee is 10 entitled to reasonable compensation under the circumstances. (Probate Code $ 15681.) The trustee has the power to pay reasonable compensation of the trustee. (Probate Code $ 16243.) 12 Trustee fees in the amount of 1% of fair market value is customary in this geographic 13 area and has been approved by this Court for non-professional trustees in other matters. Here, 14 1% of the gross value of the Trust estate at the beginning of the accounting period ($ 11,072,968) 15 amounts to a trustee fee of $ 110,000 for one year or $ 132.000 for the 15-month accounting period. Nevertheless, Petitioner took only $ 39.100 for trustee compensation during the 15- 17 month accounting period, less than one-third of the fees Petitioner could have taken. The assets 18 in the Trust estate consist almost entirely of real properties spread out over three different 19 counties (and two states). The dire condition of the Trust estate at the time of death of the 20 trustor, Judith Stockton ("Judith" ), and Petitioner's noteworthy success in putting Judith's affairs in order with the assistance of counsel are detailed in the First and Final Account. This was no simple Trust administration by any stretch of the imagination. 23 Jesse objects to various disbursements as "an unnecessary and improper Trust expense 24 for the Trustee's personal benefit which did not provide a benefit to the Trust estate." (See Objection, p. 6, lines 4-8; p. 7, lines 4-8.)'he expenditures Jesse complains about are clearlv 26 1 Jesse alsocomplains about a payinent to PG&E in the amount of $ 21.15.That payment was inadvertently reported as trusteecompensation, but was a beneficiarydistribution. As discussed in more Petitioner detail herein, is entitled 27 to an outright,one-half distribution of the Trust estate. Again, once Petitionerwas advised that sheneeded to distributefunds to herself first and then pay for expenses &om the distributed funds, Petitionerimmediately began 28 doing so. There was no harm to the Trust estateor Jessewhatsoever. REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT identified as "trustee compensation" in Schedule D, pp. 55-58 of Exhibit B-2 of the First 2 Account and Report (as Jesse expressly acknowledges) —and are included in the $ 39,100 rotal trustee compensation for the accounting period. Jesse's deliberate mischaracterization of these 4 expenditures in light of the documentary evidence to the contrary is evidence of his bad faith in filing the Objection, warranting attorneys'ees. 6 Petitioner, who is not a professional trustee, had been taking compensation &om the Trust by using trust funds to pay for certain personal expenditures. Once counsel discovered 8 Petitioner was compensating herself in this manner, counsel immediately advised Petitioner she 9 needed to pay herself first and then pay for expenses after the funds were distributed to her, 10 which Petitioner did and has been doing. In any event, the total compensation, which includes the specific items complained about in the Objection, total $ 39,100, a mere fraction (less than 12 1/3' of the total amount Petitioner could have taken as trustee. Neither the Trust estate nor Jesse suffered any damages whatsoever, as Jesse (or his counsel) well knows. 14 II. AS A BENEFICIARY, PETITIONER IS ENTITLED TO DISTRIBUTIONS 15 FROM THE TRUST PURSUANT TO THE TRUST PROVISIONS. 16 Pursuant to the Trust provisions, Petitioner is entitled to a one-half, outright 17 distribution of the entire Trust estate. (Exhibit A to Petition: Trust, Article Two, Section 2.2, 18 subparagraph 3.) 19 Jesse complains about a disbursement in Palm Springs and for Virgin America. (See 20 Objection, p. 6, lines 9-14.) As clearlv noted in Schedule E, Distribution to Beneficiary, p. 6, Items 113, 114, 115, of Exhibit B-2 of the Petition, those disbursements were allocated to Petitioner as a distribution to beneficiary. The distributions to Petitioner as a one-half 23 beneficiary of the Trust total $ 6 1 2,506.1 1,which is less than the distributions to Jesse totaling 24 $ 616,606.11. 25 The foregoing is merely additional evidence the Objection was filed in bad faith arid is a good example of the situation with Jesse's counsel that Petitioner and her counsel have had to 27 contend with throughout this Trust administration, largely contributing to the attorney fees'hat Jesse now complains about. REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT III. AS TRUSTEE, PETITIONER IS ENTITLED TO USE TRUST FUNDS FOR PAYMENT OF TRUST-RELATED EXPENSES PURSUANT TO THE PROVISIONS OF THE TRUST AND PROBATE CODE g 16243 and 16247. 4 Pursuant to Probate Code $ 16247, a trustee is authorized to hire persons, including 5 attorneys and accountants to advise or assist the trustee in the performance of her duties. 6 Pursuant to Probate Code $ 16243, a trustee has the power to pay reasonable compensation of 7 expenses incurred in the collection, care and administration and protection of the trust. a) Fees Paid to Barulich Dugoni Law Group, Inc. and Engebnan Accountancv Jesse complains about fees paid to Petitioners'ounsel, Barulich Dugoni Law Group, 10 Inc., and Engelman Accountancy. (Objection, p. 21, lines 12-25 —p.22, lines 1-17.) The 11 condition of the Trust estate at the time Petitioner took over as trustee is discussed in detail in 12 the Petition. To wit, the Trust administration consisted of seven (7) real properties, of which 13 three (3) were rental properties, significant debt, including without limitation: delinquent 14 mortgages, liens, delinquent state and federal income taxes, delinquent property taxes, medical 15 bills, an outstanding loan and delinquent credit card bills, line of credit, delinquent utility bills, 16 and water and sewage liens. The total amount of cash in the estate was $ 6,516.83. To make 17 matters worse, Judith did not keep tenant deposit accounts, required by law. (The foregoing list 18 is intended to be demonstrative and is not, by any means, an exhaustive list of the daunting 19 issues Petitioner faced when she took over as trustee. The foregoing was in addition to dealing 20 with Jesse (or Jeffrey Litke's) relentless allegations of malfeasance throughout the trust 21 administration.) 22 As a result of the efforts of Petitioner's counsel and accountant, Petitioner succeeded in 23 bringing all mortgages current, paid the delinquent property taxes and liens, made arrangements 24 for tax installment payments with the IRS and California Franchise Tax Board to pay Judith's 25 delinquent back income taxes, paid in full Judith's credit card balances and medical bills, and 26 eventually paid all past and current income taxes. Invoices listing the services provided by 27 Engelman Accountancy will be provided to Jesse's counsel before the hearing on the Petition. 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT 1 In recognition of the amount of effort by Petitioner's counsel and accountant in putting 2 Judith's affairs in order, Petitioner took only a fraction of the total trustee fees she could have 3 taken under the circumstances. 4 b) Pavments to Laborers Hired bv Petitioner. 5 Jesse also objects to payments to laborers who were hired by Petitioner and provided 6 various services to the Trust. (Objection, p. 7, lines 17-24.) Petitioner derived no personal 7 benefit from the services provided by these individuals, all of whom have no relationship to 8 Petitioner requiring disclosure pursuant to Probate Code $ 16063. The laborers have performed 9 various jobs for Judith for over a decade. Petitioner hired these same laborers to perform work 10 on Trust properties. 11 As previously discussed, the Trust estate consisted of seven real properties (one in 12 Oklahoma, three in San Francisco and four in Humboldt County). Many of these properties or units on these properties required extensive work. Services included without limitation: 14 painting, weeding, landscaping, cutting trees, general repair and maintenance, and other hard physical labor, much of which Petitioner also personally performed. 16 The total amount paid to Joseph Hicks ($ 5,460), Jamie Oiler ($ 5,657.50), Evan Steed 17 ($ 3,690), Danny Johnson ($ 1,355), Jerrad Johnson ($ 1,500), and Jerry Conner ($ 720), at 18 approximately $ 15-$ 20 per hour during the accounting period are at or below market value for 19 the services performed, which was consistent with what Judith paid. It should also be noted that 20 Petitioner devoted significant personal labor towards repair, maintenance and upkeep of the 21 Trust's several real properties to limit as much as possible the need to hire outside labor. 22 c) Pavment of Trust-related Expenses. 23 1) Vendor/Contractor Meeting Expenses ($ 1,114.40 / purported harm to Jesse as 24 one-half beneficiarv: $ 557). 25 Jesse objects to payments for vendor/contractor meeting expenses. Jesse asserts'that 26 "these entries reflect [Petitioner] using Trust monies to pay for her personal meals and drinking 2/ expenses and demonstrate her misuse of Trust funds." (See Objection, p. 6, lines 15-21.) The 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT payments were for breakfast or lunch meetings with vendors and contractors to discuss work to be performed on the Trusts'everal real properties. The total amount objected to is $ 1,114.40. Because Petitioner is a one-half beneficiary, the purported damage complained of amounts to $ 557. Any personal benefit Petitioner may have derived from this expense is miniscule. Significantly, as discussed herein and in the Petition, Petitioner paid herself only a small fraction of the trustee fees she could have taken. If Petitioner were truly interested in using Trust funds for her own personal benefit to the detriment of the Trust estate or Jesse, Petitioner could have very easily taken more in trustee fees. She did not, as Jesse well knows. The objection to this 10 expense is frivolous, but a valid indication of the merits of the Objection overall. 2) Meals!Lodmng in Oklahoma ($ 2,542.05 / purported harm to Jesse as one-half beneficiarv: $ 1,262) Jesse objects to payments for expenses Petitioner incurred during her visit to Oklahoma. The trustee has a duty to marshal and maintain Trust assets. The Trust estate 15 includes one property in Oklahoma with a residence on 160 acres. While in Oklahoma, Petitioner personally inspected the residence and the surrounding 17 property. There had been apparent squatters in the residence at one point. The residence was 18 also in significant disrepair and required substantial clean up —there were cattle excrements, rodents, and other debris in the residence. Petitioner cleaned out the residence, made some 20 necessary repairs, boarded the residence, and put up a security gate. While in Oklahoma, 21 Petitioner also met with the attorney and farm tenant. Judith's family resides in Oklahoma. It 22 was Judith's birthday and a small reception paid for with Trust funds (another item of objection) 23 was held to honor Judith with family members who were unable to attend her funeral in 24 Cali fornia. 25 3) Transportation Costs 26 Jesse objects to various transportation costs Petitioner incurred in performing her 27 duties as trustee. (Objection, p. 16, lines 20-26 — p.17, lines 1-19.) In so doing, Jesse 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT conveniently forgets that the Trust estate consists of real properties located in San Francisco, 2 Humboldt County and Oklahoma. Judith had two residences, one in San Francisco and another 3 in Humboldt County, which held large amounts of tangible personal property and Judith's 4 records. In order to perform the duties required of her as trustee, extensive travel between both residences was necessary. As Jesse well knows, the real properties in California required much 6 attention. 7 Petitioner derived no personal benefit related to the transportation costs. As previously 8 discussed, Petitioner took only less than a third of the trustee fees she could have taken as 9 trustee. If Petitioner were truly interested in milking the Trust for her own personal gain, 10 Petitioner needed only to take more trustee fees. Petitioner did not. IV. PETITIONER ACTED REASONABLY IN (I) LISTING TRUST PROPERTY FOR SALK ON MULTIPLE LISTING SERVICES TO SECURE THK HIGHEST BIDDER„AND(2) ELECTING TO PAY THK ESTATE TAX DUE IN INSTALLMENTS AT THK 2% I.R.S. RATE TO PRESERVE INCOMK- PRODUCING TRUST PROPERTY. Absent an abuse of power by Petitioner as trustee, the law provides that a court may not 16 disturb a trustee's acts. In Hearst v. Ganzi, the Court of Appeal held: Ifdiscretion is conferred upon the trustee in the exercise of a power, "the court will not interfere unless the trustee in exercising or fazlz'ng to exerczse the power acts dishonestly, or with an improper even though not a dishonest 19 motive, or fails to use lzisjudgment, or acts beyond the bounds ofa reasonablejudgment." The mere fact that if the discretion had been 20 conferred upon the court, the court would have exercised the power differently, is not a sufficient reason for interfering with the exercise of the 21 power of trustee. (Hearst v. Ganzi, (2006) 145 Cal.App.4'195, 1209, 22 citing Restatement 2d Trusts, ( 187, corn. E, p. 403.) 23 a) Sale ofAshburv Propertv with Notice ofProposed Action 24 Jesse complains about actions Petitioner took to list the Ashbury Property for sale on 25 the Multiple Listing Services. (Objection, p. 7, line 25 —p. 8, line 3.) First and foremost, as 26 acknowledged in the Objection, Jesse consented to Petitioner's Notice of Proposed Action 27 regarding the sale of the Ashbury property. Petitioner attached a copy of the Listing Agreement REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT with the Notice of Proposed Action. Jesse expressly consented to the terms of the listing 2 agreement. Further, the sale provided funds necessary for Petitioner to pay massive debts, past 3 taxes, liens, and administration costs. (A true and correct copy of Jesse's consent to the Notice 4 of Proposed Action is attached hereto as Exhibit A, and incorporated herein by reference.) 5 Second, the biggest complaint regarding the sale of the Ashbury appears motivated by 6 the fact that Petitioner rejected the purchase offer by an unknown client of Jesse's attorney, Christina Nelson, Esq. (Ms. Nelson proposed that Petitioner sell the Ashbury property in a 8 private sale to her client; based on information and belief, this undisclosed client was Jeffrey 9 Litke, who has continuously held the belief that the property awarded to Judith in their divorce 10 belonged solely to him.) It is noteworthy that Ms. Nelson's client did not submit a bid for the 11 Ashbury property —compelling evidence Ms. Nelson's client had no intention of purchasing the Ashbury property for fair market value. 13 Petitioner negotiated the broker commission from the standard rate of 6% down to 5%, 14 saving the Trust almost $ 25,000 in commissions. Jesse's objections to the reasonable costs of a necessary sale of Trust property —especially given the fact that Jesse expressly consented to 16 Petitioner's Notice of Proposed Action attaching the listing agreement —constitutes a bad faith objection to an accounting warranting attorney fees and costs pursuant to statutory authority. 18 b) Installment Plan Re: Estate Taxes 19 Jesse complains about Petitioner's election to pay the estate's tax liability in 20 installments. (Objection, p. 8, lines 4 —15.) Based upon the advice of counsel and Petitioner's 21 accountant, Petitioner elected to pay the substantial estate tax due in installments at the 22 extremely low Internal Revenue Service rate of 2% to preserve the Trust's income producing 23 real properties and securing the benefit of lower property taxes due to the Parent-Child 24 Reassessment Exclusion. 25 The objection to the installment plan stems from Petitioner's refusal to sell the Trust 26 real properties in a private sale to Ms. Nelson's client (not Jesse). Aside from conflict of interest 2'7 issues raised by such a proposal —especially in light of Ms. Nelson's representations in Court 28 10 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT pleadings that Jesse "has serious learning and emotional disabilities and was always in special 2 education classes in school...has not been able to work a job in his entire 37 years of life...unable to get a driver's license...lacks the sophistication to manage any financial assets..." 4 (See Petition for Orders to: (1) Compel Trustee to Provide Trust Information to Trustee; (2) Remove Trustee; and (3) Modify Trust to Effectuate Decedent's Intent filed herein on August 23, 2016, p. 2, lines 6-12.) —Ms. Nelson's client was apparently unwilling to pay fair market 7 value for the Ashbury property. To summarize, Ms. Nelson's client never submitted a bid after 8 the Ashbury property was listed for sale on MLS. V. THE OBJECTION WAS FILED WITHOUT REASONABLE CAUSE AND IN 10 BAD FAITH; ATTORNEYS'EES AND COSTS ARE WARRANTED UNDER PROBATE CODE g 11003(a), 17211(a). Pursuant to Probate Code $$ 11003 and 17211, if a beneficiary contests the trustee's 12 account and the Court determines that the contest was without reasonable cause and in bad faith, 13 the Court may award against the contest the compensation and costs of the trustee and other 14 expenses and costs of litigation, including attorney's fees incurred to defend the account. The 15 amount awarded shall be a charge against any interest of the beneficiary in the trust. 16 The Objection is replete with (1) objections that are based on allegations which are 17 patently false or pure speculation; and/or (2) objections that, even if true, do not amount ro a 18 breach of trust. The objections and Petitioner's responses are as follows: 19 ~ Objection: The trustee "further encumbered the Stewart Property with a line of credit, 20 the balance of which was $ 82,638.51..." [followed by lengthy discussion criticizing 21 Petitioner]. (See Objection, p. 8, line 17 —p. 9,line 10.) 22 ~ Response: The line of credit was opened and the funds expended by Judith before her 23 death. This pre-existing debt was reported in the Estate Tax Return, a copy of which was 24 —well before sent to Jesse in July 2016 the Objection was filed. 25 ~ Objection: "The Accounting discloses that in several instances monthly payments were on insurance policies covering the real property were not paid regularly and that 27 intermittent payments were made with entries indicating 'multiple payment'..." 28 REPLY TO OBJECTION TO FIRST ACCOUNT AND REPORT [followed by lengthy discussion criticizing Petitioner]. ~ Response: As detailed in the First Account and Report, Petitioner inherited an estate in disarray. Judith failed to make mortgage and insurance payments during her illness. Many of the mortgages fell behind. In some instances, Petitioner made multiple payments to catch up on prior-missed payments. In other instances, Petitioner was forced to juggle payments for several other liabilities until Petitioner was able to stabilize the Trust's financial situation. Petitioner acted reasonably and in good faith at all times. None of the properties were jeopardized by the payment schedule. Ifanything, Petitioner managed to save all properties by the payment schedule Jesse complains about. 10 ~ Objection: "The accounting discloses that $ 1,052.35 in Bank Service Charges were incurred during the period of the Accounting." (Objection, p. 10, lines 15-26.) 12 ~ Response: The majority of the charges were for wire transfers. As soon as Petitioner 13 received an infusion of funds, Petitioner paid past due mortgages to preserve the Trust 14 real properties. There were about $ 200 in ATM fees during the 15-month accounting 15 period —all were at the beginning of the Trust administration only. Petitioner notes that 16 she loaned the Trust more than $ 18,000 for zero interest. The $ 200 in ATM fees Jesse 17 complains about is a mere 1% of the $ 18,000 Petitioner loaned and significantly less than 18 any interest Petitioner could have charged the Trust (she is not). 19 ~ Objection: "...the Trustee has made repeated demands for [Jesse] to vacate 2247A [the 20 Rohnerville property], so she can sell both properties but allthe while failing to address 21 any alternative living situation for Jesse..." (Objection, p. 16, lines 1-8.) 22 ~ Response: Jesse expressly informed Petitioner he did not wish to receive the 23 Rohnerville property and further, that he wanted Petitioner to sell the Rohnerville 24 property and all Trust property as soon as possible. Petitioner made repeated requests to 25 Jesse about his needs and preferences for alternative housing arrangements, so the 26 Rohnerville property could be sold. (See Exhibits B, C, F, I, J, K, L to Trustee's 27 Response to Jesse Edward Litke's Amended Petition for Orders, et. al., filed November 28 12 REPLY TO OB JECTION TO FIRST ACCOUNT AND REPORT 30, 2016; Petitioner's counsel, Mary Pryce also discussed this issue with Jesse's counsel on November 13, 2016.) To date, all requests for information have been ignored. ~ Objection: [Regarding the Stewart property], "the property remains on the market without any serious buyers. What the Trustee does not disclose are (1) the length of the broker's listing, (2) the broker's commission rate, and (3) whether any attempts have been made to lease the property...not to mention the additional secured line of credit" (Objection, p. 15, lines 22-27.) ~ Response: As disclosed in the Notice of Proposed Action transmitted to Jesse's counsel on January 8, 2016, the listing agreement was for a period of three (3) months, and the 10 broker's commission is to be 5%. A copy of the Notice of Proposed Action transmitted to Jesse's counsel is attached hereto as Exhibit B. Attempts have not been made to lease 12 the property, as it was not anticipated that the sale would take very long, and a single 13 family home with a tenant isless attractive for potential buyers. There has been a lack of 14 interest, due to significant deferred maintenance before Judith's death. Petitioner 15 repaired and cleaned up the property, and has contractors scheduled to replace the roof, 16 which has been the primary complaint of all potentially interested buyers. The line of 17 credit against the Stewart property was taken by Judith during her lifetime (not 18 Petitioner) and disclosed as pre-existing debt in the Estate Tax Return transmitted to 19 Jesse's counsel on July 7. 2016. 20 ~ Objection. "[Petitioner] has demanded that Jesse sign [a quitclaim deed to the 21 Oklahoma property] and only then will she distribute an equal amount of cash into the